What Does Remortgage in Leeds Mean?
If you own a home, the term remortgage in Leeds may have crossed your path. But what precisely does it entail, and how does it intertwine with your financial health?
In this comprehensive guide, we’ll delve into the world of remortgaging, demystifying its meaning and shedding light on its relevance and the potential advantages it can bring to your financial well-being.
Defining Remortgage in Leeds
In straightforward terms, a remortgage in Leeds, occasionally referred to as refinancing, involves the act of transferring your existing mortgage to a new lender or re-evaluating the terms with your current lender.
This financial manoeuvre empowers homeowners to fine-tune their mortgage arrangements to align more effectively with their present financial circumstances and objectives.
The Key Elements of Remortgaging in Leeds
Let’s delve deeper into the fundamental aspects that make up the concept of remortgaging in Leeds:
Changing Lenders
A significant motivation behind remortgaging is the transition from your current lender to a new one. This choice can be driven by various factors, including the pursuit of more competitive interest rates, enhanced customer service, or more advantageous mortgage terms.
Renegotiating Terms
If you’re satisfied with your current lender but seek modifications to your mortgage terms, remortgaging is still a viable option. This can encompass changes such as extending or shortening the mortgage term, transitioning between fixed-rate and variable-rate mortgages, or vice versa.
Releasing Equity
For homeowners aiming to unlock the equity accumulated in their property, a remortgage in Leeds designed to release equity provides a practical solution.
This strategy involves borrowing against the increased value of your home, granting you access to a lump sum or establishing a line of credit that can be utilised for various financial objectives.
Reasons to Consider Remortgaging in Leeds
Now that we’ve clarified the concept of remortgaging in Leeds, let’s delve into why homeowners opt to take this step in their homeownership journey:
Lower Interest Rates
When interest rates decrease or if you originally obtained your mortgage at a less advantageous rate, remortgaging can enable you to access lower interest rates, leading to decreased monthly payments.
Repayment Flexibility
Remortgaging provides homeowners with the opportunity to adjust their repayment structure, making it more manageable. This flexibility allows you to switch between an interest-only mortgage and a repayment mortgage, depending on your financial preferences and circumstances.
Home Improvements
If you’re considering a remortgage in Leeds for home improvements, this financial move can provide the necessary funds by leveraging the equity you’ve built up in your property.
By borrowing against the increased value of your home, you can access the capital needed to fund various home improvement projects.
Debt Consolidation
For homeowners in Leeds dealing with multiple debts, like credit card balances or personal loans, a remortgage offers the opportunity for debt consolidation. This means combining these various debts into one manageable monthly payment.
Accessing Equity
As time passes, the value of your property in Leeds may see significant growth. Remortgaging can be a strategic financial move to leverage this increased property equity for various purposes, whether it’s funding your child’s education or venturing into additional property investments.
Speak to a Mortgage Advisor in Leeds
Navigating the intricacies of remortgaging in Leeds can be a multifaceted task. Therefore, it’s wise to seek guidance from a qualified mortgage advisor in Leeds. These experts possess the knowledge and experience to meticulously evaluate your unique financial circumstances.
They can help you in identifying the most suitable remortgage solution and provide valuable guidance throughout the entire process. In essence, for most remortgages in Leeds, you won’t need to provide a deposit upfront.
Instead, the key factors in this process revolve around your existing equity and the loan-to-value ratio. It’s important to engage the services of adept mortgage advisors in Leeds who can offer expert remortgage advice in Leeds tailored specifically to your requirements.
They will conduct a thorough assessment of your financial situation, explore various remortgage options, and strive to secure the most advantageous remortgage deal for you.
In conclusion, remortgaging in Leeds is a financial tool that empowers homeowners to make strategic adjustments to their mortgage arrangements, whether it’s for lower interest rates, enhanced repayment flexibility, or accessing home equity.
To make the most of this opportunity, diligent research, expert consultation, and a clear understanding of your personal financial situation are essential.
Do You Need a Deposit to Remortgage in Leeds?
When it comes to remortgaging in Leeds, it’s not uncommon for homeowners to ponder whether a deposit is necessary. After all, the notion of a deposit is more commonly associated with purchasing a new property rather than the process of refinancing an existing mortgage.
Understanding the Basics: What is a Remortgage in Leeds?
Before we explore the role of deposits in the context of remortgages, it’s essential to have a clear understanding of what a remortgage in Leeds involves.
Essentially, a remortgage refers to the process of either shifting your current mortgage to a new lender or renegotiating the terms of your existing mortgage with your current lender.
People consider remortgaging in Leeds for various reasons, such as seeking a more advantageous interest rate, exploring the option of releasing equity through a remortgage, or aligning their mortgage type with their evolving financial situation.
The Role of a Deposit in Remortgaging in Leeds
The good news is that, in the majority of cases, remortgaging in Leeds does not demand a deposit.
Unlike the scenario when you’re purchasing a new home, where a deposit is usually a prerequisite for securing a mortgage, remortgaging predominantly relies on the equity you’ve built up in your current property.
Leveraging Your Home Equity
When you initiate the process of remortgaging in Leeds, your home’s equity becomes a critical factor. Equity represents the portion of your property’s value that you outright own, and it increases incrementally as you diligently make mortgage payments.
For example, if your current property valuation is £300,000, and your outstanding mortgage balance is £200,000, your equity would be £100,000. This accrued equity serves as a valuable asset that can unlock various remortgaging opportunities.
The Loan-to-Value Ratio (LTV)
Instead of leaning on a deposit, remortgages in Leeds are typically guided by an important metric known as the loan-to-value (LTV) ratio.
The LTV ratio evaluates the amount you intend to borrow compared to your property’s current market value. Many homeowners in Leeds aim for a lower LTV as it often opens doors to more favourable remortgage options.
Deposit for Specific Remortgage Situations
While most typical remortgages in Leeds don’t require a deposit, there are certain scenarios where it might come into play:
Adverse Credit History
Suppose you have a history of credit issues; in that case, it’s possible that certain lenders may ask for a deposit as a precautionary measure to reduce risk. This deposit serves as a safety net, providing the lender with added confidence in case of any payment difficulties.
Releasing Equity
If you’re contemplating a remortgage in Leeds with the intention of releasing a substantial amount of equity, it’s worth noting that certain lenders may ask for a deposit to mitigate their financial risk.
This extra deposit acts as a measure for lenders to reduce their exposure when you’re unlocking a significant portion of your property’s equity.
Additional Considerations
It’s important to bear in mind that the remortgaging process involves several associated costs, including arrangement fees, valuation charges, and legal expenses. These expenses should be carefully taken into account as you assess the advantages and disadvantages of remortgaging.
Speaking with a Mortgage Advisor in Leeds
When it comes to navigating a remortgages in Leeds, it can often be a complex task. Therefore, the most sensible course of action is to seek guidance from a qualified mortgage advisor in Leeds.
A mortgage advisor in Leeds will have the expertise to meticulously evaluate your unique circumstances. They can help you in identifying the most suitable remortgage solution and provide guidance throughout the entire process.
In summary, the majority of remortgages in Leeds do not necessitate a deposit. Instead, the key factors in the process are your existing equity and the loan-to-value ratio.
It is important to engage the services of adept mortgage advisors in Leeds who can offer expert remortgage advice in Leeds tailored to your specific requirements.
They will conduct a thorough assessment of your financial situation, explore various options, and endeavour to secure the most advantageous remortgage deal for you.
What is a Mortgage in Principle in Leeds?
A mortgage in principle, also known as an agreement in principle (AIP), is a document given to you by your mortgage lender to show that you have passed their credit score to qualify for a mortgage. You may have also heard the term “decision in principle”, this is also the same thing.
Getting an agreement in principle can often help you negotiate the asking price with your seller. This is because the seller can see that you have the funds in place, have been preapproved by a mortgage lender and can continue immediately. Having an AIP and not having an AIP could be the difference between your offer getting accepted on a property and being rejected.
Will obtaining an agreement in principle in Leeds affect my credit score?
We find that our customers, particularly first time buyers in Leeds, are worried about their credit score having an impact on their ability to get a mortgage. Things such as credit searches may impact your credit score, and you will have to undergo one to obtain an agreement in principle.
However, you have to remember that a credit check will only have a negative impact on your credit score if something bad is found on your file. The severity depends on what the mortgage lender has found, for example, if you forgot to update your address for an old account, it won’t have too much of an impact on your credit score. On the other hand, if they find that you have large withstanding balances on your credit cards, you may see more of an impact.
As a mortgage broker in Leeds, when we arrange an agreement in principle on your behalf, we do not carry out any credit checks on you. We will, however, ask for your permission for the mortgage lender to carry one of these out on your credit file.
Credit searches come in two different forms; a soft credit search and a hard credit search.
Soft credit search in Leeds
Soft credit searches are not very in-depth and will only really look at your main information, such as employment, income, age etc. This is the type of search that price comparison sites use to verify that you are who you say that you are. More and more lenders are opting for this type of search nowadays when arranging an agreement in principle because they will likely perform a hard credit search on you further down the line.
Soft credit searches are hidden from your file, with only you being able to see that they have taken place. That means you can be unsuccessful in one instance and not worry too much about how it looks to others.
Hard credit search in Leeds
A hard credit search provides the mortgage lender with a much more in-depth look at your credit file. Any company that wants to perform a hard credit search on you must get your permission first before doing so. This is because they could have an impact on your credit score.
During a hard credit check, the mortgage lender will take a complete look at your financial circumstances. If you pass this check, you have much more chance of seeing mortgage success.
The downside to hard credit checks is that they will likely leave a credit footprint on your file. If someone looks at your file in the future, it will show that there has been a hard credit carried out. The outcome of the search will not show in your file, meaning that other financial institutions looking at this may be worried, especially if there are lots of them.
Mortgage lenders do not like seeing lots of different credit checks on your file, because it could suggest that you have been applying for lots of credit all at once. This is something that can put off a mortgage lender.
This isn’t to say that having a few will be drastically negative, you won’t need to worry a lot about this, it’s just always best to make sure you are cautious with it.
Is an agreement in principle a guarantee that I will get the mortgage in Leeds?
An AIP or mortgage in principle does not guarantee you a mortgage. Remember that you are being agreed in principle of being able to support your affordability. Mortgage lenders will require you to provide evidential documents such as your P60, bank statements, etc., to prove that you can afford the mortgage after you have an accepted offer.
If you are self employed in Leeds, the documents that you need to provide will be slightly different. It is always worth speaking with a mortgage advisor in Leeds to discuss your affordability for a self employed mortgage.
Can I make an offer on a property in Leeds without an agreement in principle?
Yes, you can make an offer on a property in Leeds without an agreement in principle, however, we wouldn’t recommend it. The estate agent and the seller will want to make sure that the person making an offer on the property is serious about their purchase and has the ability to advance through to the sale of the property. If you do not have a mortgage in principle, you are not able to go straight to the next stage of the process, you haven’t even been agreed in principle as of yet.
How long does it take to get an agreement in principle in Leeds?
As a mortgage broker in Leeds, we are able to arrange an agreement in principle for you within 24 hours of your free mortgage appointment.
How long does an agreement in principle last for in Leeds?
Your agreement in principle will roughly last between 30 and 90 days. Once your AIP expires, it is a simple process to get it renewed.
All that you need to do is get back in touch with our mortgage advisors in Leeds, and we will arrange a new one with you straight away.
When should I get an agreement in principle in Leeds?
We always recommend getting an agreement in principle as early on in the process as possible. Even if you are thinking of moving house in Leeds, before you take up property viewings, make sure that you have your agreement in principle at the ready!
The earlier the better; having an AIP and not having an AIP could be the difference between your offer being accepted on a property and being declined.
How to Save For a Mortgage in Leeds
First time buyers in Leeds may find the home buying process a little bit daunting. It is no surprise, you need to make sure your credit score is good enough, and that you have a reasonably large deposit saved, amongst other things. The latter is what we will talk about in this article.
Work Out How Much You Need to Save
To work out how much you need to save for a mortgage, you are going to need to work out your monthly disposable income. Once you have deducted your expenses and monthly expenses from your monthly income, you will be able to calculate and estimate how much you can allocate to your mortgage savings. This allows you to set clear and realistic goals for how much you need to save each month.
As a rule, when taking out a mortgage with a high street lender, you must provide at least 5 percent of the property cost. We tend to find most first time buyers in Leeds aim to save a minimum of 20% of the property price. The larger deposit you put down, the lower your monthly payments will be. If your credit is bad, your lender may want you to provide a larger deposit. This might be somewhere around 15% – 30% depending on your circumstances.
One of the reasons it may be better to save for a larger deposit is that you will have more access to competitive mortgage deals, some with lower interest rates. To work out the maximum amount of how much you can borrow for a mortgage, speak to a mortgage advisor in Leeds.
It is also worth saving some additional money to put towards the additional costs of buying a property. As well as your mortgage and protection advisor in Leeds will offer you insurance or cover for you and your property.
Are there any schemes available?
With a range of different government schemes available it is worth seeing if you are entitled to any of these schemes. One of these includes the Help to Buy Equity Loan Scheme, which was designed by the government to help first time buyers in Leeds onto the property ladder. As long as you provide a 5% deposit and fit the criteria, the Government will lend homebuyers up to 20% of the cost of a new build property.
There is also the Shared Ownership Scheme which provides the opportunity for those who can’t afford a mortgage or 100% of the home. Unlike the Equity Loan Help scheme, this type of scheme allows you to buy a portion of your property (usually between 10% and 75% of the value of the home) and make up the remaining share through rent. Further down the line, you do have the option to buy larger shares if you can afford to.
If you are looking for more information about these schemes, please feel free to contact us or book yourself a free mortgage appointment with one of our expert mortgage advisors. Another alternative is to browse the government’s OwnYourHome Web site.
Help From Elsewhere
A gifted deposit from a family member or friend can be a significant help when buying your first home. As the name suggests, gifted deposits are given with the understanding that the money does not need to be paid back and the amount you would like to gift is entirely up to you.
Review Your Outgoings
Flick through all the bills and subscriptions you currently have. You might find that you can find cheaper deals for your mobile phone and broadband packages. It is helpful to shop around for these. More leisurely services such as gym memberships or streaming services are best to see if you get the value of your money or if there are other cheaper alternatives out there. This frees up more money to save on a deposit.
Have you considered buying a property with a friend or partner?
Buying with a friend or partner is a suitable option for many first time buyers in Leeds to get on the property ladder and can also help when it comes to saving for a deposit. Because you buy with another person, it makes savings for a deposit faster than saving from a single income. However, if one of you defaults, the other person may be responsible for the full mortgage.
There are several types of mortgages designed for those who want to buy a property with their friend or partner, these include but not limited to:
Joint Tenants
This includes both individuals who own the entire property and have equal shares in it. If one of the owners dies, the property will automatically be passed to the remaining owner. From a lender’s point of view, you are one unit so you both must agree if you want to sell or remortgage the property.
Tenants in Common
Both owners have a certain share of the property here. This can be a popular option for relatives or friends who buy together. Because you do not have an equal share, you can act individually and have the right to sell or give away your share.
Saving For a Deposit if You Have Bad Credit
Getting a mortgage with bad credit in Leeds may be possible, however, it is likely that you have higher interest rates that could cause you to need a larger deposit. It may be best that you start by improving your credit score. Below are some ways to improve your credit score:
Register on the Voter’s Roll
This can show lenders that you have stability, so registering on the electoral roll is helpful. Make sure all the information on the form is correct with your name spelled correctly and your current address is registered. All this can be done online.
Try to Keep Within Your Maximum Limit
Maxing your card every month can have a negative impact on your score. It’s best to use a credit card and pay off your balance in full each month.
Meet Payment Deadlines
Paying on time and in full is a great way to show a lender that you are a responsible and reliable borrower. Older and well-managed accounts usually improve your score.
Build up a Credit History
It can be a challenge for companies to assess you if you do not have a lot of credit or none. Some people do not have as much of a headstart and find this a problem for reasons like car finances, credit cards and bills.
Close Down Any Unused Credit Accounts
If you do have any credit cards you no longer use, you must contact your providers to close the account. This can have a temporary negative impact on your score because if you close your account or provider, the credit reference cannot decipher. This should not put you off doing this as it can be a wise thing to do as it can prevent you from falling potential victim to fraud.
Detach Yourself From Any Financial Links to Others
One of the factors that could have a negative impact on your score is being financially linked to a family member or ex-partner. Remember that you will not be able to do this if the account is still active. To do this, you must contact the credit reference agency to make a request.
Our Expert Mortgage Advisors in Leeds
Here at Leedsmoneyman, we can provide the help you need when going through the mortgage journey. We offer all our customers a free mortgage appointment which you can book yourself in for through our ‘Get Started’ process on the website. During this appointment, you can speak to one of our knowledgeable mortgage advisors in Leeds who will provide you with the support you need toward your mortgage goals.
Should I Remortgage in Leeds?
For everyone who owns a home, there will be a point in their life, during their introductory period, where that deal will come to an end. If you are thinking in a similar vein to other homeowners, you might be considering taking out a remortgage on your property.
If you would like to learn more about remortgages in Leeds, please feel free to read the various mortgage guides we have on this topic. Alternatively, you might benefit from listening to the “Moneyman” himself, Malcolm Davidson, talking all about remortgages in Leeds.
Is remortgaging right for me?
This will depend on what you are hoping to achieve with a remortgage in Leeds. For a great deal of homeowners, taking out a remortgage in Leeds is the next step that makes the most sense, on the road to improving their lifestyle or making the most out of their home. That being said, it isn’t for everyone.
The purpose of a dedicated remortgage advice team in Leeds is to review your circumstances, what it is you are looking to achieve, and see if this is the most appropriate route for you overall.
We offer a completely transparent mortgage advice service, so if a remortgage in Leeds isn’t right for you, your mortgage advisor will let you know and offer a potential alternative.
Why do people remortgage in Leeds?
As is usually the case with any mortgage option, there will need to be a large amount of careful consideration prior to making any decisions. There are lots of reasons as to why a homeowner may look to remortgage their home once their introductory period has ended.
To Avoid Any Increases in Mortgage Payments
One of the biggest reasons in recent memory is because of a rise in interest rates. Based on the history of them, interest rates are a lot lower than they previously were, so you are much more likely to see increase than a decrease.
With this in mind, it may be a lot better if you take out a remortgage in Leeds as soon as you are able to do so, fixing in for a specific duration, so that you are able to take advantage of what rates are like currently. People typically choose a 2-5 year fixed rates.
In some cases, you can choose a longer fixed term. A fixed rate could save you a lot of money over the course of it’s duration, as the interest rate may have risen whilst you are fixed, though you will still be paying the lower rate of interest that was available when you took it out.
For a Better Rate
In other situations, it’s not because the interest rates are going up, but instead because you want to access a better rate that could be eligible for. As time goes on, equity will grow within your property and your property may have potentially increased in it’s value.
The equity that is within your home can be used as a means of accessing a better loan-to-value. This can mean getting much better rates, which in turn can allow you to save money or to reduce your term length, if you would like to do this.
For Home Improvements
On the topic of the equity sat within the property, other customers may look to release equity through a remortgage as a way to raise the necessary funds to cover the cost of any home improvements, modifications or alterations they are planning to make.
Whilst some may just have the mindset of simply moving home for what they want in a home, for many, they have built a life in this home, potentially raising or having plans to raise a family in it. Because of this, they may need to alter it to fit their needs.
Reasons that frequently occur include for a newly refurbished kitchen, to create an office for working from home, an additional bedroom, more living space, a conservatory or something else. This in turn can increase the value of your home, which is handy if you ever want to sell it.
To Consolidate Debt
Throughout your term, you may have gained a portion of unsecured debts against your name that have left the process of keeping up your payments a bit challenging. Though it can be risky, a popular choice amongst homeowners is to take out a debt consolidation remortgage in Leeds.
This type of process will move all of your unsecured debts into one combined monthly mortgage payment. Whilst this gives you more disposable income per month, with less outgoings, it will extend your debt over your mortgage term, which will cost more overall.
You should think carefully before securing other debts against your home. By adding your unsecured debts to your mortgage, which is secured on your home, you are potentially putting your home at risk if you cannot make the required repayments.
Although the total monthly cost of servicing your debt may have reduced, the total cost of repayment may still have risen as the term of your mortgage is longer than it may have taken to repay the debts originally.
Alternatives to a Remortgage in Leeds
For some homeowners, a remortgage in Leeds may not be the best choice. Because of this, it is always beneficial to take out expert remortgage advice in Leeds ahead of your fixed period ending, to find the best possible route for you to take.
Your dedicated mortgage advisor in Leeds may feel like it is better for you to take out a product transfer, where you would take out a new mortgage deal, but with the same lender. If you’re in need of more space, perhaps moving home would be more suitable after all.
In rare situations, it may actually be best for you to move across onto your mortgage lenders Standard Variable Rate of interest, though this occur often as it will most likely be much more costly for you on your monthly mortgage payments.
If you are aged 55 and over, owning a property that is worth £70,000, it may be beneficial for you to discuss your equity release options with a qualified later life mortgage advisor in Leeds. They will be able to discuss your lifetime mortgage options, explaining to you the pros and cons.
Get booked in for a free remortgage review today by utilising our online booking feature. A dedicated and trusted mortgage advisor in Leeds will take a look at your circumstances, providing you with expert clarity on which option will be most appropriate for you.
To understand the features and risks of an equity release in Leeds and lifetime mortgages, ask for a personalised illustration.
A lifetime mortgage may impact the value of your estate and it could affect your entitlement to current and future means tested benefits. The loan plus accrued interest will repayable upon death or moving into long term care.
Can I Buy a Home in Leeds With a Small Deposit?
You’ve managed to save up for a 5% deposit and are ready to start making offers on properties. However, you are still being let down and being asked for a larger deposit. Not being enough to save for a lerger deposit could be down to anything, e.g., sellers’ preference, other competition or your credit history.
From in-depth discussions about utilising the government schemes to simple points such as saving more money and waiting, here are some ways that can help you obtain a mortgage with a small deposit.
Different Government Schemes in Leeds
Taking advantage of government schemes can really help you through your mortgage journey. There are lots of schemes available that come under the ‘Own Your Home’ umbrella. These schemes were designed to allow opportunities for first time buyers and home movers to get themselves onto the property ladder.
Shared Ownership
The Shared Ownership scheme is very different. Shared Ownership lets you take a mortgage out on a percentage share of a property (usually between 25%-75%) and then pay the rest back via rent.
Since you are only taking out a mortgage on a smaller percentage of the property, your total deposit amount should be lower. Also, it’s worth knowing that you can increase the share of the property that you own further down the line if you want to. This can be a great stepping stone to get you onto the property ladder.
The scheme is a little complex in some cases. So, we’d recommend that you speak to a mortgage advisor in Leeds like us before diving headfirst into the scheme.
Lifetime ISA
A Lifetime independent savings account should be introduced when you’re thinking of moving or buying your first home in Leeds.
This is because it’s a savings account where your money grows year on year interest-free. You can put as much money in it as you’d like each month, as long as it doesn’t exceed a total of more than £4,000 over the year. This is the maximum that you can save each year.
Each year, the government will top up what you’ve saved by 25%. So, if you save up to the maximum you will get an extra £1,000 for free. The savings from the account can be used for one of two things: buying your first home or saving for later in life.
If you set up a Lifetime ISA at the very start of saving for a deposit, you may only require a small deposit as the lifetime ISA can cover some of it for you!
Right to Buy
If you’re currently living in a council house and planning to make an offer on the property, you may only be required to put down a small deposit, or in some cases not one at all.
This is because some lenders offer a right to buy discount through the government since you’ve already been living in the property.
95% mortgage guarantee scheme
This government-led scheme allows you to get a mortgage with just a 5% deposit. Therefore, if you go down this route, there shouldn’t be many reasons why you’ll be declined.
Of course, getting a mortgage is not guaranteed in any way shape or form. You’ll still be required to pass credit checks, affordability assessments etc.
Alternative to using government schemes
There are other ways besides using government schemes to get a mortgage with a smaller deposit.
Have an agreement in principle at the ready
An agreement in principle (AIP) or also known as a decision in principle (DIP), can boost your chances of getting a mortgage with a smaller deposit.
An AIP shows that a lender is willing to lend to you given that you can provide sufficient documentation to prove that you’ll be able to afford a mortgage. If you’re making an offer on a property, you may be putting yourself in front of someone who’s also put in an offer who doesn’t have an AIP in place.
In this situation, it’s not really about the deposit. The indication to the seller will be that they’ll be able to continue through the process quicker by choosing you. Either way, they’re selling their home, choosing you will just speed up their process!
Keep saving!
An obvious alternative would be to carry on saving up. Even pushing back your home buying journey for a further 6 months could boost up the total amount of your mortgage deposit.
Your small deposit could become much bigger if you knuckle down and save for just a little longer, in fact, it could get you over the edge that you need.
If there aren’t that many houses on the market that are appealing to you, there’s even more of a reason to wait for a little longer.
Remember that the 5%-mark changes depending on the property. If you want to move into a larger home, you may need to save up more anyway.
Taking out a loan to cover your deposit
This is a very specialist situation and often, lenders will not allow it. As a mortgage broker in Leeds, we’ve seen it happen before, but it’s always on rare occasions.
Taking out a loan to cover your deposit can sometimes affect your ability to get accepted and this is because you are essentially borrowing 100% of the mortgage.
This results in having to account for multiple repayments. Lenders will question whether you’ll be able to afford it or not. They can’t risk lending to you if that loan is going to affect your ability to keep up to date with your mortgage payments.
Again, this is a specialist topic, and we would advise that you speak to a mortgage advisor in Leeds and get in touch with us first. Taking out any sort of loan during the months leading up to your mortgage application could potentially be a bad idea.
Why Should I Use a Mortgage Broker in Leeds?
The Benefits Of Using a Mortgage Broker in Leeds
We firmly believe that there are many positives to taking on the services of an expert mortgage broker in Leeds, more than there would be to going direct. That’s just our opinion though, of course we’d say that!
In reality, there are positives to going elsewhere, so it definitely is worth exploring your mortgage options. Thankfully for us, the majority of people will opt to speak with a mortgage broker in Leeds. That being said, we will take a look at the pros and cons of both routes.
Mortgage Broker in Leeds vs Going Direct in Leeds
The first tick in the column of Team Mortgage Broker is that whilst most high street banks can be approached directly, not all mortgage lenders can be.
This means that to get the best deal across all lenders, you’ll benefit from speaking with a mortgage broker in Leeds, though a mortgage lender may still have some deals you cannot get going to a mortgage broker.
An experienced mortgage broker in Leeds will typically require a fee, whereas this likely won’t be the case when going direct. That being said, we can help to recommend other services that you’ll need for much cheaper than they might be with a lender.
Previous arguments could be made saying that “the bank manager knows my finances inside out,” but this was a nullified argument once credit scoring was introduced.
If you know what you are doing and what you are looking for, going direct can be a quick and easy process. On the other hand, if you do not know what you are doing, you could harm your chances of ever obtaining a mortgage, as you won’t match all lenders criteria.
A trusted mortgage broker in Leeds will be able to review the different lenders mortgage criteria and will be able to match you up with the most suitable mortgage deal. We always aim to get this recommendation right first time, which more often than not, we do.
Mortgage Advice Past vs Present
In days gone by, mortgage advisors from high street banks would approve you for a mortgage, whether they were adequately qualified or not. You would not benefit from correct mortgage advice or consumer protection.
As 2014 arrived, this type of practice was banned by the government. Only experienced mortgage advisors could go about providing mortgage advice to customers, making recommendations for products.
The downside to having to now having to only speak with specific individuals at a bank, meant you could be waiting months, just to speak with someone. That’s not good if you’re keen to get it done quickly!
Because of this, usage of a mortgage broker in Leeds rose, becoming a much more popular option. As a company ourselves, we offer various time slots throughout the week, allowing you to pick a time that is convenient to you, and not months in advance!
Quite often, if you’re lucky when booking your free initial mortgage appointment, you’ll be able to speak with someone the same day.
Modern Day Challenges
Nowadays, the hardest part of the mortgage process is matching up against the right mortgage lenders criteria. It’s also important to remember that deals with the lowest rates often have higher arrangement fees.
At the end of the day, a deal may be really good, but you’ll need to pass affordability checks and be eligible for that deal in the first place. With the help of a mortgage broker in Leeds, you’ll be able to find deals that are suitable for you.
Newer Regulations
Thanks in part to the regulations that followed after the credit crunch back in 2008, mortgage applications perhaps are not as straightforward as they used to be.
This isn’t necessarily a bad thing, however, as it makes for fairer lending and less chance of anyone falling into arrears, which both customers and mortgage lenders alike would much rather do without.
That being said, there are still a handful of situations that could cause some issues for applicants, of which a mortgage broker in Leeds may be able to help with.
- You have a poor credit history.
- You are receiving a self-employed income.
- There is a mixed deposit source, i.e. Gifted & Savings.
- Opting for Let to Buy. Renting your current home to buy another.
- Being a contractor or working under a zero-hours contract.
- You perhaps can’t quite meet affordability requirements.
Lending Criteria
Over our time as an expert mortgage broker in Leeds, we have seen mortgage lenders demonstrating their competitive prowess, trying to offer better interest rates than their fellow mortgage lenders.
Once again because of the changes to regulations, the other difference between these lenders, is their mortgage lending criteria and whether or not the customer can match up with it.
Examples of how these may differ, is that some mortgage lenders may have more products for self employed applicants than others, whereas others may not but will be more lenient to something like bad credit mortgages.
The Benefit of a Mortgage Broker in Leeds
Whatever your situation may be, it is unique to you. When you get in touch with a mortgage broker in Leeds and discuss your case, we may have encountered something similar before and will use that knowledge to help.
As a part of our service, we aim to go above and beyond for every customer who gets in touch with us. Customers rely on our help, so even if it seems relatively straightforward as far as cases go, we will still give it our absolute all.
During your process, one of our mortgage advisors in Leeds will be able to discuss what your budget is for making an offer on a property and recommend additional services such as trusted solicitors and the right property survey to undertake.
They can also run through any potential insurance options with you, helping prepare you and your family for the future, in the event of anything unfortunate occuring that could hinder your families financial state.
Still, need more convincing?
A further aspect of our service that is worth shouting about as a mortgage broker in Leeds, is how responsive we are to our customers. Oftentimes going direct can leave you unsure of what is going on and not always being able to make contact.
Our trusted mortgage advisors in Leeds will always keep you in the loop, with availability from early until late, every day of the week, responding as soon as they possibly can, no matter what you need them for.
Additionally, an overlooked factor as to why people may prefer the services of a mortgage broker in Leeds, is that nowadays people just seem to be so busy. It’s often easier to use a professional service, to take the stress off your shoulders.
This is especially beneficial for professional applicants who are dealing with customers of their own, perhaps not having the time to run through their process themselves.
Book Your Free Mortgage Appointment
If you would like to go direct, that is great! Generally though, whether a customer is a First-Time Buyer in Leeds, Self-Employed in Leeds, or looking to Remortgage in Leeds, they prefer to enlist the services of an expert mortgage broker in Leeds.
Book your free mortgage appointment today with a fast & friendly mortgage broker in Leeds and we will see how we can help you along your mortgage journey.
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:
- 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.
- Once they find a deal that suits your personal and financial situation, they will recommend this product to you.
- During this recommendation, you will be presented with a mortgage illustration which will showcase everything about the product.
- 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.
Can I Change My Mortgage to Buy to Let in Leeds?
The Financial Conduct Authority does not regulate some types of buy to let or commercial mortgages.
Depending on the situation that you are in and the mortgage lender you have a mortgage with, yes, you can convert your existing mortgage into a buy to let.
After being a homeowner for a while, you may want to switch things up. Perhaps you will be living with a friend or partner, who owns a home? Perhaps you want to live somewhere new? Occasionally, homeowners may wish to go back to renting.
In either of these circumstances, you may wish to hold onto your current home, turning it from a residential property, into a buy to let property, going from just a homeowner, to a landlord as well.
This is something that can be quite beneficial for many, as it will supplement your income over time.
How to change your mortgage to buy to let in Leeds?
If you wish to make a change to your mortgage and make it a buy to let in Leeds, the first thing you will need to do is speak to your mortgage lender to make sure this is something you can do. If they confirm you can, you’ll need to get in touch with a mortgage broker in Leeds.
The reason is because in order to switch, you will need to remortgage onto a new type of mortgage. Whether you stick with the same mortgage lender or find a new one, one of our expert mortgage advisors in Leeds will help find the best deal for you.
It will be a remortgage, because you are modifying the terms of your deal. You signed up to a residential, not a buy to let, so this will be updated. It isn’t as straightforward as asking the lender to switch, as you need to pass their mortgage criteria for a buy to let in Leeds.
What criteria do I need to meet to change my mortgage to buy to let in Leeds?
First and foremost, before anything else you’ll typically need to have remained within your property as a homeowner for at least six months. Once you’re past the six month point, there are all kinds of factors that a mortgage lender will consider.
Affordability
Your affordability is something that entirely depends on the rental potential of the home you’re converting. Most lenders will want to stress-test your property to make sure that you are able to cover at least 125% of what you’ll be paying per month.
Equity in Your Home
Whilst technically you won’t need a deposit to take out this new mortgage, you will need to have a sufficient amount of equity sitting within your property in order to be able to remortgage it onto a buy to let in Leeds.
Lenders will want to see that you have at least 20-25% equity in your property, though this can be more with poor credit history. Chances are you’ll need even more than this, in order to also cover the deposit for a new home to live in.
Credit History
If your credit history is pretty poor, your chances of obtaining a mortgage will be slimmer. That being said, it’s not always impossible for you to do so!
There are plenty of mortgage choices out there for bad credit mortgages, which extends to people wanting to do a buy to let in Leeds. If any new credit problems have cropped up since your initial mortgage, obtaining a buy to let mortgage may be more challenging.
The important things to remember are building up your credit score again and the amount of time that has passed since the initial issues cropped up. To give an example, the more time that has passed since being given a CCJ, the better chance you’ll have of getting a mortgage.
Type of Property
The type of property you are letting out can have an impact on your mortgage process. You’ll find it more limited if you are looking to take out a mortgage on a HMO or Holiday Let, as they are specialist areas that require the assistance of a mortgage broker in Leeds.
Landlord Experience
Some landlords won’t offer mortgage products to first time landlords. If you have been a landlord in the past, you will have access to a wider variety of mortgage deals with more mortgage lenders.
On the other hand, there are multiple mortgage lenders that we have on panel, with some of these offering products to first time buy to let landlords. To learn more, speak with a mortgage advisor in Leeds.
Can I live in my buy to let in Leeds?
No, you are not allowed to live in a property that you have a buy to let mortgage on. This would is a breach of your mortgage agreement and will very likely have a large negative effect you and your home.
Letting Out Your Current Home to Buy a New Property in Leeds
Alternatively to a buy to let in Leeds, you could let out your existing home as a way to buy a new property to live in. This process is called let to buy. It is popular amongst homeowners who wish to supplement their income and also live somewhere else.
This works the same as a typical buy to let, though you’ll be applying for two mortgages this time (one to convert your property into a buy to let and one to buy a new home. As such, your lender will need to confirm you can afford both of these.
How many buy to let mortgages can I have?
Whether you’re a new landlord planning ahead or an existing landlord ready to expand upon your property portfolio, you may be wondering how many times you can have a buy to let in Leeds.
Whilst there isn’t necessarily a strict limit on how many buy to let mortgages you can have, it will depend on the risk to the lender as to whether or not you’ll be able to take out further buy to let mortgages. Speak to a qualified buy to let mortgage advisor in Leeds to learn more.
Could consent to let be an option?
Some homeowners may have the option of accessing something that is called a consent to let. This is typically something used more in the short term, with your home only being a temporary buy to let.
Depending on lender, you will usually have a limit that is between 30-90 days per calendar year. You need to check with your lender beforehand, to make sure you are able to do this.
Speak to a Qualified Buy to Let Expert in Leeds
To gain a further understanding of the options available for making your home a buy to let in Leeds, book your free mortgage appointment and speak to a mortgage advisor in Leeds.
A dedicated member of our team here at Leedsmoneyman will be able to review your circumstances and inform you of the deals you may be able to access, as well as helping with any additional buy to let mortgage advice in Leeds you require.
What is a Property Survey?
Property Survey Mortgage Advice in Leeds
So, you have had your offer accepted on a property but, is the house actually worth what you said you would pay for it?
If you are wanting to know what the actual value is and the property’s overall condition, a property survey can help with this.
This survey will mention any significant repairs or alterations needed, like repairing the roof.
Different types of property survey
There are a plethora of survey options available, however, the most common types include mortgage valuations, homebuyer’s report and a full structural survey. You might find the survey is free of charge, however, this depends on the lender. For more information on the different types of surveys, check out the content below.
The surveys differ depending on the outcomes on the report. For example, you may receive a report that is more detailed and thorough, whereas you might get one that only mentions certain aspects. The more in-depth a survey is, the more it will cost.
Navigating your way through the process can be daunting and you might want to choose the cheaper option. As much as this will save you money at the time, it may not be worth it in the future and become far more expensive.
In the event that you find something on your survey about your property that you weren’t notified about, by law, you can approach the seller and negotiate a fairer price.
Mortgage Valuation
The most basic property survey is Mortgage Valuations. You usually have this carried out on when you are working out how much a property is worth. This is helpful to the lender as they need to be sure that the property price matches the amount you are set to borrow from them.
For instance, if you put an offer above the property’s actual value, the seller will likely accept your offer but, your lender won’t. Unless you have the funds to make up the difference, the lender will pull out of the deal which is known as down valuation.
The one drawback with this survey is that it doesn’t highlight any apparent repairs and damages. On the other hand, it can let you know of any obvious structural defects that will require a further look at. If you are looking for a more in-depth property investigation, you will need to pay extra to upgrade your survey. This could be worth it in the long run.
Homebuyer’s Report
A Homebuyers Report looks at safety. It checks out how safe the property is and if it is suitable to live in. Surveyors will want to know of any mould problems, damp issues or something that does not pass the current building laws.
The report will be carried out by a property expert. They will examine the property from to bottom to see if it’s safe for you to move into.
Full Structural Survey
You might have made an offer on an older building. As a Mortgage Broker in Leeds, we would strongly advise that you undergo a Full Structural Survey.
With the whole property being surveyed, this does make this survey type the most expensive one. This property survey will provide a lot more detail compared to the three primary surveys with showing what condition the property is in and the changes that will need to made if the property price goes through.
A Full Structural Survey can take as long as a whole day, depending on the property size.
It can take a surveyor as long as a whole day to carry out a Full Structural Survey, however, this does depend on the property size.
Do I need to get a survey on a new build?
When it comes to new build properties, surveys work a bit differently. There is a property survey designed for new builds called a Snagging Survey. This will inform you of any minor and significant issues. The issues could range from a crack in the ceiling to a missing hinge on the door.
The new build might be built and ready for you to move into which, in this case, means you would want to look at getting a snagging survey carried out prior to moving in. By doing this, you are able to negotiate the price if there is anything wrong with the property.
Mortgage Advice in Leeds
If you are wondering which survey is the best one for you, please don’t hesitate to get in contact with our team. We have extensive experience helping many First Time Buyers in Leeds and people looking to Move Home in Leeds find the most appropriate property surveys.
You can receive the services of a surveyor to carry out a Homebuyers report or building survey through the Royal Institution of Chartered Surveyors.
