Category Archives: Mortgages

Mortgages

Is Your Fixed Rate Mortgage About to End?

Mortgages

With many property purchasers buying homes with a two, three or five year fixed rate deal, every moth there are hundreds of thousands of borrowers who are reaching the end of their fixed rate mortgage deal.

When your mortgage deal ends, you can choose to do nothing and move on to a higher SVR rate or remortgage onto a better deal. If you do nothing you could find that your mortgage repayments jump up by a lot. However, you can avert these higher costs by moving onto the best possible rate.

Fixed rate mortgages

By taking out a fixed rate mortgage you are locking your rate for a set amount of time – usually two, three, five or 10 years. This means that the amount you repay each month is guaranteed regardless of what happens to interest rates during your deal, this gives a level of certainty so you know how much your outgoings will be each month, helping you to budget and plan ahead.

Moving to a SVR

When the term ends you will move onto a standard variable rate or SVR mortgage. These are usually far higher than your fixed rate deal – and could be as high as four or five per cent. SVR mortgages don’t track the Bank Rate directly but are set by individual lenders and can go up and down usually in line with wider interest rates.

A lender will often contact you before our current mortgage deal expires, but many may find themselves moved onto the SVR without realising. You may receive an offer from your current lender, but it’s important to get advice to make sure this is the best deal available to you.

If the value of your property has gone up since you bought your property, you could be eligible for a much lower rate with another lender, which is something the Mortgage Hub can assist you with.

Once you have found the best deal you will need pass the usual credit and affordability checks before receiving a binding offer. Your solicitor will take care of the paperwork and a signed deed will be sent to your new mortgage provider. Your existing mortgage will be repaid and you will start making repayments to the new lender.

However, if you want to make considerable mortgage overpayments a SVR might be beneficial because there won’t typically be any early repayment charges attached, allowing you to repay the mortgage without any penalty. In addition, if you have a relatively small mortgage for example £50,000 or less, it might not be worth remortgaging as the new mortgage fees could outweigh the potential savings. Some lenders won’t take on small mortgages.

What will it cost to remortgage?

Remortgaging will cost money as there are several charges you could be liable for including product fees, valuation fees, solicitor fees, transfer fees and valuation fees so it’s worth weighing up whether it is right for you in the short and long term.

Talk to us at The Mortgage Hub about remortgaging and let us find the best deal suited to your circumstances.

What Can I Do to Improve My Mortgage Affordability? 

Mortgages, Uncategorized

The rules surrounding mortgage affordability have become stricter over recent years meaning that those starting out on their property journey need to save as much as possible for their deposit. But what does this mean in reality?

There was a time when you could simply select the right mortgage, tell the lender that you can afford the repayments and wait for the cash to appear in your account. Lenders were offering self-certification mortgages whereby you simply needed an accountant’s letter backing up your self employed income and some buyers could even secure a 95% interest only mortgage with a cash back option! However the days of irresponsible lending are (thankfully) over.

The financial crisis — when the legacy of unaffordable mortgages caused a chain reaction that caused house prices to crash – prompted an overhaul of the mortgage application process known as the mortgage market review. When anyone talks about mortgages the word ‘affordability’ seems to go hand in hand. This protects consumers from being sold loans that they can’t afford to repay – and although this has many advantages that will be felt for generation, it has also locked a large number out of the property market especially those who are self employed or have unique circumstances that don’t conform to the profile of a typical borrower and ’safe bet’.

So how can you improve your affordability?

Cut unnecessary costs

By cutting your monthly outgoings by just £100 you could add up to £10,000 to your maximum loan. This could mean ditching the morning coffee and lunch out, staying in rather than going out or cancelling subscriptions that you can do with out such as a gym membership, an expensive TV package or memberships you don’t use. Check you have the best deal available and try and switch to a different deal or provider if possible. When you come to the end of a contract – such as a mobile phone or cable TV, renegotiate the monthly fee. By making a few small changes you can make a big difference to your outgoings and ultimately the amount you can borrow, or the extra saving can be put towards a deposit.

Plan ahead

Some lenders only want three months of statements and payslips whereas another may want six, it’s best to plan for the worst and hope for the best to give yourself the best chance of getting a mortgage. Some lenders interpret unsecured credit card and overdraft debt differently so it’s better to try and pay these off in advance of applying for a mortgage even if that means delaying buying a property.

Your deposit is key

The size of your deposit is half the battle. The larger the loan to value you need, the more difficult and expensive to obtain so it’s important to prioritise saving for your deposit.

Analyse your lifestyle

Lenders may also look for red flags such as payments to gambling companies, significant one-off payments and overspending. Take a good look at your lifestyle and how you manage your accounts as this can affect your affordability rating with the lender and you can dramatically improve your chances of being accepted by making changes to the way you spend your cash.

Reduce debts

You could find it’s more beneficial to put off purchasing your own home until you can reduce your debts – this will improve your affordability and the amount you can borrow. If you are one of the millions of people who permanently live in their overdraft, now is the time to get back into the black. If you have a student loan it could be treated differently by various lenders.

Keep an eye on your credit score

It’s essential to keep a close eye on your credit score throughout the preparation, application and buying process particularly in case of any errors that could affect a good score. As soon as there’s a change make sure it’s correct and that nothing is adversely affecting your score. 

Lenders won’t take future prospects into account

It’s worth noting that one of the changes in lending attitudes has been that lenders won’t take future prospects into account. Saying you should get a pay rise next year or more freelance work won’t carry much weight. You need to secure the increase before your application is considered.

At The Mortgage Hub we can help give you the best chance of securing a mortgage and purchasing your home. Preparation is key so talk to us today for advice from our friendly, professional team.

The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.

Is the Property Market Finally More Balanced?

Mortgages, Uncategorized

According to figures from a lobby group for the financial industry, UK Finance, in the 12 months leading up to May this year we have seen a rise in first time buyers, yet there has been a fall in buy-to-let mortgages. Could this be a sign that government and tax changes have resulted in a more balanced property market, making it easier for first-time-buyers to get onto the property ladder?
Continue reading Is the Property Market Finally More Balanced? →

How to save money on your household bills

All, Insurance, Mortgages

During the more quiet summer months might be a good time to rethink your family budget, re-negotiate contracts and look at your overall household budget. After all, we could all benefit from the savings – either to make advance payments to the mortgage and build more equity in ur house, finance home improvement – or why not – travel more. Continue reading How to save money on your household bills →

Securing a Mortgage if You Are a Business Owner

All, Mortgages, , , , , , , ,

Securing a mortgage if you are a business owner, director or self-employed may not be as difficult as you think, provided you have the right documents. 
Continue reading Securing a Mortgage if You Are a Business Owner →

Make Sure You Live in Financial Harmony with Your Partner

Mortgages, , , , ,

When it comes to managing your money, there are some perks and pitfalls of being in a relationship. All of a sudden, you could be paying half of all living costs and you could even improve your chances of getting on the housing ladder.

Continue reading Make Sure You Live in Financial Harmony with Your Partner →

Mortgages in Retirement 

All, Mortgages, , , ,

Pensioners looking to help their children or grandchildren get a foot on the property ladder or who are stuck with existing interest-only mortgages could be offered a new type of home loan.

In recent months, we have seen a rise in the number of interest-only mortgages available to those in retirement age. This has made a huge impact for those looking for mortgages in retirement.

Continue reading Mortgages in Retirement  →

Making an Offer on Your Dream Home

All, Mortgages, , , ,

If you’re about to start searching for your dream home, or you’ve already found it and you’re not sure what to do next, there are certain tactics that you can employ before making an offer. These will give you the upper hand, help you to successfully negotiate, and increase your chances of securing the dream home that you want to buy. At a time when housing stock is low, taking a smart and calculated approach to buying a home is more important than ever. Continue reading Making an Offer on Your Dream Home →