Mortgages FAQs

How much can I borrow?

To work out how much we can lend to you, we first need to assess your income and expenditure. This will be done during your initial enquiry call with one of our enquiry team. The maximum you can borrow can depend upon your circumstances and the choice of mortgage product.

What income can be used?

We recognise that income can come from a variety of sources and therefore calculating the amount that can be borrower may be complicated. Our decisions are made by real people who can take many different income types into account. Our enquiry team will let you know how much you can borrow, just give us call - there’s no obligation.

Do you have any location restrictions?

We can lend across England & Wales however some of our products may be restricted by postcode. Check the individual product pages for details. We do not lend in Scotland or Northern Ireland.

What age do I need to be before I can apply for a mortgage?

You need to be at least 18 years old to be able to apply for a mortgage.

When is the best time to apply for a mortgage to buy a home?

When you’re ready to start viewing properties it is a good idea for you to get a decision in principle from one of our enquiry team.  This will give you an idea of how much you can borrow. Estate agents may also require this before you view properties.

How long does the mortgage process take?

From the first mortgage appointment to the generation of an offer, the timescales can vary. This can depend upon the complexity of the application or maybe a change of property during the process. On average it takes 2 working days for an adviser to complete your application, 8 working days for an underwriter to review your case and provide an offer.

How long will it be before a valuation is instructed?

Our underwriters will only instruct a valuation after they have agreed your application in principle. You can request a valuation to be done sooner than this however you will be doing so at your own financial risk.

What is a deposit?

The price of a property is financed by the deposit and the mortgage. The deposit (typically at least 5% of the price) is the buyer’s contribution towards the purchase. 

Do you accept a gifted deposit?

We recognise that many first-time buyers need help from parents or close relatives so gifted deposits are accepted. We also have products which use parental support without them gifting any money - instead they simply deposit it with us as additional security. This effectively allows up to 100% of the property price to be borrowed – please see our Head Start mortgage for detailed information.

What is the LTV?

LTV stands for Loan to Value. This is the percentage of the loan against the total value of the property. E.g. If you are purchasing a property worth £200,000 and have a deposit of £20,000 then you need to borrow £180,000. This is an LTV of 90%.

What are early repayment charges?

Many mortgage products have charges for early repayment during the initial fixed or discounted period. If, during this time, you repay your mortgage or make a large capital repayment, a charge may apply.  Your adviser will discuss your future plans to ensure any product we recommend is suitable for your circumstances and to help avoid you paying any unnecessary charges.

What are overpayments?

An overpayment is any amount above your normal monthly mortgage repayment. Our products typically allow you to make overpayments up to a limit (typically 10% of the capital balance each year). If you exceed this you may need to pay an early repayment charge.

What is the SVR?

The SVR is our Standard Variable Rate of interest. We can increase or decrease the SVR, normally in response to a Bank of England Base Rate change. We would always let you know in advance if we were going to do so.

Our discount mortgage products are linked to the SVR by having a set discount from it for a fixed period of time. After this period the discount ends and the SVR becomes the interest rate applied to the loan - unless you select a new product with us.

What is a fixed rate?

A fixed rate has a rate of interest that will not change up to a specified date, often 2, 3 or 5 years in the future. This means that the rate is unaffected by any increase or decrease in our Standard Variable Rate (SVR), however at the end of the fixed rate period the interest rate would switch to the SVR at that time unless you select a new product with us.

What is a discount variable rate?

A discount rate mortgage has an interest rate that includes a discount from our Standard Variable Rate (SVR) for a set period of years. For example, if our SVR rate is 7.50% and you choose a product with a discount of 2.50%, you will be paying an interest rate of 5.00%. If our SVR were to increase or decrease, the rate of interest you pay would move accordingly and still be 2.50% below the new SVR. 

What is an interest rate floor?

Some variable rate mortgage products have an interest rate ‘floor’. This means that if interest rates fell significantly, there may be a point where your rate meets the ‘floor’. Should interest rates fall any further than this, your rate would remain at the ‘floor’ level and would not drop below it.

What is a 'capital & interest' repayment type?

Also called a ‘repayment mortgage’, this is the most common repayment method where your monthly payment covers the interest plus an additional amount which reduces the amount that you owe. Providing you keep up with the monthly payments, you will fully repay the mortgage loan at the end of the mortgage term.

What is an 'interest-only' repayment type?

This method of repayment allows you to pay just the interest on the loan each month. This means that your monthly repayments are less when compared to capital and interest repayment, however the amount that you owe does not reduce. At the end of the mortgage term, you need to repay the borrowed amount in full. 

What is a representative example?

A representative example is used to show the typical costs of a product for an average Vernon mortgage of that type. It is purely to illustrate potential costs as the actual costs depend on your individual circumstances.

What is a product fee?

Product fees applies to some of our products and are clearly displayed on the individual product sheets. This fee can be paid on, or before, completion of the mortgage or in most cases, it is possible to add it to the mortgage balance and repaid as part of your monthly payments. If you do add a fee to the loan this will result in interest being charged on it making the amount payable greater over the term of the mortgage.

What is stamp duty?

Stamp duty is a tax that is payable by anyone purchasing a property over a certain value. The amount you pay is dependent on several factors and can be calculated on the Government website. This fee is dealt with by the solicitor on completion of the house purchase.

What is portability?

This feature allows you to transfer your mortgage product to a new property should you move house. This avoids early repayment charges if you’re in the middle of a fixed or discounted period and ensures your interest rate terms are unchanged. If you need to borrow more money, you can ‘top up’ from our range of products at that time – subject to acceptance.

What is a Decision in Principle?

A Decision in Principle (DIP) is an early indication of how much we may be able to lend you for a mortgage. It’s free to get a DIP, there is no obligation to follow through and will not affect your credit score. It’s common to need a DIP in place before an estate agent will submit your offer to a seller.

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