What actually is a mortgage?
A mortgage is the contract between you and the lender that allows you to get a loan to buy a property. It sets out the terms and conditions of how a lender will give you the money you need to buy your house or flat. This will include all your personal details, covering things like the term (the amount of time over which you’ll pay the money back) and the interest rate (the rate of interest the lender will charge you for the loan). In the simplest terms, you’re promising the lender you won’t spend the money on something else, and that over time you’ll pay it back.
How much can I borrow?
Generally, if you have a decent deposit (say 10% of the house price) and you can show you have a regular income, you should be able to borrow around four times your salary. If your circumstances are less straightforward, say you are self-employed or looking to do shared ownership, it can be a little more complicated to put your case together. At Habito, we’ve handled all sorts of cases and we’ll do our best to help, whatever your circumstances.
Aren’t banks the cheapest place for mortgages?
Most of the time that isn’t the case, but if it is we’ll tell you (and it won’t have cost you a penny). Our technology means we’re completely impartial - there’s no reason for us to favour one lender over another. The only thing that matters is getting you the best deal.
I already have a mortgage, can you find me a better rate?
1 in 4 people with a mortgage are paying too much, so it’s worth taking a few seconds to check with us. You could end up saving thousands of pounds a year like other Habito customers! We can find you the best deal, and we’ll be here to help you switch as quickly and easily as possible. You can start by heading over to the Digital Mortgage Adviser, and getting an idea of how much you could save by switching.
What if a better deal comes along?
Once you have your mortgage we’ll continue to check the market and, if there’s a better deal, we’ll find it and help you switch smoothly. Our aim is for you to never worry about your mortgage again.
What is the minimum deposit I need?
Typically, the minimum deposit you’ll need to get a mortgage is 5% of the value of the property, but obviously a number of other factors are taken into consideration. We look at every mortgage from over 90 lenders and give you simple, neutral and honest advice. We can’t promise to get you a mortgage, but if there is one out there for you, we’ll find it.
What if my deposit is too small? Any advice?
You may want to look into an affordable housing scheme if you feel like your deposit is not stretching as far as you want. The government website for affordable housing explains a lot about the options that might be available to you, so it may be worth checking that out.
Can my parents help me get a mortgage?
There are 2 ways parents can help out. First of all they can offer to help with your deposit, which they can gift to you as part of the mortgage process. Secondly, in some cases they can actually include their income as part of the application, which is commonly described as a ‘guarantor mortgage’. If you would like to explore the possibility of organising your mortgage in this way, it is best to discuss your options with one of our mortgage experts.
What documents will you need from me?
Initially, none. The first step is for you to answer a few questions on our site, so that we understand your circumstances. When we move on to preparing your submission to a lender, we will need to make sure that your information is accurate and we’ll need some documents from you. Those include proof of your identity, income, bills and address, as well as things like visa status or SA302s where it applies. We’ll always make it clear exactly what we need and why. And all of these can easily be uploaded via our live chat on any internet-connected device.
Do you perform credit checks?
Our job is to make sure that you have the best possible chance of being accepted. So we perform our own affordability check before sending anything to a lender. This leaves no footprint on your credit history.
A credit check takes place only when we apply for your Agreement in Principle (AIP) with a lender. An AIP is when a lender says they’re likely to give you a mortgage based on some basic information. This isn’t 100% guaranteed and you’ll need to give more information before the lender can be certain. We will always let you know when that’s going to happen and make sure that you’re OK with it first.
Importantly, some lenders will only carry out a soft credit check, which means that it leaves no footprint on your credit file. We may therefore recommend getting an Agreement in Principle from those lenders over others.
What are the age limits for getting a mortgage?
There is no universal maximum age after which you cannot get mortgage. However, most lenders have set their own age limits; typically between 65 and 80, and most lenders will not allow someone to be still repaying a mortgage any later than 85 years of age. Your age will be considered but so will other factors like income, your pension income, your planned retirement age and the mortgage term (how long it’ll take to pay back) that you are looking for. Some lenders prefer older applicants, so if this is a factor for you we’ll advise you so you have the best possible chance of being accepted.
Can I get a mortgage with a bad credit history?
Your credit history is just one factor a lender will consider and there are plenty of other things that they will want to look into as well. Depending on how poor your credit history is, some lenders may not be willing to offer you a mortgage but there may be plenty of others who will be much more understanding and it’s our job to present your case to them.
That said, if you’ve experienced a bankruptcy or Individual Voluntary Arrangement (IVA) in the past, we unfortunately aren’t able to help you, as we don’t have access to the appropriate lenders at this time. An IVA is a legal agreement that allows you to make affordable payments on your debt over a number of years
How do I get a mortgage?
There are a few steps between now and getting the keys. We have a beautiful guide to the mortgage timeline you can download here.
Your maximum borrowing amount
First of all, you will need to find out how much you’re going to be able to borrow. You can do this by heading over to our shiny new Digital Mortgage Adviser. By entering some simple information about yourself and any other applicants, you will have a Habito Mortgage Illustration in a matter of minutes. This illustration shows you how much you could expect to borrow and who from, neatly packaged together in one place.
It breaks down your maximum borrowing amount, your chosen borrowing amount, your property price, the mortgage term (how long it’ll take to pay back), loan-to-value ratio (how much money you need to borrow compared to the price of the property) and your monthly payments. It also works out the stamp duty you would pay on the property, as well as any fees associated with the mortgage. Stamp duty is a tax charged by the government whenever a property is bought for more than £125,000 in the UK (£300,000 if you’re a first-time buyer). These are then taken away from your total savings to create an accurate idea of how much you would have left for a deposit.
All of this is free (just like everything we provide) and doesn’t need a credit check.
Find a property and make an offer
Once you have an idea of how much you can borrow, the next step is finding your dream property. We’ll leave this bit to you, but if you have any questions, we’re always happy to help.
Agreement in Principle
To get your offer on a property accepted, our job is to help you get an Agreement in Principle (AIP) from a lender. An AIP is when a lender says they’re likely to give a mortgage based on some basic information. This isn’t 100% guaranteed and you’ll need to give more information before the lender can be certain. This is the right time to speak to one of our advisers and get some mortgage recommendations from us. All you need to do is log in and have a live chat with the expert team, or they can arrange a phone call to help guide you through your options. They will use the details you’ve given us to find specific mortgages that are right for you and take the guesswork out of the application. If you’re happy with what we can find for you, we’ll then proceed to the AIP stage. All being well, your dream property should be taken off the market by this point.
This is when conveyancing comes into play. Conveyancing is when a lawyer prepares the documents needed to legally buy a house. We’ve partnered with My Home Move Conveyancing and will be happy to give you a quote — just let your mortgage expert know that this is something you’re interested in. Tip: If you’re planning to use the government’s Help to Buy scheme, it would be a good idea to check if the solicitors you’re planning to use can handle this type of application, as sometimes they will charge extra fees. In the case of remortgaging, the solicitors are free and appointed by the lender. Remortgaging is when you take out a new mortgage on a property you already own. Either to replace the mortgage you already have, or to borrow more money or to do both.
Doing a full application
We’ll handle the next step, which is changing your AIP to a full application by giving some more documents to the lender. Our expert team will let you know what you’ll need to upload and will keep you updated on the progress of your application. Lenders will need you to prove your income, identity and address, as well as mortgage statements for remortgages. If you’re buying a property, lenders will need a memorandum of sale (provided by estate agents) and you will have to show that you have the deposit. A memorandum of sale is a document that shows that the buyer and the seller of the property have agreed to the sale, including that both are happy with how much it’s being sold for.
Valuation and surveys
At this point you’ll need to decide which type of survey you want carried out, all of which you can read about here. The valuation that the lender says you must have is pretty basic, done by the surveyor of their choice who will check to make sure the property is ok to live in. As a buyer, you can arrange to have the property independently surveyed. HomeBuyers Report is the most common and RICS Building Survey the most thorough survey you can get for your money. Both of these types of surveys look for things that might affect the value of the property in the future.
How long will this all take?
On average, it takes around three weeks from the full application being given to the lender to approval (them saying ‘definitely yes’). Once we hear from the lender, we will send a copy of the agreement to you and your solicitor. Once we get an offer on your mortgage, your solicitor will take over the process all the way to exchange of contracts - when the buyer and seller sign the legal contract - and completion. The only thing left then will be to pick up your keys and just like that — you’ll be walking through the door of your new home.
What is an agreement in principle and why am I being told I need one by my estate agent?
An Agreement in Principle (AIP), also known as a decision in principle (DIP), is a certificate or statement from a lender. It agrees that ‘in principle’ - or probably - they would lend you a certain amount of money. This is given after a lender has seen some basic information about you.
If you’re a first-time buyer, an estate agent will want to see an AIP to make sure you have been allowed to borrow the right amount of money to purchase the property. If you’re looking for a remortgage, an AIP isn’t usually needed until you have found the right mortgage and lender.
How long does it take to get a mortgage?
The time it takes to get a mortgage varies depending on lots of factors. Whilst we’ve made use of technology to speed up the mortgage process, we still rely on lenders’ timeframes.
There is no hard and fast rule on how long it takes to get a mortgage. We have access to over 20,000 different mortgages, so we should have one to suit everyone. Because of such a wide range of mortgages, and the unique circumstances of each application, we couldn’t put a fixed timeline on any one application.
However, because we handle lots of mortgage applications on a daily basis, we will be able to give you a very good idea of how long it will take when you decide to apply. We’ll update you regularly on its progress so you’re never in the dark, and it’s a safe bet that no-one else can get it done quicker.
We understand that people like to be kept in the loop when they’re waiting on things. From parcels to mortgages, we know communication with the customer is key. Whenever there is progress with your application, we’ll keep you up to date. Whether you’d prefer a text, email or phone call, we’ve got you covered. If you ever have a question, or just want to chat, don’t be afraid to send our expert team a message.
I want a mortgage, what’s next?
Once you’ve worked out how much you want to borrow and the size of deposit you can put down, you’ll need to sign up and enter some basic information. Usually, this shouldn’t take more than 15 minutes, and you’ll be one step closer to a mortgage. At this point, you can have an online live chat or a phone call with one of our mortgage experts. They will answer any questions you have, and tell you exactly what documents you’re going to need to get an Agreement in Principle (AIP). From there, the expert team will guide you through the application process and keep you updated on progress.
I’m interested in working out what I can afford.
Well you’re in the right place! Head over to our Digital Mortgage Adviser and enter in some simple details about yourself. Within five minutes you’ll have a Habito Mortgage Illustration showing how much you can expect to borrow, with stamp duty and possible lender fees factored in as well. Stamp duty is a tax charged by the government whenever a property is bought for more than £125,000 in the UK (£300,000 if you’re a first-time buyer).
What are the first steps in getting a mortgage?
Once you’ve worked out how much you can borrow and the size of deposit you’ll need using our Digital Mortgage Adviser, you’ll need to sign up and enter some basic information. Usually, this shouldn’t take more than 15 minutes, and you’re one step closer to a mortgage. At this point, you can have an online live chat, or speak over the phone, with one of our mortgage experts. They will answer any questions you have, and tell you exactly what documents you’re going to need to get an AIP. From there, the expert team will guide you through the application process and keep you updated on progress.
What do I need to get a mortgage with Habito?
You’re going to need to provide some in-depth details about yourself and any other people you’ll be getting a mortgage with. This is what we’ll base our mortgage research on and the information needed will change depending on what type of buyer you are: first-time buyer, home mover, or looking for a remortgage. Typically, each person who’s applying will need to prove their income (such as with a payslip), proof of any secondary income, details of any credit commitments (such as any credit cards you’re paying off) or loans you’re still paying back and proof of residence documents - a document showing where you live, such as a driver’s license - but this list is not everything we may need. More information showing the documents you will have to give us during your application can be found here. We have access to over 90 lenders, so what they need for different mortgages can change from case to case. Don’t worry if this sounds confusing, our expert team will keep you informed and answer any questions you have about what you might need for a mortgage.