James Lawson, Author at Leedsmoneyman

What is a Mortgage Illustration?

Mortgage Illustration Leeds

During the mortgage process, you will come across a “mortgage illustration”, but what is it? Although it can sound complicated, a mortgage illustration is simply a document that outlines every detail of your mortgage product.

As a mortgage broker in Leeds, we will be the ones who provide you with a mortgage illustration. The process works like so:

  1. After booking and attending your free mortgage appointment in Leeds, your advisor will search through 1000s of mortgage deals in order to try and find the best one for you.
  2. Once they find a deal that suits your personal and financial situation, they will recommend this product to you.
  3. During this recommendation, you will be presented with a mortgage illustration which will showcase everything about the product.
  4. If you are happy with the product and want to continue with us, we can start to prepare your mortgage application.

Your mortgage advisor in Leeds will run through all of this with you… So, especially first time buyers in Leeds, don’t panic!

For a quick, simple explanation of “what is a mortgage illustration”, watch the video below. For more videos just like this, head to MoneymanTV on YouTube!

What is included in a mortgage illustration?

Your mortgage illustration highlights the main details of the product, the costs of taking out the product, your monthly repayments, legal fees and sometimes valuation fees.

Main details
The main details of your product include who you are taking out the product with, the length of your fixed term and the interest rate.

Costs of taking out a product
With most types of mortgages, you will be charged a fee for taking out the product, however, depending on the product, you may not be charged a fee. This will be outlined in your mortgage illustration.

Monthly repayments
Your monthly repayments are how much you will have to pay each month for your mortgage. These will be calculated by the total mortgage amount, interest rate and fixed-term.

Legal fees
Legal fees include the services of a solicitor. Your mortgage broker in Leeds will talk you through this and the other costs involved before handing you over to the solicitors.

Valuation fees
You will see details of property surveys and valuations fees inside of your mortgage illustration. These costs can change depending on the type of survey you choose to take out.

Do I have to agree to your mortgage recommendation?

No, you do not. At this stage of the process, you have only been recommended a product, therefore, you are under no obligation to continue with it. In some rare cases, you may even want your mortgage advisor in Leeds to find you another deal.

If you choose to part with us and the deal, you will have to search elsewhere for another product.

Does going through a mortgage illustration guarantee me a mortgage?

Though we would like to, we would never guarantee someone a mortgage. A mortgage illustration is only an outline of your mortgage recommendation, therefore, you have not submitted your application yet and have not been approved by the lender.

Is a mortgage illustration the same as an agreement in principle?

Prior to receiving your mortgage illustration, you will have received an agreement in principle to show that a lender is willing to lend to you. This is not the same as a mortgage illustration.

This is also not a guarantee, they are agreeing in principle that you can provide sufficient evidence of your income and affordability. After your illustration, we will prepare your mortgage application with you if you want to continue.

Speak to a Mortgage Broker in Leeds

As a mortgage broker in Leeds, it is our job to help you through the whole mortgage process. We will be on hand to answer any questions that you may have about the mortgage process.

Your free mortgage appointment includes a mortgage illustration. Book your free mortgage appointment online and we can get your process started today.


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Mortgage Advice for Divorce & Separation in Leeds

Specialist Mortgage Advice in Leeds

It can be a very difficult time when you have to close the door to a relationship. Moving on, trying to arrange finances and finding where you’re going to live can be very stressful. Your financial commitments to one another must be attended to first. This may not go as smoothly as you would hope and you may encounter some bumps along the way.

Our job is to help you through the financial hardship that you and your ex-partner are facing, in particular, the mortgage side of things. We have a history of helping applicants in this situation and experience helping customers in other specialist situations such as debt consolidation, equity release and buy to let investments.

As a Mortgage Broker in Leeds, we are often able to help applicants going through a divorce or separation. Here are the most common questions asked by customers when it comes to Divorce & Separation Mortgage Advice in Leeds:

  • How do I remove my ex-husband/wife from my mortgage?
  • How do I remove my name from my ex-partner’s mortgage?
  • Can I have 2 mortgages?

How do I remove my ex-partner from my mortgage in Leeds?

If there are children involved in this situation, it is usually the mother who stays inside of the property; this isn’t always the case though. Regardless of gender, it will be the same process for you if you want to remove your ex’s name from the mortgage.

Once you have decided that you are going to be the applicant to remain living inside the property, you will need to try and remove your ex-partner’s name from the mortgage. This is where you and your ex-partner will need to prove that they’re financially stable with their sole income alone. This can be demonstrated in different ways; measuring affordability, costs of living, and eligibility.

If you manage to remove their name from the mortgage and you have demonstrated that you are able to meet your repayments without your ex’s contribution, if by any chance you fail to meet a payment, they can chase your ex for the money. This is because, at the time of taking out the mortgage, you were registered as a second applicant so they can legally still ask for the money from you.

If you cannot demonstrate that you are able to afford your mortgage repayments on your own, then you may need to ask a family member to help out, or in some cases, an applicant will already have another person ready to move in.

It also makes no difference if you and your ex-partner create a verbal agreement that one party will not contribute towards any payments. Until you have successfully removed the name from the mortgage, that party will still remain liable for any payments, should the balance fall into arrears.

How do I remove my name mortgage in Leeds?

The process works exactly the same, however, you are trying to move out of the property and take your name off the mortgage. A recurring problem here is that the applicant remaining inside of the property could refuse to have your name taken from the mortgage. This could mean that you are still liable for any outstanding repayments that are not met by your ex-partner.

We deal with customers in both scenarios in Leeds, and most of the time it can be a complex and difficult situation, as it’s not that easy to remove a name from a mortgage. It also means trying to get a mortgage of your own as a sole name applicant or trying to get a mortgage still linked to another one. Even though you may not be paying anything towards the repayments, it doesn’t mean that you are not responsible.

Can I have two mortgages?

If your name is still on your ex-partner’s mortgage, you may be asking the question “can I get two mortgages”. The simple answer is yes, however, it is down to your current financial and personal situation.

If you are still financially linked with your partner, your Mortgage Broker in Leeds or lender will assess this situation and be able to determine whether you can afford to be linked with two sets of repayments. Lenders always check ongoing financial commitments, which can include the mortgage payment you currently hold with your ex and any additional commitments you have, such as car payments, phone bills and more.

Mortgage Advice in Leeds

Our Mortgage Advisors in Leeds will try their best to help you in your situation. We know that not every scenario is the same, therefore, we will make sure that we are fully aware of the full picture before continuing.

Don’t be ashamed of getting Specialist Mortgage Advice in Leeds, we can work out how much you are able to borrow by checking your affordability and then take a look at some potential deals that could be perfect for you. If we work out your budget, you will be able to get an idea of where you stand.

Moving on from previous joint financial commitments can be difficult, and that is why we want to take the stress away and offer a helping hand. Remember that as far as lenders are concerned, it’s all about the risk. They would prefer to avoid repossession situations at all costs.

Remortgage for a Home Office in Leeds

Over the past three years, more and more people have been investing in home offices and extensions. This is due to job roles altering, people wanting a fresh change and growing families. Rather than Moving Home in Leeds, it may be more financially beneficial to Remortgage for Home Improvements instead.

Remortgage for a Home Office UK | MoneymanTV

Remortgage for home improvements advice in Leeds

Home Improvements range from home offices to conservatories to home Gyms. Anything that you can think of adding to your home could be considered a ‘Home Improvement’.

You would think that incorporating home improvements into a remortgage could be costly, however, in the long run, it can work out cheaper. The way that this works is that you incorporate the costs of the home improvements into your mortgage and you pay it off with your mortgage.

If you were to pay for a home office upfront, you would have to pay the full amount there and then, whereas, when you combine the costs into your mortgage, you are spanning the payments out until your mortgage term ends.

The costs involved with remortgaging for a home office

Remortgaging for a home office should be less costly than remortgaging for a gym or kitchen renovation. To get the true cost for your home improvements, you will need to get a quote from the renovator or tradesman that you are using. This will then allow you to work out how much you need to incorporate into your remaining mortgage amount.

For example, if your estimated costs are £5,000 for your new home office, you may only have to pay an extra £21 per month on top of your usual mortgage repayments. This is assuming an interest rate of 2% is possible over a 25-year term. If your term is shorter, you may have to pay slightly more per month.

Many factors will affect how much you will have to pay back per month and how much you can borrow overall. It is down to the specification of the home improvement, such as the size of the extension and the amount of work that needs doing in the room. You will also need to consider that with a remortgage, you will also have to undergo another affordability assessment, even if you switch deals through the same lender.

If you consider how much it is going to cost to move home and the stress involved with buying and selling a property at the same time, remortgaging could be the best option. Remortgaging in Leeds for a home office could help you pace your repayments and you won’t need to pay for the full cost all at once.

Why remortgage for a home office in Leeds?

Now is a better time than ever to remortgage, there are many different deals out there that can help you fund your home improvements. There are also lots of positives to converting a room into a home office in your new property:

  • Increase productivity and cut off from distractions in the office.  
  • Saving money by avoiding transport costs.
  • Saving time due to rush hour traffic to and from home.
  • Working in the comfort of your own home avoids sharing kitchen appliances and you can take care of your children if you need to.
  • Reduce your carbon footprint and fuel consumption.
  • In an ever-growing digital world, you can do everything that you can do at work at home.

Are you looking to remortgage for a home office?

If remortgaging for a home office sounds like something that you are interested in, then make sure to get in touch with our team to discuss your options. You can book a free remortgage appointment through our ‘Book Online’ system, it’s simple and easy to follow.

We can access 1000s of remortgage products and deals. Your remortgage advisor in Leeds will search for the perfect one for your personal and financial situation. They will also perform an affordability assessment to make sure that you will pass the lending criteria.

We are looking forward to helping you with your remortgage in Leeds.

Remortgage Advice in Leeds

Do I Need Mortgage Protection Insurance in Leeds?

Mortgage Protection Advice in Leeds

What Insurance is Right for you? | MoneymanTV

Mortgage Protection Insurance is a term used to encompass various types of cover designed to protect borrowers if they become unwell, lose their job or from other events that could severely impact their ability to maintain their mortgage payments.

Generally speaking, there are three main types of mortgage payment protection insurance: unemployment only, accident and sickness only, and accident, illness and unemployment.

Each insurance is to provide peace of mind, and here we will discuss the following types of cover:

Free Review Service For Your Protection Needs

What tends to happen is customers when they buy a house but don’t always review their policy when they have changes in their life circumstances. 

The chances are that the cover you took when you bought your first property might not be suitable for your needs now. 

Here at Leedsmoneyman, we review the cover you’ve got, recommend any changes, or tell you that you’ve got the right cover in place.

Next, we find a provider for you and shop online for the lowest cover price we recommend.

What is Life Insurance?

Life cover generally falls into two types – ‘Whole of Life’ or ‘Term Assurance’. The whole of Life cover is guaranteed to pay out a lump sum on death whenever it occurs.

Term Assurance pays out if you die within a specified term of years. There are also different types of term assurance – for example, level, increasing, or convertible – but the type most commonly used as mortgage protection these days is Decreasing Term Assurance. 

Linking to a repayment mortgage and the sum assured reduces the same rate as the mortgage balance over the specified term. Because the insurer’s risk diminishes over time, the premiums are generally cheaper than the other life cover types. 

If the policyholder dies within the period, the sum assured should be enough to pay off the outstanding mortgage balance and ensure the borrower’s dependents will not be left with a debt they might not otherwise be able to manage.

Critical Illness Insurance

There’s an argument that says that life cover gets taken for the benefit of other people – i.e. your dependents – because sadly, you won’t be around to see any service yourself.

However, these days, thanks to improvements in medical treatment, many people now survive conditions that once might have been fatal. 

Nevertheless, whilst undergoing what may be long spells of treatment and recovery, it could have a marked effect on your ability to meet your financial commitments.

It is leading to the development of the Critical Illness cover. That works similarly to Life Assurance in that it has taken for a specific term of years. 

The cover can have different options, such as level/increasing. It got designed to pay out a lump sum and, like Life cover, for borrowers, it is typically taken on a decreasing term basis in line with the reduction of your mortgage balance.

The key is that the benefit is paid if you fall victim to one of several specified critical illnesses and pays out whatever the long term prognosis of that illness.

Do you need critical illness cover?

The type of illnesses covered vary from company to company, but, in general terms, insurers usually cover between 40 – 50 specified conditions, including cancer, heart attack, and stroke. Payouts depend on meeting the required seriousness of the particular situation suffered. 

The life companies all work to at least the pre-designated clinical definitions prescribed by the Association of British Insurers, which means that they can’t just arbitrarily decide that you’re not ill enough.

Hopefully, if your treatment is successful, it means that not only have you survived, but you can benefit from your prudence by no longer having a mortgage to pay after your illness.

In practice, many companies will offer Life and Critical Illness Critical cover as a combined policy. They would usually payout on the first event, i.e. whatever happens first – either death or a severe illness – the payout gets made. They can also get written on a single or joint life basis.

Income Protection Insurance

Whereas Life and Critical Illness cover pay out a lump sum, “Income Protection” pays out a monthly sum designed to replace your wages in the event of you being unfit to work. 

There are no restrictions on the illnesses or injuries covered, unlike Critical Illness cover, the only factor being whether they make you unsuitable to work. 

However, restrictions on how much you can cover and how quickly benefits would get paid. Additionally, the insurers want you to have an incentive to return to work rather than being better off on sick.

Typically, the most you can cover would be approximately 55%-65% of your income. Benefits would begin to get paid after a “deferred period”, which would generally equate to the length of time you would receive sick pay from your employer. 

Benefits would continue to be paid for as long as you remain unfit to work or until the policy term ends, whichever comes first. However, most companies offer a “budget” option to make premiums cheaper. 

Whereby benefits would get paid for a shorter period – usually between 2-5 years – to at least allow you to make alternative arrangements if it looks like you’ll get incapacitated for longer than that.

Like Life and Critical Illness cover, these policies are underwritten based on your health and lifestyle when you apply. All income protection policies get written on a single life basis.

Accident, Sickness, Unemployment (ASU) Cover

Similar in many ways to Income Protection, these policies also cover you should you be made unemployed. Benefits are usually linked to your mortgage and other costs (rather than necessarily your wages) and would usually be paid one month “in arrears” after a successful claim. 

These policies get underwritten at the time of a claim, which can sometimes mean confusion/delay regarding whether a request would get met.

They are a helpful safety net if you are made long term unemployed but be sure to check the details of how/when any unemployment benefits would get paid out, as it may be that you would have returned to work before any monies become due.

Family Income Benefit

Probably the least common of the “mortgage protection” type policies but can often be valuable, particularly for young families. These plans can get taken to cover Life and/or Critical Illness get underwritten on the application in the same way as mentioned above.

However, unlike the traditional forms of policy, the cover would pay an annual or monthly income for the remainder of the plan’s term rather than pay out a lump sum. 

Thus it can replace the primary breadwinner’s income for several years, dependent upon a particular client’s circumstances, which would get written on a level or basis, or an index-linked basis designed to keep up with inflation.

How a Protection Advisor in Leeds can help you?

There’s an adage that says you can never have too much insurance. Indeed, many people have one or more of the different policy types, and it would be wrong to think of Mortgage Protection Insurance as just an “either/or” choice. 

Affordability plays a huge role. Whilst it would be great to cover yourself for every potential opportunity, our Protection Advisor in Leeds will discuss the different types of cover available to you. Next, they will help tailor a suitable deal to cover your repayments to help support next of kin with financial support when sadly, something happens to you.

If you want to take out more than one type of policy, your Protection Advisor in Leeds would usually place all the cover with one provider to help save you from any additional policy administration charges.

Fixed-Rate Mortgages in Leeds

Fixed-Rate Mortgage Advice in Leeds

What is a fixed-rate mortgage?

As one of the most popular mortgage types, it’s important that you know what a fixed mortgage is and how they work. When it comes to your remortgage, you may want to explore your options, therefore, finding out about the different types of mortgages could help you make your decision.

Your interest rate on a fixed-rate mortgage will remain the same throughout your fixed term. Whether this is a longer term or a shorter term, either way, your interest rate will not change.

Typically, the longer that you fix in your mortgage for the higher the interest rate will be. Therefore, if you are looking for a lower rate mortgage, you may need to look at taking one out over a shorter term. The only real downside to short term mortgages is that your renewal will be due more often. Short term fixed deals usually last 2-5 years.

During your Remortgage in Leeds, it may be worth looking at fixed-rate products so that you know exactly what you’ll be paying over your fixed-term.

What is a Fixed-Rate Mortgage | MoneymanTV

Medium & Long Term Fixed Mortgages

If you are happy with tracking a slightly higher interest rate over a longer period of time so that you don’t have to remortgage and pay the extra fees that are involved with taking out a new product, a medium to a long-term fixed mortgage may be more suited to your needs. 5-7-year fixed-rate mortgage products tend to be the most popular amongst people in this kind of situation.

Despite the high interest rates, if you still want to take out a product over a long term, you could look into the possibility of taking out a 10-year fixed-term rate. Although, 10-year terms are a little harder to find and you may need to approach a specialist lender to take out one. They also come with high costs as you’re locking in for a decade, a lender needs to be able to trust your affordability throughout the term.

In comparison, both medium and long term fixed-rate products have their advantages and disadvantages, however, it mainly comes down to your personal situation and what type of product you are looking for.

Booking & Arrangement Fees

Upon remortgage, you will face booking and arrangement fees. You will need to consider these costs before taking out another product. Sometimes, you will be asked to pay these fees upfront just in case your purchase falls through. Your Mortgage Advisor in Leeds should go through these costs with you before you take out a new product with them.

If you are taking out a long-term mortgage product, you may be able to avoid these fees.

Early Repayment Charges

If your financial situation changes unpredictably and you pay back your mortgage earlier than you originally planned, you may face an ERC. An ERC or an Early Repayment Charge is a fee that you’ll receive for paying off your mortgage term too early.

An ERC is calculated through a percentage of the amount that is still left on your mortgage. For example, if you have £200,000 left on your mortgage and you paid off your term early, with a 2% fine, you may face an ERC of £4,000.

Some people will deliberately pay off their mortgage term and face an ERC. This could be because they’ve acquired a large sum of money for some reason and want to pay off a part of their mortgage, they’ve seen a new mortgage deal after a long term and they want to access it early or simply that they are at the end of their whole term and just want to pay it off.

Fixed-Rate Mortgages

Make sure that a fixed-rate mortgage is right for you before taking one out. It could turn out that another product is more suited for you.

There are many different types of mortgages available on the market, therefore, it’s wise to shop around first! We would always recommend speaking with a Mortgage Advisor in Leeds to get some helpful information and tips.

You can easily find out more information and get Remortgage Advice in Leeds by contacting our team. We offer a free Remortgage Review for every customer – all you have to do is book your appointment online.

Product Transfer & Remortgage Advice in Leeds

Remortgage Advice in Leeds

As you are approaching the end of your fixed mortgage term, you will need to start thinking about taking out a new product. Ideally, you need to start searching around 6 months early.

When you take out a new mortgage product, it is either called a product transfer or a remortgage. A product transfer is when you take out a new mortgage product with your existing lender, whereas, a remortgage is when you take out a new mortgage product with a different mortgage lender.

You are under no obligation to stay with the same lender; in fact, you may be able to access better products if you search elsewhere.

Are you rewarded for lender loyalty?

Lenders rarely reward you for being loyal. This is why we always recommend looking around for more deals and seeing what is on offer. You could always search through your current lender for another product, however, it’s just as easy to switch products through a different lender.

For convenience, you could argue that staying with your current lender is the right idea. On the other hand, you could say that if there is a competitive deal out there that involves a little more paperwork, it may be worth it. As your Mortgage Broker in Leeds, we will search around for products for you, and arrange all of the paperwork! This will take all of the stress away from the process.

We have many different lenders on our panel, each holding different lending criteria. Some of which, have competitive deals available that may be the perfect match for you and your individual situation.

Tempted by an online switch?

Nowadays, it’s way too easy to perform a mortgage switch online; sometimes this is not a good thing!

You should take your time if you’re tempted by an online switch. Taking out the wrong mortgage product could make you lose a lot of money further down the line, so you need to make sure that you do this right. Your current lender may not offer any, but if you’re looking for Remortgage Advice in Leeds, feel free to contact our mortgage team.

As a recommendation, before switching online through your lender, take a moment to look for deals elsewhere and get some advice if you need to. More often than not, people are unsure of how the process works and what product they are taking out; when this is your situation, it’s important to get an expert’s opinion.

When you switch online, you are also missing out on the consumer protection you would’ve got had you spoken to a Mortgage Advisor in Leeds. If you take out a wrong product, you have no say as you took it out yourself with no advice.

Early repayment charges

Once you lock into a new deal, you’re stuck on that rate until your fixed term finishes unless your want to pay an ERC (early repayment charge). An ERC is calculated by the mortgage that you took out and how long is left on your term, therefore, if you take out the wrong deal and want to switch right away, this could be costly.

Unfortunately, lenders love it when this happens as they receive a big pa yout. This is why they rarely offer advice during a product transfer or remortgage. We have encountered multiple different scenarios in the past where this has happened.

One notable case of ours was when a customer who was pregnant, chose not to take mortgage advice and then was declined for a small further advance to fund the planned home improvements she needed to create a room for her child.

Because of the choice that the customer made, she had to pay a very large early repayment charge, in order to allow her to swap to a new lender that would be willing to grant her the necessary funds.

It’s heartbreaking when we see this happen as we wish we could’ve helped in some way. This is why it can benefit you to speak with an expert and get Remortgage Advice in Leeds.

Open & Honest Mortgage Advice in Leeds

Remortgaging and transferring products is a process that almost every property owner will go through. During your first remortgage, it may be best to get Remortgage Advice in Leeds so that you can get through the process stress-free and right the first time.

You can book your free remortgage review with Mortgage Advisor in Leeds online. This will definitely help you get an idea of what sort of deals you can access and what will be your beneficial option.

It costs nothing to get a second opinion, that’s why our free remortgage review is so brilliant! The remortgage market is a very competitive one and searching the market for a new deal can often help you to save you a lot of money.

Buying a Property With a Partner or Friend(s) in Leeds?

Mortgage Advice in Leeds

Purchasing with friends/partner

When you’re a First Time Buyer in Leeds and you’re struggling to get onto the property ladder by yourself, the best and most practical solution can be to move in with a partner or friend. There are many benefits to doing this, for example, you would be able to make up your deposit faster, your application will look stronger with two sets of incomes and your mortgage payments will be equally split.

There are also downsides to taking a mortgage with friends or a partner, as you’re now financially linked with the person(s) that you take one out with. If one of your friends or your partner has adverse credit, a CCJ/default in their name or something that reflects badly on their finances, it could also affect you.


How many people can jointly own a property?

Up to four people are able to co-own a property. Joint owners have the legal right to stay in their home unless a court rules otherwise.

All homeowners will have to give consent before a party can sell or take out extra borrowing against the property.

Joint tenancy or tenancy in common – what’s the difference?

Joint tenancies are typically taken out by civil partnerships or married couples. If one party passes away, the property rights and ownership is transferred to the other owner. Joint tenants are seen as one owner, which means that you cannot sell the property or remortgage without an agreement from other parties.

Tenants in common are popular amongst relatives or friends who are buying together. Each party will have ownership over the property, however, they may not have equal shares. You can freely sell or give away a share of the property if you want, without an agreement from other parties. Some lenders may even let you take out a mortgage on your share, although, finding one that allows this may be difficult.

Joint mortgages & removing names

What happens if you have a joint mortgage, but the other parties stop paying their share of mortgage payments?

Unfortunately, since you are jointly reliable for the mortgage and meeting the payments, if one party stops paying their share or misses a payment, the other parties will have to make up for the shortfall.

When you take out a mortgage, you will be expected to keep up to date with your payments. If a lender doesn’t think that you’re reliable, they won’t lend to you.

It can be more beneficial to speak to an expert and Specialist Mortgage Advice in Leeds for help on this subject.

How do I remove my ex-partner’s or my name from a mortgage?

Removing your own or an ex-partner’s name from your mortgage can be difficult, it’s not as easy and approaching your mortgage lender and taking off the name. Removing financial links as a whole can be tricky, and it’s usually because one of the parties cannot afford to live on just one income or there are children involved.

When it comes to mortgages, even if there is an agreement that one of the parties will not contribute towards the mortgage payments, if their name is still listed on the mortgage, they’re still responsible for them. Furthermore, in the event of mortgage arrears, both parties are responsible.

If your ex-partner is the party keeping the mortgage, the lender has to be adamant that the remaining applicant can afford the payments, and vice versa, if you are the one with the mortgage, they need to know that you can afford the payments by yourself.

More often than not, in a situation like this, there is a family member or another partner ready to step in and help with the payments. As a Mortgage Broker in Leeds, we are here to help you through this difficult time and help you sort the mortgage side of the process.

Mortgage Broker in Leeds

Interest-Only Mortgage Ending in Leeds?

Interest-Only Mortgage Advice in Leeds

What are my mortgage options in Leeds?

As a mortgage broker in Leeds, we see many Interest-Only Mortgages come to the end of their term. In quite a few of these situations, people have struggled to pay their mortgage off in full.

Our job is to help you through these kinds of situations and give you advice on what you can do if you are faced with these problems.

Here is everything about interest-only mortgages and what you can do if you’re struggling to pay off your mortgage.

What is an Interest-Only Mortgage?

We’ll rarely find someone that has taken out an Interest-Only Mortgage on a property that they’re living in. Usually, it’s only landlords that take out Interest-Only Mortgages these days. Landlords do this so that they can maximise their profits, Interest-Only Mortgages can help them do this.

During the 1980s and ’90s, these mortgages were very popular, even amongst buyers that wanted to live inside the property that they’re buying. Their idea was that they would pay interest on the capital owed then pay the lump sum back at the end of the term.

At the time of these borrowers taking out an Interest Only Mortgage, it’s likely that they also set up an investment vehicle, this is usually a low-cost Endowment policy. This policy provided life cover to pay off the mortgage should the borrower die.

Sometimes, people were advised wrongly and wasn’t made aware of the risks involved with an Interest-Only Mortgage. There was no guarantee that the investment would mature for a big enough sum to repay the mortgage. Leading to a surge of complaints, and thousands of people received compensation if they got mis-sold.

Why have people still got Interest-Only Mortgages?

Endowment Mortgages are more of a thing of the past. It’s been a very long time since they were popular. You’ll still find people with them though. It may be that they just haven’t got around to switching to a repayment mortgage. If you end up in this position, it can be a very worrying time because you might be worried about losing your home.

You can still take out Interest-Only Mortgages, however, you will have to pass a lot more requirements to get one. Lenders are much stricter nowadays and matching their criteria may be tricky.

If you take one out now, you may encounter problems in the future.

What can I do about my Interest-Only Mortgage?

A borrower could be taken by surprise by their lender requesting full repayment of the balance. This may happen if there’s been a lack of communication between the applicant and the lender. Lenders should be regularly writing to their Interest-Only customers to ensure that they know they must make plans to repay the capital.

If you have no means to repay the capital, our advice is to keep the lines of communication fully open with your lender. They will be very experienced in dealing with these situations, and you just need to let them know where you stand. Lenders never want to repossess your property, although, they will do this as a last resort.

Here are some of the things you could be doing to resolve the situation:

  • See if your lender will switch you to a Repayment Mortgage if this is affordable.
  • Consider selling up and downsizing if this is achievable.
  • Use your savings/assistance from family members. Sometimes parents will “fast-forward” a future inheritance if they can do so.
  • Speak to a Mortgage Advisor in Leeds and see if you can Remortgage in Leeds to a new Lender.
  • Consider Equity Release/Lifetime Mortgage option through a specialist advice firm.

What are my options?

Following on from our last points, there are far more retirement mortgage options open to borrowers now than there has ever been. If you manage to qualify for one of these, you can continue to pay interest to protect the equity you have in the property. Alternatively, if you are not worried about leaving an inheritance to your children, you can let the interest roll-up and cease making payments altogether.

One major problem in getting a mortgage through Equity Release tends to be the loan to value. You must have a decent amount of equity in your home to qualify for one of these products.

Mortgage Broker Leeds

Can I get a mortgage as a student?

Student mortgage advice in Leeds

University: a place to enjoy freedom, independence and time away from the parents! However, as you know, university life comes with costs and lots of different fees. With constant bills, it can sometimes be hard to see what you’re actually paying for, particularly with student accommodation.

When it comes to student accommodation, you may feel like you’re getting your money’s worth yet sometimes you may feel the complete opposite. You’re in luck if you manage to get a landlord that looks after you and your property and takes care of damages and repairs quickly. On the contrary, you could get a landlord that isn’t responsive at all and leaves you with broken appliances for weeks on end.

Unfortunately, more often than not, students will end up getting a landlord that doesn’t give much back to them and treats them poorly. In this situation, it can make you question, is it really worth spending all of this money to get nothing back? If you’re asking yourself this question, why not consider becoming your own landlord?

When you are your own landlord, you’ll avoid all the hassle and be able to sort things out yourself. You can become your own landlord by taking out a student mortgage. Although it can be expensive in the short term, it can save you money as soon as you get the keys and start living in the property!

Why should I get a student mortgage?

A student mortgage will not only allow you to save money on your accommodation but will also give you an early chance to get yourself onto the property ladder. Usually, these mortgages are more popular amongst students who are planning to carry on their education to a masters/PhD level.

Even if living within the property is temporary, you can always sell it in the future and make money back on it. Alternatively, you could turn it into a buy to let in Leeds to rent out to other students.

When your university journey comes to an end, you will have built up a large amount of equity within the property. This equity, when released, can be turned into a lump sum of cash. You can use this cash on whatever you want, whether it’s for another deposit, a wedding, a car, etc. Since it’s your money and your equity, you can spend it how you want.

There are many different things that you could do with your property in the future!

How can I get a student mortgage?

Sometimes, it can be hard to obtain a student mortgage because you’ll need funds in place to afford one, and for a student, this can be difficult.

As a mortgage broker in Leeds, when a student enquires about a mortgage, we have to ask them some questions to learn about their financial situation and see whether they’ll be able to qualify for one or not. Firstly, we will need to find out whether you have a deposit at the ready. Your deposit can be a gifted deposit, from a Lifetime ISA or even as simple as funds from a savings account.

Secondly, we need to make sure that you can actually afford a mortgage. One of our mortgage advisors in Leeds will measure this by working out your mortgage affordability. You will certainly need a form of income to get a mortgage as a student. Depending on your lender, you may be able to get a mortgage with a part-time job, however, most lenders will only accept a full-time job.

Showing reliability

Showing reliability is key. You need to show the lender that you’re a reliable applicant that will be able to afford a mortgage. Here are a few examples of how you can increase your reliability:

Increasing initial deposit – By putting down a higher deposit, the overall amount that you’d need to borrow for a mortgage would decrease. This would also mean that your mortgage payments would decrease.

Utilising government schemes – Government-led schemes are a great way to increase your reliability for a mortgage. The schemes are under a program called “Own Your Home”, they were introduced to help first time buyers get onto the property ladder.

Through these schemes, you may be able to access a larger deposit. Some of the schemes include the Help to Buy Equity Loan, Lifetime ISA and Shared Ownership. There are many more if you visit https://www.ownyourhome.gov.uk/all-schemes/.

Have an AIP ready – A mortgage agreement in principle (AIP) can benefit your student mortgage application. An AIP proves that a lender is willing to lend to you based on you providing evidential documents to support your income, mortgage affordability, etc.

This is just a few examples, there are more ways to show your reliability as a student. Get in touch with our mortgage advisors in Leeds today to find out even more ways to improve your reliability.

What type of property can I buy with a student mortgage?

Likewise to other mortgage options, you will have to meet certain requirements before securing your student mortgage:

  • The property must be within a 10-mile radius of your university.
  • The property must be 3-4-bedroom house.

With these points in mind, we suggest that you have a think about what you are going to do with the extra rooms. It makes sense to rent them out to help support your mortgage payments each month.

What happens if I can’t afford my payments?

Lenders won’t take any risks when it comes to offering a mortgage student. They will take careful precautions with all student applicants.

When signing off the papers for your mortgage, you’ll be asked to give a name for a guarantor. This is someone who will cover your payments if you cannot meet them at any time. There are some limitations to who your guarantor can and can’t be:

  • They cannot be over 65 at the point of your application.
  • The guarantor must own a property in the UK.
  • They must live inside this property in the UK.

You’ll find that every lender will always have some sort of backup.

For expert help with achieving your mortgage dreams as a student and first time buyer mortgage advice in Leeds, contact our brilliant team today. We will help you see whether you qualify for a student mortgage and perform a free affordability check on you and your file.

First time buyer mortgage advice in Leeds

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