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Questions to ask your Financial Advisor

Getting a mortgage can be daunting. Whether you’re a first time buyer, you haven’t bought a property in a while or even if you’ve gone through the process quite recently, it’s not something most of us do regularly and you’re bound to have some questions.

So we’ve come up with some questions that you should be asking your Independent Financial Advisor (IFA) to ensure you’re getting the best rates, and to make sure you understand the whole range of mortgages available to you.

Are you an independent advisor?

-        IFA’s have access to the entire mortgage market place and tend to have preferential and exclusive rates. They also work with a lot more lenders, so not speaking with an IFA could mean you miss out on your ideal mortgage.

What does your service involve?

-        Ask your IFA how involved they will be throughout the whole house buying process. Will they just be arranging the mortgage, or do they offer a ‘hold your hand’ service from beginning to end?

What can I afford?          

-        This may seem like an obvious question, but it is probably the most important!

What repayment methods are available to me?

-        Make sure you’re told about capital and interest mortgages and interest only mortgages, as well as the different repayment methods such as endowment policies, PEP's, ISA's and pension mortgages. For a breakdown of which mortgages are best, download our Guide to Buying a Home

What is the interest rate that I will be charged and for how long does this rate apply?

-        Ensure you know how long the initial interest rate will apply. Some mortgages offer an initial introduction rate and then a higher rate for the remainder of the mortgage term, don’t be caught out by an attractive introductory rate!

When will my monthly repayments increase?

-        If you do receive an introductory rate, no matter how cheap the mortgage is to begin with, at some point you will have to pay the normal rate. So make sure that you will be able to afford the mortgage when this happens. Remember that the standard rate may be higher in a few years’ time, so make sure you’re prepared.

Will I face any penalties if I repay my mortgage early?

-        Make sure to ask about ‘early redemption penalties’ and be especially wary if these extend beyond the term of the initial fixed, capped or discounted period. If there are no penalties after the initial incentive period, then you will be able to change your mortgage at the end of that time.

If I move before the mortgage is paid off – can I transfer it?

-        Find out what will happen if you decide to move home before the mortgage is finished. This is especially important if you are taking out a long term fixed, capped or discounted mortgage, or if the redemption penalties last for a long time. Many lenders make their mortgages portable so that you can transfer the mortgage if you decide to move.

Am I allowed to make partial repayments or allowed to increase my monthly repayments?

-        Ask your IFA what conditions apply if you wish to pay off part of the mortgage, or increase your monthly repayments.

What other fees should I expect?

-        Make sure you ask your IFA if there will be any additional fees when setting up your mortgage, such as an ‘arrangement fee’. Don’t forget, there are also other additional costs including stamp duty, surveys and solicitors fees – which all need to be paid outside of the mortgage funds.

If you are looking for independent mortgage advice, look no further than Prospect. We work in association with the Mortgage Advice Bureau (MAB) to give impartial advice on the best mortgage rates available and what you can afford to borrow. Book an appointment with an Independent Financial Advisor here

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