Mortgage

Let's face it: not all of us are cash buyers who have just one problem - 'where to invest'. The majority are concerned with 'where to get the money to invest'. One of the answers could be 'MORTGAGE'.

For most people a mortgage will be the largest financial commitment of their lives, especially for first time buyers. We understand that it is time when lenders asking for bigger and bigger deposits from first-time buyers, global financial crisis has left them extremely cautious about taking on new, untested creditors. Despite homes becoming more affordable, it is becoming more difficult to get on the property ladder. But difficult doesn't mean impossible. So, if you're thinking about taking out a mortgage you should make sure you look into all the different options available, it will help you to get the right mortgage first time.

Our company are proud to have independent mortgage advisors as a partners who can choose from over 120 lenders and over 8500 rates. With this variety it is hard to summarise mortgages within a paragraph. Please contact us on how you could save 1000's of pounds on residential and commercial finance.

At DOM UK Properties we like to keep our clients as much informed as possible. Please read some useful information below to understand the process of Mortgage.

Agreement or Decision in Principle

At an initial meeting our mortgage advisor will give you an Initial Disclosure Document that will confirm our status as a firm regulated by the Financial Services Authority to give mortgage advice. You will provide us with all your financial and personal information that will enable us to recommend the most appropriate mortgage to meet your individual requirements. You will not need to bring any documentary evidence with you at this stage. At this meeting we will tell you about the different types of mortgage available, how much you can borrow, what are the monthly costs both now and in the future. You will also be informed of the period you are tied to the lender and any penalties for breaking those ties. You will also be given a breakdown of all the costs associated with obtaining a mortgage.

If you are happy to take it to the next stage, it is a very good idea at this first meeting to then obtain from the lender an Agreement in Principle, AIP or a Decision in Principle, DIP to determine whether the lender is happy to lend and give you the amount of loan you are seeking. You will then have the confidence to go and find your new home and be able to prove to any doubting estate agent that you already have the mortgage agreed in principle. This is especially important where you are competing with others for the same property.

Full Mortgage Application

Having made an offer and had it accepted you are now in a position to arrange the mortgage. Our advisor will then convert the AIP or DIP into a full application before sending to the lender. You will need to provide at this meeting the following documents; last 3 months payslips and P60 or 3 years accounts if self employed; 3 month personal bank statements; proof of identity usually a passport or driving license; proof of current address, usually a utility bill or bank/credit card statement; proof of deposit; and also a cheque book or credit/debit card to pay for the valuation.

Our advisor will then send the mortgage application either electronically or as a paper application. When it is received by the lender it will be loaded on to their computer systems, given a reference number and then be appraised by an underwriter. If they are happy with the paperwork received they will issue instructions to their valuer to value/survey the property. If they require additional information they will ask us to obtain this from you.

Mortgage Offer

When the lender has received the valuation and they have all the documents from you that they need, they will produce a mortgage offer detailing the terms and conditions under which they are prepared to lend. A copy of this offer will be sent to you, ourselves and your solicitor who will be doing all the legal work associated with the purchase of the property. Once all the legal work has been carried out you will be in a position to exchange contracts.

It is advisable to find a good Legal Conveyancer (it could be useful to find out more about conveyancing) whilst you are looking for a property so that you are in a position to give the estate agent their name once your offer is accepted. The solicitor should give you a breakdown of their costs and if you contact more than one you can compare their charges. DOM UK Properties will be happy to suggest some names of experienced solicitors at your request

Exchange of contracts and Completion

You will be asked to pay your deposit on exchange of contract and this will usually be 10% of the purchase price unless you are only putting down 5% or indeed no deposit at all e.g. 100% loan. At present there are no 100% mortgages. A completion date will follow when you have the legal write to access to your new home. If you are part of a chain involving a number of properties, the completion date will be one that you will all have to agree on.

Repayment mortgage

This is a mortgage in which the capital borrowed is repaid gradually over the period of the loan. The capital is paid in monthly instalments together with an amount of interest. The amount of capital which is repaid gradually increases over the years while the amount of interest goes down.

Interest only mortgage

With this type of mortgage, you pay interest on the loan in monthly instalments to the lender. Instead of repaying the loan each month, you pay into a long-term investment or savings plan which should grow enough to clear the loan at the end of the mortgage term. However, if it doesn't grow as planned, you will have a shortfall and you will need to think about ways of making this up.

There are three main types of interest-only mortgages. These are:

• an endowment mortgage. This mortgage is made up of two parts - the loan from the lender and an endowment policy taken out with an insurance company. You pay interest on the loan in monthly instalments to the lender but do not actually pay off any of the loan. The endowment policy is paid monthly to an insurance company. At the end of the mortgage term, the policy matures and produces a lump sum which should pay off the loan to the lender. In some circumstances, an endowment policy may produce an additional lump sum. However, there is also a risk that it will not be worth enough to pay off the loan at the end of the mortgage term. If you have been told by your endowment provider that your policy will not be enough to pay off your loan, you should seek independent financial advice. You can get information about dealing with endowment policies from the Financial Services Authority (FSA) at www.moneymadeclear.fsa.gov.uk
• a pension mortgage. This mortgage is mainly for self-employed people. The monthly payments are made up of interest payments on the loan and contributions to a pension scheme. When the borrower retires, there is a lump sum to pay off the loan and a pension
• an ISA mortgage. With an ISA mortgage, you pay interest to the lender, and contributions to an Individual Savings Account (ISA) which should pay off the loan.

Islamic mortgage

With an Islamic mortgage, none of the monthly payments includes interest. Instead, the lender makes a charge for lending you the capital to buy your property which can be recovered in one of a number of different ways, for example, by charging you rent.