Our Mortgage Service - helping you make the right decision
The essence of the Fair Mortgages service is professional independent mortgage and protection advice brought to you by a team of specialist advisers and experienced administration support.
As your mortgage is such an important transaction, good advice is imperative.
Our independent mortgage broker service provides:
- FREE initial mortgage consultation
- Access to exclusive mortgage deals not available on the high street
- A dedicated mortgage adviser and case handler to deal with your mortgage from enquiry to completion
"Our mortgage team is committed to providing you with an excellent mortgage service". Adam Arnott, Head of Mortgages & Protection.
If you’re looking at different £250,000 mortgages, it is important to shop around different providers. This is because, as with any size mortgage, you need to consider the different term lengths and interest rates available, as this will affect the cost of your mortgage repayments. You also need to consider other relevant charges such as any arrangement fees.
Getting a mortgage
The exact size of the mortgage that would be available to an individual, couple or group will depend on their specific financial factors such as: how large of a deposit they have, their income, the type of mortgage they are interested in and their credit history.
Borrowers are required to put down a deposit on a mortgage. The ratio between the size of the deposit and the amount borrowed is referred to as the ‘Loan to Value’ (LTV) of a mortgage.
There are different bands of LTV mortgage, and generally speaking the lower the size of the loan compared to the deposit, the lower the interest rates are. For example, if an individual wished to purchase a house with a market value of £250,000 using a 90% LTV mortgage, they would need to put down a 10% deposit on the house. Meaning they would have paid £25,000 towards the property and have a 10% equity share.
Generally speaking residential mortgages are available up to a maximum LTV of 95%, whereas buy to let mortgages tend to require at least 25%. However, it may be possible to get a mortgage with a smaller deposit from some providers.
Lenders will assess the affordability of their potential borrowers to assess if they can afford the mortgage. To do this they will assess the combined income of all of the applicants on the mortgage, but also consider things such as their outgoings, existing credit commitments and their credit history. They will also carry out a ‘stress test’ to assess if an applicant could still afford their mortgage payment in the event the rates were to rise in the future.
Types of mortgage
When looking at £250000 mortgages it may be wise to first decide whether a repayment or interest-only mortgage would be more suitable for specific borrowing needs:
- Repayment: As the name would suggest, with this kind of mortgage the borrower’s monthly mortgage payment also repays an amount of the capital borrowed in addition to the interest accumulation. This means that by the end of the mortgage’s full-term the borrower will have completely repaid the mortgage.
- Interest-Only: With this kind of mortgage, the monthly payment only covers the interest that accrues on the loan. This means that at the end of the mortgage the borrower is required to repay the original amount borrowed in full. As such lenders usually have more rigorious requirements for their interest-only products, such as requiring applicants to have higher incomes than would be necessary with a repayment mortgage, and to also show them with a detailed savings or investment plan for how they intend to raise the necessary repayment capital over the course of the mortgage. The plan must be well thought through, simply stating they intend to sell the property, and rely on the increase in its value over time will not usually be sufficient.
Using the services of an independent mortgage adviser may be beneficial to potential borrowers. Advisers that offer a whole-of-market service can use their professional knowledge of the industry to search across a range of providers, and find the most suitable products for their clients and give them impartial advice.
To find out if Fair Mortgages could help you, you can fill in the online contact form or call us.