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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.
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.
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.
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.
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.
Your mortgage journey can be a fruitful one for many. If you are able to proceed, though there may be ups and downs, you will inevitably always end up with one of a few potential outcomes.
Those outcomes are either a home for you to settle down in, a starter property to later push you up the property ladder or an investment property with a view to provide you with an additional income.
Regardless of the route of which you took, you will eventually find yourself at a point where you need to consider what to do next. A selection of homeowners will sell their home to upsize or downsize into a new home.
Other property owners may instead sell their portfolio to either a tenant or another property buyer. The most common occurrence we see, however, is people looking to remortgage their home or property.
The first step here is to review what a remortgage actually is. In the simplest way to describe it, a remortgage is the process of replacing your current mortgage with a new mortgage, for a desired purpose. These range from smaller options to larger ones.
By using over two decades of mortgage industry knowledge from the “Moneyman” himself, Malcolm Davidson (host of our YouTube channel MoneymanTV), we put together a useful Remortgage guide for those looking at what they can do next, when their term nears its end.
When you start your mortgage deal, you’ll more than likely choose to run for 2-5 years, with low fixed rates and the rates potentially discounted. From time to time though, you could find yourself on a tracker mortgage, with interest following the Bank of England base rate.
Once your deal has ended, it is very likely you will find yourself on the mortgage lenders Standard Variable Rate (SVR). An SVR is a type of mortgage that has an interest rate set by the mortgage lender. This can fluctuate at any time, depending on what they want to charge for it.
Because an SVR will not be following the BoE base rate and are set at mortgage lender discretion, they tend to be much more expensive and can lead to many customers remortgaging to find a better rate of interest. Hopefully, this will save you money down the line.
Once you have gotten to the point of being around 2-5 years into your home owning journey, you may feel like you want a change. Perhaps you need more space, an extra bedroom, a kitchen refurbishment, a room or loft conversion.
Rather than finding a much bigger home to move into, many homeowners will look instead at releasing some of their equity that is in their home, through a remortgage, as a means to cover the costs of the home improvements they intend to make.
Obtaining planning permission and both funding and managing your own project can sometimes be a little stressful, though some would debate that it’s less stressful than selling a home, buying a new one and moving everything you own.
In the long run, you may be able to reap even more benefits, as opening up lots of space within the property and having a top level of craftsmanship will very likely increase the value of the property, which is useful if you ever decide you want to sell your property or let it out instead.
Sometimes you’ll find that people are looking to remortgage in Leeds as a means of gaining access to a better mortgage term, whether they want to reduce the length of the term they have or perhaps switch onto one that is more flexible.
By reducing the length of your term, you won’t be paying back your mortgage for as long, though it will more than likely mean that your monthly mortgage repayments will go up. The longer your term, the lower your mortgage payments will be.
A lot of homeowners choose to take out a more flexible mortgage term when they look to remortgage. They may do this due to the amount of benefits that are present for these types of mortgages and their holders.
In having this mortgage, you may be able to overpay, meaning you could pay your mortgage off much quicker, as well as being able to take the same mortgage and rates with you across to another property, if moving ever becomes something you’d like to achieve.
Though flexible mortgages seem perfect to some, they also tend to be tracker mortgages, which as we said before will follow the Bank of England base rate. This means your payments could differ depending on interest, which can be a little unreliable for some people.
Every homeowner has some level of equity existing within their property. The amount can be worked out by looking at the difference between what is left on the mortgage and how much the property is currently valued at.
As we have said, the equity can be used for home improvements, though you can use it for more than that too. Some use their equity to cover long-term care costs, to boost their income, to go on holiday, to pay off an interest-only mortgage or to just give them some spare money to spend.
From time to time we even see buy to let landlords using a remortgage to release equity as a way to cover their deposit for buying any future property portfolio additions they wish to own.
If you are aged 55+ and own a home that is valued at a minimum of £70,000, it may be worth your time looking at your options for equity release in Leeds. Book online and speak with a qualified later life mortgage advisor to learn more about later life mortgages.
On the topic of releasing equity, we also find that there are a lot of people who will pay off any unsecured debts that you may have gathered against your name over time.
Though it can seem initially like a really simple process, debt consolidation will not only factor how much you owe, but the value of your property and also your credit rating. This means that you might not be able to borrow as much as you would like.
Additionally, in order to pay off your previous mortgage and your debts, you need to borrow a much higher amount than your mortgage, making your monthly repayments incredibly high. Though it isn’t the best of options, at least you know there is something you could do, should these problems arise.
If you have a damaged credit rating, there are still a selection of options out there for you, though these aren’t easy and more often than not, require very specialist remortgage advice in Leeds before you proceed. Even with those options, nobody is guaranteed to successfully obtain a mortgage.
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.
If your mortgage deal is reaching its conclusion and you would like to understand your options more in-depth regarding a remortgage in Leeds, book your free mortgage appointment and speak with an expert mortgage broker in Leeds today.
A trusted and experienced mortgage advisor in Leeds will review your situation and what else you would like to achieve in the future, as a means of determining the next step of your home owning journey. This time around, we aim to make your process go quicker and smoother than the first time.
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.
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.
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.
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:
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.
The majority of home buyers will decide within seconds of arriving at the property they are viewing, whether or not they want to proceed with the purchase. This is especially the case if your viewer is an existing homeowner and needs to decide quickly, so they can move forward with the sale of their own property.
Your equity is the amount at which you sell for, minus your current mortgage balance. This will be used to contribute towards a security deposit for the next purchase that you make if you are moving home in Leeds. By utilising savings or a gifted deposit, you are able to top this up.
There is always a very specific minimum amount that the seller of a property is willing to accept for a sale to be agreed. Even still, when you list your home for sale, it is important to market and present your home in the best light possible. This can make a large difference in how quickly you’re able to sell it.
Your asking price should always reflect the standard of those in the local area. Be reasonable with the amount you’re looking to sell for, as some estate agents may just suggest the highest possible price without any credibility behind the suggestion.
Nowadays everyone has the ability to advertise on Zoopla and Rightmove, so we would definitely recommend that you make the dive into the market and get as many viewings as you possibly, primarily within the first two weeks of it being listed.
If interest in your property seems to below, it’s probably quite like that the property has been overvalued and the price needs to drop.
Before they look to put their current property on the market, many homeowners prefer to research and visit other properties to identify which one they might call home down the line. If you find yourself in that same or a similar position, here are some helpful tips for you to sell your home as quickly as possible.
First of all, this can be quite a strange one and quite difficult to do if you’ve spent a long time in there, but you need to look at your own house as if you were viewing it for the first time yourself. Make sure it looks great from the outside, as that’s the first thing people will see when driving or walking up to it.
Simple actions make a big difference, so ensuring you have a freshly jet-washed drive and neatly cut front lawn indicates that you have put a lot of time and effort into looking after your home. You need to aim for that feel-good factor, as this may help the viewer in their hopes that the inside will be just as good as the outside.
If you have any kids, it is recommended that you tidy away any bikes or loose toys that have been left about in the front garden. Make sure your front door looks clean and well maintained, and that your doorbell (if you have one) works well. Spend a little bit of cash getting a nice new doormat or welcome sign to give it a nice, new home vibe.
Take a look around all of your rooms, paying close attention to rooms like kitchen or bathrooms. You should make sure that they are spotless and have a high level of hygiene. Cupboards and wardrobes should be tidied up, arranged neatly and free from unnecessary clutter.
You should absolutely ensure your home is pristine and clean; this is a very important step to remember! Wash your curtains & blinds, wipe down your walls and clean all your floors and windows. Any repairs that need work should be up-to-date and fixed, and you should put clean bedding out on the beds.
Clean all of your windows, making sure they’re nice and sparkling clean both inside and out. New carpets in smaller rooms can be a reasonably low-cost way of creating a welcoming impression, showing that the home has been well cared for.
If you are a smoker it’s always air the rooms out before the potential buyer arrives to view it. Ensure there are no bad smells lingering, as any pet smells or cigarette smells can put off a viewer from wanting to buy your property.
You will ideally want your viewer to feel as relaxed as possible whilst they look around your property, so try and avoid having pets or young children getting under their feet as they try to take it all in.
That being said, if you are selling a family home, leaving up a selection of nice family pictures and paintings can help as it will give them an image of what it may be like to raise a family in that home.
You will find that home buyers, especially those who are first time buyers in Leeds, will prefer to walk around the property on their own. If it’s a couple walking around, allow them some breathing space to discuss with each other, but also be on hand to answer their questions.
Always clean your bathroom, removing any items like cosmetics left out. You should coordinate your towels and flannels, maybe consider putting a small amount of money into making it look nice and appealing. Also make the floor space is spotless.
A well-lit house is always going to be more appealing to prospective buyers. This can be achieved through making sure lights are turned on to brighten up rooms if it’s darker outside or keeping all curtains and blinds open to let in natural daylight.
Plants can often block out light so place these strategically around your house.
White walls look clean and fresh, and also come with the added benefit for the buyer of being extremely to paint over when the time comes to decorate. It gives the viewer a blank canvas to work with. It will also help to avoid scraping previous wallpaper off the walls.
Give a fresh coat of paint to all interior doors. Polish the brass fixtures and ensure all doors are able to open and close nicely, with no broken locks or strike plates. Buyers will want to look at making the most of space, so it’s recommended that you store objects into cupboards and have clean and tidy worktops in the kitchen.
In terms of your garden the viewer may ask you if they can take a look inside your shed (if you have one), so it’s recommended that you don’t just throw everything in there. Once again, a running theme here, keep it neat and tidy.
Pay attention to your fences, make sure all the slats are in place, and that they are nicely painted or creosoted. Tidy up any visible items such as outdoor barbecues, removing any utensils left around.
People do still like to see a colourful garden so ensure its beautifully turned out. Flowering plants are lovely to see if the season is conducive. It is also recommended that you make your garage space more efficient, therefore providing more space for a vehicle.
People buy from people, so it is recommended that you always take conduct the viewings yourself if you can. You will be able to accurately convey the emotions you feel about your home and can show it off in the best way you can, whilst still also pointing out any small issues that have cropped up and how you managed to fix them. Transparency goes a long way!
Estate Agents will always be wanting to earn their commission, but compared to you, who has potentially lived there for years, maybe even raised a family there, they will not know as much about the property. Your knowledge and experience of living in that property will lend well to a property viewing.
Last of all, always remember the emotions attached to buying a home. If you have a family, it really helps to put an emphasis on how much of a happy family home this has been for you. This will almost certainly rub off on the viewers if they are thinking of raising a family in that same home.
Has your current mortgage deal come to an end, and do you need to borrow some additional money? If so, then it could be the right time for you to consider remortgaging.
We have witnessed far too many customers who leave searching for a new deal too late and end up falling onto their Lender’s Standard Variable Rate (SVR). We always recommend that all customers keep on top of their mortgage and make sure you know when your term is ending.
A lender’s rate will be a lot higher than your current rate, which will result in your monthly payments increasing. There is nothing wrong with being ahead! Keep on top of your mortgage and speak to a remortgage advisor in Leeds.
Lenders don’t reward loyalty. We have seen some lenders offer better deals to new customers than existing customers who have been with them for several years! That’s why we recommend you look around before committing to the same lender. There could be better offers with lower rates out there.
We understand that some choose to do it by themselves online and switch over there and then. That’s what’s called an ‘execution-only mortgage’. It might be easy to do, but you don’t benefit from any consumer protection. Again this highlights the importance of getting mortgage advice in Leeds before making any rash decisions.
Is your home due for some upgrades? Were you aware that you can remortgage for home improvements? It can be a good investment as some improvements, such as loft conversions, extensions, can potentially increase the property value.
People who are not looking to increase their property value and have found their “dream home” will also borrow for home improvements, there is nothing wrong with this, they just want to make give their home a bit of a makeover. You can increase your mortgage to pay for cosmetic alterations as well as structural work.
You have the decision to use whichever contractor you choose. But, if you need to borrow a significant amount of money, your lender will need to know the estimates for the works you intend to have carried out.
It is possible to raise capital on your property when you remortgage for almost any reason. Some popular scenarios include wanting to raise money for:
Keep in mind that you will be paying interest on a remortgage for a while. Ensure that you are borrowing for the right reasons and keep up to date on your repayments during the entire mortgage term.
Just adding unsecured debt to your mortgage might result in you needing to pay back more interest. A mortgage term can be much longer than a personal loan, but it isn’t always the case.
Make sure to consider that you are taking unsecured debt and securing your home, which will not sit easily. If you cannot afford your mortgage payments down the line, you have put everyone at risk of repossession.
You will need to consider that you are taking unsecured debt and securing your home. Which will not sit easily with everyone as you are under the risk of repossession if you cannot afford your mortgage payments down the line.
You will need to know that if you have 0% credit cards, the interest rates that apply to the debts that you are considering rolling onto your mortgage will start attracting interest too.
It would help if you considered all of your options before deciding to consolidate debts. We think that the best way to make a decision is to seek remortgage advice in Leeds from a remortgage advisor.
A remortgage advisor can evaluate all of your options and then recommend the best route to go down. Your advisor might even suggest that you don’t need to go down the path of debt consolidation remortgage.
Consolidating debts into your mortgage leads to a reduction in your monthly outgoings. We have seen some customers end up reducing their payments by several hundreds of pounds.
If you feel that remortgaging is the right option for you, get in touch to speak to a remortgage advisor in Leeds today. We will help and assist you with all your mortgage-related needs.
Remortgaging is where you switch to a new mortgage product. Some tend to confuse remortgaging with product transfer; the difference between the two is that when you remortgage in Leeds, you change products and lenders, whereas when you achieve a product transfer, you switch mortgage products but stick with the same lender.
Everyone remortgage scenarios can be different. It all depends on what the homeowner wants. They may want to look for a better rate of interest, consolidate their debts, or raise capital for things such as home improvements.
This article is going to be centring more on remortgaging/transferring products for home improvements.
We always recommend breaking down the estimated costs for the home improvements before you remortgage. From extensions to conversions, depending on what you want to improve in the property, the prices will differ.
Once you have worked out your estimated costs, the additional funds will be added to your mortgage. This will slightly increase your overall monthly payments as you are now paying off your mortgage as well as your home improvements. In some cases, your costs may barely increase. Again, this all depends on the home improvements carried out. As a mortgage broker in Leeds, we’ve seen some customers go up by an extra £50, to an additional £200.
Estimated costs include:
We would also advise that you have some extra savings aside from the remortgage, as if things go wrong or the costs don’t quite add up, you may have to cover them.
The most common reason for people remortgaging for home improvements in Leeds is to make more space. Whether it’s because they’re starting a family or want a bit of extra room within their home, the whole process can be a good alternative instead of moving home in Leeds.
Rather than going through the whole moving process, if you already love the home you live in, why move? It often works out that it’s much cheaper to remain inside your current home too!
You can remortgage for various types of home improvements; some include:
Whether you need the extra space or just because you want to refurbish your home, there is always an enticing reason to remortgage. Feel free to contact our team to book you in for a free remortgage consultation, and let’s make a start on your application.
Our efficient team works 7 days a week, so make sure to get in touch to have a chat about your remortgage options. There are other remortgage scenarios to consider, so if you’re going to go down a different route, we would be more than happy to help with that too.
If you are applying for a first time buyer mortgage in Leeds, are looking at moving home in Leeds or are planning on taking out a buy to let mortgage in Leeds, you will no doubt at some point find yourself dealing with an estate agent.
Estate agents do their job well, they often act as a middle ground between seller and buyer, advertising the property on the open market and enticing potential property buyers to purchase something that they have to offer.
Whilst many out there are honest, loyal and do right by their customers, there are also plenty who do not. We feel, as a mortgage broker in Leeds, that it is our responsibility to educate potential property buyers on the sales tactics that some of these estate agents may use.
As a mortgage broker in Leeds, one of the situations we hear of the most is the estate agent pushing the home buyers to use their in-house services. This can include conveyancing, solicitors and even their own mortgage advice in Leeds, to name but a few.
You are under no obligation to take any of these services, it is up to you what you do, but refusal to accept their offers can lead to a whole range of controversial actions on their part, such as refusal to put an offer forward.
Even though it may be hard to believe, we have seen instances of estate agents actually refusing to put your offer forward, if you instead decided that you don’t want to use their in-house mortgage advisor, finding a mortgage broker in Leeds.
We have also have seen them showing favouritism to other potential home buyers who are willing to use their in-house mortgage advice service, even if you were already part way through negotiations. Of course neither of these practices are legal.
In addition to being pushy and refusing to put through your offers, we also frequently see them giving overpriced quotes for things like conveyancing. In the past we have seen customers quoted over £1,500 for just a standard purchase!
With the help of our knowledgeable mortgage advisors in Leeds, we were able to get the customer using another conveyancer and only facing a cost of £750, around half what the estate agent had actually quoted them.
Once an offer on a property has been made, you might start to notice your estate agent becoming a lot more pushy with you. We have heard genuine cases from customers wherein the estate agent has called them up and demanded to know the conveyancer you have used.
Again, this can lead to a refusal to proceed with anything or borderline harassment on their end, until you agree to use their in-house services, which as said are often extremely overpriced and you are under absolutely no obligation to go with, you are free to choose.
No, you have the freedom to go wherever you wish when it comes to your mortgage process. You can use any mortgage broker in Leeds, any conveyancing or any other financial service. It’s all down to what you would personally prefer.
You are under no obligation to use the services on offer from the estate agent, as their job is to foresee the sale between yourself and the vendor, with everything else being purely optional.
“Keeping everything under one roof is easier with one point of contact.”
“If you use our services, it will give the vendor peace of mind that everything will go through smoothly.”
“We will do all of the chasings of the solicitors for you, and they’ll be more responsive to us due to the amount of work we send them.”
“You need to come in and see our mortgage advisor in Leeds for your offer to be qualified.”
“Everything is likely to go through quicker if you use us.”
“Free carpet/washing machine if you use our (extortionately priced) recommended conveyancing service.”
“Choose us and your offer is more likely to be accepted if you use our mortgage advisor in Leeds.”
“Our service gets better deals than most mortgage brokers in Leeds.”
Always bear in mind when you are negotiating with a purchase price, that it is probably not within your best interests for the person you are purchasing from to also know your financial situation, including the amount you could possibly afford.
Make sure that you are always vigilant and that the estate agent knows you are not willing to use them if you don’t want to. At the end of the day, this is your potential home and it’s your decision.
Book a free mortgage appointment with a mortgage advisor in Leeds today and ensure you are as prepared as you can be for your home buying experience.
Over the years, we have seen property prices increased at a far faster rate than wages have. Through speaking to many customers, we have found a common occurrence, in that many people look to purchase in joint names with a partner or friend, as a means of being able to afford a suitable home at a more reasonable price.
Purchasing in joint names will usually increase the maximum capacity of what you are able to borrow, as the lender will look at all parties income, rather than just one, taking this into account when running calculations on affordability.
We have known and we do work with some lenders who will accept up to four people as co-owners of a property. If throughout the duration one of the co-owners of the property decides that they would much rather not contribute to the mortgage repayments, any of the other joint owners will still have the legal right to reside in the property, unless this is ruled otherwise by a court.
If you would like to increase the mortgage amount later down the line, you must gain full consent from all your fellow co-owners. It’s therefore essential that you make long term plans with each other, discussing what you’d like out of this, so you can stay on the same page and avoid future disputes if you end up wanting something different.
Commonly, for married couples or those still in civil partnerships, a ‘Joint Tenancy’ is something we have seen customers choose quite often. With this type of tenure, if for some unfortunate reason one of the party were to pass away, the property would be handed over to the other owner of the property. If you have taken out relevant life insurance, at this point, your mortgage would be covered and repaid.
With ‘Joint Tenancy’, you would still need all owners of the property to agree if you decided you wanted to Remortgage later down the line.
If choosing to purchase with relatives or friends, we find that ‘Tenants In common’ is the most popular route that customers take. You will still remain as a co-owner of the property, along with your cohorts, but you also have the flexibility to do this without the need to have completely equal shares. This works well if one party is making a more significant financial contribution than the other, as you could split the shares, for example if there were 3 of you, 60%, 30%, 10%.
With ‘Tenants in Common’, another positive aspect for the co-owners is that you have the freedom to act independently. An example of this, is that you can then choose to sell or give away your share of the property to someone else, without the need to consult with your fellow co-owners
All mortgage borrowers are jointly and severally (responsible for their own decisions) liable for mortgage payments. IF at any point in the future you find yourself paying all of your mortgage payments without a co-owner, you will still be liable to prevent the mortgage from falling into arrears.
This is because mortgage arrears showing on your credit file could have the potential to stop you from obtaining a mortgage at any point in the future. The best way to think of it is like this: You don’t own 50% of a property, you own 100% jointly.
When purchasing a home with a partner, it’s a whole new chapter starting in your life and can be a great way to start fresh with another individual. In all the excitement of moving home, it can make you wonder about what will happen if things go a little wrong.
The primary thing to remember is that lenders will always need to have the utmost confidence that you can keep up with monthly payments on your own before they will approve you removing a partner and taking on the mortgage alone. As seen from above, a mortgage is a big financial commitment and making changes is going to be a challenge.
If you are able to prove that you can maintain mortgage payments following on from your partner leaving, the lender may agree to your request to put the mortgage into your single name. However, lenders like the idea that there are two people to pursue in the event of arrears occurring. To remove someone, they will carry out a brand-new affordability assessment, just like they would’ve done originally at the point of purchase.
Whilst a lender may not always accept a request, it’s always beneficial to speak with a mortgage advisor in Leeds prior to taking this route, as there may be other lenders who could agree to your transfer request.
It can also be worth talking to family members to see if they can help you out to make your financial and personal life a little easier. They can do so by replacing your ex-partner on your mortgage or by gifting you a lump sum, in a bid to reduce the amount owed. This will hopefully mean that your savings are able to contribute to easing your future mortgage payments.
If you and your partner split up and you leave the family home, then your responsibility is still shared for mortgage payments. Even if you agree that you will send your partner the money to cover the costs, in the event of potential arrears, you will still be chased for payments.
If you are sending your partner money each month, you should also keep an eye on your credit report to ensure they are still actually paying the mortgage. If they default, then it will impact your own score due to the financial tether you have.
If your name is still linked with an existing mortgage, then the payments for that will be considered down the line if you buy a new home of your own. This means that lenders might not lend you as much as you would like.
Buying a home with someone is different than just renting with them. It’s always better to agree on what would happen to the house should things not plan out as expected.
For any first time buyers in Leeds or those moving home in Leeds that are looking to purchase in Joint Names, you will absolutely benefit from speaking to a mortgage advisor. Even if you are looking to remove a name from a mortgage by looking into a remortgage in Leeds in your sole name, a member of our mortgage advice team will be able to look into this with you. Please feel free to get in touch with our friendly Mortgage Team, we will be more than happy to answer all of your questions.
Whether you are a first time buyer in Leeds looking to put your foot onto the property ladder or are going through the process of moving house in Leeds, you will understand that there are lots of different types of mortgages.
Some mortgages are more popular than others, and some may even be difficult to obtain. As your Mortgage Broker in Leeds, we have assembled a list of some of the most common mortgage types you might get offered.
Here Malcolm has compiled a playlist of videos to explain the different types of mortgages available in Leeds. Below you will also find one of our moneymanTV episodes for each mortgage type, and we hope you find them helpful!
A fixed-rate mortgage means that your mortgage payments will stay the same for a set period. You can set the length you want to fix your costs for, typically 2, 3, or 5 years or longer. No matter what happens to inflation, interest rates, or the economy, you know that your mortgage payment, usually your biggest outgoing, will not change.
A tracker mortgage indicates that your interest rate will track the Bank of England’s base rate. Meaning, the lender that you are with does not set the rate themselves. You will be paying a percentage above the Bank of England base rate. For example, if the base rate is 1% and you are tracking at 1% above the base rate, you will be paying 2%.
When you take out a repayment mortgage, meaning each month you are paying capital and interest combined, as long as you keep your payments going for the entire length of the mortgage term. The mortgage balance is guaranteed to get paid off at the end, and the property becomes yours.
A repayment mortgage is the most risk-free way to pay your capital back to the lender. It is mainly the interest that you are paying in the early years, and your balance will reduce very slowly, especially if you have taken out a 25, 30 or 35-year term. This situation switches in the last ten years or so of your mortgage, where your payments are paying off more capital than interest, and the balance will come down much faster.
Whilst many buy to let mortgages in Leeds get set up on an interest-only basis, it is much more challenging to get a residential property on an interest-only basis. It is much less likely for lenders to offer an interest-only product now.
However, there are certain circumstances where this can be an option. These include downsizing when you are older or have other investments that you will use to pay the capital back. Lenders are stringent when it comes to offering these products now, and the loan to values are a lot lower than before.
Offset Mortgages are a flexible type of Mortgage Arrangement. Due to their complexity, this type of mortgages usually come with a higher interest rate and set up fees. Offset Mortgages give you the ability to potentially overpay your mortgage, underpay your mortgage or pay off a lump sum.
The main attraction of these types is that your chosen lender will open up a savings account to run alongside your mortgage account. As an example, we’ll say that you take out a £100,000 mortgage, but in your savings, you already have £30,000. You can then put that £30,000 into your new savings account and only pay interest on the remaining £70,000. The idea behind this is that if you keep your payments up as average per month, then you’re able to pay off the mortgage earlier and with less interest.
Like Fixed-Rate mortgages, Capped Rates have a maximum amount that a customer will pay each month with a maximum interest rate. With that in mind, if capped at 5%, you will never go higher than 5%. Where these can be more beneficial, however, is if interest rates start to drop. For example, if the rates dropped to 4%, 3% or 2%, your mortgage will do the same.
Flexible mortgages allow you to underpay and overpay by unlimited amounts. Underpayments are only allowed if you’ve overpaid first and have agreed with a lender to do so. However, it is not something that we recommend. Overpayments can be beneficial, though, as you could end up paying off the mortgage early and with significantly less interest. Mortgage flexibility is usually a feature of Offset Mortgages.
There are many reasons why existing homeowners will want to look into taking out a second or even a third mortgage. Some examples of these include using an additional mortgage to expand your property portfolio or to help one of your family members get onto the property ladder themselves.
There may be more difficult to obtain a second mortgage, compared to when you took out your first one because you will now have two lots of mortgage payments to factor in. If you cannot afford the costs of both, you will likely not be accepted for a second mortgage.
As a Mortgage Broker in Leeds, we’ve seen people apply for a second mortgage for lots of reasons:
If you are several years into your mortgage term, chances are you have built up a substantial portion of equity within your property. Instead of remortgaging, some may look to release some of that equity for a smaller mortgage.
This type of mortgage process is known as a further advance. A further advance gives a homeowner the option to borrow more from their current mortgage lender, as a means of funding potential home improvements or the deposit for another property purchase.
A remortgage to release equity will allow you to switch to a better product with a new mortgage lender, releasing a portion of your equity.
A further advance is remortgaging with the same mortgage lender, who will have their own interest rates that will stand separately from your current mortgage balance. Whilst it means you will be paying two mortgage balances to the same mortgage lender, it can often be cheaper than the fees involved in a remortgage.
To get a further advance, you’ll need to pass the affordability check by your mortgage lender, to make sure that you can take out this additional mortgage. The maximum amount you can borrow will depend on the equity in your property, though you likely won’t be taking it all out.
Our Mortgage Advisors in Leeds will take a look at your case and help you to decide whether a remortgage to release equity or a further advance is a more suitable mortgage option for you.
Whether you are new to the industry or an experienced landlord with several buy to let properties to your name, you’re going to need more than just one mortgage.
Buy to let landlords that have an extensive property portfolio will be used in the process of getting more than one mortgage. Whereas if you are just starting, you will benefit from speaking with a mortgage expert.
The process of having multiple mortgages on buy to let properties are similar to any other mortgage route. You will still need to meet the criteria for the mortgage, put down a substantial deposit (typically at least 25% of the purchase price), and show that you can afford the monthly payments, even if you have no tenants living on the property.
For expert mortgage advice in Leeds, if you are looking for a Buy to Let Mortgage in Leeds, feel free to book yourself in for a free mortgage appointment today and we will see how we can help obtain a second mortgage.
Otherwise known as a let to buy mortgage, a variation of buy to let, this is an option that can allow homeowners to get a second mortgage on a newly purchased home, whilst renting out their current property, becoming landlords in the process.
With this type of process, you are planning on finding a tenant to move into your current property, so that you can move out. This is often a popular choice for landlords who would like to move into a bigger home, but keep a property in their portfolio.
You may be familiar with the term “accidental landlords”, people who perhaps never initially planned to become a landlord, with that plan changing as time has gone on.
Our expert Buy to Let Mortgage Advisors in Leeds also specialise in helping customers with let to buy mortgages, so book online today and we will see how we can help with your let to buy process.
If you know someone who is struggling to get on the property ladder, you may be able to take out a second mortgage in your name, allowing them to get their footing on the property ladder.
Another popular choice for some that don’t require a second mortgage is to gift a deposit. A gifted deposit can help you to get your family or friend onto the property ladder. Feel free to check out our helpful mortgage guides for more details.
In some circumstances, whilst you may have intended to take out a second mortgage, you may also find that you are listed on two mortgages.
As an open & honest Mortgage Broker in Leeds, the most common reason we see for people being listed on two mortgages is that they have become divorced or separated.
Unfortunately, it can be quite difficult to remove either your own or your ex-partner’s name from a mortgage, as not only do you both have to mutually agree on who gets removed, but you also have to prove the remaining party can afford to keep up payments by themselves.
If you happen to still be listed on a mortgage with an ex-partner, it is important to try and get your name removed as quick as you can. This ensures you are less likely to be affected by the financial links to your ex, as if they miss any payments, it could bring your credit score down.
Whilst this is the recommended route, if for some reason you are unable to get your name removed from a mortgage, there may still be mortgage options available to you. Some mortgage lenders will take your personal circumstances into account.
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Leedsmoneyman.com & Leedsmoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.
Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk
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