Buying a property is an expensive exercise no matter how much your home is.

A mortgage is only one of the expenses you are likely to incur.  Before you own your property there are a number of other one-off charge and fees you may have to pay.  It's important to include these within your budget before searching for your next home.

These extra costs would include:

• Deposit for your property
• Valuation fee
• Mortgage – Lender arrangement / booking fee
• Legal Costs
• Stamp Duty
• Removal costs

Is it better to put a bigger deposit down on a property?

The larger the amount you can put down as a deposit, the greater the choice of mortgage. A bigger deposit will make things easier in terms of affordability, as it will mean smaller monthly mortgage payments. 

Lenders typically work out how big a mortgage they are prepared to offer you based on a multiple of your income as they need to be certain you will be able to keep up with your monthly mortgage payments. They will consider your outgoings and any other debts you may have. 

For example, if you earn £30,000 a year, they may agree to lend you three or four times your income, so from around £90,000 up to £120,000. If you wish to buy a property costing £135,000, you need to save a deposit of at least £15,000 to be in with a chance of securing it.

Do I have to pay Stamp Duty Land Tax when purchasing a property?

Depending on the purchase price of your property - Yes you will have to pay Stamp Duty.  

The amount charged is based on the price of the property and where it is in the UK.  

There is usually a minimum threshold or value of a property which will not attract Stamp Duty at all.  These thresholds are reviewed within the Governments budget but changes in the economy such as the Covid-19 pandemic can also lead to adjustments or holidays to the rates that apply.

You should check what Stamp Duty is payable online before entering into a purchase

These rates also apply to anyone who purchases a second property which is not their main residence. This does include holiday lets and buying a property for children if the parents keep their names on the title deeds. 

Stamp duty must be paid within 14 days of the completion of the property purchase, although this is normally paid by the solicitor on completion. The amount of stamp duty that is paid is deductible from any capital gains you might make when the property is sold. 

What if I have adverse credit?

This doesn’t necessarily mean you cannot apply for a mortgage but it could have a bearing on which lenders we are able to place you with and the rates they can offer you.  It may be that we cannot place you yet but in working together we can plan when you would be successful with a mortgage application.

Will I be able to have a mortgage with a gifted deposit?

If you choose to buy a home using a gifted deposit the lender may require confirmation that the person gifting the money is aware that they will not have any claim to the property, and that they do not expect their money back.

What is APRC?

The term APRC Stands for Annual Percentage Rate of Charge.

It is important to understand the different rates quoted so you can establish how much a deal is going to cost you.  The APRC shows how much your mortgage will cost you each year on the assumption you keep it for its full term.

How are joint mortgages calculated?

Lenders will consider your combined incomes to help them decide what is affordable for you to borrow. For example, they may offer you a mortgage equivalent to four times your combined income. Therefore, if you are earning £25,000 a year, and the person you are buying with earns £35,000 a year, your combined salaries add up to £60,000. If the lender you are applying to makes their calculations based on a figure four times your salaries, you may be able to have a joint mortgage for £240,000. 

Lender will also consider all your monthly outgoings, including any other debts you may have, and how much you spend on things like holidays and going out. They will also want to see your credit reports to determine whether you have both managed debts responsibly in the past. 

Whose credit score is used when applying for a joint mortgage?

The lender will consider both of your credit scores when you apply for a mortgage jointly. 

If one of you has a high credit score, it can benefit the other person, particularly if their score is lower. 

Joint mortgages and separation/divorce

If you have taken out a joint mortgage with a partner and you decide to separate or divorce, there are numerous options available to you. 

These include selling the property and both of you moving out, arranging for one of you to buy the other out, or not changing who owns the property but one of you moving out instead. It can be a complicated process with joint mortgage separation, but it is beneficial to seek professional advice if you are splitting up.