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A Guide to Remortgages in Durham: Top Reasons to Consider

Remortgage Broker in Durham

The mortgage journey can come with its highs and lows, however, the ultimate goal will either involve you settling down in your dream home to start a family perhaps, a step up to get you further up the property ladder or an investment purchase to provide another income source.

Whatever route you may go down, both will eventually come to a point where your mortgage term will end. You might sell up and upsize/downsize into a new property. If you are a landlord, you might want to sell your portfolio to the tenant or another buyer and look at other options. One option that is the most popular is a Remortgage.

What is a Remortgage?

It’s best to start by understanding what a remortgage is. This term is the act of paying off a pre-existing mortgage using a new mortgage. There is a range of options when taking out a Remortgage, some being more major than others.

Below is a quick guide that we compiled that includes all the options you could when it comes to taking out a Remortgage utilising the 20 years plus knowledge of our resident “Moneyman” Malcolm Davidson (host of our YouTube channel MoneymanTV).

Remortgage For Better Interest Rates

So, your initial mortgage deal will usually last 2-5 years and include low fixed rates or possibly discounted rates. There might be a possibility that you will be placed on a tracker mortgage which means the interest rate will go off the Bank of Englands’ base rate.

If you aren’t on a tracker mortgage, you will likely be on the lenders Standard Variable Rate when your term ends. Also known as SVR, this is a mortgage with an interest rate that might change depending on how much the lender wants to charge. Unlike tracker mortgage, this will not follow the Bank of England’s base rate.

These can be seen as more expensive routes to take, which is why a lot of people may look at Remortgaging for better rates in order to potentially save money on their monthly repayments.

Remortgage For Home Improvements

You might find yourself in a position where you are 2-5 years into occupying your home and feel something isn’t right. It might be that you need an extra room or bigger living space for your kids/belongings. It might be some form of renovation such as getting a kitchen, office or loft conversion. In this situation, many look into releasing their equity with a Remortgage to cover the costs instead of to moving into a larger house.

The option to release equity in order to fund/manage your own projects might seem quite intimidating especially when getting planning permissions, however, it can be seen as more rewarding and less stressful in comparison to finding your new home, selling your current one and moving your belongings.

Furthermore, funding towards home projects that could make the house look a lot more impressive and appealing can be beneficial if you will sell it up or rent it out in the future as the property could increase in value.

Remortgage for Changes to Your Term

In some circumstances, many might look at getting a better mortgage term by reducing the length or switching to a more flexible product which is where they could Remortgage in Durham. The longer your term, the lower the payments will be over time. Therefore, reducing the length does mean you won’t be paying back your mortgage for as long so you aren’t exactly tied down forever, however, your monthly repayment will be a lot higher.

An option that provides benefits that can prove endearing to some homeowners is having a more flexible mortgage when they remortgage. This could give you the chance to overpay which could result in paying your mortgage off as quick as you’d like also being able to pass the same mortgage and rates over to another property, if you decide to move at any point in the future.

Although a flexible mortgage might sound perfect, it likely will come in the form of a tracker mortgage. As mentioned before, this mortgage follows the Bank of England base rate. This means that payments could fluctuate on a monthly basis depending on interest, therefore making them a little unreliable.

Equity Release

Equity is something that is in any property. The way the amount is worked out is through the difference between what is still owed on the mortgage and the current property value. Like we mentioned before, this equity can be used to fund home improvements, however, there are more options for you out there.

You may equity is used to cover long-term care costs, to supplement their income, to have a holiday, to pay off an interest-only mortgage or to have free spending money.

If you are a Buy to Let landlord, you might use the Equity Release as a way of covering your deposit for buying a future property for an addition to your portfolio.

Remortgage to Consolidate Debt

Some people use Equity Release for paying off any unsecured debts that they have accrued over time.

Paying off unsecured debts may sound like a simple solution, Debt Consolidation not only bases both on the amount you’re owed and the value of the property but also on your credit rating. Therefore, it could mean you are limited in the amount you can borrow.

On top of this, you will need to borrow more than your outstanding mortgage amount in order to pay off your previous mortgage and your debts. Because of this, your monthly repayments will potentially be higher. This may not be the best situation to be in, you can be assured in knowing that there are some options out there should you find yourself in an unfortunate situation.

In the case where you have damaged credit, there are still options to choose from, however, these may be difficult and require very Specialist Remortgage Advice in Durham before proceeding. Be aware that this might not be guaranteed.

You should always get mortgage advice before choosing to consolidate and secure any debts against your home.

Experienced Mortgage Advisors in Durham – Get in Touch

Getting in touch with an experienced and trusted Mortgage Broker in Durham would be very beneficial if you are reaching the end of your term and are exploring the options when it comes to Remortgaging.

With an advisor by your side, they can provide you with the support you need when looking into your circumstances and future goals so then you have the best route for you ready in the next step of your mortgage journey. We always aim for this process to be smoother and quicker than your first time.

Help to Buy Mortgage Schemes

Help to Buy Mortgage Advice in Durham

After the unfortunate event that was the 2008 credit crunch, our government opted to create a backup plan, in a bid to try and restart the pulse of the mortgage market. Their focuses were on first time buyers, introducing ways to help them get onto the property ladder, referring to these as government ‘Help to Buy Schemes’.

There are various different Help to Buy Schemes available, some that you might find you are better suited for and others you won’t qualify for. Here is a list of the Help to Buy Schemes available to home buyers and a bonus scheme that might be useful.

Help to Buy Equity Loan

The Help to Buy Equity Loan is the most popular of the schemes available to customers. If you are a first time buyer in Durham and are looking to get started on your mortgage journey, this could very well be the scheme for you.

Help to Buy Equity Loan Mortgage Advice UK | MoneymanTV

First of all, you must be first time buyer to be able to qualify for this scheme. You must also be purchasing a new-build property too, as this scheme does not apply to regular properties. You will be required to have a minimum of a 5% deposit.

The way this scheme works, is that you will put down a 5% deposit (or more if you can, that usually works out better for home buyers) and then the government will provide you with a loan to make up a total of a 25% deposit. This changes depending on how much you put down, i.e., if you then put down a 10% deposit, they’ll loan you 15%.

Overall, this will leave you with a 75% mortgage and the loan provided by the government to pay off. You get 5 years interest-free to pay back your loan. If you are unable to pay this back within the 5 years, you will start gaining interest on the amount of the loan that is left to pay off, starting at a rate of 1.75%.

As a trusted mortgage broker in Durham, we know that balancing your mortgage payments and the equity loan repayment at the same time can be quite a difficult task. There are many different ways around this, for example, some customers look to remortgage to raise capital for this loan, however, this route will increase your monthly mortgage payments.

Help to Buy Shared Ownership Scheme

The Help to Buy Shared Ownership scheme was introduced as a means of allowing applicants to purchase a percentage of a property and then pay back the remaining amount as rent.

Help to Buy Shared Ownership Mortgage Advice UK | MoneymanTV

You will usually have to own between 25-75% of the property in question. The remaining percentage will be owned by an outside party, namely the local housing association or council. This share can possibly be increased further down the line, if you happen to find yourself in possession of some more money.

The way that your payments work is that you will be paying back your monthly mortgage payments, but also a monthly rental cost. This basically means you are paying 100% of the ground rent and service charge on your new home. This will still apply, even if your share is the minimum amount.

Help to Buy Armed Forces Scheme

The Armed Forces Help to Buy scheme was introduced in 2014 after the roaring the success of the Help to Buy Equity Loan scheme. This scheme aimed to utilise the same basic concept as the one that came before it, however, this one was focused in on members of the armed forces.

Help to Buy Armed Forces Mortgage Advice | MoneymanTV

If you do fit into the criteria of the scheme, this is something that could provide a real advantage to you when trying to get onto the property ladder. The government has now extended the deadline/review date of the scheme to December 2022 and we have high hopes that it stays around, as the scheme is incredibly helpful to existing armed forces members who are in need of the extra help.

Bonus: Lifetime ISA

The Lifetime ISA is often a scheme that people forget. It’s not everyone’s immediate go-to scheme, however, it’s still useful to have some knowledge of it, as it could be the scheme that helps you secure a property as a first time buyer in Durham.

Lifetime ISA Mortgage Advice UK | MoneymanTV

A Lifetime ISA is more or less a savings account where your money grows, completely free of tax. The government will also provide you with a top-up to your savings with an extra 25%. This means that if you meet the £4,000 maximum amount, you will receive a rather welcomed £1,000 bonus to your savings.

You have to pass specific mortgage criteria in order to gain access to this mortgage scheme. All of these details are readily available on the Lifetime ISA website.

Fixed-Rate Mortgages | Mortgage Advice in Durham

Fixed-rate mortgage advice in Durham

There are lots of different types of mortgages, with some being more complicated than others. In this, article, we are going to look at fixed-rate mortgages and how they could be right for you.

What is a fixed-rate mortgage?

A fixed-rate mortgage is exactly what it says on the cover. By taking out a fixed-rate mortgage, your interest rate will remain at the same rate throughout your mortgage term.

The length of a mortgage term can differ from one deal to another. It depends on how long you fix your deal in for.

The lowest fixed-terms often come with the lowest interest rates; although this is positive, on the contrary, it also means that you’ll have to renew your mortgage product through a remortgage in Durham more frequently.

Effectively, this could mean that it’s more beneficial to fix in your mortgage over a longer-term on a fixed-rate mortgage.

Medium & long term fixed mortgages

You’ll have to decide whether you’re willing to search for a new fixed-rate deal every two to three years or not. If you don’t want to be frequently searching for new deals, a medium to long-term product may be for you. You’ll have to consider your current and future personal and financial circumstances when deciding how long you’re going to fix your mortgage for.

Five-year fixed rates are popular choices; they add the security of consistent monthly payments. These lock in deals also have negatives. For example, if interest rates drop whilst you’re locked in, you will end up paying more than you would’ve been had you taken out a product with a shorter term.

You can fix in your mortgage for an even longer period of time if you feel like that’s the right thing for you. The options are usually limited, however, you can usually find seven to ten year fixed products. These types of products aren’t usually very popular, as you’re committing to a product for a whole decade! During this time, better rates are very likely to come available. You should know that these are usually the most expensive fixed-rate products available to customers.

Fees to consider

Booking and mortgage arrangement fees

On top of interest rates and payments, you’ll also have to consider mortgage arrangement and booking fees.

A booking fee may be charged for an appointment with a mortgage advisor in Durham. At Durhammoneyman, we do not charge a booking fee, we offer a free mortgage consultation to every customer.

Mortgage arrangement fees are charged upon completion, therefore, if you take out short, fixed-term products, you may end up accumulating a large number of costs just for arranging your mortgage. This is one of the benefits of taking out a medium fixed-term mortgage, you won’t have to constantly pay for arrangement fees.

Early repayment charges

Otherwise known as ERC’s, you can receive an ERC when you overpay your mortgage or pay back your mortgage too early.

Sometimes people forget about ERC’s or overpay by accident, whereas others can overpay on purpose. This is where the positives of overpaying can occasionally outweigh the negatives.

In a situation where your fixed-mortgage term is approaching its end and you can see that there are much better interest rates readily available, it may benefit you more to overpay and receive an ERC so that you can access these rates. Perhaps it’s a limited product offer that you’ve received or a deal that you’ve found and you want to lock into right away, sometimes tactically receiving an ERC can benefit you in the long run.

You’ll find that some ERC’s won’t be too costly. They are calculated by the remaining amount left on your mortgage. For example, if you have a total of £80,000 left on your mortgage and the ERC charge is 2%, you’ll receive a £1,600 early repayment fine. In the grand scheme of things, this figure does not seem too bad.

Our advice

As a mortgage broker in Durham, we always suggest that do your research jumping into a deal. We would also recommend that you don’t chase ‘headline’ deals; don’t let them mislead you, the cheapest/lowest rates can come with the highest arrangement fees!

For help securing a great fixed-rate mortgage rate and remortgage advice in Durham including how to save costs on various fees that come with getting a mortgage, get in touch with our brilliant mortgage team today.

Top 5 Mortgage Hurdles People Experience in Durham

Experienced Mortgage Advisor in Durham

Through our experience as a mortgage advisor in Durham, we have heard of our many clients’ different mortgage hurdles. Although these challenges are not entirely impossible to resolve, it’s vital to know that they can become a major factor in stalling the speed and flow of the process.

 These challenges could include:

  • The effects that divorce and separation could have on a mortgage
  • Unemployment and getting a new job
  • Costs relating to childcare  
  • Evidencing a deposit source
  • Understanding benefit income

Effect of Divorce and Separation  

Divorce and separation can be hard to deal with and is very unfortunate. When this occurs, many divorced partners are then faced with more than just marriage challenges, with one of these being the joint financial endeavours that were taken out together. 

An option that initially sounded endearing to many married couples, due to the fact it can allow them to achieve their goal quicker, can quickly turn sour in the event of a separation. 

We tend to hear a handful of commonly asked questions from one half of the former happy couple when they get in touch. These include;

  • What is the possibility of being excluded from their ex-partner’s mortgage?
  • Could they possibly obtain a second mortgage?
  • Is there a way to exclude their ex-partner from the mortgage, in order to keep it for themselves?

Considering the affordability of your mortgage payments is paramount. As well as having an expert Durham mortgage advisor, you need to ensure that you are fulfilling necessary income requirements that make the obstacle of divorce and separation easier to overcome.

Effect of Employment Gap and New Job on Mortgage Payments 

In some cases, getting a new job comes with a greater income level than your previous job. However, a gap between going from your previous job to your new job can become a complication with your mortgage, and it’s especially the case for mortgage lenders.

If you are starting a new job, some lenders are always willing to factor in the new job either in the first month or as soon as you are about to start it. Furthermore, you will find periods of probation are acceptable.

Childcare-related Expenses 

When dealing with mortgage-related issues, we have found that the mortgage amount can change depending on if you are a family with children or not. A family with children, for example, will be offered much less compared to a family without children.

This is especially true in cases where the parents have just started back at work and are in the process of managing childcare, which are known for having notoriously high monthly costs. Many mortgage lenders will view these the same way they view other large monthly outgoings such as car payments.

It is best to mention, however, that a number of mortgage lenders operate in a different way. In some cases, lenders dismiss childcare-related expenses as part of the outgoing costs. This is due to the fact they strictly operate based on the data presented by the Office of National Statistics for outgoing costs. This can potentially increase the mortgage amount.

Evidence of Deposit Source 

Anti-Money Laundering laws, put in place in the UK, tend to be quite strict. Because of this, it needs to be known where all funds deposited by the mortgage borrower are coming from. Evidence of the deposit source will be required by your mortgage broker and lender. Sometimes, it may even be required by estate agents and solicitors.

Due to this, the entire mortgage application becomes a lot more complicated. Regardless of the source of deposit (either gift, personal savings, property sale, premium bonds, or personal loans), there must be documents detailing how the funds were obtained.

What to Know About Benefit Income? 

Benefit income can have its challenges too! With the help of an expert mortgage broker, this can be easily tackled. In fact, all forms of benefit incomes can be taken into account from disability benefits to child tax credits, however, this depends on the views of the mortgage lender.

Get in Touch with a Mortgage Advisor in Durham

It doesn’t matter if you are a first time buyer in Durham, looking to move home in Durham, or looking to remortgage in Durham, challenges can come about and cause unnecessary stress. Get in touch with a mortgage broker like ourselves and we will try and help take the stress away. 

Why isn’t it easier to get a Mortgage in Durham? | Mortgage Advice in Durham

Getting a Mortgage in Durham

Durhammoneyman has had more than 20 years of experience in the mortgage business. In this time, our heaps of experience and knowledge through the years have allowed us to help many different and unique customers get through difficult mortgage obstacles.

Therefore, no matter what personal situation you are in, we have probably encountered a similar one before. A few of our services include first-time buyers, remortgage, and self-employed mortgage advice in Durham.

Getting a mortgage can become complex if you are unsure of what you are doing. The reason for this is that there are thousands of different lenders with their own individual lending criteria, and it can be difficult to find the right one.

You’ll find that by instead opting to speak with a mortgage broker in Derby, you’ll be opened up to a wider variety of mortgage options, with criteria that your dedicated advisor will be able to match you up to.

Going to a lender for a Mortgage in Durham

Sometimes, you will find you can pass a lenders credit scoring system easier than you would from another, it all just depends on the lender. There are parts of the market that different lenders love to focus on, specific niche markets.

It’s common to find that the stricter the lending criteria are, the lower the supply rates are. The criteria can be stricter to match than others. Therefore, don’t feel disheartened if you are struggling to find a lender that will accept you.

It can be hard to qualify with lenders who have strict criteria. When a competitive deal has been offered to you, it will always have a tight margin. This is due to the fact that the lender needs to know the customer will be able to afford the mortgage and lenders want to make a profit off this and not lose money.

Lenders with Low Rates

When it comes to high street lenders offering the cheapest rates, you will find they will always increase their earnings from their borrowers. As soon as a mortgage has been accepted, they will gain more profit by selling you more of their products. Some of the products include bank accounts, unsecured loans, credit cards, and Insurance.

A common occurrence that you may find with mortgages, is the lowest rate of interest often comes with expensive set-up costs. This is why people often stay away from these products. When a lender grants you a mortgage, the main thought they have will be about their profit.

On the contrary, a Mortgage Broker in Durham will always have your best interest. Our knowledgeable and caring team knows all the secrets to save both your time and your money. We will work hard to find the best deal available that fits your circumstances.

Difficulties When Looking to Remortgage in Durham

In some cases, not everyone can just remortgage somewhere else and this is due to many reasons:

  • Breakup with a partner
  • Your household income may be less than it was at the start of the application
  • Since taking out a mortgage, the applicant has had a default or CCJ
  • There has been an decrease in value of the home since it was bought

Lending Criteria and the Economy

Matching lenders’ criteria, depending on the current performance of the economy, can affect how easy or hard it is to get accepted a mortgage. If the economy is suffering, lenders will tighten the margins and vice versa when the economy is doing well. Depending on when you are applying, it can sometimes be hard to obtain a mortgage, yet previously, mid-2000’s, it was too easy. This was prior to the credit crunch where lenders were granting ridiculous mortgages to people who couldn’t afford one at all.

As well as matching the lender’s criteria, the current state of the economy is another factor that can affect your chances of being accepted for a mortgage. If the state of the economy isn’t doing well, lenders will tighten the margin and vice versa when the economy is performing well.

There are times when obtaining a mortgage can be difficult. It just depends on when you have applied for it, whereas, in the mid-2000s, it was too easy. Before the credit crunch, lenders were granting ridiculous mortgages to people who couldn’t afford one at all.

Lenders took a completely different view and tightened their criteria after the credit crunch. The requirements included a 25% deposit which meant getting on the property ladder was unattainable. This tempted customers into renting due to the brisk increase in interest rates.

Mortgage Broker in Durham

We have become knowledgeable about what lenders are looking for in mortgage applicants through our valuable experience. Credit scoring is something many high street lenders now do to try and save time and money. Furthermore, this method gives the lender confidence in their ability to lend. 

Speaking to a Mortgage Broker might be the best option if you are struggling to match the lender’s criteria. As a Mortgage Broker in Durham, we can provide you with options that we know will increase your chances of your mortgage application being successful.

With a range of simple ways to achieve this, giving us a call could bring up a step closer to securing a mortgage deal. Get in touch and speak to an experienced Mortgage Advisor in Durham and potentially start your journey on the property ladder. 

Lending Criteria Mortgage Advice in Durham

The Credit Crunch Explained

Mortgage Advice in Durham

In order to understand what happened with the 2007/08 “Credit Crunch”, we need to take a look back on the years that lead up to it. If a First-Time Buyer in Durham took out a mortgage to buy a home back in the 1970s and ’80s, it’s very likely that this process was undertaken through a building society. It may be hard to believe, but your high street bank did not always offer their customers mortgages!

To find out whether you qualified for a mortgage or not, you’d have made an appointment with the building society manager and spoke with them. Customers would be encouraged to take out savings accounts with the building society and then the building society would use those people’s savings to lend to their other customers. Interest-rates would also be higher to borrowers than the rate they were paying to savers, in order for them to turn a profit.

Once the banks started to get involved with mortgage lending, they moved away from that older model. Instead, they opted to “buy” the money from markets, in order to accelerate the rate in which they could lend money to their customers.

Mortgages in The Noughties

If we move ahead of time and into the mid-2000s, there were plenty of new specialist lenders working within the mortgage market. Most of these originated from North America. Their way of handling business was to sell their book of mortgage customers, allowing them to raise new funds and continue the cycle of lending.

This method of practice was labelled Securitisation. The investors that bought these books were larger financial institutions such as pension funds and other High Street Banks.

The market was booming and these mortgage lenders were making a great deal of money. The newer lenders seized an opportunity by introducing more relaxed lending criteria. Poor credit history? Don’t worry about it. Wanting to self-certify? Go for it! These sorts of things were no issue for their businesses, or so they thought at the time…

Apparent Problems in the Market

As anyone with an inkling of common sense might have anticipated, these mortgages began to default. Major banks lost their confidence in each other, due to the uncertainty of how exposed they were in the very quickly falling apart subprime mortgage market.

In very quick fashion, the once sustainable banks’ share prices had completely dropped. A select few were bailed out by the UK Government (or more accurately, the taxpayer) in order to stop them going under altogether, whilst many failed to stay afloat.

Over the course of “The Great Recession”, a total of almost 80 different banks, building societies and lenders around the world, across 20 different countries, filed for bankruptcy or were acquired.

Because of this utter economic disaster, lending quickly dried up. Property prices dropped by a large amount and everyone lost confidence in the UK economy. It took almost a decade for the market to safely get back to a point where it could function sustainably once again.

Economic Recovery

Nobody wanted this to happen again, especially the UK Government, so investigations took place that aimed to look into what exactly happened and where it all went wrong. These studies led to the carefully thought out “Mortgage Market Review of 2014” that led the charge forward.

Self-cert mortgages had already been completely banned by then, but the biggest change to come out of this was that lenders themselves were now solely responsible for ensuring that the customer could in fact afford their mortgage payments.

The lenders were now responsible for digging deeper into customers incomes and outgoings with more precise lending criteria. They were paying more attention to credit commitments, childcare and other outgoings, so they could ensure customers were definitely able to afford their mortgage repayments on a consistent basis.

We have no doubts that it has now become a lot harder to get a mortgage than it was back in the day, though this is absolutely for the betterment of the industry, the economy and homeowners nationwide. Customers need to be a lot more organised with paperwork in order to prove their finances and be taken seriously by lenders and home sellers alike.

So many mistakes were made in the period running up to the Credit Crunch, but we hope that the industry learned a lesson this time and has lowered its chances of ever falling into a rut like this again.

Fast & Friendly Mortgage Broker in Durham

What is a 95% Mortgage?

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. 

95% Mortgage Advice in Durham

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 Durham 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.

Can I get a 95% mortgage?

95% mortgages are usually accessible by both First-Time Buyers in Durham & those who are Moving Home in Durham. 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.

Improving your credit score

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 

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.

Can my family help me get a 95% 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. 

How do I choose the right 95% 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.

How can a bigger deposit help with my mortgage? 

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. 

Reasons Why People Choose to Move House in Durham

If you are a Durham resident, then you must be aware that moving to a new house in Durham is not always easy. Moving to a new house can often be the root cause of financial or personal stress and yet despite this, people still move to a new house in Durham. Many possible reasons are behind this move. Maybe some of them need extra space, while some move due to a new job.

Here are some of the common reasons why people are moving to a new house in Durham.

  • You are looking for a better lifestyle or a change.
  • You want to move to an area closer to your child’s school.
  • Your children have moved away, and your house is now too big for you. 
  • You just want to live near your friends and family.
  • Your new job has asked you to move to.
  • You are moving in with your new partner or relocating because you have now separated. 
  • You want to save money by moving into a small house. 
  • Your family has grown, and you just need some extra space.
  • You are finally able to afford your dream home. 
  • You want a decent neighborhood or need some peace, so you decided to move. 

No matter the reason, people in Durham prefer to purchase a new home rather than rent these days. Especially those who have found a place where their monthly installments are lower than their monthly rent. If someone is emotionally attached to a place, then it will be tough for them to move to a new house.

People have memories attached to their homes and some feelings make it difficult for them to move. Depending on the current situation and people’s personal preferences, the pros and cons of moving can vary.

Get in Touch for Mortgage Advice in Durham

Our mortgage advisors will guide you and help you by comparing the total cost. They will help you analyse the costs of improving your home, compared to moving to a new home.

If you think you need their help calculating the approximate maximum borrowing capacity, they are able to help with that too. They will also give you a full breakdown of your monthly payment cost so you can think about what your next step should be.

If you are looking for the best option for either moving to a new or remortgaging for home improvements, Get in Touch with our dedicated and passionate mortgage advice team for free initial mortgage advice.

How Will Lockdown 2.0 Affect the Property Market?

Mortgage Advice in Durham

On Saturday 31st October, the British Prime Minister Boris Johnson announced that the nation would enter another lockdown from Thursday 5th November to Wednesday 2nd December. These restrictions were brought in to try and decrease the spread of the coronavirus. In comparison to the last lockdown, the restrictions aren’t as tight this time. This is allowing more industries and educational systems to remain open. Now that we are deep into lockdown 2.0, we can say that everything is looking promising and the property market is remaining open!

On the other hand, not everything can carry on as normal as the whole nation is on lockdown. Social distancing measures have become stricter, for example, when you are visiting estate agents and going for house viewings etc. Despite some restrictions, the property market is still going strong, here is what you are allowed to do over the lockdown:

  • View a property to buy or rent
  • Visit estate agents, letting agents, sales offices and show homes
  • Move home
  • Prepare a home to move into
  • Prepare a home for sale or rent

As a Mortgage Broker in Durham, we have recently received a lot of questions about the property market and whether or not it’s going to be affected by lockdown 2.0. In response, we thought that it would be best to answer your questions by breaking them down one by one:

Lockdown Mortgage Advice in Durham

Can I move home in lockdown?

As mentioned before, this lockdown’s restrictions aren’t as tight, so yes, you can still move home. Everything that you needed for your Moving Home journey is all still available, this includes home removal services, van hire, etc.

You must remember that every step of the process must be completed under the social distancing guidelines. This is particularly important if you are taking house viewings regularly.

Can I visit my estate agents?

Yes, you can visit your estate agent’s office, however, quite a few of them have chosen to temporarily close their branches and have their employees work from home. It might be worth checking to see whether or not your estate agent has gone down this route before going directly to them.

We are expecting more and more estate agents to move towards this approach, particularly in this day and age. Don’t worry though, you can still get your process started over the phone and even online; there is nothing wrong with this new way of starting your process. We always advise that you take your time if you decide to do everything online, and make sure that you clearly understand everything that is being communicated.

Can I continue with house viewings?

Yes, you can still continue with house viewings, however of the option is there, maybe you could try out your estate agent’s virtual house viewing. Again, most home buyers are realising that this approach is a lot safer; as a Mortgage Broker in Durham, we expect that a lot of people will take up virtual viewings, especially over the lockdown period.

Even though a virtual viewing maybe your best option, we also understand that choosing your dream home is a life decision, especially if you are a First Time Buyer. So, we completely get it if you want to view the property in person to get the feel for it.

Your estate agents will also have to double-check with the property owners that a socially distanced property viewing is okay with them. If they are, you are all good to go, a date and time will just need arranging. Depending on the time of day and the homeowner’s situation, they may want to go out somewhere so that there as few people in the household as possible.

Can I put my property on the market?

The property market hasn’t really been put on hold like the last lockdown, you can continue the home selling process as normal. You’ll need to consider a lot of different things when selling a property, this includes things like choosing an estate agent and a property valuation, getting pictures of the property taken, etc.

With the current government guidelines in place, there may be a slight delay in the process. Estate agents are extremely busy at the moment and are facing new enquiries all of the time. With all of the current measures and new guidelines in place, things that are normally easy to complete are taking a little longer.

Can I still use conveyancers?

Yes, conveyancing solicitors are staying open throughout this lockdown. They will still be available to support your property sale. Again, most solicitors have chosen to work from home, so we recommend that you be patient. There is a high demand in the market right now so things may come slower than usual.

Can I take out a mortgage payment holiday during this lockdown?

In Durham, we are asked this question a lot. During the last lockdown, many homeowners decided to take out a mortgage payment holiday to help with their mortgage payments. However, in this lockdown, the demand has lowered even though you can still take one out.

So if you want to take out a mortgage payment holiday, the answer is yes, you still can. Although, make sure that you only take one out because you really need to. As a Mortgage Broker in Durham, we do realise that there are a lot of people that will need to take a mortgage payment holiday, if this is your situation, make sure that you know exactly what they are and how they work. For more useful information on mortgage payment holidays, check out our mortgage payment holidays article. It could help you decide whether you need to access the scheme or not.

If you have already taken out a mortgage payment holiday during the last lockdown and are currently still on the scheme, you can extend your holiday so that it comes to a total of six months holiday. However, if you have already had a six month payment holiday, you have already reached the six month limit and therefore unlikely that you will be able to access this scheme again.

Catching up to speed

Catching up to speed

Eventually, the property market will catch back up to speed and everything will hopefully resume back to normal. During lockdown 2.0, the property market may not be up to a perfect standard, but thankfully you can still keep trading. So you are able to get the mortgage/home buying process started whenever you want.

If you want to get the ball rolling, it may be within your best interests to get Mortgage Advice in Durham. With all of the social distancing measures in place and the demand in the market, this could also speed things up for you. As an experienced Mortgage Broker in Durham, we have mountains of knowledge in helping customers obtain their mortgage goals. We want the whole process to run as smoothly as you do; don’t hesitate to get in touch today. We can’t wait to hear from you!

Mortgage Payment Holidays | Mortgage Advice in Durham

Mortgage Payment Holiday

At the start of the Covid 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 guidelines and did their best to help their borrowers during these hard few months.

We feel that it is best to create a summary of what mortgage payment holidays are, what lenders are doing and who can provide you with help and guidance through the coming months.

On that note, we feel like this is a good time to talk about what mortgage holiday payments are and how they can help you with your mortgage payments.

What is a Mortgage Payment Holiday?

They are quite simple. A mortgage payment holiday is a set-period, agreed upon between you and your lender, bank or building society, where your mortgage payments are deferred. In this situation, the set period should be around three months.

You will still have to pay back these payments. Over the period, you will receive interest which will be added onto your loan at the end of the payment holiday whilst your capital balance will not decrease. So, your overall mortgage loan will slightly increase. So you save money in the short term but in the long term, it may prove expensive.

Once you feel like you are ready to start paying back your monthly mortgage payments, either your monthly mortgage payments will be recalculated at a higher level or your mortgage term could be increased. Lenders prefer to not increase your mortgage term as it could put you past their standard retirement ages.

You may even be allowed to pay off a lump sum later on in the year to get your monthly mortgage payments back on track to how they were prior to your payment holiday.

Mortgage payment holidays are available for borrowers with both residential or Buy to Let Mortgages in Durham. This really helps out landlords as they now have help if rental payments are affected.

The Government’s Proposal

Here is the Government’s proposal following the COVID-19 outbreak:

  • Mortgage lenders will offer an automatic three-month mortgage payments holiday for borrowers who have been 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 made aware that interest will accrue in the holiday period and they will need to make up deferred payments in the future
  • Customers who wish to undertake a full assessment of their ability to pay or financial difficulty may still do so.

How do I apply for a Mortgage Payment Holiday

Even if you had a mortgage payment holiday before, we always recommend speaking to your Mortgage Advisor in Durham. They will sort out everything out for you and work out whether you actually need to take a mortgage payment holiday. You can also go directly to your mortgage lender and enquire about taking one but this may not benefit you as you may not even need one. The main thing is not to panic and explore all of your options before rushing into anything.

Here are the steps you need to take if you won’t meet/aren’t meeting your monthly mortgage payments and have been directly affected by the COVID-19 outbreak:

  • The customer would contact the lender and inform them that they are being impacted
    by COVID-19
  • The lender would accept these details from the customer and offer an automatic
    three-month mortgage payment holiday
  • No evidence is needed for the lender
  • 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, also 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.

For more useful information on how the coronavirus could affect your mortgage click here.

Will a Mortgage Payment Holiday impact my Credit Score?

In most cases yes, they can give a negative effect to your credit score. However, you are taking one because of a virus so lenders shouldn’t let it damage your score.

To ensure that this is the case, before taking out a mortgage payment holiday, you must contact them. You need to record their answer as well as the date, time and the name of the person that you spoke with. This will avoid any confusion down the line if anything changes. It all depends on your lender, there is no guarantee that every lender will say the same thing.

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

You would’ve thought that everything would continue as normal, however, all lenders are now avoiding all remortgages and product transfers during a mortgage payment holiday.

This will affect borrowers approaching the end of their existing product as they may be forced to move on to a higher lenders variable rate. This could mean that borrowers who act too early and jump into a mortgage payment holiday deal straight away could end up accruing interest on a costly variable rate.

This is another reason why we say don’t rush into anything! Take it slow and evaluate your options with an expert Mortgage Advisor in Durham first, they will make sure that you actually need to take out a payment holiday first before diving in headfirst. There are lots of mortgage options out there so have a look first with your mortgage Broker in Durham.

What are my other options?

Some lenders could offer you a temporary switch over to interest-only in order to reduce your monthly payments but not to add any more to the loan amount by still servicing the interest payments each month.

You don’t need to put all of your mortgages onto interest-only, but doing so could help you out financially.

If you have savings, remortgaging onto an offset basis could really help you out, you will be cutting down on monthly payments massively. For example, if you have a £250,000 loan and £50,000 in your savings, you would only pay interest on £200,000.

This may all may seem a bit stressful and it this may have come around faster than expected, however, you should try to take it slow and calm down. As your Mortgage Broker in Durham, we are still here to help and relieve you of all of that stress. Remember, we are still open as usual operating 7 days a week. Receive a free mortgage consultation with a Mortgage Advisor in Durham today, we hope that we can help you out!

Mortgage Advice in Durham

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