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Muddling through mortgages


I recently found myself in a world of mortgage mayhem and didn’t know where to turn. I quickly realised that there are so many options and differing opinions when it comes to mortgages.

With a world of jargon that I had never come across, it became apparent I needed some clear advice without being barraged by technical terms. I figured that if I was confused, many other people just like me are probably confused too. I reached out to Mortgage Light, a mortgage advisor and broker serving Milton Keynes and the surrounding areas. They are passionate about making mortgages easy to understand for everyone, explaining each and every step to avoid customers getting lost in the technical language.

Mortgage Light has years of experience in helping first-time buyers and homeowners looking to move or remortgage, along with Shared Ownership, Help to Buy, and Buy to Let mortgages.

To help us all gain a better understanding of mortgages, I asked the team at Mortgage Light to explain the following – in a way that we’ll understand!

What is a Mortgage in Principle?

If you are a first-time buyer taking out a mortgage, one of the first terms you might come across is a Mortgage in Principle. A Mortgage in Principle is a piece of documentation that states, in principle, how much money a lender is happy to loan you to buy a house. 

Getting a Mortgage in Principle in place speeds along the process when purchasing a house, as when you’re ready to put an offer in on a property, a Mortgage in Principle proves that you are in a position to buy, without having a solid mortgage offer in place.

What is mortgage porting?

Mortgage porting is a term you may come across when you move house. It refers to moving – or ‘porting’ – your mortgage from one property to another. You can also think of mortgage porting as repaying your existing mortgage from the sale of your current property, and transferring the mortgage deal to your new property. You stay with the same lender on the same rates and conditions. Not every mortgage can be ported and different lenders have different standpoints, so make sure to do your research before settling on this option!

What is remortgaging? 

We all want the cheapest deal and to pay off our mortgage as quickly as possible. The simplest way of doing this is by making sure you always have the most competitive product suitable to you at all times. You can do this by remortgaging. 

When you remortgage, you change the mortgage product that you currently have on your property, either by switching to a different deal with a different lender or by moving to a different deal with your existing lender. Remember – you are not locked into one mortgage for life. It’s something that can be reviewed every few years, or when circumstances change, in order to help make your mortgage work for you. In that way, remortgaging is a little bit like renewing your car insurance.

What is the Shared Ownership scheme?

If you need a little helping hand getting on the property ladder, there are a few schemes out there that you can make use of. Shared Ownership is amongst one of the most affordable. It allows you to purchase a share of a property (commonly between 30-50%). You have a mortgage for the percentage of the property that you own, and you pay rent to the Housing Association on the rest. 

Once you have owned your share for a fixed period of time, you can begin to increase your shares. The more shares you own, the less you will pay in rent. Eventually, if you continue to increase your shares, you will be able to own 100% of the property. Another plus point with Shared Ownership is that you do not need a large deposit. You’ll only need 5+% – or in some cases, no deposit at all!


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Posted by: Sarah Dixon | Posted on: November 26, 2020 | Posted in: MAMA

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