Depending on the situation you happen to be in, it may be possible to take out a second mortgage. In this article, we will address the reasons as to why you would want to take out a second mortgage and how to go about this.
Potential or existing landlords in Middlesbrough obtain a Second Mortgage to buy an additional home or look into taking out a buy to let, allowing this to run alongside their current mortgage. Alternatively, you may have the option of a Second Charge, where you take out an additional mortgage amount against the same property with a different mortgage lender.
Here Malcolm has put together a helpful video guide and discusses the significance of why people choose to take out a second mortgage in Middlesbrough.
There are various circumstances as to why someone might find themselves needing to have more than one mortgage. We’ve come across some fairly common scenarios, with these including, but not limited to:
We feel it’s essential to let you know that we have a vast wealth of knowledge on buy to let mortgage advice in Middlesbrough, having worked with many types of lenders, each with their lending criteria.
If you have equity in your home, you may have the option to take out a second charge to release this equity and fund the deposit for potential additional purchases.
The way a Second Charge works is that if you still have equity sitting in your property, you may be able to take out a mortgage with a second lender to release some of the equity in the property.
Usually, if you are on a lenders Standard Variable Rate, we can shop around for you and find a more competitive deal whilst also releasing Capital. A different approach with your existing lender may have an alternative option available to you.
We tend to find some homeowners looking to keep their existing property, rent it out, and take out a second residential mortgage on a new property. This process is known as a let-to-buy mortgage.
Sometimes your family may need that extra support to help put their foot onto the property ladder. As such, we regularly see homeowners using either a second charge to release some equity to gift them a portion of or the total amount for a deposit.
Many landlords are looking to purchase additional buy to let properties add to their portfolio by taking out a second mortgage.
Some homeowners have their name on another mortgage and cannot get their name taken off; you may still want to apply for a mortgage of your own. For more information get in touch and speak to our mortgage advisors in Middlesbrough regarding sole name mortgage advice.
If you are looking to get a second mortgage, we may be able to help. We can book you in for a free mortgage consultation, following up to find you the most suitable product for you based on your situation. Get in touch, and speak with a dedicated mortgage advisor in Middlesbrough today.
Regardless of your mortgage scenario, if you are a first time buyer in Middlesbrough and have had your offer accepted on a property, the next step is to arrange a property survey to confirm your property’s condition and find out whether or not it’s worth what you’re paying for it.
Our qualified mortgage and protection advisors will help you choose the right survey for your situation and the type of property you are purchasing. Please feel free to get in touch, and we will be happy to help.
A property survey is a comprehensive review of a property’s condition. It’s a property surveyor job to go out to the property and examine its suitability for the homeowner to live in; they will produce a report highlighting any dilemmas with the property. These problems vary from internal to external.
The issues could be severe or easily rectified with a potential small fee, but you will need to get a property survey either way. The surveyor report will also feature expert commentary on the property, from the type of wall to the kind of window glazing.
A mortgage valuation takes a brief looks at your property to assess how much the property is worth to your mortgage lender. Your mortgage lender will usually insist on using a company they trust, and you will have to pay for it.
The cost of a mortgage valuation varies depending on the size of the property. We tend to find; some mortgage lenders offer free valuations as part of a deal.
This survey will cover structural safety and highlights problems, including damp and anything that doesn’t meet current building regulations.
You will receive an independent report of your property by an expert. It is advisable to ask the mortgage companies surveyor to carry out this report for you, and it will take a couple of hours to complete depending on property size and condition.
This survey is advisable for older properties and those of non-standard construction. Depending on the property size and type – a full structural survey can take as long as a day to complete.
A full structural survey provides a detailed report on the condition of the property and highlights issues that the homebuyer should investigate further before going ahead with the purchase, providing you with peace of mind about the state of your property.
When it comes to savings and avoiding extra expenses, people often get confused about whether they should buy a house or whether they should rent one, especially First Time Buyers in Middlesbrough. This is a very complex and complicated issue for many people. There are lots of people who consider renting a house as a total waste of money but then there are also people who consider it a wiser option.
If you are a young person and your parents are owners of a home, you will most likely be encouraged by them to save and buy a house of your own. But time changes everything and now, a lot more people rent houses as compared to the number of renters in the past. Today, we will take a look at all the pros and cons of buying a home so that you can make a wise decision.
There is one fact about the property market that you should know: you never know what cycle it is in. You never know whether it is going to crash or if it is going to boom in the near future. What’s really disappointing is when you purchase a property and the next thing you know, it has gone down a lot in value.
History does suggest that even if you buy a home when the market is at the top, it’s value could go down at some point. However, as long as you can afford to keep the property, you should be aware that its value will surely go up again sooner or later.
If you take a look at the sold values from the period of the Credit Crunch, you will see that it was one of the worst economic times that we have faced and yet less than just a decade later, the UK property values reached to a point that is an all time high!
You can also lose a lot of money if you are forced to sell your property at the wrong time which could be due to a reduction in the overall income or maybe even a relationship breakdown.
You must discuss all the possible outcomes with your Mortgage Advisor in Middlesbrough and also your family before you decide to make a purchase. This will make sure that you are well protected from things like being unable to work because of illness and other things. That being considered, we are talking about a home and not just an investment in property.
A lot of the times, the mortgage payments that you’ll be making will be a lot cheaper than rent payments. Interest rates always go up and down all the time which means that your mortgage payments will surely fluctuate as well. If you are worried about that fact, then what you should look at are fixed-rate mortgages so that your payments will always remain the same over your mortgage term. On the other hand, rents will either remain the same or they will go up. It is very unusual for your landlord to reduce your rent.
Most people feel that owning their own home will create a very stable situation in many regards for them and their family. This is because nobody can ask you or force you to move from your house unless you want to yourself or you fail to meet your mortgage payments.
While you will surely have some protection as a tenant in terms of how much notice your landlord will have to give you, if they want their house back to themselves, sadly, there isn’t much that you can do in such a case. This is not very ideal, especially if you have a family and have your children in a local nearby school or if you work nearby.
Regarding flexibility, renting can be a lot more flexible than owning a home. For example, there is absolutely nothing to stop you from giving your landlord a notice to leave if you get another job in another area. This is not as easy if you are a homeowner though. You will have to decide whether or not if you want to sell your home or sell it out as a Buy to Let in Coventry. The process of selling a home and then purchasing a new one is very complicated, difficult, and expensive and time-consuming.
If you are aware that you will not be living somewhere for a long period of time, you should surely think a lot about whether it is worth buying a home or not. Buying a home should mostly be considered as a long term investment for everyone.
Being a tenant, your landlord is going to be responsible for all the repairs. Some of the letting agents and landlords are a lot better than others when it is a matter of repairs and even if you are renting, you will surely end up doing some of the minor maintenance of the property yourself.
If you are a homeowner then all of this will be on you along with insuring the property as well, which will surely be a condition of any of the mortgage that you take out.
As opposed to what many people might say, having your own home is not for everyone. If you are someone who is young and moving in with a partner of yours for the first time there is nothing wrong with renting for a while. Things will not always work out the way that we plan and it can be a very difficult to get removed from mortgage.
Buying a home is a very major financial commitment and all the people should consider each and every option before they dive into it. If you plan on renting, it will surely take you a longer time to save up enough for a deposit.
In the end, a lot of people end up deciding that they prefer to buy a house as opposed to renting one. Whether you are going to rent or will be paying a mortgage, you will be making monthly payments to live somewhere and a lot of people would rather see this go towards their own benefit as opposed to someone else’s. It is mostly just a situation of getting your timing right and also being in the correct financial state to be able to proceed with all this.
For a free mortgage consultation and an accurate affordability measure, get in touch with your Mortgage Broker in Middlesbrough today.
It’s crucial to any first time buyers in Middlesbrough when applying for a mortgage; having a high credit score is a helpful factor. It ideally means a higher chance of you getting accepted and being successful with your application.
Although this doesn’t mean you’ll be guaranteed acceptance, though, each lender has their internal scoring systems.
Each lender has their criteria that they have developed over the years. Suppose you’ve failed with one lender not to worry. Mortgage lenders may be inclined to be more lenient, and it is down to your Mortgage Advisor in Middlesbrough to match you with the lender that’s right for you.
There are multiple credit reference agencies in the UK; we recommend Experian and Equifax. It is a good idea to look into many of these agencies as possible in advance, to give you a more specific idea of your credit score.
Furthermore, it is also plausible that some of these agencies hold inaccurate information. So, by checking with multiple agencies, you can be sure that this information gets appropriately amended.
Multiple credit searches can have adverse effects on your credit score. Be on guard of using price comparison websites which are known to be significant credit culprits searching on individuals.
If you are applying for a mortgage soon, it may be wise to apply for additional credit afterward. Whilst having some credit and paying it back is a good thing for your score in the long run.
Lenders prefer to see you leverage your borrowings right before setting up a mortgage application.
Making sure you’re registered on the electoral roll increases your credit score. It indicates stability which lenders like. Ensure your name gets spelt correctly and that it’s your current address which is registered online.
If you aren’t registered, it’s simple and easy enough to do this online.
If you max out your card each month, your credit score will get lowered. Utilizing a credit card to keep on top of your payments each month is a preferred method. It’s a good indicator of your lender that you are good at managing your money.
The main red flag in a lender’s eyes is if you exceed an agreed card limit or overdraft. The reason lenders watch over this is because they want to know you’re able to take your finances responsibly.
Sometimes it can get perceived on your credit report that you are living in two places at the same time if providers have yet to get told that you have moved houses.
It is pivotal that the addresses which you’re updating get spelled correctly; If you have been residing in a flat, this can be a bit more complex as the address can get formatted in different ways.
If you no longer use individual store/credit cards, you should get into contact with the providers to close the account for extra security. In the short term.
This could get seen as having a brief impact on your score as the lender can’t tell who’s closing the account, e.g. you or the provider, but this will be for the better and an advantage to you in the long run.
It’s a great thing to do to reduce your chance of becoming a victim of fraud if you don’t notice you have a lost a card which you may use regularly.
Many consumers feel that credit scoring is an unfair way of applications getting assessed through lenders themselves are indifferent to this idea as it makes their overall job more manageable.
It is more cost-efficient for them to operate this way and computers give more consistent outcomes. On the other hand, some lenders do still do it the old-fashioned way but still apply the same rules about the number of defaults and CCJ’s they will allow.
When setting up your application, be sure your report is up to date to increase your chances of being accepted the first time. The more in-depth information which your Specialist Mortgage Advisor has at hand, the better.
Moving Home in Middlesbrough can be tricky for some as it often comes with a considerable amount of pressure and expenses. There are numerous reasons people may choose to do this despite the doubts that surround it. These could range from needing more space or perhaps you are transferring to a new job.
Below are some of the primary reasons why people may find it suitable to move home:
Nowadays most would instead buy than rent in Middlesbrough, primarily due to the monthly expenses likely being a lot less than rental costs.
Moving home can prove to be a reasonably tricky choice for some due to the emotional bond and the advantages and disadvantages of moving home against staying in your home for longer and making home improvements.
If the latter applies to you, then getting in touch for a Free Mortgage Consultation can be beneficial to you. We’ll book you in when you’re free to speak with one of our Specialist Mortgage Advisors in Middlesbrough.
They’ll help you compare the costs of raising money to improve your home versus the costs of moving, as well as help calculate the approximate maximum borrowing capacity. You’ll also receive a quote on your monthly payments so that you can start thinking about your next step.
Speaking with an experienced Mortgage Advisor in Middlesbrough may be a popular choice, as your Advisor may have a good understanding of the area. They may be able to share with you what kind of options their other clients have been taking recently.
Recent research undertaken by Experian has shown that 33% of all mortgage applications are ruled out by lenders, due to mismatches in criteria.
To us, the statistics highlight the importance of First Time Buyers in Middlesbrough, customer care and their values when using a Mortgage Broker in Middlesbrough and the importance of getting it right the first time. We have experience dealing with customers going through a variety of circumstances. Don’t worry though, we’re here for you and will be with you every step of the way.
Experian also found out that only 3.5% of people searching for mortgages were eligible for deals on the market. However, just because you had seen these cheap deals online, it cannot guarantee that you will qualify for it. As our customer we will offer you full customer service, trying to find you the perfect deal.
Experian had shown that 22% of applicants started using price comparison websites to find the right mortgage. We recommend that if you happen to fall inside that demographic, remember that price comparison websites exclude the matching of a lender’s criteria. On top of that, the application can take weeks to process, not to mention the lender can dismiss your case. Ideally, speak to one of our members of staff. We’ll search 1000’s mortgage deals and picking the right ones for you, saving you time and money.
The analysis also showed that 27% were eligible for a mortgage but only for a reduced amount to meet the lender’s affordability requirements. Again, we find this happens all the time. A lender says you can borrow one amount but down the line find a reason to reduce the mortgage available.
It’s incredible the variance in the amount one lender will lend you compared to another. It will save you much aggravation, in the long run, to use a Mortgage Broker in Middlesbrough, and it may sometimes cost slightly more when you have to factor in a Broker fee but most customers who utilise the service feel it’s well worth it to ensure a quick and easy process.
Research gathered from Legal & General; parents are gifting deposits for their children now more than ever before. The gift so much now that it the “Bank of Mum & Dad” was a bank it would be one of the top 10 biggest lenders in the UK.
The average parental gifted deposit in the UK is now up to £24,000. Gifts also come from other family members, including grandparents, as their wealth sometimes skips a generation. Thousands of homebuyers every year are reliant on their families to either get onto the housing ladder in the first place or upgrade to a larger, more beneficial home.
Gifts are vital to the workings of the market and make a significant difference. If they were not accessible; the property market could be very different from how we know it and not for the better.
According to the research gathered, almost 20% of parents who had helped their children buy, did so because they felt it was their responsibility as a parent to help.
Property price rises have outstripped wage increases over the years, putting purchasing a first home out of reach for many, especially if there is only one income bringing in a level of financial stability into the household. It can be a challenge saving for a deposit and having to cover the costs of bills and rent. Some end up Moving Home in Middlesbrough and back in with their parents for a while in the run-up to moving to help with savings.
Of the back of the survey, Legal and General warned that parents’ generosity could impact their standard of living in retirement. Based on their survey of 1600 parents who had helped their children, most were gifting from their savings. Slightly more worrying, though was that many were withdrawing from their pension schemes or their equity.
Effectively this is them “fast-forwarding” their child’s inheritance.
The happy days of 100% and even 125% mortgages seem a long time ago. Now the credit crunch is behind us, and lenders tend to be more confident again to offer 95% mortgages.
It’s reasonable that you should show you can save each month. It also gives lenders comfort that you have something to invest in the process showing you have something to lose should it start to become more challenging to keep up your mortgage repayments.
We know it’s challenging to save up a deposit for many people, and this is their primary barrier to entry into the property market. It is daunting if you have a family or are in rented accommodation.
The higher the deposit the lower interest rate you will receive and this usually is more cost-effective and helps you in the long-term. The reasons for this is that you appear more reliable to them.
Bands differ in price depending on various factors such as your deposit.
The percentage of your mortgage provides lenders with an idea of how invested you are to your mortgage, although considering – the higher the interest rate, the more expensive. This means that the higher your deposit, the more secure you will be when it comes to purchasing your dream home meaning you will be happier in the long term.
In a limited number of circumstances, it can be successfully achieved.
The Lender will make the monthly payment as an additional credit commitment, therefore, grant you a smaller mortgage.
As a result, one will qualify if you hadn’t borrowed the deposit. Most lenders oppose this as you are essentially borrowing 100% of the purchase price.
Yes, most accept gifted deposits from family members and friends can be acceptable too. The sender of the gift will need to confirm it’s a gift, rather than a loan, and need to produce ID and proof of funds for anti-money laundering purposes.
Others have turned to the Bank of Mum and Dad, gifting their children funds towards a deposit.
For Anti-Money Laundering purposes, providing bank statements help to evidence funds. Lenders like to see how the money is being built up as this provides more of genuine insight.
If you have deposited a large amount into your account, you may need evidence to support this.
For example, if you have sold a car, then you’ll need a receipt and the amount you have sold the asset for would match the amount paid into your bank account. This will highlight reliable sources backing up your finances.
If you are selling a property, then the Memorandum of Sale provided by the Estate Agent is your proof.
It’s still 5% as a minimum if you qualify for the Government’s Help to Buy Scheme in Middlesbrough. It can be topped up to 25% via the equity loan so you will obtain a lower rate mortgage.
Choosing to opt-out from the scheme results in the 20% deposit gift provided by the Government changing meaning you will have to pay it back as a loan.
Usually. If it is a genuine discounted purchase, i.e. the house is worth £100,000, and you have been offered it, for example £90,000, then some Lenders will accept this as your guaranteed deposit.
This works well if you have the Right to Buy from the Local Authority or other Social Landlord.
When your introductory mortgage deal comes to an end your mortgage lender may offer you a new deal to stay with them, this is known as a product transfer.
Unfortunately, lenders do not always reward your loyalty and the offer they make you may not be competitive with deals you could get elsewhere. Even more annoyingly, these product transfer rates are not as good as the deal they offer new customers either!
Whilst swapping to a new deal with your current Lender may well be fairly easy online, it is always in your interest to see what other deals you may be eligible for. Lenders will also tempt you to effect a new deal online without taking advice.
This can be really dangerous because if you do this without advice you are waving goodbye to all the valuable consumer protection you would otherwise have benefitted from.
We have seen numerous examples of customers affecting these “follow-on” deals and locking themselves into an inappropriate deal. Because they opted out of advice then they have waived a lot of their rights in terms of making a complaint.
We did have a recent case where a customer who was pregnant did this and was declined for a small further advance to fund some necessary home improvements a few months later. She then had to pay a hefty early repayment charge to swap to a new Lender who would grant her the additional funds.
If we think a product transfer is the most suitable deal for you we will recommend that as a course of action for you and if we arrange the mortgage for you as a mortgage broker then all the regulation and consumer protection will apply.
In short, even if your requirement seems straightforward we recommend you always take Mortgage Advice in Middlesbrough– a second opinion costs nothing and making a mistake when taking a new product can be costly.
The Remortgage in Middlesbrough market is highly competitive and savings can generally be made by searching the market for a new deal.
A survey carried out by the Nottingham Building Society showed there was a rise in declined mortgage applications from clients in and over their 40s. When asking customers directly, who had been declined during the last two years, they had stated about how it was due to their age. However, it’s still possible to obtain a mortgage at a later age.
To understand the clients that feel like they are being hard done by, we’d need to look at how the mortgage application process was carried out before computerised credit scoring and increased regulation – when a branch manager or Mortgage Advisor would individually assess personal details and decide whether the application was approved.
If by chance that the application was approved, then there would be the matter of looking at how much was allowed to be borrowed and this would have been expressed quite simply as a multiple of the individual’s gross salary. For example, if you were earning £20,000pa and the Lender’s income multiple was 3.5x then you would be allowed a mortgage of £70,000.
However, what the method didn’t account for was age so it did not matter what age a person was, they could all be allowed to borrow the same amount of money. But this isn’t as fair as it may seem. If we look at two types of cases and compare, we can understand why.
If two applicants were both due to retire at the age of 65 then applicant one would be granted a mortgage term of up to 35 years whereas applicant two only 15 years making their monthly payments much higher. Let’s take the above £70,000 (capital and interest) mortgage and use that as an example, using a notional interest rate of 5%:
So, in this situation we have two identical earners with the same mortgage debt, but applicant two’s monthly payment is quite higher by a considerable amount. But if interest rates were to suddenly shoot up, then the risk of an arrears situation occurring is greater for applicant two than applicant one.
Therefore, modern mortgage calculators now consider the maximum term of the mortgage, e.g. your age as well as your income and expenditure.
It’s not so much that older First Time Buyers in Middlesbrough customers are being turned down as such, but that they are being told that they are able to borrow less than what they had in mind. Of course, the irony of this situation is that we are constantly being reminded that we are going to have to work until a later age by the Government before qualifying for a State Pension. Although Banks don’t seem to be taking this into account when granting mortgages, this is something we’re able to explore further.
Firstly, there are some occupations with manual work involved where a person is unable to physically able to work up until a certain age.
Also, the Lenders are closely monitored by the Regulator in terms of repossessions and arrears cases and it can have an adverse effect on them when these occur. Taking a property into possession is a very expensive process which could also lead to bad press that Lenders don’t want or need. They won’t want to be seen kicking an elderly applicant out of their home.
The good news is that Lenders will consider granting mortgages past normal retirement ages if the person is able to demonstrate affordability after they’ve retired. This would normally consist of a letter from their Pension provider with a projection of their future income. An issue here can crop up is that virtually everyone reading this will likely take a reduction in income at retirement.
Therefore, the Lenders will need the applicant to prove that they can afford their mortgage from that reduced income. In practice this hardly ever works unless they require only a very small mortgage – if this is the case, it probably wouldn’t need to be extended past retirement age anyway.
In 2011, the default retirement age was scrapped which led to it that an Employer can’t force a person to retire. Whilst some lenders use the State Retirement age as the age that you must have your mortgage paid off, it has become more normal for them to let you self-declare the age that retirement is intended. Though there will be a plausibility check, so if you are a fire-fighter declaring an intended retirement age of 72 that would likely be knocked back.
If you find yourself in this position, there are things you’re able to do. You must prepare to be questioned on the matter of affordability. The consumer protections and regulations are in place to protect consumers and encourage prudent lending. If you need the mortgage term to run past your normal state retirement age you will need to demonstrate how you will sustain payments and provide evidence if requested.