Services


Purchase
Purchasing a home is recognised as an exceptionally stressful time and using a mortgage broker not only to establish the most suitable source for the mortgage, but also to guide you through that part of the transaction, will remove much of the stress.

Income
Income is usually calculated as annual salary, plus a proportion of additional earnings, less the yearly cost of any bank loans/HP/maintenance payments/etc. Generally, an income multiplier of 3.5 times is available, although this may be stretched to in excess of 4 times. For joint applications, once times the secondary income will be added to this, or up to 2.75 times the joint incomes, although a joint income multiplier in excess of 3 may be achievable. These figures are guidelines, with more and more lenders now looking at “ability to repay” rather than relying on mathematical multipliers. Self-employed applicants will normally have to produce at least two years’ financial accounts, although this requirement may be waived in certain circumstances.

Deposit
Typically the rate of interest may be affected by the amount of cash (deposit) an applicant is able to put into the purchase. Most attractive rates are on loan to value ratios up to 75%, with a further band for loans in excess of 90%. Higher Lending Charge is often payable on loans in excess of 90%, although the cost can be added to the mortgage.

Property
All lenders will instruct a surveyor of their choice to inspect and place a value upon the property. The applicant pays the cost of this, although some mortgage products include a refund of this fee or even a free valuation. Surveyors are invariably members of the Royal Institute of Chartered Surveyors (RICS).

All mortgages are based upon the purchase price or valuation, whichever is the lower. The valuer will bring to the lender’s attention any major defects in the property. Items such as structural defects, dampness etc. may result in the lender making an offer of mortgage subject to repairs being carried out prior to the loan being released, or subject to the cost of repairs being withheld until the defect is rectified, or indeed, the lender may refuse to lend at all. Minor defects may be drawn to the attention of the applicant but should not affect the mortgage.

The lender can arrange either a basic valuation, a more detailed Homebuyers Report, or a Full Structural Survey.

Re-mortgage
Lenders sometimes do not offer existing borrowers such competitive terms as those used to attract new business, therefore, if there is sufficient equity in the property, there may be substantial benefits in moving the loan to a new lender. This is known as re-mortgaging. It is particularly worthwhile if the current loan is on the lender's standard variable rate or about to be transferred to such on expiry of a discounted or fixed rate product. Care should be taken to ensure there are no early repayment charges (ERC) attached to the current mortgage, although even if so, a re-mortgage may still be cost effective.

At this time a re-assessment of needs may be carried out. Perhaps to borrow an additional amount for home improvements, to change the type of repayment vehicle, or to extend or reduce the term of the mortgage.

Re-mortgaging is now even more attractive as many lenders will meet most, if not all the costs of the transfer.

Buy-to-let Mortgages
Recently the purchase of residential property to let has become a popular form of investment. The return on both capital invested and rental income has been very attractive. Lenders not usually associated with commercial finance, have moved into this market with specific buy to let products, offering rates of interest close to those for owner-occupied mortgages.

The maximum mortgage loan as a percentage of the property value is usually 75%, although occasionally this may be increased to 85%. The amount that may be borrowed is usually based upon a formula, which includes gross rental income and mortgage interest costs. Some sources will take personal income and existing mortgage debt into the calculation.

The lender will also undertake the inspection and valuation of the property. It is also possible to raise a single loan for a portfolio of properties. As properties are not assessed individually, the sale & purchase of stock is easily dealt with.

The FSA do not regulate Commercial and Buy-To-Let Mortgages.

Practice Finance
Surgery purchase or practice buy-in can be arranged at rates appreciably below that of normal commercial transactions. Usually at 1% over Bank of England Base Rate for GP’s and 1.5%/2.0% for dental surgeons, often with other "add-ons".

The FSA do not regulate Commercial and Buy-To-Let Mortgages.

Commercial Mortgages
Lenders will usually limit commercial mortgage to a loan to value ratio of 70%/75%, although under certain cicumstances, 100% can be achieved.

The percentage loan, the type of security being offered and the financial standing of the applicant’s business will determine the rate of interest.

Davidson Deem’s involvement will ensure the rate of interest and conditions attached to the loan are as competitive as possible.

The FSA do not regulate Commercial and Buy-To-Let Mortgages.  

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