Mortgage video transcript

CHAPTER 1 GENERAL, WHAT YOU NEED TO KNOW ABOUT MORTGAGES

1. Q: If I’m looking for a mortgage, where do I start and who can help me?

PMA: A mortgage is one of the biggest financial commitments you’re likely to make but there is no one-size-fits-all. The choice depends on your financial situation. Navigating through the huge range of products and deals can seem bewildering, but as a start point, the internet or newspapers can help you get details of different products to compare.

Independent Financial Advisers can give you impartial advice or mortgage brokers, who act as intermediaries can negotiate mortgage deals on your behalf with lenders.

At RBS, we also have fully trained, Personal Mortgage Advisers who’ll take the time to understand your individual circumstances and be on hand to help you every step of the way.

Our website also has a range of useful guides and tools, such as mortgage calculators, jargon busters and helpful guides that will help you understand all you need to know about your mortgage.

2. Q: What types of mortgage are there?

PMA: A mortgage is a loan to buy a property – it’s designed to be paid back with interest over a long period, typically 25 years. Our range of mortgages includes:

Fixed Rate mortgages mean your monthly mortgage repayments stay the same for as long as the initial deal lasts – which is typically 2 or 5 years. You’re effectively protecting yourself against interest rates going up. But of course, if rates tumble your repayments will not fall.

Our Tracker Mortgage follows the Bank of England Base rate. So if base rate rises or falls, our tracker mortgage will also move in line with this.

FIXED AND TRACKER MORTGAGES-Early Repayment Charges may apply during the discount period and Product fees may apply.

And Offset Mortgage link your savings and your current account balances to your mortgage so you only pay interest on the difference. It could help you pay less interest and finish your mortgage faster whilst still having access to your savings. However you will not receive interest on your savings or current account balance.
Offset Mortgages 4.00% variable. Overall cost for comparison is 4.2% APR . Product fee £499. Minimum deposit 20%.
Whatever your circumstances and priorities, we have a range of mortgages to choose from to suit your individual needs

3. Q: How Does the Mortgage Application Process Work?

PMA: When you apply for a mortgage a lender assesses your application against their lending criteria. This typically takes into account the amount you want to borrow, the property in question, a valuation of the property, your credit history and your employment status. This is done to ensure that you will be able to repay your mortgage.
If the lender is satisfied with your application, you’ll get an ‘Agreement in principle’ which will give you an indication of how much we are prepared to lend you. Then, when your formal application is accepted, you will then be made a formal offer.
If you accept, this will be sent to your solicitor as confirmation that we will provide the money when the time comes to exchange contracts. This is followed by the completion day, when the property is finally yours and you can move in.

4. Q. What factors should I consider when arranging a mortgage?

PMA: The main thing to think about is what how much you can realistically afford. The more deposit you can put in up front, the less you’ll have to pay out later. You’ll also need to set some money aside for fees and associated costs that come with buying a property including solicitor’s fees, mortgage fees, valuation fees, removal costs and insurance. And don’t forget about your other regular outgoings, to work out a realistic budget.

5. Q: How do I repay my mortgage?

PMA:  There are two ways to pay back a mortgage. These are called Interest only or repayment mortgages.

With an interest-only mortgage, your monthly payment does not chip away at your actual debt – it just covers the cost of borrowing the money, so it’s your responsibility to ensure you have enough funds to repay the balance at the end of the mortgage term.
Repayment mortgages mean that as well as covering the interest, you’re paying off the original debt too, meaning if you make all of your monthly repayments, you’ll owe nothing at the end of your term. So, with a repayment mortgage, there is no need to put aside more money in a separate account.

CHAPTER 2 FTB

6. Q: What’s the best way to get a deposit as a first time buyer?

PMA: Quite simply, you need to save for it! There’s no easy shortcut to getting the cash – it takes discipline and may mean saving up, money from parents, selling your car or an inheritance.

The more savings you have to put towards your deposit the better, because a larger deposit usually helps you get a better mortgage deal. The Loan to Value or LTV as it is also known, is the amount borrowed against the value of the property, so on a property worth £100,000 the LTV on a loan of £85,000 would be 85%. Loan To Values can affect both the amount that is lent and the rate payable. Lenders will normally offer products with lower interest rates to clients with a lower LTV.
However, remember to also take into account other costs that come with buying a house, such as legal fees, valuation fees, stamp duty, surveys and removal costs.

Plus, on our website, you’ll find some helpful calculators to help you budget and work out how much your repayments could be on different types of mortgages. And also, if you’re an RBS online banking customer, why not use our savings goal tool to help you reach your target.

7. Q: As a First time buyer, how can I boost my ability to get a mortgage?

PMA: There are a few things you could do to help make things easier. This includes getting registered on the electoral roll and checking your credit file to ensure every active account registered has the correct address. Errors can trigger rejection so if you think your file’s wrong, ask the lender to correct it. You should also cancel unused cards because access to too much credit could be bad. And last but not least, make sure you avoid missing any payments and avoid paying late by setting up direct debits.

8. Q: What can RBS do to help First Time Buyers?

PMA: Our trained Personal Mortgage Advisers have the expertise to help you get started. We take the time to understand your needs, answer any questions you have and help you every step of the way, right up to moving into your first home.

You can also visit our website where you will find useful step-by-step guides, calculators, checklists and jargon busters all dedicated to helping First Time Buyers to get on the property ladder.

We also offer a wide range of mortgages some specifically designed to help make it easier for First Time Buyers to buy their first home. 

And for extra reassurance, we’ve been voted Best First Time Buyer Mortgage Lender by Your Mortgage, so we must be doing something right.

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