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There are several considerations to explore in order to fully answer the question; ‘what is a mortgage illustration?find me a mortgage
A mortgage illustration is the document that you receive from your mortgage lender explaining a variety of essential topics regarding your mortgage. It will be given to your following advice from a lender or advisor or along with an offer made by the lender. Included in the mortgage illustration you will find:
The mortgage illustrations from each lender should be set out in a similar format, giving clarity to the terms and conditions of your prospective mortgage.
Using this information, your lender, broker or advisor can draw up an accurate mortgage illustration.
For many people, mortgages can be profoundly confusing. If you are not a specialist in the mortgage field, then securing your mortgage can be daunting and overwhelming. Although it is not essential, a mortgage illustration is specifically tailored to make it easier to select the ideal mortgage for you and to ensure that you fully comprehend the mortgage terms.
A mortgage illustration can give you insight and clarity into your potential mortgage. It allows you to see all the terms set out in a clear and easy to understand format. Furthermore, it is exceptionally useful when comparing different mortgages, because you will be able to conduct a side-by-side comparison of all the prospective mortgages. Consequently, this can simplify the decision-making process, facilitating ease and speed.Check Affordability
A mortgage illustration is not an offer. An offer is made by your mortgage lender in the latter stages of your mortgage application. The offer will only be made once a credit check has been performed and your affordability to take on the mortgage has been confirmed. Importantly, unlike with an offer from a lender, you will not need a credit check to receive a mortgage illustration, so it will not affect your credit score in any way.
A mortgage illustration outlines the terms of a mortgage in theory. It is not credit checked and does not count as an offer or as an agreement in principle. On the other hand, an agreement in principle is a document from the lender confirming that they are likely to lend to you based on your current financial circumstances and affordability criteria. One similarity between the two is that neither a mortgage illustration nor an agreement in principle is credit checked, therefore an agreement in principle is not binding and does not constitute an offer.
When you are considering taking out a mortgage, a mortgage illustration can help you gauge whether or not the mortgage is appropriate for you. This can be in terms of affordability, the terms and conditions of the mortgage, the length of the mortgage and the amount of interest payable. You don’t have to get a mortgage illustration but it can be a helpful guide to making the ultimate decision.
A good time to request a mortgage illustration can be before you start your property search if you have an idea of your budget. You can also get a mortgage illustration once you have found one or more properties that you are considering for your new home.
Yes, if you are considering a contractor mortgage, a buy to let mortgage, an SPV mortgage or any other kind of mortgage, you can ask your broker, advisor or lender for a mortgage illustration in order to clarify your mortgage terms. Mortgage illustrations are not purely for residential mortgages. You can even ask for one in the case of a remortgage.Contact Us
One of the main criteria for getting a mortgage is affordability. The amount that you can borrow will be based on factors such as your income and the amount that you have saved up for a deposit. When you can answer the question, ‘what is a mortgage illustration?’, it is also important to realise that there are other methods you can use to predetermine whether a mortgage would be in reach for you based on your annual household income. You can use a mortgage calculator to determine affordability and find out exactly how much you could borrow. This will allow you to easily decide whether or not the property is right for you based on your criteria.
Once you have an idea of how much you may be eligible to borrow, then contacting a broker for more advice will provide you with the expertise you require to make an informed choice about the size and type of mortgage you want.
Get in touch with us at WIS Mortgages for free advice or use our mortgage calculators.