Mortgages

Mortgages

HOME MOVER

What is a home mover mortgage? If you are thinking about moving home you may need a Home Mover mortgage. These mortgage products work in exactly the same way as standard mortgages, if you’re trading up to a larger property, you may need to increase the size of your loan.

Most mortgages are portable, meaning that you can transfer them from the property that you originally borrowed against to the home to which you want to move. You can do this via a broker.  Lenders will want to value the property and you may need to borrow more to secure it. There may also be fees to pay for the transfer.

 

FIRST TIME BUYERS

Buying a property is one of the most important purchases you will make, and buying a home for the first time will be an even more daunting prospect. To help you with making the right decision we have put together our top 5 tips for you.

1. Ensure that you are realistic when working out exactly how much you can afford to spend on your new house. You should ensure the intended mortgage is affordable (by doing a budget calculation) and it is wise to seek a Decision in Principle certificate, so that you know how much you can offer once you have found a suitable property. Even a newly built house will require some sort of furnishings, whereas older properties may require extensive work, such as re-flooring, tiling or renewing the wiring. Make sure that you factor in all these likely expenses, in addition to the purchase price, and other fees such as conveyancing and stamp duty.

2. When buying for the first time, there may be a number of details in the houses you are looking at, which you may not pick up. Always take an experienced home buyer, such as one of your parents, or a home-owning friend, when looking at property. If this is difficult to arrange, then make sure you at least get some assistance once you have selected a property you like and are arranging a second viewing.
 

3. Make sure you know what the likely council tax charge will be in your new property. The selling agent should be able to tell you what tax band the house you are interested in buying is in, and how the charges are levied by your local authority.
 

4. Always consider how your transport arrangements will change in your new house. If you have a car, your insurance premium may increase dramatically if you move from a town with relatively low crime into a city centre with higher crime rates or if you move from your parents’ house with a locked garage to a smaller terraced house with on-street parking.

5. Consider the availability of public transport services, making sure you find out local bus routes, the frequency of train services from your nearest station, and, if you are moving a long distance, the range of flights available from your local airport. Even if you drive everywhere, this information will be useful for anyone coming to visit you who does not drive.
 

REMORTGAGE

When you re-mortgage, you are switching your mortgage to another deal, and frequently, another lender.

Re-mortgages can be used for various reasons. However, most people simply switch mortgages because it will work out cheaper for them. For example, the introductory discounted interest rate may have finished with your current lender; therefore you could potentially get a new discount rate, or a lower APR, with another lender. Another example is when you may need to re-mortgage to consolidate debts.

It is worth noting that a re-mortgage is not the best option in all cases. Even if the lender you are considering switching to is offering a lower APR, you must take into consideration the facts that:

·  The new lender may charge you for valuation and solicitors fees, even if you have already paid these for your mortgage with your current lender.

·  If you switch mortgage remember to look at the overall repayment period. You may be able to pay less monthly, but check the final repayment date of the mortgage as well.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

BUY TO LET

There are 3 main differences in buy to let mortgages:

1. Rent Potential – the decision as to whether or not a mortgage will be offered is usually based on the rent you will earn as well as your income. In some cases your income is not ever considered.

2. Interest Rate – buy to let mortgages have slightly higher interest rates.

3. Larger Deposit – typically a minimum of 25% or 30% of the property’s value is required as a deposit.

When buying a second property to let, you will need to decide whether your primary objective is income or capital growth. In other words, are you looking to make a profit month on month or are you looking to make a profit through increased equity from the second property if it increases in value over time? The decision may affect the type of property you purchase, and the location.

When you manage a property there are many costs involved in addition to the monthly mortgage repayments. As a guide, you should be aiming to achieve a gross rent of about 135% of the rental property’s interest only mortgage repayments in order to cover your costs should anything go wrong.

The Financial Conduct Authority does not regulate all Buy to Let mortgages

These additional costs include:

·  Property upkeep – maintenance costs for the property.

·  Letting agent’s fees – letting agents charge around 5-10% of the monthly rent for finding and vetting tenants.

· Ground rent / service charges – applicable to leasehold properties.

·  Legal insurance – to cover costs from evicting tenants in the event of non-payment, very important, as this can be very expensive.

· Insurance – building insurance and contents insurance for the items provided as part of the rental agreement.

· Furnishings – the purchase of any furniture. If the property is to be let furnished, make sure you are covered for this by your home insurance.

· Gas / electrical appliances – cost of maintaining appliances and ensuring they comply with any regulations such as safety tests.


 

 


 
This firm usually charges a fee for mortgage advice. The amount of the fee will depend upon your circumstances and will be discussed and agreed with you at the earliest opportunity.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE