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Middlesbroughmoneyman Spring Budget 2021 Update

Rishi Sunak’s second Budget as Chancellor brought two pieces of welcome news for the property sector as the Government attempts to transform “Generation Rent” into “Generation Buy” to help stimulate the UK economy, namely the new 95% Mortgage Guarantee and an extension of the Stamp Duty Holiday.

95% Mortgage Guarantee

The name of this scheme is misleading as not everyone that applies is guaranteed to be offered a mortgage, it is still subject to affordability and credit score. The “guarantee” itself is that the Government will ensure Lenders don’t stand a loss if they grant a 95% mortgage to a customer who then subsequently falls into arrears and is repossessed leaving behind negative equity.

This scheme should in theory give Lenders more confidence to lend even though the applicant only has a smaller deposit to put down. Of course, Lenders never want to repossess someone’s home unless it is the last resort, but if that happens then the new scheme would cover any shortfall.

Lenders have been worried about the prospect of home values decreasing so this measure should alleviate that concern although of course, the chances of negative equity occurring will naturally reduce should property prices increase as a result of these announcements!

The scheme is available to both 1st Time Buyers and Home Movers, it’s available on any property (not just new build) and will run until December 2022. Some major High Street Banks have already signed up to the scheme and it’s likely more will follow later on. It’s still a big challenge for Lenders to cope with the demand they are getting for mortgages due to the difficulties training and supervising staff working from home but they will want to offer as many of these mortgages as they can.

Stamp Duty Holiday Extension

When the Stamp Duty Holiday was launched last year we all hoped life would be very much back to normal by the cut-off date of 31st March 2021 but things didn’t pan out that way as we know. Solicitors are struggling to keep up with the workload and if lots of chains had collapsed then it would have partly defeated the object of the exercise.

Therefore it was good to hear the scheme has been extended to 30th June for purchases up to £500,000 and 30th September for purchases up to £250,000.

The Government certainly sees the property sector as an area that can play a big part in our economic recovery and if you are looking to buy a home or remortgage this year please reach out and we will be happy to advise you.

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Why Don’t People Overpay Their Mortgages

Speak to your Expert Mortgage Advisor in Middlesbrough

A survey including 56% of homeowners with a don’t take up the option of overpaying despite most applicants starting off their mortgage journey with that intention to speed up the process.

It is common knowledge that overpaying, regardless of the amount, makes a big difference in terms of the interest paid back over the term. The earlier you start with overpayments, the faster you see the effects.

Reasons why people don’t overpay?

The survey carried out by Compare The Market highlights how Homeowners, simply can’t afford to make the overpayments on their homes. We all know a plan can seem good at the moment but sometimes it’s a bit harder to carry out, especially when there are many other things in life which also need financial attention.

Another part of the problem is also remembering to overpay. When you have payments going out automatically through direct debit it’s more of a case as out of sight and out of mind meaning, unless you have a few years left, it’s not something a person would think about often. 

If these reasons sound familiar and you would like to get more into the habit of overpaying for purposes such as early retirement, then a few tips are included to help you out. 

A suitable recommendation would be to set up a standing order each month that is payable to your Lender, to go out on the same day as your mortgage payment. So if your mortgage payment goes out on the 1st, the make sure the standing order is set to go out on the 1st too. The reason for them both scheduled for the same day is that you’ll start forming the idea that your mortgage adds up to the two payments combined and you’ll restructure your finances.

The advantage of doing this is that unlike a direct debit, a standing order is able to be modified from the person who’s paying as opposed to the receiver. That means a simple adjustment can be made by logging into your mobile banking and cancelling if needed.

Although it is a shame if you do have to stop overpaying for certain reasons, the overpayments you have done up until this point will have had a positive effect. So some good will come of the payments. Further bonuses also come from overpaying such as being able to take payment breaks or reduced payments within your mortgage if you have been paying a substantial amount towards your mortgage.

Obverhaul

Whether your a First Time Byer in Middlesbrough overpaying your mortgage is a great thing to do if you want to reduce your mortgage by a few years or finish your mortgage early if you’re in the position to do so.

It is important to check with your lender beforehand that you are eligible to take a payment break to avoid a negative mark on your credit report.

Should I Transfer to a Buy to Let Limited Company?

Should I transfer my existing Buy to Let portfolio to a limited company?

In the event that you have a current portfolio, it is conceivable to exchange ownership from your own names to a limited company if that suits your necessities and conditions.

If you choose to exchange your property portfolio with a limited company, you will trigger a deal and repurchase. Doing as such will bring about capital gains tax, stamp duty and the legal, Mortgage and valuation charges.

It is likewise imperative to take note that limited companies do have running expenses and lawful necessities, for example, documenting accounts. In any case, you will pick up the upside of tax deductible costs, for example, Mortgage broker fees and lender arrangement fees.

This is a very specific territory and if you are thinking about making this move, it’s important that you seek specialist Buy to Let Mortgage in Middlesbrough then speak to one of our Mortgage Advisors in Middlesbrough, who will be ready to help you with the arrangement of top quality mortgage advice, backed up by introductions to appropriately experienced accountants and lawyers if needed.

Buy to Let Mortgages in Middlesbrough

Mortgage Advice After Divorce / Separation in Middlesbrough

Divorce & Mortgage Advice in Middlesbrough

It is very sad when you and your partner decide to call it a day. When you have made joint financial commitments unwinding that side of things does not always run as smoothly as you’d hope.

Here are three main questions that we get asked on Divorce and Mortgage Advice in Middlesbrough on a regular basis:

How do I remove my ex-husband/wife from my mortgage?

Obviously, when you buy a home together you don’t do so with the intention of splitting up in the future but it is a massive financial commitment and making changes to your mortgage further on down the line is not always easy.

When there are children involved, quite often it’s the mum that stays in the property but regardless of gender, there may come a time that whoever is “in situ” wants to take over the mortgage in their own right. This is not always straightforward!

The fact that you may be able to demonstrate you have been paying the mortgage without any help from your ex, does not change the fact that at the point of application you bought the property jointly or, in other words, in the event of mortgage arrears there are two people the Lender is allowed to pursue.

Before removing a party from a mortgage the Lender has to be sure that the remaining applicant has the means to be able to afford the mortgage on their own going forward and this means a full assessment of income regardless of whether you have kept up mortgage payments in the past or not.

Quite often in these situations, there is someone who can step in to replace the ex-partner such as a family member or indeed your new partner.

Of course, there are lots of Mortgage Lenders out there all with slightly different ways of assessing your ability to afford a mortgage so don’t give up hope if your existing Lender says no, we still may be able to help you.

How do I remove my name from my ex-partner’s mortgage?

In the event of a separation or divorce, you need to understand that even if you vacate the family home you remain responsible for any joint financial commitments you took out with your ex-partner. This is the case even if you make an agreement with your ex that they will make all the payments.

The mortgage payment for your old property will be taken into consideration if you want to buy a new property in the future so it’s essential in these instances that you take Mortgage Advice in Middlesbrough before making an offer. Some lenders are more generous as regards how much they’ll lend you than others and I’ll take this into account when recommending the most suitable lender to apply for a Mortgage Agreement in Principle with.

Can I have two mortgages?

It is possible. Lenders and their credit scoring systems take many factors into account before they offer you a mortgage.  On-going financial commitments are just one of these. The mortgage payment you hold with your ex will need to be inputted, alongside any other credit commitments you may have.

Once we’ve keyed all this in for you our system will confirm the maximum amount you are able to borrow. So you know your budget at outset and how much deposit you will need to put down.

It can be difficult to move on from your previous joint financial commitments. Just remember it’s all about risk as far as Lenders are concerned. They want to avoid repossession situations at all costs.

The Costs of Buying a Home in Middlesbrough

How much does moving home cost?

For a First Time Buyer in Middlesbrough one of the common questions we are asked by prospective clients is “How much will this all cost?”.

So here is a full list of the fees you can expect to pay when you are thinking about buying a new home (and when they become payable).

Estate Agency Fees

This only applies if you have a home to sell. With the rising of the online Estate Agent, the price to sell your home can be as low as £500 for a basic Rightmove listing. However, if you are looking for a more personalised local service and a dedicated sales negotiator, the fee will be in the region of 1-2%.

Valuation Fees

Your mortgage lender will have a requirement to have a valuation carried out on your chosen property. This will be to ensure they are lending against adequate security.

Prices can vary from nil (for a basic valuation with some lenders) up to several hundred pounds for a more detailed Home Buyers’ Report. A full Building Survey can be even more.

Having an element of choice is the key, in whether you wish to elect for a more detailed report or not. Your decision will likely depend upon the age and type of property you’re buying. This will be along with any fears/concerns you have about it.

Mortgage Arrangement Fees

Some mortgage products offer comparatively cheap rates. Although this benefit can be outweighed by an arrangement fee payable to the lender. Not every product has one, so the cost can be nil but could, for example, be £999 or even more depending upon the lender/product.

Sometimes these are to be paid up front or you can elect to add these to the balance of your mortgage.  Although, you would then incur further interest charges.

Being a reliable Mortgage Broker in Middlesbrough, we can compare mortgage deals with all fees added so we can compare on a like for like basis.

Solicitor’s Fees

You’ll need to engage the services of a solicitor, the fees quoted by various firms can differ enormously. Estimation for a straightforward purchase with a local company is £600 for a low-value property.  You will need to give the property address. This is the case whether it’s leasehold or freehold. You will also need to give the purchase price to obtain quotations.

The key points to cover when asking for a quote are:

  • Ensure the firm includes VAT
  • Ensure the firm includes the cost of any “disbursements.” These are fees such as Land Registry Fees and Local Authority Search Fees
  • Is your Solicitor on your mortgage lenders panel?

Stamp Duty

You’ll be required to pay this tax which the solicitor collects on completion of the property purchase, in addition to your Solicitor’s fees and disbursements. Full details can be found here: https://www.gov.uk/stamp-duty-land-tax/

Broker Fees

Your Mortgage Broker in Middlesbrough will usually charge a fee for their service. Please try to avoid any application fees where your money will be at risk.

Removal Fees

The cost of moving your furniture can vary significantly. It will depend on the level of service you are looking for. If you are quite happy to hire a van and roll your sleeves up, this can cost less than £200. On the other hand, if you are looking for a company that provides the full service this can be £1,000 plus.

If you would like to discuss the costs involved in obtaining a mortgage in more detail then please don’t hesitate to contact us.

Mortgages for NQTs in Middlesbrough

Newly Qualified Teacher Mortgages in Middlesbrough

For a First Time Buyer in Middlesbrough many schools now only offer Newly Qualified Teachers (NQT’s) a 12-month initial contract as standard. This can prove a problem for many teachers if they want to buy a property. This is because most of the High Street Mortgage Lenders will class them as a “Contract Worker”. As such teacher mortgages will require you to have 12 months in the role.

Fortunately, some smaller Lenders are more sympathetic to this situation and will consider an application without the 12-month history.

Things to be considered:

  • No previous employment history required (so it’s fine if you have been studying up until now)
  • A 12-month first post-contract can be treated the same as a permanent role
  • Mortgages available up to one month before the start of the first contract (so you can apply in the August for example)
  • Up to 95% loan to value

If you are a newly qualified teacher and would like to discuss your mortgage options then please don’t hesitate to contact us.

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.
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