Think of a mortgage as a home loan; a way to get your feet on the property ladder - the first step on the way to getting out of renting, or living with parents and getting a home of your own. Let’s look at a couple of basics.
Basically a mortgage is a loan used to buy a home. And the home becomes the security for the mortgage loan. A bank agrees to lend you money to buy, build or renovate a home and you agree to repay it.
When you apply for a mortgage with us we’ll give you what’s called an Approval in Principle. This shows how much we’re able to lend you based on the information you’ve given us. Of course, this isn’t a loan yet, but the figure we give you lasts for 12 months so you can go house hunting confident of what you can afford.
With our mortgage calculator it’s easy to find out how much you could borrow.
There’s also rates to consider. We’ve competitive fixed and variable rates, but what do these mean?
Fixed Rate or Variable Rate?
You can chose between a fixed interest rate, a variable one or a combination of both.
A fixed rate mortgage has a rate of interest which doesn’t change for a set period of time, so you know exactly how much you pay every month. A fixed rate makes it easier to budget for payments.
But remember it’s fixed for a certain time like three, five or seven years and if you change it before the end, we may charge you a fee.
A variable rate mortgage has a rate of interest which can change, for example, if we change our rates. We will always tell you in advance if it is going to go up or down and how your monthly repayment amount will change as a result.
So you have approval in principle, what’s next?
You go house hunting, find a home, make an offer and hopefully it goes sale agreed. When that happens let us know and we’ll guide you through the next stage. That includes things like getting the home valued by one of our valuers, getting it insured, telling us who your solicitor is, getting a mortgage protection policy in place and so on. It sounds daunting but we’ll help you through it all.
When everything’s done we’ll send you a contract – what we call a letter of offer - to sign. Your solicitor will also get a copy and they’ll take you through it before you sign it and they send it back to us.