Your Mortgage Questions, Answered - From LBTT to Forces Help to Buy

Mortgage Questions, Answered

If you've got a mortgage question, you're in the right place. These are the questions we get asked most often - by first-time buyers, people remortgaging, those who are self-employed, and people who've been told by one lender that they don't qualify.

We cover the whole of the market. That means we work with lenders you probably haven't heard of as well as the ones you have. We'll always give you an honest picture of what's available.

Does buying a home in Scotland work differently to the rest of the UK?

Yes, in a few important ways. In Scotland you get access to a Home Report before you make an offer - it includes a survey, a valuation, and an Energy Performance Certificate. This is different from England and Wales, where you typically don't get a survey until after your offer is accepted.

In Scotland, you also pay Land and Buildings Transaction Tax (LBTT) instead of Stamp Duty. The rates and thresholds are different. First-time buyers in Scotland pay no LBTT on the first £175,000.

The offer and missives process in Scotland is also legally distinct. Solicitors handle the conveyancing and the binding offer process is different from the system in England. We work closely with local solicitors and can point you in the right direction.

What is the Home Report and why does it matter for my mortgage?

The Home Report contains a Single Survey, which is a valuation and condition report. Your mortgage lender will use this valuation as the basis for how much they'll lend. If the price you've agreed is above the Home Report valuation, the lender will base their loan on the lower figure - and you'll need to make up the shortfall.

This happens more often than people expect, particularly in competitive markets. We'll always factor this into the planning with you.

What is LBTT and how much will I pay?

LBTT is Land and Buildings Transaction Tax. It applies to residential property purchases in Scotland above £145,000. First-time buyers have a higher nil-rate threshold of £175,000.

Above these thresholds, LBTT is charged on a sliding scale. We'll work out the exact figure for your purchase as part of the full cost breakdown.

If you're buying a second home or a buy-to-let, an 8% Additional Dwelling Supplement (ADS) applies on top of the standard LBTT rate.

LBTT rates are set by the Scottish Parliament and can change. We'll always confirm the current figures with you before you commit to anything.

I'm self-employed. Can I get a mortgage?

Yes. Being self-employed doesn't disqualify you from a mortgage, but the way lenders assess your income is different. Most lenders will want to see at least two years of accounts or tax returns. Some will accept one year if your circumstances are strong.

If you're a sole trader, lenders typically look at your net profit. If you're a limited company director, they usually look at salary plus dividends, though some lenders will also consider retained profits in the company. This makes a significant difference to the figures.

We work with lenders who understand self-employment and take a considered view rather than applying a blanket rule.

I work through an umbrella company or on a CIS card. Can I get a mortgage?

Yes, but it requires lenders who understand how construction and contracting income works.

For CIS (Construction Industry Scheme) workers, some lenders will use your gross CIS income rather than the net figure, which significantly improves the loan amount available to you. Not all lenders do this. Knowing which ones do is part of what we do.

For umbrella company workers, lenders typically want to see your contract rate and employment history. Some are more flexible on this than others.

I'm a contractor on a day rate. How do lenders assess my income?

Some lenders will annualise your day rate - multiplying your daily rate by a number of working days per year - and use that figure for affordability. This is often a more favourable approach than using payslips or accounts alone.

The key is matching your circumstances to the lenders who use this method. We know which lenders take this approach and we'll point you in the right direction.

Can I get a mortgage on a rural property in Scotland?

Yes, in most cases. Rural properties can raise questions around access, construction type, and saleability - all things lenders think about when assessing risk. Some lenders apply minimum value thresholds or restrict lending in very low-population postcodes.

The answer is rarely a flat no - it's more about finding the right lender for the property. We regularly arrange mortgages on rural and semi-rural properties across Scotland.

The property I want to buy is non-standard construction. Is that a problem?

It depends on the construction type and the lender. Older stone-built properties, timber frames, properties with flat roofs, or those with unusual materials can all flag on a standard lender's system. Some lenders will proceed subject to a specialist survey. Others have specific products for non-standard construction.

We'll look at the property type alongside the mortgage options from the start, rather than hitting a wall partway through an application.

I'm serving in the Armed Forces. Are there mortgage products for me?

Yes. Several lenders have criteria tailored to Service personnel, taking into account the nature of forces pay, allowances, and the fact that you may be renting in quarters or living on base rather than owning a home already.

Forces Help to Buy is a scheme run by the Ministry of Defence that allows eligible personnel to borrow up to 50% of their salary - up to £25,000 - interest-free, to use as a deposit or towards buying costs. This runs alongside a standard mortgage. Eligibility and scheme terms are subject to MOD rules, which can change.

We work with lenders who understand Service life and can access the right products for your situation.

I've left the Armed Forces. Can I still access any specialist products?

Some lenders continue to offer favourable terms to veterans, particularly where you have a preserved pension or stable post-service income. Your situation will depend on how long ago you left and what your income picture looks like now. We'll give you an honest assessment.

Can I buy a property through a limited company?

Yes. Buying a buy-to-let through a Special Purpose Vehicle (SPV) - a limited company set up specifically to hold property - is increasingly common, particularly for higher-rate taxpayers.

The mortgage market for SPV buy-to-let is well developed. Criteria, rates, and product availability differ from personal buy-to-let, but there are plenty of lenders who work in this space.

Whether an SPV is the right choice for you is partly a tax question, which is best answered by your accountant. We can talk through the mortgage side and work alongside whoever is giving you tax advice.

How much deposit do I need for a buy-to-let?

Most buy-to-let lenders require a minimum 25% deposit, though some will consider 20% in certain circumstances. The rental income the property generates also affects the loan available - lenders apply a stress test to make sure the rent covers the mortgage comfortably.

We can give you a clear picture of what's achievable based on the property and your existing financial position.

I'm a first-time buyer. Can I also buy a buy-to-let?

Some lenders will consider first-time buyers for buy-to-let, but the field is narrower. Most prefer that you already own or have previously owned your own home. We can advise on whether this is feasible for your specific situation.

When should I start thinking about remortgaging?

Six months before your current deal ends is a good rule of thumb. Some lenders allow you to lock in a new rate several months in advance, so you don't have to wait until the deal actually expires. This means you can secure a rate now while still completing the switch later.

Leaving it too late means falling onto your lender's Standard Variable Rate, which is almost always higher than the product rates on offer.

My property value has gone up. Can I release equity?

Possibly. If your property is worth more than it was when you last mortgaged it, your loan-to-value ratio has improved. This can mean access to better rates, or it can mean releasing some of the equity as cash - for home improvements, other purposes, or both.

We'll look at your current position and compare what's available across the market.

I'm over 55. Are my mortgage options different?

Some standard mortgages have upper age limits at the end of the term. That said, there are more options for older borrowers than many people realise - including Retirement Interest-Only (RIO) mortgages, which are designed specifically for people who want to make interest-only payments without a fixed repayment vehicle, and lifetime mortgages for those who want to access property wealth without monthly payments.

A lifetime mortgage is a loan secured against your home. It will reduce the value of your estate and could affect your entitlement to means-tested benefits. We'll always explain the full implications before making any recommendation.

We advise on both RIO mortgages and lifetime mortgages. Each has very different implications and we'll give you a clear, balanced view of both before anything is recommended.

Do I need life insurance when I take a mortgage?

Your lender won't usually require life cover as a condition of the mortgage. But taking a mortgage without it is a risk worth thinking seriously about. If you died with an outstanding mortgage and no cover in place, the financial consequences for whoever depends on you can be significant.

We always discuss protection alongside mortgage advice. The right cover depends on your mortgage type, your family situation, and what you're trying to protect.

What's the difference between life insurance and critical illness cover?

Life insurance pays out if you die. Critical illness cover pays out if you're diagnosed with a specified serious illness - things like cancer, heart attack, or stroke. Most policies include a survival period, typically between 14 and 30 days from diagnosis, so terms vary and it's worth comparing policies carefully.

They cover different risks and many people benefit from having both.

Income protection is a third type, covering a portion of your income if you're unable to work due to illness or injury. It's often the most overlooked and, for many people, the most important.

We can look at all three alongside your mortgage and find the right combination for your budget and your circumstances.

Something else?

If your question isn't here, get in touch. We cover the whole of the mortgage and protection market and we'll always give you a straight answer about where you stand.

or 📞 01506 537111 or 📧 enquiries@greenshootsfinancial.com

Greenshoots Financial is authorised and regulated by the Financial Conduct Authority.

Please note your home may be repossessed if you do not keep up repayments on your mortgage.