In 2015 the government introduced a 3% stamp duty surcharge across all bands on 2nd properties whether purchased as a buy to let or holiday home. The surcharge is only payable if the buyer is purchasing a residential property which is not a replacement for their main residence and the property is valued at more than £40,000.

When a lender offers a high LTV mortgage they often require a HLC. This is often used to buy a mortgage indemnity insurance guarantee (MIG) policy that is designed to protect the lender if the property is repossessed and sold for less than the outstanding mortgage. The MIG policy is provided by an insurer who then has the right to sue the borrower for the amount paid to the lender under their rights of Subrogation.

Within mortgage terminology the "Mortgagee" is the lender and the "Mortgagor" is the borrower.

If a lender repossesses a property they must get the best price and dispose of it as soon as possible. Any debt and charges they are owed are cleared first, any remaining equity belongs to the property owner.

Mortgage payment protection insurance (MPPI) is a short term income replacement insurance policy designed to cover the monthly mortgage payments in the event that the borrower cannot work due to accident, sickness or unemployment (the self-employed are excluded from the unemployment element). It is a pure protection policy with no surrender value and can be obtained relatively cheap as there is no medical underwriting.

Before a lender will provide a mortgage offer they will conduct the underwriting process. This will involve checks on the property and the borrower. During the inspection of the property any issues identified may involve an undertaking. An undertaking means that the building is basically in good repair but the lender requires the borrower to undertake to carry out minor repairs to bring the property up to the standard of an average property. This must be completed within 3 months of the offer and is a condition of the mortgage.

Within the 3 main Land Law Acts of 1925 the borrower has the right to "Let" a property, but must state to the lender that the mortgage is for Buy to let purposes. If a person buys a property for their own residence and then subsequently Let the property without notifying the lender this is a breach of the mortgage terms. Borrowers must request a "Consent to Let" if they want to Let out their property.

A Cashback mortgage  offers a genuine non repayable sum that is either a fixed amount or a percentage of the amount borrowed. The amount is not added to the loan and does not need to be paid back as long as the borrower stays with the lender for a set term. The lower the LTV, the higher the cashback. 

When an adviser gathers the information to provide a mortgage recommendation they must first establish affordability. A self-employed borrower will have to provide information confirming their income and expenses using their self-assessment details and the Net Profit figure is used. This is calculated using: The record of  the turnover (income from the business activity) and expenditure. Gross profit = Gross turnover less raw materials and goods purchased to sell (i.e. stock). The Net profit = Gross profit less expenses.

UK Residential mortgage regulation only came into force in October 2004. Any mortgage taken out before that date and any mortgage taken out since 2004 where the borrower or the property does not meet the FCA regulated mortgage definition is treated as an unregulated mortgage and will not be covered by the FOS or the FSCS.