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Mortgage Frequently Asked Questions

Mortgage FAQ

Find answers to the most commonly asked mortgage questions. 

General Mortgage FAQs

Yes. To calculate the amount we can lend you, we will need at least two years' accounts or tax calculations using an average of the two years as our income figure.

Leek United holds the deeds to the property until the mortgage is fully repaid.  Psychical Deeds will be sent directly to you via your solicitor as they are now held electronically.

Help to Buy is an equity loan assistance scheme available to home buyers from the Homes and Communities Agency (HCA). Help to Buy makes new-build homes available to anyone (not just first-time buyers) who a) wishes to buy a new home, b) can be expected to maintain the monthly repayments and c) is restricted by deposit requirements. Under the scheme, up to 20% (England) and 40% (London) of the purchase price is available to the buyer through an equity loan funded by the Government through the HCA. Contact your local Help to Buy agent (www.helptobuy.org.uk) to see if you are eligible. If you are approved, we will be happy to guide you through the rest of the mortgage process.

Yes, as long as you use the second home as a holiday home, a weekday base while working away from home, or to house a dependent relative. You will need a minimum 25% deposit for a second home mortgage with Leek United.

This is the amount of mortgage you owe against the value of your property. For example, if your property is worth £100,000 and your mortgage loan amount is £75,000, this would represent a loan to value of 75%. Lower loan to value mortgages tend to offer more competitive deals.

APRC stands for 'annual percentage rate of charge'. Your APRC shows you, as a percentage, the annual cost of your mortgage - including fees, interest and other costs - assuming you keep your mortgage for the full term and do not change it.

Interest is calculated on a daily basis and is calculated in advance each month on the balance outstanding at the end of the previous month.  The balance outstanding will include any arrears and charges debited to the mortgage account.  When a repayment is received, an interest credit is applied to the account, calculated from the date the payment is received to the end of that month.

Frequently Asked Questions about Different Types of Mortgage

A mortgage where the rate of interest is fixed for a specified period, such as two, three or five years.

A mortgage where the rate of interest can vary. It is usually based on the lenders' Standard Variable Rate and changes when the lender reviews its SVR.

The interest rate is guaranteed in a fixed-rate mortgage for a defined period. The interest rate can change in variable rate mortgages.

On an interest-only mortgage, you only pay the interest due against the loan. This makes your monthly repayments smaller than a capital and interest repayment mortgage. But at the end of your mortgage, all the capital balance will still be outstanding. You will need a clear savings and repayment strategy to ensure you have the funds ready to repay the capital.

Yes, we offer mortgages that need just a 5% deposit. These are designed to help first-time buyers get on the property ladder.

A mortgage is a long-term (typically 25-40 years) loan taken out with a bank or building society to purchase a house or other property.  If you do not make the required monthly repayments, the lender can take you to court to obtain an order to repossess the property. They can do this because you agree to give the property as security for the loan when you sign the mortgage agreement.

A secured loan is usually taken out with a different lender to raise funds for things like home improvements or a business loan. They are sometimes called 'second charges' because, if you default on the repayments, the lender could take you to court to repossess the property. But the lender with the 'first charge' (e.g., the mortgage loan), would be repaid first. That's why secured loans tend to be more expensive than mortgages.

 

Leek United does not offer self-build mortgages.

A discount mortgage is a variable rate mortgage that is linked to the lenders Standard Variable Rate (SVR). Each lender sets its own SVR. When the SVR changes, the rate on your discount mortgage changes proportionately.

Frequently Asked Questions about Mortgage Affordability

You do not need a job to get a Leek United mortgage. However, you do need to be able to show that you can afford any repayments. You will have to show us where your income - earned, pension or investment - comes from.

No. Our mortgages are only issued to borrowers with a minimum deposit of 5% of the purchase price.

We lend a maximum of 4.5 times joint gross income, minus any existing credit commitments.

You will need at least 5% of the purchase price or value of your property (whichever is lower).

Yes. Generally speaking, the lower loan-to-value mortgage you need, the more competitive the mortgage rates available you.

No, benefits do not count in your income calculations. We only consider income paid in sterling from:

  • Employment or self-Employment
  • Occupational, private and state pensions
  • Unencumbered rental income
  • Investment income
  • Income from trust funds and second jobs
  • Maintenance
  • Working family tax credits

 

Frequently Asked Questions about Mortgage Applications

If we cannot verify you electronically, we may require two different types of ID:

  • Evidence of ID (passport, driving licence, etc)
  • Evidence of income (last three payslips, P60, tax calculations, pension statements, bank statements, etc). 

Depending on your circumstances, we may also ask for other documents.

 

To be eligible for a Leek United mortgage, you must be able to demonstrate that you can afford the monthly mortgage repayments. To do this, you must receive either sustainable earned or pension income. We do not accept temporary contracts as proof of income. If, however, you are on a fixed-term contract of at least 12 months with at least six months remaining, or have evidence of a new/renewed 12-month contract in the same line of work, we will accept this as proof of income.

Leek United does not currently offer guarantor mortgages.

Yes. To buy at auction, you would already need a Binding Mortgage Offer from us. First, you'd have an initial mortgage interview with one of our qualified mortgage advisers. Once you complete your mortgage application, we have the property valued and complete the full underwriting on your application. A solicitor would also need to be involved because, if you are successful at the auction, you will normally need to pay a 10% deposit and exchange contracts immediately.

Rather than using a credit scoring system, we look for conduct of credit. If your mortgage application is for a 90%-95% loan to value sum, we need to see one (single applications) or two (joint applications) active line(s) of credit with satisfactory conduct.

For loan to value applications of 90% or less, we do not have to see any lines of credit. However, if they exist, they must have been conducted satisfactorily.

 

When you apply for a mortgage, we make various checks to see if you pass our affordability assessment and meet our other lending criteria. These include credit searches, identity checks, income and employment checks and property valuations. When these checks are complete, an independent underwriter will review your application in full and decide whether to approve the mortgage. If your application is approved, you receive a binding mortgage offer that is valid for six months. This gives you enough time to take up the offer and complete your mortgage.

If you pass our lending criteria and affordability assessment, we give you a Mortgage Decision in Principle. This document enables you to negotiate the purchase of a property with a vendor or estate agent. However, it does not guarantee that your will mortgage application will be accepted. Instead, it gives a good indicator that your application is likely to be accepted.

We aim to process your mortgage application as quickly as possible. The time taken will vary depending on the type of application and whether all supporting information is included with the application.

The first step is an initial interview with one of our qualified mortgage advisers. They will check your eligibility for a Leek United mortgage.

If you are eligible, our advisers will ask you a series of questions designed to help establish which mortgage best suits your needs and circumstances and recommend the most suitable mortgage for you.

When you are ready to apply for your mortgage, you complete a mortgage application form. When we receive your form, we will carry out credit checks and status enquiries to verify your income, expenditure and property valuation.

If these checks are completed satisfactorily, we will issue you a Binding Mortgage Offer. This is valid for six months.

Your solicitor will also receive a copy of the offer, enabling them to progress the necessary legal work surrounding your application.

 

Yes. As long as your retirement income/pension passes our affordability assessment, you can get a mortgage into retirement with Leek United. The maximum loan to value available is 70%.

Frequently Asked Questions about Mortgage Offers

In certain circumstances, yes, your mortgage offer can be withdrawn. Check your Binding Mortgage Offer document for more details.

Any formal mortgage offers are binding on the lender. They can only be withdrawn in certain circumstances. Check your Binding Mortgage Offer document for more details.

In certain circumstances, yes, a mortgage can be declined after valuation. The most common reason for this happening is if the property is not deemed to be suitable security for the size of loan requested. It can also happen when answers to status enquiries are received after the valuation has been completed.

We lend a maximum of 4.5 times joint gross income, minus any existing credit commitments. We then put the figures through our affordability assessment. This calculates how you would cope with potential interest rate rises given your income, expenditure and the size of your household. 


Your mortgage offer is valid for six months. In rare circumstances, it may be extended upon request. Each extension request will be independently reviewed.

Frequently Asked Questions about Additional Costs

No, we do not lend money to cover stamp duty. Our maximum loan-to-value on any mortgage is 95% (up to a maximum loan of £400,000 on 95% LTV). Your deposit and all associated buying fees (stamp duty, removals firm, legal firm, etc) must come from your own funds.

Subject to loan-to-value limits and our affordability assessment, yes, mortgage product fees can be added to your mortgage.

Frequently Asked Questions about Mortgage Repayments

It depends on your mortgage deal. If your mortgage is on a variable rate, then yes, your payments could change. If you are on a fixed rate, your interest rate (and payments) will change when your fixed-rate period ends. We will write to you at least 60 days before this happens.

Your first full monthly repayment will become due the month after you complete your property purchase. You can choose for it to be paid by Direct Debit on the 1st, 15th or 27th of the month.

However, interest is charged from the date your mortgage funds are released to your solicitor. So during the month of completion, you will also need to make an initial interest payment. This covers the interest charged from the completion date to the end of the completion month.

If the interest rate on your mortgage is about to increase, we will write to you at least seven days before the change to confirm your new monthly repayment.

If the interest rate on your mortgage is about to decrease, we will write to you at least seven days before the change to confirm your new monthly repayment.

Our minimum mortgage term is five years. Our maximum mortgage term is 40 years. However, your age, planned retirement age and income - both now and in retirement - could impact the maximum mortgage term available to you.

If you're struggling to make your monthly repayments, please contact us immediately. We have a range of options that might resolve the situation. Ultimately, though, your home may be repossessed if you do not maintain repayments on your mortgage.

On some mortgage products, the lender makes a loss if it does not run its full term (e.g., if you take out a five-year mortgage, but repay it in full by year three). The early repayment charge compensates the lender for the loss of interest they would have otherwise received. Early repayment charges tend to reduce the deeper into the mortgage you are.

Yes. Regularly overpaying on your mortgage could save you significant interest charges, because when you pay off more than is due, the surplus is deducted from the outstanding capital. So your interest payments get smaller. If you overpay regularly, you could repay your mortgage in full much earlier than originally expected. Some mortgage products restrict the amount you can overpay by, for example, up to a maximum of 10% of your original loan amount.

There are two types of mortgage: capital and interest repayment mortgages, and interest-only mortgages.

For capital and interest repayment mortgages, each month you pay off any interest due and a portion of the capital. Each month, the interest payments reduce slightly as the outstanding capital get smaller. If you continue to make all payments in full and on time, your mortgage is repaid at the end of your mortgage term.

For interest-only mortgages, you only pay the interest due against the loan. This makes your monthly repayments smaller than a capital and interest repayment mortgage. But at the end of your mortgage, all the capital balance will still be outstanding. You will need a clear savings and repayment strategy to ensure you have the funds ready to repay the capital.

Frequently Asked Questions about Existing Mortgages


Mortgages can be transferred using a Transfer of Equity, but it is not an automatic process. The person taking over the mortgage must make a new mortgage application and meet our lending criteria. One of our qualified mortgage advisers can guide you through the process.

Our mortgages do not include funds for renovations. You should factor the cost of any necessary renovations into your calculations about the size of deposit you can offer. Your deposit will need to be at least 5% of the property purchase price.

If you decide to move home, it's usually possible to 'port' your mortgage to another property - as long as you still meet our lending criteria. Check your mortgage terms to find out if your deal is portable.

In most cases, it is possible to pay your mortgage early. This could save you money in the long term, but you may incur an Early Repayment Charge. Check your Binding Mortgage Offer document for details of any charges you may face.

Once the mortgage is fully repaid, we will remove our charge over your property at HM Land Registry. Any title deeds and documents will be returned to you for safe keeping.

As soon as we receive a copy of the death certificate, we'll update our records. If the mortgage is in the sole name of the deceased, we'll contact their executors. If the mortgage is in joint or multiple names, the deceased person will simply be removed from the mortgage account. Monthly mortgage payments will continue to fall due unless otherwise agreed.

Frequently Asked Questions about Buy to Let Mortgages

This depends on your personal tax situation. Please seek professional advice.

Buy To Let is when you are buying a property with the specific intention of letting it out. The property in question would be classified as an investment property. To secure a Buy To Let mortgage with Leek United, you will need:

  • A minimum earned or pension income of £20,000
  • A property ready for immediate occupancy
  • A rental value of more than 140% of the mortgage interest, using an interest rate of 5.5%
  • A single Assured Shorthold Tenancy agreement for a maximum of 12 months