Mortgages

Use our guide to learn about how mortgages work and find out what’s right for you…

Your mortgage: the basics

What is a Mortgage?

What do Interest Rates mean?

What if I only have a small deposit?

What is conveyancing?

What are my options for paying off my mortgage?

Repayment Mortgage

Interest Only Mortgage

Mortgage Calculator

What is a Mortgage?

A mortgage is when a bank or building society lends you money to buy property – usually your home. A mortgage is a loan which is secured against your home. When you take out a mortgage you agree to pay the loan back with interest over a period of time agreed with your lender. If for any reason you cannot repay the loan, the mortgage lender can sell the house to recover the debt.

Tyrer and Hart Estates believe finding your ideal home or property investment is intrinsically linked to the most suitable method of financing it, and Tyrer and Hart Mortgage Services can help you in this quest.

The recent financial upheaval has changed the mortgage market. Lenders are more cautious about what and to whom they will lend. Our mortgage advisers provide practical advice on how to get the most suitable mortgage.

Prior to making a recommendation we consider all available lenders in the market, tailoring the lender to meet the needs of either first time buyers, home movers or buy to let landlords.

There are many types of mortgage advisers, some only advise on the products of one company such as bank or building society advisers. Others operate using a limited panel of lenders this restricts the choice their clients have.

Tyrer and Hart mortgage advisers look for suitable mortgage products across the whole market.

Our qualified advisers will discuss your requirements and then using our sophisticated system will find the most suitable mortgage for your personal circumstances.

With regards to mortgage protection for either life, critical illness or Income Protection we can also look across the whole of the market which means that our advisers can find the most suitable product for you.

Please call 0151 363 3471 for initial advice or use this contact form.

What do Interest Rates mean?

The interest rate shows you the basic cost of your mortgage. Some lenders will quote several interest rates: use the APR (Annual Percentage Rate) to compare mortgages. This rate includes any fees and charges, so it’s the best representation of the overall cost of your loan.

When you apply for a mortgage, you’ll be able to choose from several different types of deals. Most lenders offer a range of options on their mortgages, including:

Fixed rate mortgages

With a fixed rate mortgage, your interest will stay the same each month, whatever happens to interest rates generally, until a set date. Many lenders offer fixed rates for two, three or five years, sometimes longer.

The benefit of a fixed-rate mortgage is that it helps you to budget more easily, because your interest rate will stay the same for the length of the deal.

There will almost always be early repayment charges if you switch away from the mortgage before the fixed rate period ends.

Tracker mortgages

With this type of mortgage, the interest rate tracks a rate that is outside the control of the lender, such as the Bank of England bank rate (also known as the base rate). Every time that rate goes up or down, so does the interest rate on your mortgage.

Naturally, you will be better off whenever the interest rate drops and your monthly payments will be less. But you should make sure your budget will allow you to make higher monthly payments if interest rates go up.

There will sometimes be early repayment charges if you switch away from the mortgage before the tracker deal period ends.

Standard variable rate

A standard variable rate mortgage (also known as an SVR or reversion rate mortgage) is a type of variable rate mortgage. The SVR is a lender's 'default' rate - without any limited-term deals or discounts attached.

When a fixed, tracker or discount mortgage deal comes to an end, you will usually be transferred automatically onto your lender's SVR

Discounted rate

With this type of mortgage your interest rate will vary with your lender's standard variable rate but you get a discount for a set period of time.

Tyrer & Hart Mortgages will help you consider all of your options and choose the right type of mortgage for your individual circumstances.

What if I only have a small deposit?

Dream of buying a home without using the bank of mum and dad?

The Government’s Help to Buy scheme now makes it possible to get a mortgage for a new or existing home with just a 5% deposit.

The Government has created the Help to Buy scheme to help hard-working people like you take steps to buy your own home. Whether you want to get onto the housing ladder or move up it, Help to Buy makes it possible to buy a new-build or existing home priced up to £600,000 with as little as a 5% deposit.

Tyrer and Hart Estates is supporting the Government’s new Help to Buy: equity loan scheme which launched on 1st April 2013. For more details speak to one of our mortgage advisers today on 0151 363 3471 or email info@tyrerandhart.com or go to the Government’s web site www.gov.uk/affordable-home-ownership-schemes/help-to-buy-equity-loans.

What is conveyancing?

Ensuring the sale of your property is completed quickly is vitally important, especially if a chain is involved. By utilising Tyrer & Hart’s conveyancing expertise, you can make sure that your sale goes through quickly, legally and effectively.

Conveyancing is the process of transferring legal ownership of your new home from the seller to you. Tyrer and Hart Estates can appoint a licensed conveyancer who will make sure that:

all the money goes to the right place at the right time
the contracts and other paperwork are in order
you know exactly what you’re buying – for example, who has rights of way over any land that comes with the property

There are usually two important dates: first when you exchange contracts, and then when you complete the purchase. Once the buyer and seller have exchanged contracts, you’re both committed to doing the deal at the price you’ve agreed. The period between these dates leaves some time to iron out any details, but it’s possible to exchange and complete on the same day.

What are my options for paying off my mortgage?

Tyrer and Hart Mortgage Advisers will be glad to look at all of your options and works out what is the best way for you to repay your mortgage.

Whichever type of mortgage you have, you need to repay the loan (the amount you borrow) and the interest charged by the lender. You’ll pay interest on the outstanding amount for the whole term of the mortgage, which could be anywhere between 1 and 40 years. If you choose a longer term, your monthly payments will be lower, but you’ll pay more interest overall.

You can make payments by Direct Debit, and most lenders will let you choose a mortgage payment date that suits you.

Early repayment charges

Some mortgages have what's known as an early repayment charge (ERC). This is a charge for paying off your mortgage before a certain date, for example by moving to another lender.

Tyrer and Hart Mortgage Advisers will be glad to look at all of your options and works out what is the best way for you to repay your mortgage.

When you take out a mortgage there are different ways you can pay it – repayment, interest-only, or a combination of the two. This guide below explains the differences between them and who they are suitable for.

Repayment Mortgage

The payments made each month to the lender consist of an element of capital and interest
Gradually the loan reduces as equity in the property is built up
The loan will be fully paid off by the end of the mortgage term providing monthly repayments are kept up
In the early years the payments will be mainly interest so if you want to repay the mortgage or move house, you will find that the amount you owe will not have gone down by very much

With this type of mortgage, you have the benefit of knowing your mortgage balance will get smaller every month and that if you keep up the repayments your mortgage will be repaid at the end of the term.

Just one thing to be aware of is that to start with your payments will be mainly interest, so if you want to repay the mortgage or move house in the early years, you'll find that the amount you owe won't have gone down by very much.

Interest Only Mortgage

The payments made each month to the lender consist of interest only
No capital repayments are made, and the mortgage loan does not reduced
It is your responsibility to ensure that an adequate repayment method is in place to repay the mortgage at the end of the mortgage term.

Most lenders will require that you have a repayment vehicle or strategy in place if you want to take out an interest-only mortgage. This may mean paying separately into an investment plan each month to build up enough money to pay off the capital at the end of the term.

In addition, some lenders may ask for a higher deposit than with repayment mortgages.

Unless you can meet all of these criteria it’s likely to be difficult to get an interest-only mortgage – with no repayment strategy in place you could end up without the means to repay your lender.

If you have a substantial deposit and are considering an interest-only mortgage you may want to get financial advice to work out the best repayment vehicle for you.

Tyrer and Hart Financial Planning can help you look at these options, please email fp@tyrerandhart.com to book an appointment.