Generally you’ll find that the majority high street mortgages are portable. What this means is that you will have the ability to move it from one property to another, without incurring any kind of penalty.
Portable mortgages are especially useful if you are looking to move into a new home and are currently engaged in a contract with a fixed rate, as it can allow you to potentially avoid any early repayment charges that otherwise would have occurred.
Whilst it’s true that a lot of mortgages available to customers are portable, this doesn’t apply to every mortgage. Some specialist lenders for example, won’t allow this to happen. Getting in touch with and speaking to your mortgage lender for a quick discussion can give you some confirmation on this.
Even though more often than not it will be there as an option, in lots of cases, homeowners may simply choose not to. Perhaps the lender isn’t willing to lend them the necessary additional funds needed to move home.
It’s important to know as well, that the additional funds will be on a different rate to the rate that your existing mortgage deal is currently on. Depending on the deal that your lender offers you, it may even be more beneficial to you to take on those early repayment charges, rather than staying where you are.
A sub-account on your mortgage is created at the point where you decide to port your mortgage, with the additional funds being placed onto a different deal than the one you have on your current mortgage.
This means that although you have only technically have a single mortgage and a single direct debit in your name, there are different rates of interest that will apply to each.
Further into the future, having sub-accounts can be known to cause a bit of grief. The reason for this, is because different products will eventually overlap one another. Working to get them aligned once again could mean that one of the sub-accounts has to fall onto the lenders standard variable rate for a particular amount of time.
For more information on the option to port mortgages onto new properties, please contact us to speak with a mortgage advisor in Newcastle and we’ll see how we are able to help you.
No matter if you’re moving house in Newcastle, working with a buy to let mortgage in Newcastle or are in need of help with a self employed mortgage in Newcastle, we’d love to get you booked in for an appointment to discuss your options.
Firstly, how many types of mortgages are out there for home buyers? There are lots of different mortgages available to those looking to buy a home, with them all being unique and featuring both pros and cons to each.
Throughout this article, we are going to focus specifically on the tracker mortgage, how it could work for you and why it is popular amongst homebuyers. Please bear in mind that a mortgage deal is only as good as the situation it is paired up with, so it may not necessarily be the best option for you.
As an example of this, you could take out a tracker mortgage initially, only to later realise that you would much rather prefer fixed payments (a fixed-rate mortgage). At this point it would be too late to switch as you are locked into a contractual agreement.
As a trusted and experienced mortgage broker in Newcastle, this is why we always recommend getting prepared and doing research prior to the process, and why you would benefit greatly from expert first time buyer mortgage advice in Newcastle.
Alternatively to our article, you could watch our YouTube video on the same topic. Feel free to hop over to our moneymanTV channel and watch “What is a Tracker Mortgage?“, take a look at it here on this page:
So, the burning question, what exactly is a tracker mortgage? Well, if you were on a tracker mortgage, your interest rate would follow alongside the Bank of England’s base rate and with an additional percentage usually added on top from your lender. Your lender cannot choose this rate, as this is set externally and will have to be followed.
To use an example, the Bank of England’s base rate could be 1% and your lender would have to put on another set amount of say 1%. So, depending on the Bank of England’s percentage, your interest rate will always remain at a percentage just above it.
A tracker mortgage works out really well if the Bank of England’s rate is currently at a lower rate. It will generally sit around 0-1%, however, it will gradually go up and down all throughout the year.
Back during the credit crunch in 2007-2008, the market crashed, so the interest rate skyrocketed. The highest that the percentage ever went up to was round about 5%. When you factor in the percentage that your lender would be adding on top, you could’ve ended up with a whopping 6% interest on your monthly mortgage repayments.
On the flip side, back in March 2020 at the beginning of the coronavirus, the mortgage market had a similar scare when the Bank of England’s rate decreased by a large amount, dropping a down to 0.1%. If you were on a tracker mortgage during this time, it was highly likely that you would’ve also dropped down to a 1.1% interest rate.
Of course, throughout this time period, you couldn’t pick up a tracker mortgage as in truth, the mortgage rates would’ve been far too good to be true. Ultimately lenders are trying to turn a profit, not lose out on their money. As of July 2021, we’d say it’s still fairly difficult to obtain a tracker mortgage, especially one that’ll suit your financial circumstances.
The tracker mortgage has both positives and negatives to it. This mortgage type relies massively on the economy, so if the market is performing badly and the Bank of England’s rate is high, a tracker mortgage is definitely not the best mortgage for you to get. On the other hand, if the situation is that the economy is performing well with a low Bank of England base rate, a tracker mortgage is certainly one to be favoured.
There are lots of different types of mortgages available to budding first time buyers in Newcastle, it’s just finding the one that is right for your circumstances. Before you dive into any mortgage deals, we highly recommend that you speak to a trusted mortgage advisor in Newcastle about your potential options. They will try and find you the most competitive deal for your personal and financial circumstances.
If you are a first time buyer in Newcastle, we believe our mortgage advice service will be greatly beneficial to you. We have been working within the mortgage industry for over 20 years now and have expert knowledge on the various types of mortgages available, able to cater your case as a first time buyer to a specific mortgage type.
We are also available for anyone who is looking to remortgage or move home in Newcastle. We believe that you will find our mortgage advice service invaluable. As a dedicated and caring mortgage broker in Newcastle, we will work alongside you from start to finish, offering a helping hand throughout your mortgage journey.
Here are some of the reasons why a homeowner might be needing two different mortgages:
If you have a substantial amount of equity built-up in your home and are looking for a second mortgage to release some of this, as a means of funding the purchase of a new home, or home improvements on another property in your portfolio, then this is definitely something an experienced mortgage advice team in Newcastle, like ourselves, can take a look at.
Quite often you’ll find towards the back end of your mortgage, you’ll be heading onto, or potentially already are on a lenders Standard Variable Rate (SVR). Our team of advisors are able to shop around and find a potentially more competitive deal, whilst also giving you the option to release capital. A further advance with your current lender could also potentially be an option for you.
If you are looking at the possibility of moving house but maintaining ownership of your existing property with the purpose of letting it out, this is another instance wherein a second mortgage would be applicable. Your second mortgage will be a new residential one, taken out on a property after raising the funds from renting out the previous home. This particular type of process is known as a Let to Buy and has become particularly popular over time.
In some cases, a homeowner may look to release the equity that is sitting in their property, using that supplemented income to either buyan additional property to add to their portfolio. We have spoken to many customers over the year who have been looking to do this and are ready, willing and able to help you out with a mortgage for this purpose.
Rules vary on taking out a second mortgage to purchase a home for your child. The more commonly seen situation is where a homeowner may wish to take out a remortgage to release equity as a means of gifting their child a substantial deposit. This is a widely popular option that has seen many First-Time Buyers who otherwise wouldn’t have gotten on the property ladder, find their dream homes and settle down.
Other circumstances where a second mortgage may apply, could be through financial complications present with a divorce or separation. You may not always be able to get out of your joint mortgage straight away, if at all, but may wish to take out a mortgage on a home of your own once you’ve moved out. This is a situation that we come across on a regular basis and often have the ability to help with.
Whatever the circumstances surrounding your financial position and need for a second mortgage, being an Experienced Buy-to-Let Mortgage Broker we may be able to help you achieve what you’re looking to do. Our mortgage advisors in Newcastle will search through thousands of mortgage deals to find the right one for you and your personal situation.
A Gifted deposit can be either a portion of or the full amount of a deposit that is Gifted to you by a family member or friend, with an agreement that it is a loan and you don’t need to repay the money.
Gifted Deposits are useful for when you have enough money to cover your monthly repayments but can’t afford the initial deposit on the property, maybe down to a smaller salary or possibly something else. Having more Gifted Deposit available may present you with options for better rates from a lender.
Generally speaking, it is your parents who can gift you the deposit. This is acceptable both birth and adopted parents. You may see this mentioned online as the “Bank of Mum & Dad”, though there are potential other family members who could also be considered as options for a Gifted Deposit. This depends on individual lenders though, so would require care when trying to find the right mortgage lender.
If the person gifting you a deposit is over the age of 55, they may be able to help you out through taking out a Lifetime Mortgage and an Equity Release in Newcastle.
We often find that clients don’t always know that their parents can help with their mortgage, or if they do, they don’t feel like they can ask them for help. The truth of the matter is that most parents are more than happy to help their children in any way they can in getting on the property ladder.
It’s widely believed that taking out a mortgage is a better option than renting, due to you being able to potentially pay less per month. Your deposit can often come from inheritance, although parents have been known to gift it earlier on in life, especially if they already have enough saved or have released equity from their own home.
The majority of lenders won’t accept a loan as a means of funding your deposit. This is down to the uncertainty that you’d have enough disposable income to pay back both the loan and the mortgage at the same time.
There is no maximum limit on the amount someone can gift you, though there are at least a few lenders that will insist you put in at least 5% deposit from your own funds.
If you are a First-Time Buyer in Newcastle or Moving Home in Newcastle, a Gifted Deposit will be greatly beneficial to you. It can also be useful when in conjunction with a Help-to-Buy in Newcastle. This is because the required 5% deposit, depending on the lender you go with, is acceptable to be paid via Gifted Deposit.
Typically, all lenders will require a Gifted Deposit form. Depending on your lender, you may be asked to provide further proof of these funds, such as the donor’s ID or bank statements.
Whether you are a First-Time Buyer in Newcastle aiming to take a step onto the property ladder, looking to move home in Newcastle or thinking about a Remortgage for Home Improvements, overpaying, even if it’s not by a lot, can make a large difference in the amount on the interest you pay back throughout your mortgage term. The earlier you begin the process of overpaying, the better the effects it will have on your mortgage payments.
Many homeowners are aware that overpaying can have a big impact on the amount of interest they end up paying back.
Even small overpayments can have a noticeable impact. The trick is to start overpaying early because then the extra payments have a longer period to take effect.
The survey suggests that the reason people don’t overpay is that they can’t afford it. However, we feel the main reason is that life simply gets in the way.
Given the figures, we all know that overpaying is the “right” thing to do. But, let’s be honest, there’s always something more exciting to spend your money on!
For some people, the issue also comes with remembering to overpay. To be honest, it’s not something that’s particularly likely to cross your mind too often if you don’t have a reminder setup.
Potentially, you might think about it more when your mortgage only has a few years left. However, at this stage, the impact isn’t as great as it could be if you do it earlier.
An easy way to make overpaying part of your routine is to set up a standing order. Even better, organise it so that it goes out at the same time as your regular mortgage payment. This way, it feels like just one amount and you will become used to it.
Another benefit of using a standing order is that you’re in control. Unlike a direct debit which the receiver controls, you can easily cancel a standing order if your financial situation changes. Whilst it would be a shame to stop overpaying, at least you aren’t committed to anything you can’t afford.
As we’ve discussed throughout this article, whether you’re a First-Time Buyer, Home Mover or looking to Buy to Let, overpaying your mortgage is a great habit to get into. You don’t need to pay huge amounts unless you feel you can.
But you’ll be grateful toward the end when you realise you’ve been able to shave a year or two off your mortgage repayments.
It’s not uncommon for some mortgage providers to even let you make reduced payments or take a payment holiday if you have been overpaying for a while.
However, before you take a payment break, it’s important to check with your lender that you are eligible to do so. Because, if you’re not, you could face a negative mark on your credit report.
A 95% mortgage is as simple as it initially sounds; you are borrowing against 95% of the price of a home, with the remaining 5% being paid for by your deposit. An example of this is if you looked at buying yourself a home worth £150,000 with a 95% mortgage, you would then also be putting £7,500 down as your deposit, borrowing the remaining £142,500.
Following on from the Budget in March 2021, the UK Prime Minister Boris Johnson announced a Mortgage Guarantee Scheme for Lenders. The purpose of this would be to make 95% mortgages more readily available from the bigger banks.
This news is fantastic for both first-time buyers and home movers as this particular scheme will run until December 2022. There are specific terms and conditions that will apply, your Mortgage Advisor in Newcastle will be able to double check if you can qualify.
All our customers will have access to a free, no-obligation mortgage consultation where one of advisors will be able to recommend the most appropriate mortgage deal based on your individual situation.
95% mortgages are generally available to both First-Time Buyers in Newcastle & people who are looking at Moving Home in Newcastle. Whilst the primary idea of saving for a 5% deposit sounds really simple, you’ll still need to have a good enough, lender approved credit score, in order to prove that you can afford your monthly mortgage repayments. Doing this increases your chance of being granted a 95% mortgage.
A good credit score is absolutely necessary in obtaining any mortgage, especially when it’s a 95% mortgage. Factors like paying any current credit commitments on time, ensuring your addresses are accurate & up-to-date and that you’re on the voters roll, can all help build up your credit score. For a detailed and helpful guide discussing what you can do and why, please see our How to Improve Your Credit Score article.
Affordability is another one that is vital to the process. By providing details of your monthly income and regular outgoings (these can be evidenced with your bank statements) and any pre-existing credit commitments, your lender will get a detailed overview of whether or not you are able to afford a mortgage like this.
Quite often these days, we see family members, especially parents, eager to help each other get onto the property ladder. This can be done by one of these family members gifting the deposit required for the property. Often referred to as the “Bank of Mum & Dad, Gifted Deposits work solely as a gift, and not as a loan that you are required to pay back. The lender will need proof of an agreement between you and the gifter, before it can be used towards your mortgage.
When looking for a 95% mortgage, it’s important to know you’re on the right mortgage for you and your personal circumstances. Different mortgage types will all work in different ways, which allows you to explore your options and find one that is best suited for your personal and financial situation.
You could find that you are better suited for a Fixed Rate or a Tracker Mortgage, wherein you either keep interest rates at a specific amount throughout your term, if you choose the former, or with the latter you would have your interest rates follow the Bank of England base rates.
On the flip side, you might find that you would much rather go with an Interest-Only or a Repayment Mortgage. Interest-Only allows you to have cheaper payments until you need to pay a lump sum at the end (more suitable for Buy-to-Lets), whilst Repayment Mortgages means you’ll be paying a combined amount of both interest and capital per month.
You can learn more about the Different Types of Mortgages in our article, with accompanying videos.
As you might figure when it comes to such a huge financial outgoing, you need to make sure you are prepared and wary. If you don’t properly plan ahead, you could find yourself with a variety of problems, including higher interest rates, remortgaging difficulties due to less equity and then negative equity.
The positive side though is that all these can be avoided if you’re smart enough ahead of time. Something that will be very beneficial is that if you put more deposit down, you are less risk to the lender.
A larger deposit, somewhere around 10-15%, would not only reduce your interest rate significantly but would also place a lot more equity in the property. This in turn will reduce the risk of negative equity as you would be borrowing less against your home.
So all in all, 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 massively beneficial and something you’ll be able to reap the rewards from in the future.
Through our many years of providing expert mortgage advice in Newcastle, our experienced mortgage advisors have seen the numbers rise when it comes to enquiries from renters interested in becoming First-Time Buyers in Newcastle by purchasing the home they are renting from their current Landlord.
Newcastle has always been a favourite of many to live in and enjoy the peaceful life, however, many tenants who are already living there find it difficult to own a property or house there. With changes in the tax realm, things are showing positive signs for tenants who want to buy their currently occupied house.
Many landlords are selling their property through the market agents, but some of them are also willing to sell their houses to the tenants who already occupy the building. If there is a house you want to purchase from your buy-to-let landlord, it will be much better to discuss the offer with them directly on a priority basis.
A big reason why more tenants are able to purchase their home from their Landlord, is that Government previously cracked down on tax relief on Buy to Let purchases. These changes took effect over a period of 4 years, and we are now starting to see the impact of these changes as Landlords receive their tax bills.
The juicy profit margins in buying and selling properties have always been a big attraction for landlords as there are great rewards in the property business. This profit is what convinced many businessmen to face the taxes and enjoy the feastful profits that follow in the property market.
Just like any other business, the property business has its downsides as well. News has been heard about landlords quitting the business and moving on to something else. Multiple reasons have been recorded for the transition including tax complications, financial demands, and even the stress of making huge risky deals.
If you are a tenant, and willing to buy, to let landlord of the house easily sell it to you, you can make a fine deal. As there will be no Estate Agents involved, no chunks of money will flee the deal as consultation fees which is an advantage for both parties. The landlord can further enjoy more benefits such as:
Suppose a landlord decides to sell his house, and the tenant takes his time to move out, during all this time, there will be no tenant and hence no rent. If a sitting tenant decides to buy the house, the transition of ownership will be much fluent and so will be the money inflow. The landlord will keep getting his rent until the deal is finalised for which he will receive the amount of the property.
If a tenant decides to move out and empties the house, the landlord will have to go through the tiniest details in the house and get the lacking ones repaired. Considering the costs of paints, cleaners, and other manpower, it will suck in a lot of money from the landlord.
All these expenses can be saved if the tenant decides to buy the house because he will be willing to purchase it in the existing condition. Hence, no money expenditure and hustle of repairs for the landlord.
This is where the deal sweetens. The tenant knows the house in and out and knows exactly what improvements and changes are needed. If you buy a house as a non-tenant, there is a risk of hidden lacks in the house that were not conveyed properly by the previous landlord. If you get a house with such issues, you might end up spending quite a lot of money just to be on the safe side.
Tenants may have multiple things they wanted to do to their house, but the landlord would not agree to it. But after you purchase to house, you will have the ultimate freedom to make any legal and permitted changes in the house with no limitations.
If you have been a tenant consistently on the move, you know how tense the situation can get if the tenant of your newly rented house is unable to move due to multiple obvious reasons. For instance, the previous tenants have not been able to find another house, or the house where they want to move has not been emptied yet.
Such situations have been a normal sight and can be avoided if you become the owner of your currently rented house. Therefore, it’s a good time to start living in the same house as its owner and decide to purchase the property from your buy-to-let landlord in Newcastle.
Yes, a discount is a big possibility in such cases because the landlord will be saved from a lot of stress and spending money as well.
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.
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.
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.
As a First-Time Buyer in Newcastle, you may find yourself competing with other potential buyers who are looking at the same properties. With this in mind, it is always best to ensure that you are in the best possible position to have your offer accepted.
When it comes to purchasing your home, you will rarely beat a cash buyer – Even if the cash offer is lower than your offer, they are likely to go with this as it means a quicker process and less paperwork. Luckily, you may not come across many cash buyers when searching for your dream home. If you are looking to make the mortgage process even quicker than it otherwise would be, sending the Estate Agent a copy of your Mortgage Agreement in Principle is your safest option.
By doing this, you possibly put yourself ahead of other potential buyers who are less prepared and don’t have this document ready. An Agreement in Principle can be turned around very quickly, often resulting in same day service if your circumstances are straightforward. If you would like assistance in getting this document, Get in Touch and a mortgage advisor in Newcastle will be able to help you out with this.
When buying a house you may find there is a lot of back and forth negotiation. Be very careful as your first offer, if accepted straight away, will most likely be too high! On this basis, we often find that our customers’ original offer will be turned down by the seller. It’s always a good idea to offer a bit less than you’d be happy to pay, as Estate Agents have been known to push an increase on your offer.
If the seller won’t budge from their original asking price, it’s up to you to decide whether or not you are willing to meet their asking price. If the property you are applying for is new to the market and you can’t negotiate a deal with the Estate Agent, then it is may be worth your time to walk away and look for another property.
If you are unsure about whether the asking price is right or not, you can always check sold prices on Zoopla and Rightmove to get a rough idea of what it should be. These websites draw data from the Land Registry which means that they are providing you with reliable information. Sometimes, you may see a house on the same street with a much lower price than the one you are looking at purchasing. Don’t worry though, as there will be a reason that this house sold for less.
These can include;
As part of our service, we offer expert first-time buyer mortgage advice in Newcastle regarding your offering strategy. We know that this process may be nerve-wracking, though it can also be exciting, and we are here to help you along this journey.
As a dedicated Mortgage Broker in Newcastle, we have experience in working with hundreds of Buy to Let landlords and helping them secure competitive Buy to Let mortgage deals. The customers we speak to who already have an existing property portfolio always ask whether it’s possible to transfer ownership from your own individual name(s), into the name of your own limited company.
First things first, it is important to know how a mortgage lender will approach purchases from a Limited Company. There are not a lot of lenders that will accept Ltd Company applications through anything else besides one through a SPV (Special Purpose Vehicle) Company.
When you register a company, your registration includes a SIC (Standard Industrial Classification) Code that sets out the business type(s) in which the company will be able to participate. Mortgage lenders don’t normally accept applications from general trading companies that can trade in other areas. An example of this, is if you have a plumbing and heating company, you would need to set up a new and separate company to your Buy to Let properties, rather than simply buying them through your pre-existing plumbing company.
The SIC codes typically accepted are 68100, 68201, 68209, 68320 but it can vary from lender to lender. To find out more information about SIC Codes, consult the Government website:
Purchasing a Buy to Let property under a limited company comes with both positives and negatives. For example, not every mortgage lender will consider applications from an SPV, as they would much rather lend to individuals/couples in their own personal name(s). With this in mind, individuals tend to have a larger choice of lender and product than SPVs.
Of those lenders that will lend to an SPV, you would likely receive higher rates than those offered to individuals. On a positive note, in recent years, changes to the way rental income is taxed has meant that the tax advantages generated by SPV ownership (relating to how income is taken and how that income is taxed) make up for any extra interest charges or lack of options to choose from.
As a trusted Buy to Let Mortgage Advisor in Newcastle, the first thing we’d always suggest customers do when considering whether to buy your property portfolio under the umbrella of an SPV is that you get advice from an experienced and specialist tax advisor. They will analyse how factors, such as your other income sources and the rate of personal income tax you pay will affect the overall status of your tax and establish whether individual or SPV ownership would be a better option for you or not.
As mentioned earlier on, the main factor in deciding whether to buy under an SPV is the position of your tax. This becomes further complicated when deciding whether to transfer properties that already exist in your own name, across into company ownership. The problem with this is that it is not a simple transfer, it’s a change of legal ownership.
The limited company is a separate corporate identity, so it works under the principle that your SPV is purchasing the property from you as an individual. This means you’ll have to account for stamp duty charges, legal costs and new mortgage valuation charges. You’ll also need to bear in mind that limited companies have running expenses and legal obligations. The good news is that these may be offset by the potential upside of some tax-deductible costs or long-term tax benefits.
Where Landlords are looking to increase their property portfolio, we find that they usually just continue to hold existing properties in their sole name(s) and purchase any new additions under the company name, in a bid to avoid all the on-costs of switching. With that said, no case is the same and there may be some instances where a switch like this would be beneficial in the long run, even when factoring in the costs of such a deal.
As you can tell, this is a specialist topic meaning that you need to be careful and know what you’re doing. If you are thinking of taking this route, you should know that our team of mortgage experts are on hand to help you with all of the arrangements, providing top quality Buy to Let Mortgage Advice in Newcastle, backed up by introductions to fully experienced accountants and solicitors whenever appropriate.