FAQ

General Question

We have put together a small selection of frequently asked questions for you.

Loan to value (LTV) is the ratio of mortgage to property value expressed as a percentage. For example, if you purchase a property at £500k with a £50k deposit (10%), you will need a 90% LTV mortgage.

Typically the lower the LTV the better the rate of interest a lender will offer because a high LTV mortgage represents more of a risk to the lender. In terms of LTV, most mortgage rates fall within the 60% to 95% range.

This depends on the lender, and the mortgage.

The majority of lenders allow you to make regular or lump sum overpayments of up to 10% per annum of the amount owed, without having to pay an early repayment charge. If the amount you overpay during the year exceeds 10% you will only be charged an early repayment charge on the proportion you overpay above 10%.

Some lenders offer greater allowances, e.g. Charge-free up to 20% or no early repayment charges at all. There are very few fixed-rate products without an exit penalty clause. The more flexible overpayment arrangements tend to be associated with variable interest rate loans.

Yes, if the product is ‘portable’. What actually happens is that you repay your existing mortgage when you sell and then resume it at the same rate of interest to purchase the new property. You have to re-apply and meet current affordability rules, and any changes to your circumstances could affect the decision to lend.

If you move to a more expensive property and need to borrow more, the extra amount will be in the form of a new mortgage; and that could mean another arrangement fee and differing product end dates.

Before committing to selling your property and buying a new one, you should look into whether you qualify to port your mortgage and whether that’s a better option for you than applying for a brand new mortgage (with all the fees that involves). Remember, just because you can doesn’t always mean you should.

Term policies, the most common type of life insurance, only pay out if you die within the duration agreed in the policy. For example, if you take out a term life policy for 25 years, your family can claim if you die during this 25-year period.

A critical illness plan is a policy that pays the insured a lump sum following the diagnosis of an illness covered under the plan. Critical-illness plans often cover diseases like cancer, organ transplant, heart attack, stroke, renal failure, and paralysis, among others.

Yes, you can get health insurance even if you have a pre-existing medical condition. But most policies restrict when they can pay out to treat pre-existing conditions.

A mortgage broker will have access to a wide range of lenders and will help you choose the most suitable mortgage for your situation.

It is our job to make the process as hassle-free as possible. We liaise with the lender and your solicitor, complete the paperwork, and are available to guide you through the specifics and answer any questions that arise.

Though the documents you need to show will depend on your individual circumstances, generally speaking, you need the following depending on whether you are employed or self-employed:

All

  • Passport
  • Proof of address, dated within the last three months (e.g. a posted bank/credit card statement, utility bill, annual council tax statement, driving licence, etc.)
  • Proof of deposit or gifted deposit letter (purchase application).

Employed

  • Most recent three months’ payslips + two years’ bonus/commission payslips (if applicable).
  • Most recent three months’ personal bank statements, showing salary, mortgage or rent, utilities, and direct debits.

Self-employed

  • Most recent two years’ HMRC tax calculations & tax year overviews; and/or
  • Most recent two years’ signed trading accounts (limited company).
  • Most recent three months’ personal & business bank statements, showing salary, mortgage or rent, utilities, and direct debits.

If you change lenders then there will be legal work that needs to be carried out in order to remove the legal charge of the existing lender and to register the new lender. Most lenders will either cover the cost of this if they appoint the solicitor or will offer you the option of selecting your own solicitor and they will give you cash back towards the cost.

Following a recent review, the government has announced plans to bring this timetable forward. The State Pension age would therefore increase to 68 between 2037 and 2039. The retirement age has risen in the past (in April 2020 it rose to 66 for men and women alike) and there are new rises planned. Under the current law, the State Pension age is due to increase to 68 between 2044 and 2046. 

This is the most common type of pension and is very often a workplace pension provided by your employer. When you reach your chosen retirement age, the size of your pension pot will depend on how much you, and your employer where applicable, have paid in, how the funds in which your pension savings have been invested have performed, and the tax relief your employer has added to your pot on your behalf.

Also known as final salary schemes, defined-benefits pensions are workplace pensions that provide you with an income for life after you retire. How much pension income you will get is based on how many years you worked for your employer and your salary.

Have Any Question?

If you have a question that you think the team at Market Wide could help with don’t hesitate to get in touch. 

 

Market Wide is a trading style of The Partnership (Southampton) Ltd which is an appointed representative of Quilter Financial Services Limited and Quilter Mortgage Planning Limited, which are authorised and regulated by the Financial Conduct Authority. Quilter Financial Services Limited and Quilter Mortgage Planning Limited are entered on the FCA register (https://register.fca.org.uk/s/) under reference 440703 and 440718.

The guidance and/or information contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.

The Partnership (Southampton) Ltd is registered in England and Wales, No: 04339531. Registered Address: Unit 1 Northam Business Centre, Princes Street, Southampton, Hampshire, SO14 5RP.

 

 

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