FAQs

How does a Mortgage work?

A Bank or Lender loans money with interest. In return their loan is secured against the value of a person's property. The details of the loan agreement are registered against the Title of that property- this is known as a mortgage.

What is a mortgage broker?

Mortgage brokers are specialist mortgage advisors who will look for a suitable mortgage product on a client’s behalf in order to ensure they get the best possible deal. Rather than having access to one lender or bank, a mortgage broker can search multiple lenders for you, saving you time and money by getting the best deals available to you.

Is your mortgage advice independent?

Yes, our advice is always independent and impartial, we research the whole market, this means we will recommend what we consider to be the best mortgage to meet your needs. We have no affiliation with a particular bank or lender. Our advisors are CeMAP qualified, FCA regulated and offer professional advice. Please note a small amount of lenders do not provide mortgages through a broker. 

Where are you based? 

We are based in Chesterfield and this is where the majority of our clients are, however we offer a modern approach to mortgage advice and can complete everything via phone / video call and email meaning we can help clients all over the country. 

What does a free mortgage consultation involve?

A mortgage consultation is all about finding out about you. Our advisors discuss your plans and goals, whether it’s buying your first home, moving somewhere new, remortgaging to a better mortgage deal or investing in rental properties. They will run through a series of questions to build up your financial picture enabling them to research the best deals available to you. If you need a Decision in Principle this can be provided after your appointment. They can provide advice on making offers for new properties or tips to boosting your chances of being approved. It’s also a great opportunity for you to ask any questions you may have.  

How much can I borrow? 

The main things that dictate how much a person or couple can borrow is income and current credit commitments.  All lenders have different ways to calculate what someone can borrow.

How do I find out the maximum mortgage that I can get? 

Contact us at Peak Mortgages and Protection - Chesterfield for a free no obligation assessment. Our advisers will be able to give you an accurate figure of how much lenders would be willing to lend to you. 

What is a Decision in Principle( DIP)? 

A DIP (also known as an Agreement in Principle (AIP)) is a written estimate from lenders, giving you an idea of how much they are willing to lend you based on your income and credit commitments. 

It’s great for showing estate agents and housing developments you’re serious about buying and most will accept offers on properties subject to a full mortgage offer based on a DIP. 

Contact us today, our advisers will be happy to provide a DIP so you can shop with confidence.

How much deposit do I need? 

You will need a minimum of 5% deposit.  The more deposit you put in, the better the interest rates will be.  For example, if you put in 15% deposit this will get you a better interest rate than a 10% deposit.

What is LTV?

Lenders often talk about the LTV requirement. LTV is an acronym for Loan to Value Ratio. This is a term used to describe the ratio of a loan to the value of the property purchased. For example, if you borrow £170,000 to purchase a property valued at £200,000 the LTV is 170,000/200,000 or 85%, the remaining 15% is your equity.

What is equity? 

Equity is how much of the property you own. It’s the difference between the property value and the mortgage amount. For example, if your house is worth £250,000 and you have a mortgage of £200,000 outstanding, you have £50,000 equity.

What is the mortgage term? 

The mortgage term is how long you have to repay your mortgage. Mortgage terms vary but on average they are 25 – 30. However, they can be as long as 40 years dependant on your age and anticipated retirement date.

How much will a mortgage cost each month? 

This will vary depending on the loan amount, the term of the mortgage and the interest rate.

Can I make overpayments on my mortgage to pay it off sooner? 

Yes, most lenders allow up to 10% of the mortgage balance to be overpaid each year without incurring any penalties.

What is the difference between a repayment mortgage and an interest only mortgage? 

A repayment mortgage is guaranteed to pay off your mortgage by the end of the term as long as all payments have been made.

An interest only mortgage is where your monthly payments are only covering the cost of the interest and your loan amount will remain the same.  At the end of the term, you would either need to sell the property to repay the mortgage or find another source to repay the loan.

Can I get a 100% mortgage? 

Although very rare, the nearest thing to a 100% mortgage is a guarantor mortgage, which usually require a family member who owns their own home to be named on the mortgage too. This can put their own property or savings at risk if you fail to make your repayments on time.

What is remortgaging & should I do it? 

Remortgaging is when you change your current mortgage deal to a new one, either staying with the same lender or moving to a different one. Remortgaging when your initial fixed rate or deal period is coming to an end can save you lots of money by switching to another low rate compared to your lenders Standard Variable Rate (SVR). Whilst remortgaging you can use it as an opportunity to pay a lump sum off your mortgage or even borrow some more to complete home improvements or consolidate existing debts. 

What is a Standard Variable Rate (SVR)

A standard variable rate (SVR) is the interest rate your lender charges you when you are no longer in a deal period. It can rise or fall depending on the Bank of England base rate so your monthly payments can vary month by month. It’s often much higher than the deal period rates offered by lenders so it’s always best practice to look at remortgaging 6 months prior to switching onto an SVR rate to avoid paying too much. If you want to know when you will be switching to an SVR or to check if you’re already on one, contact us today for a free no obligation mortgage review. 

Can I borrow more money to complete home improvements? 

Yes, depending on the amount of equity you have in your home you could borrow more on your mortgage to pay for home improvements like a new kitchen or garden.

What insurance do I need for a mortgage? 

As a minimum, the building itself needs to be insured.  We would usually recommend that you also insure the contents within your home too.  Other insurances we recommend are life insurance and income protection insurance.

What is the difference between a repayment mortgage and an interest only mortgage? 

A repayment mortgage is guaranteed to pay off your mortgage by the end of the term as long as all payments have been made.

An interest only mortgage is where your monthly payments are only covering the cost of the interest and your loan amount will remain the same.  At the end of the term, you would either need to sell the property to repay the mortgage or find another source to repay the loan.

What is a credit score? 

This is a score that we all have and is based on how we have conducted our finances over the preceding six years and is used by Financial Services companies to assess our credit worthiness.

How can I improve my credit score? 

You can improve your score by proving that you can repay debt and cope with any credit commitments you have, such as loans and credit cards and by paying things like mobile phone bills and utility bills on time.  Also, it helps to be on the electoral role.

I have bad credit; will this be a problem?

This will not prevent you from getting a mortgage. Our mortgage advisers at Peak Money Chesterfield have great success in helping clients with adverse credit. There are a number of specialist lenders that we work closely with who are more favourable to clients who have previously had trouble sourcing finance. Talk to one of our advisors today for further information.

Is debt consolidation a good idea? 

Debt consolidation is a good move for some people but not everyone. It always best to speak to an advisor about this as they will help calculate the effect of adding debt to your mortgage and whether or not it’s the best solution. 

What is a Buy-to-Let mortgage? 

A Buy-to-Let mortgage is where you buy another property specifically as an investment with the intention of letting it out.

How much deposit do I need for a Buy-to-Let mortgage? 

Normally a minimum of 25% deposit. Some mortgages are available with a lower deposit, contact one of our mortgage brokers to find out more.

Is there any tax to pay when I sell my property? 

Not for your main residence, but if you have investment properties that were bought on a Buy-to-Let basis, these will be subject to Capital Gains Tax.