Mortgages

Affinity Mortgage Solutions

At Laurence Tremayne Estate Agents we pride ourselves on the personal touch and making the customer experience as smooth as possible. By partnering with a local mortgage broker we saw the opportunity to make the customers journey easier.

We chose Affinity Mortgage Solutions who are a local, family run business who have been in business for over 10 years. They offer a personal face to face service and treat their customers how they would like to be treated.

Affinity Mortgage Solutions are an independent mortgage broker which means that their advice is always based on your needs and particular requirements. Their relationship with their clients is rarely a one off service; it is an on-going relationship to ensure that the products they arrange still suit your ever changing circumstances. New products emerge all the time and existing ones change constantly it is therefore important that they meet regularly with you to review your situation.

When you’re looking at your financial situation you want to know the advice you receive is well informed up to date and unbiased. Affinity Mortgage Solutions will spend time with you to discuss your objectives and plans for the future.

Affinity Mortgage Solutions believe in offering as flexible service as possible by seeing you either in your own home, in the office, weekdays, evenings and weekends, over the telephone and via email. Additionally, for added convenience, Affinity is based in the office above our Daventry branch.

Laurence Tremayne Estate Agents is an introducer to Affinity Mortgage Solutions Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority.

How much does it cost to use Affinity Mortgage Solutions?

Our fees and charges vary depending on the Services we provide to you. We charge a fee of up to £500 payable upon Completion. Our typical fee is £200. We will also be paid commission from the lender. 

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

How do I find out how much I can borrow?

To determine how much money that can be lent to you, the lender will need certain information, such as:

• Recent payslips

• Your last P60 tax certificate

• Details of all regular outgoing payments

• Trading accounts for the previous three years if you are self-employed

Your credit history is a factor, as is whether you are applying on your own or making a joint mortgage application.

Typically, you will be able to borrow somewhere between three and four times your gross annual salary (staff bonuses and other income may also be taken into consideration.) It is worth noting that the upper limit of available mortgage amount will only to those with a fantastic credit history and a proven track record of financial responsibility.

Additionally, interest rates do change, as does your personal circumstances and what you can afford to repay now may not be what you can afford in a year’s time so you may want to give that some thought.

The Two Basic Types of Mortgage

There are essentially two ways to repay the money that you are borrowing (formally known as the capital): Repayment Mortgages (capital and interest) and Interest-only mortgages.

Repayment Mortgages

The only way to guarantee that you own your property at the end of the mortgage term is to have a repayment mortgage! Every time you make a monthly payment on a repayment mortgage, you reduce both the loan and the interest until the debt is completely paid off.

Negatives: For the first few years you’ll mostly repay interest. This means that if you transfer to a new mortgage in the first few years, it is unlikely that you will have paid off much of the capital.

Positives: As the years pass, you’ll begin to notice that your monthly payments are making a difference to the capital debt and your mortgage will slowly shrink. Additionally, many lenders now allow you to make overpayments or lump sum payments which may help shorten the term of your mortgage or lower your monthly repayment

Interest-Only Mortgages

With an interest-only mortgage, your monthly payments cover just the interest on the loan for the term of the mortgage, for example; during a term of 20 years, if you borrow £150,000 in 2013 you will still owe £150,000 in 2033.

The lender will require that you also pay a monthly amount into an investment fund with the expectation that it will cover the capital loan when it reaches the end of the mortgage term.

The most important thing to be aware of with investment funds is that it may depend on the economic climate which means that you may they have the potential to either under-perform or over-perform, depending on the economic climate.

For example, if saving rates have been good during your mortgage term, you may end up with enough to pay off your mortgage debt and have money left over that you can take as a cash lump sum. However, if you’re unlucky and savings rates haven’t been good, you may end up with a shortfall and you will be liable to make up the difference.

Why should I use a mortgage broker?

Although, there are two basic types of mortgages, there are others that are available which might be more suitable for your needs. A broker can assess your financial situation and provide the best mortgage deal for you.

Examples of other mortgages:

• Combined Mortgages

• Standard Variable Rate (SVR) Mortgages

• Fixed Rate Mortgages

• Capped Rate Mortgages

• Discount Rate Mortgages

• Tracker Rate Mortgages

• Flexible Mortgages

LTVs, Deposits and the Credit Crunch

In general, the larger the deposit, the better the mortgage deal. Also, in today’s post credit crunch world, you may be expected to accompany your mortgage application with a larger deposit than you would have just a couple of years ago.

Before the credit crunch, lenders were giving out high loan-to-value (LTV) mortgages – loans of, say, 90% or more of the value of a home.

The global economic meltdown has forced banks and building societies to get tough on lending. This was bad news for cash-strapped first-time buyers, as their key to getting on the property ladder; the high LTV mortgage was the first to disappear.

What is a “Mortgage Agreement in Principle”?

At the initial stage of looking for a mortgage without a home to buy you can obtain a ‘mortgage agreement in principle’. This is not a solid commitment from a mortgage lender but a provisional ‘OK’ – it lets estate agents and sellers know that you’re serious about buying. An Agreement in Principle can only be completed for a customer once a full fact find has been completed and a recommendation made.

First-time buyer incentives include:

For first time buyers, there are usually some good incentives but it is important to look at whether they do provide you with the best available deal. A mortgage broker can help with this.

Below are some of the most common incentives that are available:

• First-time buyer discounted rate mortgages – these will have a preferential discount rate for a fixed length of time. This could be a low fixed rate or a generous discount off the lender’s standard variable rate (SVR) or the Bank of England Base Rate. Discount periods typically last between two and five years.

• Cashback – some deals give you a cash payout upon completion of the mortgage (either a fixed amount or a percentage of the loan). This can be particularly attractive to first-time buyers as the give you cash when money is likely to be tightest.

• Free legal fees – some mortgage deals pay for the solicitor fees.

• Free/refund valuation – A lender will value a property before lending money on it. Free valuations are free to the borrower, i.e. the lender will cover the cost for you. A refund valuation requires payment up-front from the borrower, with a full refund upon completion. But if the buyer later decides not to proceed, the valuation fee will not be refunded. A free or refunded valuation will save you around £300.

• Flexibility – a bank or building society may tempt you with the flexibility to make overpayments or lump sum payments when your wallet is bulging, or allow you to make an underpayment or take a ‘payment holiday’ at times when money’s tight.

Life Insurance/Life Assurance

Whilst it is a slightly depressing thought, many lenders require that you take out life insurance as a condition to the mortgage. Life insurance guarantees a lump sum payout in the event of the borrower’s death, and any debt outstanding on the mortgage is then repaid from this.

To make the world of finance that little bit clearer, call Affinity Mortgage Solutions on 01327 706635