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Can I Have a Second Mortgages in Middlesbrough?

Second Home Mortgage Advice in Middlesbrough

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.

Can I Have Two Mortgages Middlesbrough? | MoneymanTV

Why would you take out a second mortgage?

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:

  • Are you wanting a second mortgage to raise money for your existing property?
  • Looking to rent out your existing home and purchase a new one?
  • Are you in the market to buy a new property with your name on another mortgage already?
  • Looking to help your children out with a second mortgage?
  • Are you in need of a second mortgage to purchase a buy to let property?

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.

Raise additional funds

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.

Second mortgage to rent out existing home to purchase a new one

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.

Second Mortgage to Purchase a Home For Your Children

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.

Second mortgage for a buy to let

Many landlords are looking to purchase additional buy to let properties add to their portfolio by taking out a second mortgage. 

Named on an existing mortgage and want to purchase a new property

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. 

Specialist mortgage advisor in Middlesbrough

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.

Different Types of Mortgages Explained in Middlesbrough

Mortgage Advice in Middlesbrough

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.

What is a Fixed-rate Mortgage?

What is a Fixed-Rate mortgage? | MoneymanTV

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.

What is a Tracker Mortgage?

What is a Tracker mortgage? | MoneymanTV

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%.

What is a Repayment Mortgage?

What is a Repayment mortgage? | MoneymanTV

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.

What is an Interest-only Mortgage?

What is an Interest-Only mortgage? | MoneymanTV

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.

What is an offset mortgage?

What is an Offset mortgage? | MoneymanTV

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.

Why Isn’t it Easier to get a Mortgage?

Mortgage Advice in Middlesbrough

Obtaining a Mortgage, whatever the situation, can be a hassle. At our Mortgage Broker in Middlesbrough, we aim to make it so as your Mortgage journey is as stress-free as possible. With many applicants we have seen both past and present, don’t know where is best to start due to the many lenders out there who all have different criteria.

Due to this, some credit scores are easier to pass due to specific scoring that is aimed towards the market. It is an often occurrence that the lenders with the lowest rates have the tightest lending criteria which means most customers may not match the majority of lending criteria that is out there.

When lenders offer the chance to take up the competitive deals, the margins for these are very narrow. To make it so as these lenders are still gaining profit, they make sure to take customers that have the highest chances of being successful when paying back their mortgage and not fall into arrears.  

And whilst the deals are cheap for the customers, there are still other ways of gaining a maximised profit from borrowers. When the mortgage has been agreed on then this will lead to other products being offered so that more commission is taken. This can include such things as Bank Accounts, unsecured loans, credit cards and Insurance.

Low rates may seem a good idea at the time but they also come with high set up fees. It can sometimes be an advantage to just ignore these products. If you choose to go forward with your mortgage application with one of our Mortgage Advisors in Middlesbrough then they will be able to recommend the product that represents the best value for money for you by taking everything into account.

Lenders further maximise their opportunities to get more out of their customers when the initial deals are coming to an end. The most common option for this is a follow on deal, also known as a ‘Product Transfer’. Whilst these are easy to take up, they offer nothing of substance and aren’t as greater value than the deals which are available to new customers.

Alternatively, when a borrowers’ deal is about to finish, most will be moved onto the lenders Standard Variable Rate if left unnoticed. When it comes to Standard Variable Rate mortgages, not all customers are eligible to Remortgage for numerous reasons such as less income coming into a household, a relationship breakdown and if the client has had a default or CCJ since they took the mortgage out.

Backtracking to the lenders’ criteria, depending on factors such as the economy can affect the difficulty of gaining your mortgage. If the economy is doing well, lenders may be more open and lenient. This is why it’s easier in some years to get a mortgage and in others, not so much.

An example of incredibly easy mortgages would be ‘sub-prime’ and ‘self-cert’ mortgages that were readily available to the majority of the general public in the mid 2000s. During this time lenders were able to set out more relaxed criteria.

After the ‘Credit Crunch’, lenders restricted such things as ‘self cert’ mortgages and tightened criteria. Often, a 25% deposit was required and for many people, it became a lot harder to step onto the property ladder. Alongside this, interest rates were also high as well which gave customers more reason to rent.

Mortgage Broker in Middlesbrough

There are a lot of ways in which a customer can obtain a mortgage with the help of an experienced Mortgage Advisor in Middlesbrough. Together we will be able to look over credit scoring of certain lenders and look over more fine details such as ensuring the formatting of your address is consistent across your accounts.

If you don’t qualify for a mortgage yet you can still get the foundations ready so that when the time is right you are in a much stronger position to go ahead when you choose to start your mortgage journey.

Whether you’re a First Time BuyerHome Mover, looking at Remortgaging, we are here to help. Our amazing team of Mortgage Advisors in Middlesbrough are available 7 days a week and will be ready to answer all of your mortgage questions. Contact us today for a free mortgage consultation.

Product Transfer V Remortgage

Mortgage Products | Mortgage Broker in Middlesbrough

What is a product transfer?

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.

Are you rewarded for being loyal?

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!

Tempted by an online switch?

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.

You’ll be opting out of Mortgage Advice

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.

Always get mortgage advice

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.

Top Tips for Selling Your Home Quickly

Some helpful tips from your friendly Mortgage Broker

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.

Attention to Detail

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.

Got Kids?

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.

Upkeep

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.

Atmosphere

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.

Lighting

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.

Fresh Coat of Paint

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.

Gardening

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.

  • Maintain your lawn,
  • Weed the paths and walkways,
  • Spruce up your plants with more vibrant alternatives.

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.

Another Perspective

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.

Buying a Property in Joint Names in Middlesbrough

Looking to purchase a property in Middlesbrough?

Statistics show that in recent years property prices have increased at a faster rate than wages. We have found that many people look to purchase in joint names with a partner or friend in order to be able to afford a suitable home at a more reasonable price.

Purchasing in joint names usually will increase your maximum borrowing capacity, as the lender will look at all parties income and take this into account when running the affordability calculations.

How Many People Can Co-Own a Property?

Surprisingly, we work with some lenders who will accept up to 4 people co-owning a property. If for any reason, one of the co-owners of the property decides to no longer contribute to the mortgage repayments, any 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 at a later date, you must gain consent from all co-owners involved. It’s therefore essential that you make long term plans about what will happen in the future should you end up wanting different things. 

Joint Tenancy or Tenancy in Common?

We find the most popular Tenancy for married couples or those in civil partnerships is ‘Joint Tenancy’. With this type of tenure, if either party were to pass away, the property would be handed over to the co-owner. If you have taken out relevant life insurance, at this point, your mortgage would be repaid.

With ‘Joint Tenancy’, when looking to remortgage or sell the property in the future. It would be required that all names on the tenancy agree to this. 

When purchasing with relatives or friends, we find that ‘Tenants In common’ is the most popular tenure. You will still jointly co-own the property but are have the flexibility to do so not with equal shares. This works well if one party is making a more significant financial contribution than the other.

With ‘Tenants in Common’, another positive aspect, is that you can act independently. For example, you can choose to sell or give away your share of the property to someone else without the need to consult other parties.

Do I have to pay the mortgage if we separate?

All mortgage borrowers are jointly and severally liable for mortgage payments If you find yourself paying all future payments without a co-owner, you will still be liable. Preventing the mortgage from falling into any debt. As mortgage arrears showing on your credit file could have the potential to stop you from obtaining a mortgage in the future.

It is best to think of it like this: You don’t own 50% of a property, you own 100% jointly.

How do I remove my ex-partner from a Joint Mortgage?

Lenders will need to be confident that you can keep up with monthly payments on your own before they can approve of this happening.

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 the justifications if things go sideways.

As seen from above, a mortgage is a big financial commitment and making changes is going to be a challenge.

With physical proof that you can maintain mortgage payments since your old partner moved, 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, precisely in the same way as they would at the point of purchase.
Whilst a lender may not accept a request, it’s always beneficial to speak with a mortgage advisor beforehand, 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 life a little bit easier. They can do so by replacing your ex on your mortgage or by gifting you a lump sum to reduce the amount owed meaning your savings are able to contribute to easing your future mortgage payments.

Can I remove my name from a Joint Mortgage?

If you and your partner split up and you leave the family home, then your responsibility is still shared for mortgage payments. Even if an agreement is settled with your ex that they will make all the payments.

If you are sending your partner money each month, you should keep an eye on your credit report to ensure they are paying the mortgage. If they default, then it will impact your own score.

Is your name still linked with an existing mortgage? Then the payments for that will be considered if you buy a new home of your own. That will mean Lenders might not lend you as much as you would like.

Buying a home with someone is different from renting with them. It’s always better to agree on what would happen to the house should things not plan out as expected.

Whether you are a First Time Buyer or Moving Home in Middlesbrough and thinking of purchasing in Joint Names. Or are you looking to remove a name from a mortgage by looking into a Remortgage in Middlesbrough in your sole name? Please feel free to contact our friendly Mortgage Team, we will be more than happy to answer all of your questions.

How to Sell Your Home Quickly | Mortgage Advice in Middlesbrough

Selling your home quickly in Middlesbrough

Most people Remortgaging in Middlesbrough who look to purchasing a new family home will need to progress onto selling their current property to let them move forward in the process. The equity that you receive will be used as your deposit for whatever property you are planning to move into.

There’s always a safe minimum number in which the seller is willing to accept in order to agree to a sale. However, there are factors that can present big differences in the time it takes for the house to be purchased, for example how it is marketed and presented on the market.

Though make sure you don’t aim too high or too low just to guarantee an offer. The offer should tie in with the odds for the area so you shouldn’t just go with the Estate Agent who suggests the highest potential sale price. The way you enter into the market is a pivotal moment to how many viewings you receive. If it seems that you get no initial interest, then there may be a good chance that your property has been over-valued.

Some potential sellers tend to delay from putting their houses onto the market until they have seen one that they are aiming to buy. If you find that this is you and you’re after a quick sale, some tips are provided to increase your chances of selling more quickly.

First Impression Counts

The first tip would be to view your house as if you’re viewing it for the first time as a potential buyer then if something doesn’t look right to you, it won’t look right to another. An advantage for most houses is if they have a good ‘kerbside appeal’ as it creates a first good impression this includes attention to keeping your fences intact and tidying up any outdoor items such as barbecues. A garden full of well-placed flowers does wonders as it can add colour to the outside of the property and can create a more pleasant scent.

If it appears that you look after your home then the potential buyer will be under the influence of thinking that the inside will look just as nice inside as it does outside. Something simple will do the job such as a freshly jet-washed drive or neatly cut lawn to provide the ‘feel good factor’.

The same goes for your front door, make sure to clear any clutter that may be in or around the garden such as children’s bikes and toys, etc. It is important to make sure your front door feels welcome, perhaps it is a good decision to treat yourself to a new doormat whilst you’re revamping.

Tidy, Tidy, Tidy!

Once you’ve got the front out of the way – you can now go room to room. You should focus extra attention to the kitchen and bathrooms.

Your bathroom is a factor most people overlook. Present this room as spotless as you’re able to with items stored out of sight which aren’t in daily use and co-ordination between towels and flannels is a nice added touch.

The idea of ‘space’ is always a way to entice. Anything that is being stored outside of cupboards should be moved to a place out of sight or if it’s not needed… thrown away. As handy as the shed is to store things in for the meantime, sometimes the viewer may want to look inside your shed so make sure not to overfill it with junk – the same goes for your garage if your buyer drives, they’re going to want a decent space for parking.

Interiors are best to look well-kept. Freshly painted doors and polished brass fixtures means that it worn down features of the house become more up to date and will hold a more refreshed appearance. It is also best to tighten up loose screws around the house and make sure that doors and locks move smoothly and efficiently.

A relaxed atmosphere will make your buyer feel more at home so it’s best to avoid having pets or young children around whilst the viewings take place. On the other hand, if it’s a family home which you are selling it can be nice to project that image to the buyer with family pictures. It is also important to remember to offer them space whilst they’re viewing and not to crowd them. If appropriate, let them walk around on their own to provide them with opportunities to talk between themselves.

Well-lit rooms offer a clearer appearance and shows that nothing is being hidden, especially in the darker rooms. All curtains and blinds should be open and all lightbulbs should be working. If you have any interior plants, it’s advisable to trim them down to an appropriate size.

Keep Your House Clean

Overall your house should be immaculately clean. All aspects should be checked over such as repairs and all fabrics should be washed and presented in a well-presented manner including:

  • Curtains
  • Bedding
  • Floors
  • Windows

Plain painted walls create the idea of a place that the buyer is able to personalise, wallpaper should be avoided. A seller should not only appeal to the eye but also a fresh scent or good airing and clutter free spaces create a more open atmosphere for potential purchasers. If something appears to have a funky smell about it that you notice, it’s best to remove it as this can deter potential offers.

People buy from people, so it’s always more appealing if you do the viewings yourself as the seller. You will know the property more than anyone and the best features to show off alongside any small issues that they may need to be aware of to provide a more balanced view. Estate Agents do want to earn their commission but will have limited knowledge about the property you own.  

The projection you offer about your own experience is the main factor when it comes to selling your home. It helps to accentuate this factor to show how you’ve developed an emotional connection to your home and created great memories meaning so will the future buyer, especially if they’re looking for a family home.

Mortgage Payment Holidays | Mortgage Broker in Middlesbrough

Mortgage Payment Holidays | Mortgage Broker in Middlesbrough

At the start of the Coronavirus pandemic, the Government promised that all borrowers would be allowed a three-month mortgage payment holiday if they needed it. Most lenders followed the Government’s given guidelines and did their best to help their borrowers during the tough anticipated months ahead.

Middlesbroughmoneyman has thought carefully about the possibilities of what could happen to your mortgage over the next few months and is working very closely with all of our lenders to ensure that if anything changes, we can let you know you right away and recommend the best option for you to take so that you still feel secure, comfortable and happy with your mortgage.

What is a Mortgage Payment Holiday?

Mortgage Payment Holidays are agreements entered with establishments such as Banks, Building Societies, or Mortgage Lender depending on who your mortgage is set up with. The agreement will allow you to defer your monthly mortgage payments for a set amount of time.

However, this will not mean that you do not have to pay the amount back. The interest that is deferred will be added back onto your loan amount whilst the capital balance stays the same. In other words, the overall mortgage amount will increase by a small percentage which will attract interest on the whole amount.

When you are in a stable position to continue your payments, there are methods where your monthly payments may be recalculated at a slightly higher level or your mortgage term is extended a bit further. Most lenders will have an option that they will prefer which will be to recalculate your payments for the reason that if some borrowers extend their mortgage term, it could mean that it could take them over standard retirement age and they could then be perceived as a risk to lenders.

Depending on the mortgage deal that you acquired, you may be able to pay off a lump sum later on to bring your mortgage back to where it would originally have been.

Mortgage payments are available to both types of borrowers who hold residential or buy-to-let mortgages, which means landlords also have assistance of rental payments are affected.

What is the Government Proposal?

The full proposal is in detail below:

  • Mortgage lenders will offer an automatic 3-month mortgage payment holiday for customers impacted, directly or indirectly, by COVID-19.
  • The mortgage payment holiday will apply to customers who are up to date on their payments, not in arrears, and wanting to self-certify that they are impacted by COVID-19.
  • This means that lenders will not complete an income and expenditure assessment, or an assessment of alternate payment options as ordinarily required under MCOB.
  • This proposal will allow lenders to be more responsive to customer needs and offer forbearance in a simple way to customers in an environment where the operation of collections teams made be also impacted by COVID-19.
  • Customers will be notified that interest will accrue in the holiday period and they will need to make up deferred payments in the future.
  • Customers who feel that they want to undertake a full assessment of their ability to pay or financial difficulty may still do so.

Mortgage Payment Holidays: How do I apply?

When it comes to Mortgage Payment Holidays, we recommend speaking to one of our Mortgage Advisors in Middlesbrough rather than going directly applying for a Mortgage Payment Holiday straight away if the situation is critical so you can make sure you’re making the right approach. Lenders will be overloaded with calls and will be adhering to making sure the most urgent cases are prioritized.

Our Mortgage Advisors in Middlesbrough will talk with you and offer the correct Mortgage Advice in Middlesbrough fitted to your situation and see all the alternative options available to you.

For a customer, up to date with payments, not in arrears and impacted by COVID-19, the process will be as follows:

  • the customer would contact the lender and inform them that they are impacted by COVID-19
  • the lender would accept these details from the customer and offer an automatic 3-month mortgage payment holiday
  • no evidence will be sought from the customer
  • the lender makes the customer aware that interest will accrue and will be contacted at the end of the three months to complete an assessment of the customer’s circumstances
  • at the end of three months, an arrangement to pay will be agreed with the customer according to their circumstances to recover any shortfall, while ensuring that the mortgage remains affordable and sustainable
  • the lender notifies the customer that if they wished to complete a full assessment now, there may be other forbearance options more suitable to the customer.

Mortgage Payment Holidays – What does this mean for my Credit Score?

Normally, a Mortgage Payment Holiday can leave a negative print on your credit score but lenders are making sure this will not happen in these types of cases. When asking about the payment holidays, it is important that you ask the lender directly and make a record of the response you receive, whilst including the date and name of the person that you are speaking to which will save confusion down the line as different lenders are doing different things.

Will I still be able to remortgage or take a Product Transfer with my lender?

Remortgaging and Product Transfers at this moment in time have become quite controversial. Lenders have been asking borrowers not to make any unnecessary changes to their mortgages within the holiday period. Therefore, product transfers and Remortgage in Middlesbrough are not allowed at this time.

This would mean that borrowers who are close to finishing their existing product may be forced to move on to the higher lenders variable rate.

However, if many borrowers act too early, there’s a possibility that they might find themselves on a mortgage payment holiday that accrues interest on a more expensive variable rate.

To avoid this, we recommend you seek Mortgage Advice in Middlesbrough from our Mortgage Advisors in Middlesbrough to determine the best course of action. If possible, if you arrange your mortgage transfer first then ask for a holiday then this will be the most sensible way to proceed.

I have exchanged contracts – can I complete my purchase?

Whilst the Government has advised people to not move house unless absolutely necessary, if contracts have already been exchanged and the process is at the end with all in agreement, then going ahead and completing the purchase will be fine.

Should I pull out of my purchase?

You should not pull out of your purchase unless for example, you are worried about losing your job as a result of Coronavirus. We are advising everyone to proceed as normal for now and “wait and see” – you are not committed to completing your purchase until contracts are exchanged.

What “Other Options” are available?

There are alternative options available to borrowers, with some lenders offering the option of an interest-only to help reduce monthly payments drastically but not adding any further to the loan amount by appeasing the interest payments each month. It may be that you won’t need to convert all your mortgage to interest only and that just putting part of the mortgage on this basis could offer you some form of comfort.  

For the borrowers who hold savings, remortgaging into an offset basic could be of some support as this would reduce monthly payments whilst also keeping their savings intact.

An example of offset would be: someone with a £400,000 loan and £100,000 in savings would only pay interest on £300,000 reducing their payments accordingly.

For other borrowers, a straight remortgage to another lender, making note of any early repayment charges, may ease the burden enough financially, or simply extend your mortgage term.

To discuss these options further or gain Mortgage Advice in Middlesbrough for your situation, feel free to get in touch with one of our Mortgage Advisors in Middlesbrough.

Remortgage Advice in Middlesbrough

Mortgage Advice in Middlesbrough

If your current mortgage deal is coming to an end or you feel that you need to borrow some extra money then it could be near the time to Remortgage in Middlesbrough. It normally happens quite often that customers leave it too late and ultimately end up lapsing on their lenders’ Standard Variable Rate. If by chance this happens then you may be paying more than you need to on your mortgage payments each month.  

Why Should I Shop Around for a Remortgage?

If you stick to relying on your current Lender offering you a new deal then you could potentially be missing out on lower rates somewhere else. By not shopping around, you make it easier for your lender as they are benefiting by receiving the additional payments that could be going into your savings.

If you choose to switch online and not speak to anyone, you’ll be carrying out an execution-only mortgage. That will lead to you not benefiting from the consumer protection in which you would have had by taking advice. Again, this benefits the lender because if perhaps you have taken out the wrong product, then you’ll not be able to complain because you had chosen this yourself.

If you find that you’re still on a low rate tracker deal, it is still worth having a look to see what is out there, especially if it looks like there’s a chance interest rates might go up. If this is something you feel like might happen in the foreseeable future, you can always take out a Fixed Rate Remortgage.  

Remortgage for Home Improvements

If your home would benefit from upgrading then it may be good time for you to remortgage so that you are able to carry out Home Improvements and can often pay off in the long term e.g. selling your house, as some improvements can put value into your home.

If the amount that you are asking to borrow is significant then lenders reserve the right to ask for estimates around the works that you intend to carry out. This doesn’t mean you’ll need the contractor who provided the estimate to carry out the actual works. Additionally, home improvements don’t have to carried out just for adding value to your home, it can just be for your own pleasure.   

Capital Raising Remortgage

You are able to borrow extra funds for most legal purposes, an example being, raising capital when you remortgage for almost any legal reason. But it is important to remember that you will be paying interest off on a remortgage for numerous years on average so it’s really important that you only borrow for the right reasons.

Debt Consolidation Remortgage

By adding unsecured debt to a mortgage, you may end up paying back more interest overall. This is because a mortgage term tends to be much longer when compared to a personal loan.

The other thing that may be important is that you are taking unsecured debt and securing it onto your home and could mean that you’re under the risk of repossession of your home if you cannot afford the mortgage in the future.

You will need to take note of the interest rates that apply to the debts that you are considering rolling into your mortgage. If you have 0% credit cards, then adding these to your mortgage will start attracting interest.

It is advisable to consider all options before deciding to consolidate debts, such as seeking help from family members for assistance if it’s available ad reduce outgoings as much as possible.

It’s important to know that you need to speak to a qualified mortgage advisor prior to securing any debts against your home.

Middlesbroughmoneyman.com & Middlesbroughmoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited registered in England, registered number 6789312 and registered office 10 Consort Court, Hull, HU9 1PU.

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