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.
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.
A 95% mortgage is as simple as the name would suggest; you are borrowing against 95% of the price of a property, and then you are covering the remaining 5% with your deposit. An example of this is if you looked at buying a property that was worth £150,000 with a 95% mortgage, you would be putting down £7,500 as your deposit and borrow the remaining £142,500 from the lender.
Off the back of the March 2021 Budget, Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, making 95% mortgages more readily available from the bigger high street banks.
This is fantastic news for First-Time Buyers and Home Movers alike, as this scheme will continue running until December 2022. Certain terms and conditions will apply though, which is something your Mortgage Advisor in Middlesbrough will be able to look at, to see if you qualify.
All our customers who opt to Get in Touch will receive a free, no-obligation mortgage consultation where one of our dedicated mortgage advisors will be able to make a recommendation on the best possible route for you to take.
95% mortgages are usually accessible by both First-Time Buyers in Middlesbrough & those who are Moving Home in Middlesbrough. Whilst saving for a 5% deposit sounds like a pretty straightforward concept, you’ll still need to have an acceptable credit score and prove that you are able to afford your monthly mortgage repayments, in order to access a 95% mortgage.
A good credit score is essential in the process of obtaining any mortgage, especially a 95% mortgage. Things like paying any current credit commitments on time, ensuring your addresses are updated and checking that you’re on the voters roll, can all help with your credit score.
Affordability is another one that is important to take note of. By giving the lender details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments, your lender will be able to get a general overview of whether or not you are able to afford this type of mortgage.
Nowadays we see lots of family members helping each other get onto the property ladder, especially parents looking to further their children’s lives. The way this usually happens is by gifting the person looking to find their home, the deposit required. Known through the industry as the “Bank of Mum & Dad, Gifted Deposits are only intended to be a gift, and not as a loan. The lender will need proof that this has been agreed, before it can be used towards your mortgage.
When looking for a 95% mortgage, you want to make sure you have the right type of mortgage. Each mortgage type works differently, with that choice allowing you to find one that is most appropriate for your personal and financial situation.
Some homeowners and home buyers prefer Fixed Rate or Tracker Mortgages, mortgage types which mean you either keep interest rates at a set amount for the term given or have your interest rates tracking the Bank of England base rates.
Alternatively, you might find that Interest-Only or a Repayment Mortgages are more your style. Interest-Only allows cheaper payments until you need to pay a lump sum at the end (mostly now used for Buy-to-Lets), whereas a Repayment mortgage (a normal mortgage if you’d like) means you’ll be paying interest and capital combined per month.
Seeing as a mortgage is such a large financial outgoing, you need to be prepared and need to be aware. You might find things like higher interest rates, remortgaging difficulties due to less equity and then negative equity all cropping up if you’re not.
There is no need to worry though, as all these can be avoided if you’re savvy enough with your process to begin with. The more deposit you put down for a property, the less risk the lender will see you as.
A larger deposit, of say 10-15%, would not only reduce the rates of interest by a noticeable amount, but would also give the property more equity and reduce the risk of negative equity, thanks in part to you borrowing less against the property.
So, whilst the risks may seem intimidating, planning ahead and saving for a bigger deposit to access something like a 90% or even an 85% mortgage will be a massive help in your mortgage journey and something you’ll be able to reap the rewards from in the future.
Every lender has their way of calculating your credit score. You won’t qualify with every lender as they all require a different credit score criteria. At times, they may be easy to pass, other times they may have stringent policies and you might find it difficult to pass. If a lender has declined your application, you may not have been told why you failed it. In some cases, they might have justified reasoning for failing you, however, some may not have and you won’t be able to find out why.
It’s at this point where you should realise the benefits of a Mortgage Broker in Middlesbrough. We are here to help you and guide you throughout the process starting from the early stages, right through to the end of your mortgage journey. We will never put you forward for a deal when you are going to be declined.
Before meeting a Mortgage Advisor in Middlesbrough, it is recommended that you obtain a copy of your credit report to show to them. They will be able to go through it with you and try to match you with the most appropriate lender according to your case. The more deposit you have available to put down, the easier your chances will be to secure a mortgage.
Your credit score is one of the most important aspects of your financial situation. It tells lenders how responsible you are. The better your score, the easier it will be to get approval for new loans or lines of credit. A higher credit score can also open the door to the lowest available interest rates when you borrow. There are several things you can do to improve your credit score in Middlesbrough. A few of the important things that you need to focus on are:
If you fail one lender’s credit score, it is not the end of the road, don’t give up! Many lenders prefer to lend to a specific demographic, so just because you didn’t match one lender’s criteria, doesn’t mean that you won’t match another. Although, don’t keep applying to lots of different lenders, as lots of hard credit searches on your file can negatively impact your credit score.
Every lender has their mortgage affordability calculator to work out how much you can afford to borrow. Some lenders will be more lenient and accommodating, whilst others are more strict and rigorous in their approvals, but that varies from lender to lender.
An ideal example of this is if you are Self Employed in Middlesbrough, the lender may be more lenient and merciful with you and your application. Some lenders may only look at your base income, overtime and bonuses whereas others may also accept “unearned” income, such as tax credits, child benefits, and maintenance benefits.
As an experienced Mortgage Broker in Middlesbrough, our advisors have access to over 40 different lenders whom we can approach without the need for a credit check, to perform an affordability assessment. If you are looking to buy a house then we would recommend that you have an affordability assessment carried out before you start looking for properties to avoid any future possible disappointments. Get in touch for more information.
Meeting your monthly mortgage or rent payments helps provide evidence about your credit history but again that does not guarantee that the lenders will pass you in your affordability test.
As we have mentioned before, each lender will have their own lending criteria. Lenders also aim to carve out a niche of their own, so that good quality mortgage borrowers approach them. Here are some examples of why your mortgage application could be denied or has been denied for being outside of policy:
As a devoted Mortgage Broker in Middlesbrough, we will use our knowledge and expertise extensively to find the best lender based on your situation. It does not matter if your situation is a little bit more difficult, we will still try our best to help you through your process.
We have been in the mortgage business for quite a long time now and we know exactly how to get over the majority of mortgage hurdles. Feel free to get in touch with a Mortgage Advisor in Middlesbrough and enjoy your free initial mortgage consultation.
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 Nottingham 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.
Property inflation has outstripped wage increases over the years. In order to be able to afford a suitable property many people feel the need to buy with another person. This is because two incomes are then contributing to the payments so the costs are shared and lenders can also take the two incomes into account when calculating your maximum mortgage amount. Although, there are risks to be considered which will be answered throughout this article.
Some lenders often allow up to four people to jointly co-own a property. If, for any reason, a borrower stops their contributions towards the mortgage payments then any joint owners have a legal right to stay in their home unless a court rules otherwise. Because of this, it’s best to be very aware of who the property is bought with.
If the borrowers wish to increase the mortgage later down the line then all borrowers will need to consent. So this will mean it’s important that long term plans are made should circumstances change or the borrowers end up wanting different things.
Most married couples tend to opt for joint tenancy. If either applicant were to die then the property passes to the other owner. If mortgage life insurance has been taken out then the mortgage would be repaid at that point also. Consent will be needed from the other applicant if there is thoughts of selling or remortgaging the property in the future.
Tenants in common is sometimes chosen by relatives or friends that buy together. They will still jointly own the property but are not forced to do so in equal shares. This makes sense more if one party is contributing a bigger financial input than the other.
An applicant can act individually if they are a tenant in common. For example, the share of the property is able to be sold or given away.
All mortgage borrowers are jointly and severally liable for mortgage payments. If one of the parties stops paying then the other(s) will have to make up for the shortfall to prevent the mortgage from falling into arrears. Any arrears that appear may stop you from getting a mortgage in the future.
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.
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.