Arranging Your Mortgage Guide
Arranging a mortgage can seem daunting, but it doesn’t need to be. We show you how in 7 simple steps.
The amount you can borrow will depend on your individual circumstances, monthly income and monthly outgoings.
It will also depend on the value or purchase price of the property you want to mortgage, in relation to the amount you want to borrow. This is called the loan to value (LTV) and is shown as a percentage.
As a responsible lender, we will lend you what you can afford rather than just multiplying your income.
Our quick and easy mortgage calculator will help you work out how much you could borrow. It will also tell you what your monthly repayments would be for each of our mortgage products. Find out how the calculator works with our Calculator Breakdown.
Principality offer a comprehensive and competitive range of residential mortgage products over the phone and in our branches as well as Buy to Let mortgages via independant mortgage brokers.
Before you start researching for a mortgage, it’s worth considering how you might want to repay your mortgage loan. Do you want a repayment mortgage or an interest only mortgage?
Once you’ve decided this, you need to decide whether you want a Fixed Rate, Discount or Tracker mortgage.
With the range of options available, there is plenty to consider and our Types of Mortgages Guide can give you more information, to help you decide which might suit you best. It also explains what to look for when comparing interest rates.
Our Fee Saver mortgages have no Product fee, no legal fees if you are remortgaging from another lender (and you use our appointed solicitors) and no valuation fee.
If you don’t want to choose a Fee Saver mortgage, it’s important to budget for the fees you may need to pay when arranging your mortgage:
Mortgage Commitment Fee
Some mortgage products require a Mortgage Commitment Fee, which is charged when you apply for the mortgage and is not refundable.
Some mortgages require a Product Fee, typically £499 or £999. This can usually be added to your total loan amount and repaid over the term of your mortgage.
The fee you pay will depend on the valuation or survey you choose and the value of your property. Typically, it can vary from £300 to £1,200. See our step later in this guide on choosing a survey, for more help.
You will need to pay fees to your solicitor or conveyancer, as well as the cost of any Land Registration or search fees (these are included in the disbursements). Typically, you should budget around £700.
With many of our mortgage products, we pay the legal fees for you if you are remortgaging from another lender, and you use our appointed solicitors.
With the exception of the Mortgage Commitment Fee you can either pay your fees at the start of your mortgage or you can choose to add it to your loan amount. However, if you do add it to your loan, you need to be aware that you will pay interest on the amount for the term of your loan and therefore it will cost you more.
Remember to budget for the Stamp Duty Land Tax you will also have to pay if you are buying a property worth more than £125,000. Visit HM Revenue and Customs to see how much is due on your property purchase.
Your mortgage is secured on your home, so you need to be sure that you’ve got home insurance in case the unexpected happens.
We offer great value products to help meet your protection needs:
Home Insurance from Legal & General
Contents insurance covers your possessions and buildings insurance covers the actual “bricks and mortar” of your property. Tailoring your buildings and contents cover to suit your needs gives you greater control in protecting your home and means you could pay less for your home insurance. If you are borrowing from a mortgage lender, you’ll need to take out adequate buildings insurance because lenders want to protect their investment if the property is damaged or destroyed.
Find out more online, read our insurance guide for more help or contact your branch for friendly, helpful advice.
Buying a property can be expensive, so it’s crucial that you discover all you can about the property before making a legal commitment.
Your lender will arrange a report for mortgage purposes. This is a limited review of the property carried out to help the lender decide whether or not to lend to you. The cost of your valuation depends on the property value.
The mortgage valuation is not a survey and it won’t tell you whether the purchase price is reasonable or whether the property needs repairs now or in the future. That’s why it can be a good idea to opt for a homebuyer survey. This costs more and the report includes a summary of the main positive and negative features of the property, so you can make an informed decision about whether it’s a reasonable buy at the price agreed. It’s most suitable for properties built within the last 120 years.
This is the most comprehensive inspection of a property, and includes photographs. It costs more again and it provides you with a detailed report on the property’s condition and a summary of the main positive and negative features of the property so you can make an informed decision whether it’s a reasonable buy at the price agreed.
Whether you are buying a new home or remortgaging, you will need to appoint a conveyancer.
Simply speaking, conveyancing is the legal process of carrying out all the actions needed to transfer the ownership of a property.
Buying a mortgage is one of life’s biggest purchases, so it’s obviously important that you choose a reputable mortgage provider.
Why choose Principality?
- We are the 6th largest building society in the UK
- We have been in business for over 150 years
- We have over 60 branches and agency counters across Wales and the Borders
- We have over 500,000 customers
- 6th largest UK building society
- A mutual building society, owned by and run for the benefit of our 500,000 members
- Over 150 years' experience
- Taking care of over £8 billion of our customers' assets
- Members can access a Member Rewards page featuring competitions, discounts and more.