Mortgages

Providing Individual Mortgage advice, Tailored to you

Whether you have experience of purchasing a property or are looking to do so for the first time, knowing which mortgage is right for you is not always straight forward. What may appear to be the right type of mortgage for you now may not be suitable for you in 18 months’ time if your circumstances change. We are here to help you navigate through all the different options available.

Our experts can examine your circumstances and search the market to find the most suitable products to enable you to fund your house purchase. We will advise you on the different types of mortgages available, how they work and how they may impact your personal situation over the life of the mortgage.

We look forward to helping you.

Providing Individual Mortgage advice, Tailored to you

Buying a house is one of the most important purchases you will make in your life. Buying a home for the first time will be an even more important, but daunting prospect. In addition to this, the vast array of mortgage products and solutions available from a wide range of sources could leave you with a high-stress, high-pressure confusion decision.
To help you make the right decision we have crafted a list of top 10 tips to help you in this process.

• Firstly, ensure you are realistic when calculating exactly how much you can afford to spend on your new house. You should ensure that the intended mortgage is affordable, this can be done by doing a budget calculation. Even a newly built house will require furnishings, whereas older properties may require extensive works to breathe life back into them, this can include re-flooring, tiling, or renewing wiring and fixtures and fittings. It is vital that you factor in all of these likely expenses in addition to the purchase price and other fees such as conveyancing and stamp duty.
  
  
• When buying a property for the first time, there may be many details that require close inspection and consideration in the houses you are looking at which you may not pick up on. It is always good practice to take an experienced home buyer, such as one of your parents, a home owning friend. If this is difficult to arrange then make sure you at least get some assistance once you have selected a property you like when you are arranging a second viewing.
  
  
• If you have been used to living at home with your parents, remember to budget for expenses such as council tax, gas and electricity bills, boiler servicing, and other home repairs.
  
  
• It is key to know what the likely council tax charge will be in your new property. The selling agent should be able to provide you information on what tax band the property you are interested in purchasing is in, and the charges are levied by local authorities.
  
  
• If you do not have children, it is still important to remember that the property in the catchment area of good local schools will always be easier to sell in the future however, this may also be result in a higher purchase price.
  
  
• Always consider how your transport arrangements will change in your new house. If you have a car, your insurance premium may increase dramatically if you move from a town with relatively low crime into a city centre with higher crime rates or if you move from your parents’ house with a locked garage to a smaller terraced house with on-street parking. 
  
  

• Consider the availability of public transport services such as local bus routes, the frequency, and destinations of train services from your nearest station. If you are moving a long distance, the range and destination of flights available from your local airport, even if you use motorised transport to travel, this information will be useful for anyone coming to visit you who do not drive.
  
  
• Write a list of local amenities which are important to you. This may include supermarkets, restaurants, pubs/ bars, local parks and field and cinemas. If you enjoy activities such as walking or cycling, the neighbourhood you plan on moving to may not be able to facilitate these activities as readily as you may like as they may lack the recreational facilities you are accustomed to. Before making any decision to move, take a stroll or bike ride around the local area and note down where the key facilities are situated.
  
  
• If you are a heavy internet user, check to see whether high speed internet is available in the street you would be moving into. The selling agent should be able to provide this information to you.
  
  
• Try, where possible, to find somewhere to live that is close to your main place of work. Commuting can be one of the biggest household expenses, and as you are likely to be spending much more time on domestic chores and/or DIY, living somewhere which minimises your commuting distance will be very important. If property is more expensive nearer to your place of work, make sure you weigh up this additional expense, when compared to the costs and time of commuting. You may wish to ask colleagues in your workplace to see if there are possibilities to lift share with anyone from the area.

Providing Individual Mortgage advice, Tailored to you

When you remortgage a property, you are switching your mortgage to another deal and quite often, another lender.

Remortgages can be used for a variety of reasons. Most people simply switch mortgages as it will work out cheaper for them, for example, the introductory discounted interest rate may have ended with the current lender; therefore, you could potentially get a new discount rate, lower APR with another lender. Another example is when you may need to remortgage to consolidate debts.

It is worth noting that a remortgage is not the best option in all cases. Even if the lender you are considering switching to is offering a lower APR, you must take into consideration these facts:

• The new lender may charge you for valuation and solicitors fees, even if you have already paid these for your mortgage with your current lender.
• If you switch mortgage remember to look at the overall repayment period. You may be able to pay less monthly but check the final repayment date of the mortgage as well.
• You may have to pay an early repayment charge to your existing lender if you re-mortgage.

Also, you may be able to switch your mortgage deal with your current lender, avoiding any unnecessary costs. Many lenders will allow you to switch your mortgage deal reasonably frequently. 

Think carefully before securing other debts against your home.  Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. 

Debt consolidation is not always the most suitable option, consolidating debts must be carefully considered. It will usually mean more interest over a longer repayment term and there may also be early repayment penalties on your current mortgage, you should think carefully before securing other debts against your home. There are other ways to manage debt such as free debt advice charities, you can find out more by contacting the Money Advice Service http://www.moneyadviceservice.org.uk/en/articles/where-to-go-to-get-free-debt-advice these services may be more suitable for you.

Providing Individual Mortgage advice, Tailored to you

Becoming a private landlord should not be seen as an easy way of making money. It can be riskier and more complicated. It can also be very time consuming, more than most forms of investment, and there is no guarantee that house prices will rise. That said, having a second property to let to tenants could reap considerable financial rewards over time.

There are 3 main differences in buy to let mortgages:

• Rent Potential – the decision as to whether a mortgage will be offered is usually based on the rent you will earn as well as your income. In some cases, your income is not ever considered.
  
  
• Interest Rate – buy to let mortgages have slightly higher interest rates.
  
  
• Larger Deposit – typically a minimum of 20% or 25% of the property’s value is required as a deposit.
  
  

When buying a second property to let, you will need to decide whether your primary objective is income or capital growth. In other words, are you looking to make a profit month on month or are you looking to make a profit through increased equity from the second property if it increases in value over time? The decision may affect the type of property you purchase, and the location.

When you manage a property there are many costs involved in addition to the monthly mortgage repayments. As a guide, you should be aiming to achieve a gross rent of about 135% of the rental property’s interest only mortgage repayments to cover your costs should anything go wrong.

These additional costs include:

• Property upkeep – maintenance costs for the property.
  
  
• Letting agent’s fees – letting agents charge around 10% of the monthly rent for finding and vetting tenants with an additional cost of around 5% if you require a full management service.
  
  
• Ground rent / service charges – applicable to leasehold properties.
  
  
• Legal insurance – to cover costs from evicting tenants in the event of non-payment, especially important, as this can be awfully expensive.
  
  
• Insurance – building insurance and contents insurance for the items provided as part of the rental agreement.
  
  
• Furnishings – the purchase of any furniture. If the property is to be let furnished, make sure you are covered for this by your home insurance.
  
  
• Gas / electrical appliances – cost of maintaining appliances and ensuring they comply with any regulations such as safety tests.
  
  
• Decorating costs – the property may require work ranging from painting to a new bathroom suite before it is suitable for letting to tenants.
  
  

When choosing a property to let, it is wise to take advice from local letting agents to determine; what types of properties are in need and which parts of the town are best or most wanted. They can tell you if there is a university in the town, and if students are looking for somewhere to live.