Penny House Mortgages FAQs
What mortgage can I afford?
To find out what mortgage you can afford, we would recommend you use a mortgage calculator or call us directly to calculate the numbers for you! To find out what mortgage you can afford, you will need to prepare the following variables for calculation: loan principal, balance, number of payments per year, regular payment amount, the total amount of payments and the periodic compound interest rate.
What is the difference between different types of mortgages?
These are the different types of mortgages:
Fixed-rate: A set interest payment will be paid for a certain number of years.
Variable rate: The interest rate will fluctuate dependent on the base rate which will be set by the Bank of England.
Tracker: This mortgage will move in line with the official rate of the Bank of England.
Standard variable rate: This is when you have reached the end of your fixed term and you will now be moved to the SVR of your lender.
Discounted: A type of variable rate mortgage where you pay the SVR of the lender with a fixed discounted amount for a number of years.
Interest-only: This is where you only pay interest, rather than the loan, each month.
How much deposit do I need?
Depending on your unique situation, the type of house you are hoping to purchase a mortgage for and the amount of money that you have to put towards a mortgage, it is recommended that you try to put down a mortgage deposit that stands between 10% and 20% of the total amount.
How long does it take?
Mortgage approval usually takes between two weeks and six weeks to be finalised.
How much can I borrow as a first-time buyer?
Most lenders will let you borrow up to four and a half times your annual earnings.
Do I need to pay stamp duty? How much?
Within 14 days of property or land purchase, you will need to pay Stamp Duty. The cost ranges between 2% and 12% of the price of purchase. It is possible to add stamp duty to your mortgage.
Is it possible to convert a residential mortgage to buy to let?
Yes. If your lender does not consent to let, you can switch your home's mortgage from residential to buy-to-let. This requires a complete remortgage.
What are the tax implications of buying a property to let?
It is likely you will have to pay a capital gains tax bill which is based on the gains that you make rather than the amount the property is sold for.If you have any more FAQs about mortgages or are looking for some general mortgage advice, please do not hesitate to contact us directly.