Mortgage guides

We will consider lending on properties with a mine shaft, subject to underwriting. For affected properties we will need a copy of the Coal Authority Report.

We'll consider interest only mortgages where there is a suitable repayment vehicle available. Suitable repayment vehicles include an endowment; a stocks and shares ISA; a pension; or sale of the mortgaged property.

To add or remove someone from your mortgage you will need to make an appointment with one of our Mortgage Advisers so that affordability can be reconsidered. To book an appointment please visit one of our branches, call us on 0121 557 2551 or complete our online contact us form.

If you have a mortgage with us and would like to rent out your property you will need to notify us. Please call us on 0121 557 2551 or fill in our online contact us form.

Once we have made an offer to you, this will be valid for 6 months.

If you are looking to request a redemption statement, please send your request to redemptionstatementrequests@thetipton.co.uk and we will be able to assist you. We will get back to you within 2 working days.

To request a Certificate of Interest Paid please call us on 0121 557 2551, visit one of our branches or complete our contact us form. We don't charge for your first Certificate, but there is a charge for any duplicates you request. For more information on our charges please see our Mortgage Tariff of Charges.

To complete a mortgage application you will need:

• Most recent P60;
• Latest two months, salary fed bank statements;
• Latest two months pay slips;
• Last two years’ SA302s or limited company accounts (if self-employed) along with last two tax year overviews;
• Accountants details (if self-employed);
• Acceptable proof of address and personal identification;
• Home improvement quotations (if applying for additional borrowing or remortgaging with additional borrowing included);
• Coal Authority Report (for properties with a coal mine);
• Offer notice (if you are purchasing under the Right to Buy scheme);
• Employers contact details;
• Proof of deposit;
• Rent statement and landlords contact details (if renting);
• Solicitors contact details;
• Estate agents contact details; and
• Tenancy Agreements for any buy to let properties you have.

We will lend on most properties built using standard construction methods and materials (brick or stone walls with a tiled or slated roof). We can also consider the following property types (subject to valuation):

• Timber framed walls with brick cladding;
• Thatched roof properties;
• Grade 2 listed; and
• Prefabricated reinforced concrete (PRC) repaired properties that have the benefit of a 30 year insurance backed guarantee and structural warranty.

Flats and maisonettes will be considered subject to the below criteria:

• Maximum 10 storey block inclusive of any basement level (flats in blocks of more than 4 storeys require lift access regardless of which floor our security is on);
• Ex-Local Authority flats and maisonettes will be considered to maximum of 6 storeys and require lift access. As part of the consideration the valuer must confirm that the property is in a good area with good resale ability; and
• Consideration given to the level of privately owned properties within the block.

If you're unsure whether your property type fits our criteria, please contact us and a Mortgage Adviser will be happy to help. Call 0121 557 2551, visit a branch or complete our online form.

A standard valuation report is used to calculate how much we will lend you. This is separate from any valuation or survey of the property you might want to commission for your own use. There are other homebuyers or structural survey options available to you at additional cost. Some of our mortgages offer free valuations and the product pages will tell you if this is the case. Our mortgage valuation charges page will provide details of the costs incurred for both a standard valuation and the more detailed homebuyers report.

If you are experiencing difficulties in keeping up with your monthly repayments you should contact us as soon as possible so we can ensure you get the right help and advice. You can contact us by completing our contact form, or calling our Financial Support team on 0121 521 4089.

Interest starts accruing on your mortgage from the day your mortgage completes. As we do not collect a payment during that month, your first monthly repayment will include this accrued interest and is therefore higher than your normal monthly repayments. Please refer to your mortgage completion confirmation letter for details of your monthly payments.

In short, any person named on the mortgage will be liable for the repayments.

Cohabitation Agreement
A cohabitation agreement is a legal agreement which can be put into place when you first start living with someone. If you set one of these up historically, it is worth revisiting it as it may have an impact on the situation. For example, if the mortgage is held solely in your name, but you have a cohabitation agreement in place which states your ex is liable to pay towards the mortgage in the event of separation, this will be legally binding.

Court Ordered
Alternatively, depending on your individual circumstances, the court may order your ex to make a payment towards the mortgage, even if they are not listed on there. This will depend on your unique situation, but will be legally binding.

If you are Divorcing
If you are divorcing and want to know if your ex should pay half towards the mortgage, it is always best to seek independent legal advice. Many different factors are likely to impact the responsibility your ex has to the mortgage. These can include:

• Whether you were married, cohabiting or in a civil partnership with your ex;
• The names listed on the mortgage and the property deeds;
• Any guarantors to the mortgage;
• If a prenup was completed prior to marriage;
• Any spousal support your ex may be paying to you; and
• Yours and your ex’s monthly income and outgoings.

Due to the complexity of this situation, it is always best to seek advice from a professional.

Who Pays the Mortgage During a Separation?
While you are going through the separation process, it is important that any parties named on the mortgage continue to make the repayments. If your mortgage is in joint names with your ex, both of you will be responsible for the repayments until an alternative agreement is made.

Do I Have to Sell My Home Because of a Separation?
While some choose to sell their property following a separation, this is not always the only option. The most common options are detailed below:

Sell your home: if you choose to sell your home, the proceedings of the sale will be used to pay off any mortgage remaining. Anything left over can then be split between the parties who were named on the mortgage. Some people choose to sell their home as they cannot afford the monthly costs on their own, or as they don’t want to be surrounded by the memories they have in the property.

Buy your ex out: if you would prefer to stay in your home, you should speak to a Mortgage Adviser about the options available here. Where you can satisfy affordability assessments, many lenders will allow you to take equity from the property to buy your ex out of the property and remove them from the mortgage. This means that going forward the mortgage and property will be in your sole name and therefore your sole responsibility.

It is important to remember that everyone’s circumstances will be different, and court orders may change what is available to you. It is always best to seek professional advice.

Is it Better to get a 15 Year Mortgage or Pay Extra on a 30 Year Mortgage?

15 Year Vs 30 year mortgage: what’s the difference?

In simple language, the main difference between a 15 year and 30 year mortgage is the term. On a 15 year mortgage, you will pay off what you owe (and own your property) within 15 years whereas with a 30 year mortgage, it will take double the time.

Why a 15 year mortgage is better

Depending on your circumstances, a 15 year mortgage can usually be more beneficial. Some of the reasons why are explained below.

Savings on interest

While the interest rate will be the same regardless of the term of your mortgage, as interest is calculated daily and paid with each monthly payment, the shorter the period you pay your mortgage over, the less interest you will pay in total.

Build home equity faster

With a shorter term, your monthly repayments will be higher to ensure the full amount is repaid by the end of your mortgage term. This means that with each repayment you will be building the equity you own in the property faster than if you were paying lower monthly repayments over a longer term. Please note, this is only applicable for mortgages on a capital and interest repayment basis and not interest only repayments.

Own your property in half the time

As long as you have opted to repay your mortgage on a capital and interest only repayment basis, at the end of the 15 year term, you will own your property outright. This means you won’t have to make any more mortgage repayments.

Why a 30 year mortgage is better

In some scenarios, it can be more beneficial to have a mortgage over a longer term, as highlighted below.

Lower monthly repayments

The longer term you opt to repay your mortgage over, the lower your monthly repayment will be. This is one of the reasons that people choose to have a longer term. However, it is important to remember that you will also be paying interest over the longer period and therefore will repay more overall than you would have on a shorter term.

Getting the right mortgage

As explained above, your mortgage term is individual to your personal circumstances, and it is therefore important to make sure you choose the right term for you. Our team of Mortgage Advisers will discuss your personal situation with you in detail, before recommending a term and product to suit you! Remember, there is no right or wrong way as long at the mortgage suits your personal needs best.

In the UK, there are two main regulators within the mortgage market, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).

The FCA regulates all homeowner (residential) mortgages and lifetime mortgages. This also includes equity release to older borrowers. The FCA do not regulate buy-to-let mortgages.

The Prudential Regulation Authority is a part of the Bank of England and create policies that regulated firms must follow. They oversee banks, building societies, credit unions, insurers and major investment firms.   

How are Mortgage Companies Regulated?

Mortgage companies are regulated by FCA and their goal is to ensure honest and fair markets. This is done through protecting customers, the financial market and encouraging competition.

Working alongside the FCA is the PRA. The PRA is part of the Bank of England. They determine the monetary limits that that lender must adhere to, including capital and liquidity. The PRA also go further to require providers to have suitable management. It uses regulation to set standards that providers must follow and will monitor compliance against these. The PRA also monitors the activity of lenders and can step in if they believe lenders are not running efficiently. 

Why is it important to use a Regulated Mortgage Lender?

Mortgage lenders must assess whether the borrower will be able to pay the sum of money due for the mortgage and must not accept applications unless it can be demonstrated that it is affordable.

If you are applying for a mortgage through a regulated mortgage lender, it means you will receive a certain quality of advice and guarantees access to FCA for complaints support, should there be any problems.

Applying for a mortgage through an unregulated lender means that customers are not protected from incorrect advice or miss-selling from lenders or brokers.

Here at The Tipton, all our residential mortgages are regulated. We will consider residential mortgages for homebuyers, people looking to build their own home, those lending in retirement, holiday homes, family assist mortgages. To learn more or get in touch, please click here.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

What is a mortgage interest rate?

A mortgage rate is the rate of interest charged on a mortgage by your mortgage lender for borrowing money. Mortgage interest rates are determined by each mortgage lender.

Your interest rate will be specific to the mortgage product you have. These can be over any period, typically from 2 years up to 10 years. While your overall mortgage term may be longer than this, you will have a number of products during the term of your mortgage. Once each product comes to an end you can switch to a new product, with a different interest rate and product term with the same lender. Alternatively, you can look to move your mortgage to another lender at this point, this is known as remortgaging.

So how do they work?

There are different interest rate options when It comes to choosing a mortgage. Here at the Tipton, we offer:

• Fixed Rates; and
• Discount Rates (also known as variable rates)

All mortgages will show an APRC. APRC was introduced by the Financial Conduct Authority (FCA) in 2016 and stands for Annual Percentage Rate of Charge. The purpose is to show you the overall cost of your mortgage. An APRC is a rate that can be used to compare different mortgage products as it includes any fees etc. to give an overall view.

It is worth remembering that the use of APRC’s can be limited. If you decide to switch to a new rate or remortgage to a new lender at the end of your product term, you will not remain on the standard variable rate (SVR), meaning the original APRC, is no longer applicable.

Fixed rate vs discounted (variable) rate

A fixed rate mortgage charges a set rate of interest that does not change throughout a specified period. The monthly payments will stay the same for that duration. This can make budgeting easier for homeowners.

A discount or variable rate mortgage means the interest rate can change throughout the product period. Lenders can choose to reduce or increase their interest rates while you are within the product term, which means your monthly repayments can change with little notice. However, these rates typically tend to be lower than fixed interest rates.

Interest rates are typically higher on fixed rate mortgages, as you are paying for the security of knowing that your repayments cannot change during the product term.

Why are mortgage rates important?

Your mortgage interest rate is important as it impacts on the cost of your monthly mortgage repayments. Put simply, the higher the interest rate the higher your monthly repayments are likely to be.

How are mortgage rates set?

Mortgage rates are decided by your mortgage lender. There are a variety of factors that impacts how mortgage rates are set. This can include:

• The cost of funds: lenders must fund your mortgage in some way. How the lender does this can affect the mortgage rate. Many building societies do this through the savings deposits acquired from their savers, other funding available includes funding through wholesale markets.
• Loan to value (LTV): where you have a lower deposit, the risk of lending to you increases. Due to this, it is not uncommon for interest rates to be lower, the larger deposit you have.
• The market: mortgage rates available in the wider market are likely to influence where your lender will consider setting their rates. Alongside remaining competitive, lenders will also need to consider their own business targets.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Summarising a Decision in Principle

A Decision in Principle (also known as a DIP, Agreement in Principle, or AIP) is a written summary from a mortgage lender detailing how much they may be able to lend to you and is a helpful first step in your mortgage journey. Lenders will typically ask you to request a DIP before a full mortgage application and require information such as: personal details, and your income/outgoings. This information will be required for anyone who is looking to be named on the mortgage.

A Decision in Principle is helpful to give you an accurate indication of how much you are likely to be able to borrow. The amount a lender can offer you depends on factors such as your income, your credit profile, and the amount of deposit you have available.

Typically, you can apply for a Decision in Principle online, or by phone. Estate agents and sellers may also request to see a DIP before they accept any offer on a property. This is because a DIP usually shows you’re serious about buying a property, and you’re likely to afford the amount you are looking to borrow.

A Decision in Principle is typically valid for between 30 and 90 days. In some cases, it is possible to renew the DIP after this period, otherwise you may have to arrange for a new Decision in Principle from your lender. This is because your personal and financial circumstances may have changed, meaning your lender will want to reassess your application.

Is it possible to get more than one Decision in Principle?

Yes, you can get more than one Decision in Principle. Having a Decision in Principle with one lender doesn’t stop you getting another from a different lender. Different lenders may be able to offer you a different loan amount based on their affordability criteria, and therefore may be worthwhile seeking multiple options. However, it is worth noting while most lenders carry out a soft credit search, some lenders may perform a hard credit check when you apply for a DIP – leaving a footprint on your credit file.

Advantages of multiple Decisions in Principle

Applying for multiple Decisions in Principle from different lenders is possible and there’s no maximum limit. If you receive a decision in principle and you are not satisfied with the outcome, you can apply to other lenders for another Decision in Principle.  Lenders may have different affordability criteria which means different lenders may be able to offer a higher or lower loan amount.

Disadvantages of more than one Decision in Principle

When applying for a Decision in Principle most lenders will complete a soft credit check, which does not affect your credit file. However, some lenders may complete a hard credit search, which leaves a footprint on your file for other providers to see.

Too many hard searches on your credit file in a short space of time, can negatively impact your credit score. This could further impact you when applying for a full mortgage application, or other lending as it may indicate you are desperately searching for credit. It is worth checking with each lender before completing a Decision in Principle what credit check they are performing.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Historically, it was possible for landlords to claim tax back on rental income. However, since April 2020, it is no longer possible to deduct tax from rental income. However, you can now qualify for Landlord Mortgage Interest Tax Relief.

Landlord Mortgage Interest Tax Relief

This is a new tax-credit available to landlords and is based on 20% of your mortgage interest payments. While this is a benefit for all qualifying landlords, those higher-rate taxpayers will have previously received tax relief of 40% under the old rules, and so this new system is less substantial.

Due to these changes, landlords will need to declare any rental income that isn’t used to repay the mortgage on their tax returns going forward.

It is important to note, that these rules only affect private landlords, and not those who own their properties through a business.