Mortgages

Our mortgage advice is free, helpful and easy to understand. Our guides below can help answer questions such as How much can I borrow on a Mortgage? and How much does a Mortgage really cost? amongst other questions.

What happens to my house on an IVA?

An IVA is usually seen as the last resort before bankruptcy and it comes with a lot of big changes and upheavals – one of which is your home. A mortgage...

Read this guide

Introduction to variable rate mortgages

In this second article in our beginner’s guide to mortgages we’re looking at variable rate mortgages, the alternative to the fixed rate repayment option. What...

Read this guide

A beginner’s guide to mortgages

If you are thinking about putting your first step onto the property ladder you will almost certainly be looking at getting a mortgage. So just what...

Read this guide

Why you should use your savings to get you out of debt

Most people at one time or another will borrow money from a bank or a building society, whether in the form...

Read this guide

Why you shouldn’t take out a payday loan if you want a mortgage

Payday loans are toxic when they are recorded on your credit record. On average, 85% of applicants who have had a payday loans on their credit history in the last 12 months were turned down by high street...

Read this guide

5 unforeseen costs of buying a house

When you are buying a house for the first time, or upgrading from an older house to a newer one, there are going to be large costs associated with...

Read this guide

What is an endowment mortgage?

An endowment mortgage is quite simply a form of interest only mortgage. This means you’re not making any repayments on the lump sum you’ve borrowed to finance your home, you’re simply repaying the interest that...

Read this guide

How much can I borrow on a mortgage?

If you’re first time buyer, looking to upgrade your current property or you’re thinking of investing in a buy-to-let opportunity, getting your mortgage calculations correct is a fundamental first step in the process. Once you’ve saved up...

Read this guide

Top tips for first time buyers

Purchasing your first property is an exciting time, however it can also be quite financially daunting. The world of mortgages, legal fees and deposits is...

Read this guide

Introduction to fixed rate mortgages

So, you’ve made the decision to buy your first property, but how do you know which is the best mortgage for your needs? In this new series, Money Saving Advice takes an in-depth look...

Read this guide

A simple and safe way to profit on your home

Many people take great pride in buying a house, and over the years making small improvements and embellishments to make it more comfortable. This could include some additions such as an extension...

Read this guide

What is the minimum credit score to buy a house?

The short answer is that there is no minimum. When you apply for a mortgage, the lender will assess you on several...

Read this guide

Can I remortgage my house with a bad credit score?

Remortgaging your home regularly is essential if you want to ensure that you get the best deal on your monthly repayments. Choosing the right...

Read this guide

Simple tips to help you get a mortgage

It’s no secret that getting a mortgage has become quite difficult in recent years, but there are of course things that you can do to make things easier for yourself. There’s no quick fix though, and you have to...

Read this guide

When’s the best time to get a mortgage?

The best time to apply for and take out a mortgage depends a lot on you and your personal circumstances and there is no easy formula that will help you to figure out the answer. Here are...

Read this guide

How can I get a mortgage with a low credit score?

That depends a lot on just how low your credit score is. There was a time when people with poor credit could get a mortgage without too much trouble and at the time...

Read this guide

Tips for taking the hassle out of househunting

Anyone who has ever been through a major move knows that, whether you’re purchasing a first home or moving into a larger one,...

Read this guide

How does my credit score affect my mortgage rate?

As you know, your credit score is an indicator of how good or bad your credit history is and, by extension, how high a risk you are for lenders. While you credit score is never look at in isolation,...

Read this guide

Is equity release a good alternative to downsizing?

If you are approaching retirement or already retired and wondering whether your amassed pension savings and other investments are going to provide you...

Read this guide

What credit score do I need for a mortgage?

For many people the first time they will ever look at their credit rating is when they first start looking for a mortgage – hopefully a few months ahead of...

Read this guide

Can I remortgage my house even though I now have bad credit?

Remortgaging your property is a good idea, as you can generally get a better deal and save yourself money if you move your mortgage every few years. You might worry that if you have bad credit you...

Read this guide

What credit score do I need to remortgage?

Remortgaging is something that you should do regularly to make sure you are always getting the best deal possible, but unfortunately it does require you...

Read this guide

What is the minimum credit score for a mortgage?

There is no minimum credit score, per se, to qualify for a mortgage, but you can certainly use a bit of common sense to estimate whether...

Read this guide

Why a starter home is obselete

The concept of a starter home is starting to become obsolete in today’s property market… and here’s why: Buyers have had to wait Instead of sinking their hard-earned cash into...

Read this guide

Quick tips for help you to choose a mortgage

Choosing a mortgage is one of the biggest decisions most of us will ever make in our life and we need to ensure that we can meet our necessary payments and that we will get a...

Read this guide

How to work out the true cost of a mortgage

Most people aiming to get on to the property ladder need to arrange a home loan or mortgage. As well as paying additional interest...

Read this guide

How to get a mortgage if you’re self-employed

Applying for any type of mortgage can be stressful, but for someone that’s self employed, applying for a mortgage can be frustrating, stressful and often requires a lot...

Read this guide

Saving Money On Your Mortgage

Getting a mortgage is a pretty simple idea, it’s just a loan really; you borrow some money and you pay it back in monthly payments. But mortgages are perhaps one of the most complicated types of credit available – there are different types, different rates and various fees and conditions.

On top of that, your rates can vary, you will probably re finance your mortgage every few years and all in all you will probably pay back about twice as much as you originally borrowed. So even though the idea is simple, mortgages are certainly not.

This section of the site will attempt to make your life a little easier though, we will discuss the various different types of mortgage available, whether you are a first time buyer, landlord or just looking to re mortgage and get the best rate.

A mortgage is actually very good value, it is the cheapest form of credit you are ever likely to get. But since you are borrowing such a large amount of money you will still find that the repayments are large and the interest you incur is dizzying.

In the first couple of years your monthly repayment amount will be 90%+ interest. That means if you are paying £500 a month, less than £50 of that will go towards paying off your loan amount. This is why over paying on your mortgage can save you so much money in the long run.

Loan To Value

Another nuance of mortgages is the critical LTV or loan to value ratio. In other words how much of the value of your house are you borrowing? A few years ago you could get 110% LTV mortgages, which basically meant that you would borrow £110,000 to buy a £100,000 house – leaving another £10,000 to spend on fees, repairs, holidays etc…

Needless to say, since the credit crunch this doesn’t happen any more, and now the biggest loan you are likely to get is 90% or 95% if you have very good credit (more on that in a minute).

The lower the LTV ratio is the lower the risk to the bank: If you default they will want to take your house and sell it to recoup the debt, so the higher the value of the home compared to the debt, the easier it is for them to recoup their losses. All of which means that the bigger your deposit the better the rate you’ll get.

Credit Ratings

Now back on the topic of credit, it is important to note that when the credit crunch happened, a lot of people with those risky 110% LTV mortgages defaulted and the banks found that they had to write off a whole load of debt that they couldn’t recoup.

As a result the banks are pretty risk averse right now because they don’t want to make the same mistakes again. Many would argue that they have gone back the other way and they are being too risk averse… But either way the fact remains that getting a mortgage is pretty tricky right now.

Unfortunately first time buyers are the ones who are having the hardest time because they generally have a smaller deposit, a smaller income and less of a track record. Let’s face it, if you have never had a mortgage your biggest loan ever might only have been for £5,000 and now you want to borrow 20 times that amount!

How To Get The Best Mortgage Deal

Well we’ll be covering the specifics in the individual articles within this section, but the moral of the story so far is that you need to prepare in advance. You need to start thinking about your mortgage at least 6 months before you apply for it and ideally a year in advance.

The more you have going for you the better the deal you are likely to get. That means that you need to get saving to increase your deposit and decrease your LTV ratio, you need to maximise your income (or just wait until you have had that income for long enough), you need to make sure your credit score is as good as it can be and that you don’t have any bad credit affecting your applications.

Other than that, shopping around and just being aware of what you owe and how your mortgage works will put you in a better position to be able to save money and maybe get mortgage free a little bit sooner.