Everyone will be able to answer the question ‘what is a mortgage?’. However, if you wish to be literal, a mortgage is actually a ‘charge on property’. In legal terms this means that you give a lender an interest in your property until a loan is repaid. However, in accepted use a mortgage is the actual loan taken to buy a property. This usually means freehold or leasehold property which is ‘permanent’ – e.g. not houseboats, pre-fabricated designs or static homes.
You can get a mortgage direct from a lender including banks, building societies and specialist mortgage lenders, or you can access these using a mortgage broker. Your mortgage broker will need to hold a professional qualification in mortgage advice – look for letters after their name including CeMAP and CertCii(MP).
Since April 2014 all mortgage arrangement has been conducted on an ‘advised only’ basis, with a few small exceptions. The industry Regulator is considering easing this requirement in come cases, but that will be some way off. A mortgage broker will advise and guide you and also make a specific recommendation. They will also have access to hundreds or thousands of different schemes.
Regulation of mortgages
Mortgage advice in the UK has been regulated since October 2004, although buy to let loans, second charge mortgages and loans on property which will have less than 40% residential use, are excluded from regulation. These loans do not therefore have the same regulatory protection as normal mortgages.
What do mortgage lenders need to know?
When considering the type of mortgage which is most suitable for you, your broker will need to know full details of your situation. Expect to be asked about your family situation, your income, employment details, debts, credit history (you may be asked to obtain a a copy of your credit file from a credit referencing agency), any existing mortgage details, savings and assets position and so on. You will also need to prove your address and identity. The more accurate the information you supply then the better the resulting advice.
We have pages available for further information about home mover mortgages, first time buyers, buying to rent out and other guidance on house buying and mortgages. Please see the list of topics on the right hand side of this page.
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