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.
In the beginning of the mortgage process, you’ll very quickly realise that there are lots of different options available to you as a customer. Below we have put together a list of the most popular types of mortgages available on the market, hopefully answering any questions that you may have. If you would like to speak further with a mortgage advisor in Middlesbrough regarding any of these, please do not hesitate to Get in Touch.
A fixed-rate mortgage is a simple form of mortgage wherein your monthly payments are going to stay the same for a set period of time. You are able to set the length of which you want to fix your payments for yourself, with standard choices being 2, 3 or 5 years or sometimes longer. Even if there happen to be any major changes to inflation, interest rates or the economy, you know that your mortgage payment, usually your biggest outgoing, will stay consistent.
A tracker mortgage will follow the Bank of England’s base rate. What this means is that the lender that you are with does not actually set the interest rate themselves, thus making it potentially unpredictable due to the potential for it to change. You will likely be paying a percentage above the Bank of England base rate. An example of this would be if the base rate is 1% and you are tracking at 1% above base rate, that means that you will be paying a rate of 2%.
By taking out a repayment mortgage, this means that each month you will be paying back a total combination of capital and interest. Providing that you keep your payments going for the full length of the mortgage term, the mortgage balance is almost certainly going to be paid off at the end and the property will become yours.
This is widely considered to be the most risk-free way to pay your capital back to the lender, especially as in the early years it is mainly the interest that you are paying and your balance will reduce at a slightly slower pace, especially if you have taken out a term over 25, 30 or 35 years. Your circumstances will change within the last ten years or so of your mortgage, as your payments will be paying off more capital than interest and the balance will come down at a quicker pace.
Whilst many Buy to Let mortgages in Middlesbrough are set up on an interest-only basis, taking out a regular residential mortgage in the form of interest-only is a lot more difficult and not seen as often.
It is a lot less likely for lenders to offer an interest-only product to applicants these days. That being said, there are very particular circumstances where this can be an option. These options can include downsizing later in life or to use the capital to pay off other investments. Lenders are very strict when it comes to offering these products now and the loan to values are a lot lower than they used to be.
With an offset mortgage, the lender will set you up a savings account to run in tandem with your mortgage account. This is quite in an interesting one in how it works. Let’s say you have a mortgage balance of £100,000 and £20,000 is transfered into your savings account; you would only be paying interest on the difference between the two amounts, so in this case it would be £80,000. This can be a very efficient and financially savvy way of managing your money, especially if you are a taxpayer with higher rates.
Most homeowners who are looking to buy a new family home will need to sell their current property in order to proceed The equity (the amount at which you sell for without your current mortgage balance added on) will contribute towards a security deposit for the next purchase. You can top this up from savings or a family gift if you wish.
There is always a “magic number”, the minimum that a seller (vendor) is willing to accept to agree on a sale. However, when a home is listed for sale, it is important to market and presents it in the right way. It can make a big difference in terms of how quickly it sells.
The asking price should portray that of its surrounding properties. Be reasonable, some estate agents may just suggest the highest possible price for the sake of it. With everyone now able to advertise on Zoopla and Rightmove, it’s a good idea to make the dive into the market and get as many viewings as possible, within the first two weeks.
If interest in your property seems to be low, there’s a chance it was overvalued.
Prior to putting their current property on the market, people often like to research and visit other properties to identify which one might become their new home. If this is you and you need a quick sale, here are some tips to give yourself the best possible chance of selling it.
Something simple like a freshly jet-washed drive and neatly cut front lawn indicate that you are the kind of person that looks after their home. You need to aim for that feel-good factor, it’s more than likely that the potential buyer will think the inside is likely to be as nice as the outside.
If you have any kids, it’s best to put away any bikes or loose toys in the front garden. Make sure your front door looks appealing (clean) and the doorbell works. Spend a little bit of cash getting a nice new doormat or welcome sign.
Go around each room and caution around rooms like kitchen or bathrooms, pay a lot of attention ensuring that they are spotless and have a high hygiene level. Cupboards and wardrobes should be neatly stacked and free of clutter.
One of the critical things is to ensure your home is immaculately clean. Wash your curtains, blinds, wipe down your walls and clean all your floors and windows. All repairs should be up to date too and clean bedding on the beds. Windows should be sparkling clean inside and out. New carpets in smaller rooms can be an inexpensive way of creating the impression that your house is welcoming and has been well cared for.
If you are a smoker it’s a good tip to air the rooms out before the potential buyer arrives. Ensure there are no bad smells lingering, buyers can be put off bad odours from pets or cigarettes.
You will want your buyer to feel at home and relaxed as they view your property so try and avoid having pets or young children getting in their way as they move around. That said, if it’s a family home you are selling then just a couple of family pictures and paintings can help as it will them envisage bringing up their family there too.
First Time Buyers in Middlesbrough like to walk on their own, if there are two of them allow them some breathing space to talk amongst themselves but be ready to answer their questions honestly.
Your bathroom should be presented spotless declutter any items like cosmetics and co-ordinate your towels and flannels, maybe consider doing a small investment look at ways you could create a fresh feel with some minor renovations. Make the floor space spotless.
A well-lit house is more appealing to potential buyers, this is achieved through making sure lights brighten up rooms and all curtains and blinds are open. Plants often block out light so place these strategically throughout the house.
White walls look fresh and clean, it also has the added benefit for the buyer of being extremely easy to work whenever they redecorate. It helps to buyer avoid scraping previous wallpaper off the walls.
Interior doors should all be freshly painted. Polish the brass fixtures and ensure all doors open and close nicely, no broken locks etc.
Buyers are looking at making the most of space, it’s recommended storing objects into cupboards and have clean and tidy worktops.
In terms of your garden the viewer may want to look inside your shed so don’t just throw everything in there, it needs to look neat and tidy.
Pay attention to your fences, make sure all the slats are in place, and it’s nicely painted or creosoted. Tidy up any visible items such as outdoor barbecues. 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.
Make your garage space more efficient therefore providing more space for a vehicle.
People buy from people, so it’s always better if you do the viewings yourself as the seller. You will no doubt feel very passionate about your home and can show it off in its best light, albeit pointing out any small issues that you have encountered over the years (“We had a leak, we fixed it”) to present a balanced view.
Estate Agents do want to earn their commission, but they will have a certain amount of knowledge on your home compared to you.
Finally, remember the emotions attached to buying a home. If you have a family, it helps to accentuate it has been a happy home for you, and this is sure to rub off on the viewers if they are thinking of raising a family also.