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The Pros & Cons Of Using A Mortgage Broker in Newcastle

Finding your footing on the property ladder for the first time, or jumping in once again at the end of your fixed term, can feel a little daunting at times.

There are plenty of routes these days for homeowners and home buyers to take for themselves, but you ideally want to get it right first time, especially with so much money involved.

Of course, we firmly believe that our service as a mortgage broker in Newcastle, will benefit all during their mortgage process, especially first-time buyers in Newcastle.

Whilst we are confident in our ability to assist our customers, we also understand that it is not for everyone and some may still be unsure of how we can help.

As such, we have put together a balanced overview of why coming to a mortgage broker in Newcastle may benefit you in some cases, as well as why sometimes you may prefer to go direct to the mortgage lender instead.

What are the pros & cons of using a mortgage broker in Newcastle?

Cost-Effectiveness

In the minds of many, you are much more likely to save money by going direct and finding your own mortgage deal. This isn’t entirely untrue, as a mortgage broker in Newcastle may charge a fee, though this is very much circumstantial.

If you’re experienced in doing it yourself, have a straightforward case and knowledge of lender criteria, by all means this will be easier and more cost-effective. The downside to this comes with more complex cases and people who don’t understand the lender criteria.

Without the know-how, you could either end up on the wrong deal, or unsuccessfully applying for a mortgage deal. Both of these situations could result in you spending more money than you have to, or damaging your credit score, harming your chances of applying for a mortgage in the future.

A trusted mortgage advisor in Newcastle will always aim to get their recommendation right first time, at the cheapest deal they can find. Whilst again, this may come with a service fee, you could be saving yourself a lot more money in the long run.

Local Bank Branch Relationships

Another point that many older customers think works in the favour of the bank directly, is the way the mortgage process was previously run. Before the rise of technology and online banking, you would be a loyal customer of your local branch regularly, often speaking to the same people.

When it came to a mortgage, you would sit with the bank manager themselves, who would “know your finances inside and out”, and they would be the one to approve a mortgage for you. A lot has changed since then though, and credit scoring is now all done digitally.

That means the bank manager won’t personally run through your case. Instead your case will be run against a complex online system, to determine whether or not you qualify for a mortgage. These days, everyone gets a fair shot, no matter which bank you are with.

Exclusive Mortgage Products

Tying into the previous point, many believe that you can get better, exclusive deals only by going direct. Once again, this is somewhat true, but only part of the story. See, they can offer great deals, but only from their own company.

The problem here is that not all mortgage lenders are banks and there are lots of different options out there to choose from. The best deal your bank can offer, might not be the best deal overall that you could’ve gone with.

That’s once again, where it is beneficial taking out mortgage advice in Newcastle. A dedicated mortgage advisor will be able to run through your case, and match you up to a suitable deal with one of the many lenders they have on panel, rather than from just one source.

It’s also worth noting on the topic of exclusivity, that you may also find deals with a mortgage broker in Newcastle, that you can’t find anywhere else. Whether you’re a first-time buyer, looking to remortgage in Newcastle or have a more specialist case, there will be more options for you when going with a mortgage broker.

Changes to Regulation & Consumer Protection

Following the 2007-08 credit crunch, the mortgage market needed an overhaul. As outlined in the 2014 Mortgage Market Review, lenders were no longer able to sell mortgages to their customers on a non-advised basis.

What this meant, was that you couldn’t just walk into a bank, tell them you want a mortgage and be granted it without any checks. You also couldn’t be granted a mortgage by anyone in the bank, as this was something that would happen regularly, whether they were qualified to do so or not.

In addition to this, these changes also brought about consumer protection, that a bank otherwise wouldn’t have given you. You now have the right to complain to the Financial Ombudsman if you feel mis-advised in any way. You also can make a claim via the Financial Services Compensation Scheme.

This is a tick in the column for both mortgage broker and mortgage lender alike, as it means no matter which journey you take, you’ll be safe, secure and professionally advised.

Booking an Appointment with a Mortgage Advisor in Newcastle

One area where the mortgage lenders fall short and the mortgage brokers excel, is that it can sometimes literally take months to try and speak with someone at a bank. Once you have made that contact and started your process, you’re not always guaranteed to be kept in the loop.

A unique selling point of our own, is that we are able to speak with you at times that best suit you and your schedule. Our mortgage advisors in Newcastle are here from morning until late, every single day of the week, including weekends. You might also find us working on some bank holidays too!

If you’re lucky, you might find yourself with an appointment on the same day, but that also doesn’t have to be the case. Want to speak with someone in a few days time? You are more than welcome to do so!

These advisors have time slots that best suit your lifestyle. Work 9-5 and need to speak with someone later that evening? We’ve got you covered! The best part is that with our online booking feature, it’s never been easier to speak with a qualified mortgage advisor!

Further to this, we pride ourselves on being responsive with our customers. This means no matter what stage of the mortgage process you’re in, you will always be kept in the loop. If there are any changes, your advisor will let you know as soon as they are able to do so.

It’s because of mortgage brokers in Newcastle like us, offering this level of customer service, that the public perception of mortgage brokers has changed. This has led to more people than ever getting in touch with their local experts, rather than going to the big banks.

Handling of Complex Scenarios

Sometimes a mortgage situation might be a bit more difficult than the average case. Frequent examples of this that we’ve encountered over the years, include (but are not limited to);

  • Mixed Deposit (Savings & Gift) – This means auditing two different sources.
  • Zero Hour Contract Workers – Will there be a consistent income?
  • Wanting to Make a Second Purchase – Can they afford to make that additional purchase?
  • Self-Employed with No Fixed Income – This is always a challenge for Self-Employed applicants.
  • Poor Credit History – A lender will not look favourably upon an applicant who has mismanaged payments in the past.
  • Affordability – Can they afford a mortgage full stop?

In the past, mortgage lenders could easily compete with one another by offering deals that were better than the other. Times have changed since then, and now the main difference in which deal you go with, is whether or not you match the criteria.

A deal might well be cheaper, but you may not be eligible for it. The mortgage lender will run either a hard search (leaves a footprint on your credit file) or soft search (leaves less of a footprint on your credit file), to see if you are indeed able to have that mortgage.

If you apply for the mortgage with a lender and are declined an agreement in principle, this will likely damage your credit file. Worst of all, it is very unlikely you will be given a reason as to why you were declined, which can be understandably frustrating.

On the flip side to this, a mortgage broker in Newcastle will be able to run through your case beforehand, making sure you’re good to go, and informing you of anything you need to do to better your chances of being accepted.

Using the lenders they have on panel, they’ll be able to match you with deals that you may well be eligible for and look to get you agreed in principle. Obtaining your agreement in principle through Newcastlemoneyman, will usually take no more than 24 hours of your free mortgage appointment.

Of course, this doesn’t mean you’re guaranteed to be agreed, nor does it guarantee a mortgage at the end, but it’s much safer for your credit file to have an expert comb through beforehand. As expert mortgage advisors in Newcastle, we always aim to get our recommendation right the first time.

In Conclusion; Should I use a mortgage broker in Newcastle?

Ultimately, it’s your choice. As you can see, there are indeed pros and cons to going with a mortgage broker in Newcastle. Conversely, there’s also plenty of pros and cons to going direct as well. It basically comes down to how quick you want your service to be, and how secure you want to be.

As a mortgage broker in Newcastle, led by 20+ year industry veteran Malcolm Davidson, we have helped thousands of customers with their mortgage goals. From first time buyers in Newcastle getting onto the property ladder, to people at the end of their fixed period, looking to remortgage in Newcastle, it’s safe to say we’ve done it all.

If you would like to speak with a responsive, open & honest, FCA regulated mortgage expert, feel free to book yourself in for a free mortgage appointment or remortgage review, with one of our fantastic mortgage advisors. We’re here to help with all your mortgage needs, with time slots that best suit you, subject to availability.

To learn more about our service, please feel free to take a look at our genuine customer reviews. They are a wonderful reflection of the levels of service we give to our happy customers, on a regular basis. If you would like to learn more about the world of mortgages, check out our YouTube Channel, MoneymanTV.

Buying Your Home as a Sitting Tenant in Newcastle

Through our years of giving our customers expert mortgage advice in Newcastle, our dedicated mortgage advisors have found that enquiries from renters interested in becoming First-Time Buyers in Newcastle are always on the rise. They can achieve this by purchasing their rental property from their landlord.

Newcastle has always been a popular place for people to call home and enjoy their life, however, many tenants who are already living there find it quite a bit challenging to own their own home there.

With changes always happening to taxes, it’s looking ever positive for tenants of properties who are looking to purchase the place they already occupy.

Many landlords look to sell properties in their portfolio through various standard means like an estate agent, though you’ll find that there are some out there who are also willing to sell their houses to the whoever is already living in the property in question.

If you are living in a rental property and would like to purchase it from your buy-to-let landlord, it is definitely recommended that you discuss the offer with them directly on a priority basis.

Why are landlords happy to sell their houses to the existing tenants?

One of the main factors as to why more tenants now have the ability to purchase their home from their Landlord, is because of changes the government made previously, in order to crack down on tax relief relating to Buy to Let purchases.

The changes that they made took effect over the course of 4 years, and the impact of these changes are now being seen as Landlords receive their tax bills.

The temptation of the profit margins in buying and selling properties has always been something that attracts landlords as joining the property industry can come with great reward.

This profit is why a lot of different property investors chose to instead tackle the taxes head on and enjoy the the great profits that came from being involved in the property market.

Though there are positives regarding the industry, there are also negatives, with these changes being a major factor as to why some landlords have previously and still continue to leave the world of property investing and move onto something else.

A lot of the reasons have been noted for this happening including complications with tax, financial demands, and even the mental stress of trying to take on such risky deals.

If you are a tenant of a property owned by a landlord and are willing to buy your home, your landlord may very well be open to selling the property to you. Often these sales come with deals too.

These deals occur as there will be generally be no need for estate agents to get involved, as well as various other external services, meaning the landlord is likely to save some money.

Benefits For The Landlord

Maintaining Steady Rent Income

Perhaps a landlord is looking to sell his house, and the tenant takes quite a long time to leave the property. Whilst this is going on, it can mean that there may be a lapse in income for the landlord, due to no rent.

If a sitting tenant agrees to buy the property from the landlord, the transition of ownership will be a lot smoother and so will be flow of income to the landlord.

This is because the landlord will keep getting rent from the tenant until the deal is finalised, at which point he will receive the full payment for the property.

Decreased Refurbishment Costs

If the tenant of the property decides to move out and takes everything with them, the landlord will have to inspect every little detail of the house and make any necessary repairs.

If you consider the various costs of bringing in painters and cleaners, as well as anyone else that is needed to make repairs, this can be quite financially draining to the landlord.

They can save a lot of money on all of these expenses if the tenant decides to buy the house, because they already live there and will be willing to buy the property as is. Because of this, the landlord won’t have to fork out on many of the expenses they otherwise would’ve.

Benefits For The Tenant

With this sort of process, there are many different perks for the tenant. You know the property inside and out, knowing exactly what needs work.

Any non-tenant purchases run a risk of any issues going unfixed and unreported, only cropping up once they’ve already bought it.

In those cases, you can end up spending a lot of money to fix any of the problems with the property.

Freedom Of Choice

Buying the property allows you the freedom to make any of the changes (so long as planning permission is approved when required) that your landlord may have otherwise not agreed to.

Again, you may require authorisation from the council to make additions to your land, but for the most part you will be able to do whatever you want.

No Stress Of Moving

If you have been a tenant for years on end, always moving between properties, you know about the difficulties of waiting for the person in front of you to move, so that you can move in.

In these instances, the previous tenants may have struggled to find another house, or are ready to move but they too are waiting on someone else. Buying the property you already live in can be a way to avoid this.

First-Time Buyer Mortgage Advice in Newcastle

Can I port my mortgage to a new property in Newcastle?

Mortgage Advice for Porting a Mortgage Newcastle

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.

Are all mortgages portable?

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.

Should I port my mortgage?

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.

What is a Sub Account?

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.

Mortgage Broker in Newcastle

How Much Deposit Do I Need To Buy A House in Newcastle?

How Much Deposit Do I Need To Buy A House? | MoneymanTV

Deposit Mortgage Advice in Newcastle

Your mortgage deposit will generally need to be for at least 5% of the value of the property you are buying in. For example, if you are looking to purchase a home in Newcastle that costs £180,000, you will need to save up a minimum deposit of £9,000.

Ideally, however, you should aim to save more than 5%, as the more significant the deposit you can build up, the more comprehensive your choice of mortgage options will be. You may also benefit from lower and often better mortgage rates.

Why is a deposit necessary when buying in Newcastle? 

In the past, it was common to find 100% mortgages. Back then, Northern Rock were offering 125% loan to value mortgages, meaning if you were purchasing a property valued at £180,000, they would lend you up to £225,000.

The reason why lenders need a deposit is to reduce the risks when they are lending. If they lend you 100% of the purchase price and you happened to fail to keep up monthly repayments, they would then have to take possession of the property. All it takes is a slight dip in house prices for them to be at a loss.

Look at it from a Lender’s perspective, if you can’t save up for, or get help to make up at least a 5% deposit for a property, then you probably aren’t quite ready to take that step onto the property ladder.

Government help to buy scheme

If you can save 5% of your funds for a deposit, you could qualify for the Government’s Help to Buy equity loan scheme. This scheme applies to new build properties only and you have to be a First Time Buyer in Newcastle. How it works is that you put in 5%, and the Government tops the deposit up by loaning you up to 20% of the property purchase price, making up a 25% deposit. After 5 years, the loan will be interest-free, afterwards, it will increase at a starting interest rate of 1.75%. Some people choose to either remortgage or pay back from savings they have made over that period.

Is a 5% deposit enough?

Generally, 5% is enough for most mortgage types. Although it does vary on the lender, some will accept only a 5% deposit. To access a 95% deal, 9 times out of ten you’ll need to have a good credit score. There are lenders out there that may consider you for a 95% mortgage with a lower credit score, but the interest rate might be higher.

How much deposit do I need for a Buy-to-Let property?

It has always been necessary for the Landlord to put down a larger deposit for Buy-to-Let Mortgages, and most lenders at the moment are looking for at least 25%.

Can I take out a loan for the deposit?

In theory, this could be possible, but most lenders won’t let you do this, as essentially, this would still be 100% lending, which no longer exists due to the aforementioned risk involved with such a venture.

Can someone gift me a deposit?

Yes, this happens constantly. You might have heard the term the “Bank of Mum and Dad” (both birth and adopted parents, as well as carers & legal guardians) gifting the deposit or other family members such as Aunties & Uncles. 

As long as they can evidence the funds, prove who they are and confirm they are not expecting repayment of the gift at any point in time. For more information, we check out our article all about Gifted Deposit in Newcastle. 

Are there any circumstances where I don’t need a deposit?

If you are buying as a sitting tenant and your Landlord or family member has given you a discount from the open market value, or if you qualify for a discount under the Right to Buy scheme. Then typically, you don’t need to put any of your own money in as a deposit. This is due to the equity being already “built-in” in the deal.

Can I Get a Second Mortgage to Buy Another House in Newcastle?

Can I Have 2 Mortgages? | MoneymanTV

Second Mortgage Advice in Newcastle

Here are some of the reasons why a homeowner might be needing two different mortgages:

  • To raise some money for an existing home.
  • With a view to rent out your existing home and purchase a new one.
  • As a means of helping your children out, with a second mortgage.
  • Requiring a second mortgage to purchase a Buy-to-Let in Newcastle.
  • Your name is on an existing mortgage and you are looking to buy a new property.

Second Mortgage to Raise Money

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.

Second Mortgage to Rent Out Existing Home to Purchase a New one

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.

Second Mortgage for a Buy to Let

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.

Second Mortgage to Purchase a Home for your Children

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.

Named on Existing Mortgage and Want to Buy a New Home

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.

Should I transfer to a Buy to Let Ltd Company?

Buy to Let Mortgage Advice in Newcastle

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.

Buying as an SPV

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:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/527619/SIC07_CH_condensed_list_en.csv/preview

Pros and Cons

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.

So… Should I transfer properties that I already own to an SPV?

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.

The Different Types of Mortgages Explained

The Different Types of Mortgage

From First-Time Buyer Mortgages in Newcastle to Moving Home in Newcastle, to Remortgages in Newcastle – When you start out looking for a mortgage it will quickly become apparent that you have a whole array of mortgage types available for you to choose from.

Below you will see a list of the most popular types of mortgages we encounter on a regular basis that are available on the market.  If you have any questions regarding one of these mortgage options, then please do not hesitate to contact us and an experienced mortgage advisor in Newcastle will be in touch to see how they can help you get the ball rolling.

What is a Fixed Rate Mortgage?

A fixed rate mortgage means that your mortgage payments are going to remain as they were for the length of time that has been agreed on between you and the lender. You are the one who can set the length of which you want to fix your payments for, with the usual options customer opting for being 2, 3 or 5 years or longer.

Regardless of what happens to inflation, interest rates or the economy, you can rest assured that your monthly mortgage repayments, usually your biggest financial outgoings each month, will remain as you are used to, providing financial stability for you.

What is a Fixed-Rate Mortgage? | MoneymanTV

What is a Tracker Mortgage?

A tracker mortgage means that your interest rate will follow along with the Bank of England’s base rate. What this basically means, is the lender that you are with is not the one who sets your mortgage rate and you will be paying a percentage above the Bank of England base rate.

In an example, if the base rate is 2% and you are tracking at 1% above base rate, that means you will be paying a rate of 3%.

What is a Tracker Mortgage? | MoneymanTV

What is a Repayment Mortgage?

When you take out a repayment mortgage this means that each month you are paying a combination of both interest and capital.

So as long as you are able to keep up your monthly mortgage repayments for the full length of the mortgage term, the mortgage balance is guaranteed to be paid off at the end and the property will then become yours completely.

This is the most risk-free way to pay your capital back to a mortgage lender. In the early years of your mortgage term, it is mainly the interest that you are paying and your balance will reduce at a very slow rate, especially if you have taken out a mortgage that stretches over 25, 30 or more years.

This situation then changes in the last ten years of your mortgage, where your payments are paying off more capital than interest and the balance will be reducing at a much quicker rate than it was at first.

What is Repayment Mortgage? | MoneymanTV

What is an Interest Only Mortgage?

Most buy to let mortgages are set up on an interest-only basis, however, landlords may find it much more difficult to get a residential property with this type of mortgage.

Nowadays, finding a lender who is willing to offer this will be hard to come by, though there are certain circumstances where this can be an option. These include downsizing your home when you are older or have other investments what you will use in order to pay back the capital.

Lenders are very strict when it comes to offering these products now and the loan to values are a lot lower than they were in previous years.

What is an Interest-Only Mortgage? | MoneymanTV

What is an Offset Mortgage?

With an offset mortgage, the lender will set you up a savings account to go alongside your existing mortgage account.

How this works is that let’s say you have a mortgage balance of £100,000 and £20,000 is deposited into your savings account, then you will only pay interest on the difference, which in this case would be £80,000.

This can be a very efficient way of managing your money, especially if you are a taxpayer that pays much higher rates than others.

What is an Offset Mortgage? | MoneymanTV

A Guide to Remortgages in Newcastle: Top Reasons to Consider

The mortgage journey is a rewarding process. Despite its fair share of up and down’s, you will end up with one of the following:

  • Settled down in your dream property, and looking to start a family.
  • A stepping stone to boost you further up the property ladder.
  • An investment purchase to provide some extra income.

No matter which path you take on. There will eventually come a time when your mortgage term is approaching its end. Your option is to sell up and upsize/downsize into a new property.

Maybe you are looking to sell your portfolio to the tenant or another buyer and look at other opportunities? The most popular option, however, is a Remortgage.

What Is Remortgage?

A Remortgage is where you use the proceeds from a new mortgage to pay off a pre-existing mortgage. It can be an excellent way to find lower interest rates and better mortgage terms.

Utilizing the 20 years or so experience with Malcolm Davidson (Director / Mortgage Advisor), we thought it best to put together a quick-thinking guide to all the options you could choose when it comes to taking out a Remortgage.

Remortgage For Better Interest Rates

Your initial mortgage deal will typically last 2-5 years and feature low fixed rates or possibly discounted rates. In some cases, you may even get placed on a tracker mortgage, which follows the Bank of England’s base rate.

When your term ends, you will likely get moved along to the lenders Standard Variable Rate (SVR). In short, an SVR is a mortgage with an interest rate that can change depending entirely on what the lender wishes to charge.

In any case, this does not follow the Bank of England’s base rate like a tracker mortgage. We find; these are usually the most expensive paths to take, leaving many to look at Remortgaging for better rates, which will hopefully save you money on your monthly repayments.

Remortgage For Home Improvements

2-5 years into occupying your home, you may decide that something isn’t quite right. Maybe you need an extra room or larger living space for your kids/belongings, a new kitchen, a new office, or loft conversion.

Rather than you move into a larger house, consider seeking advice to release equity with a Remortgage to cover the costs of these. Though it may seem like a frightening concept having to obtain planning permission and fund/manage your project.

You could argue it’s a lot less stressful and more rewarding than the process of finding a new home. Selling your current one and moving your belongings.

In the long run, this may prove even more beneficial as creating more space and will likely increase the value of your property, handy for if you ever do decide to sell up or rent out.

Remortgage For Changes to Your Term

In some cases, people may wish to Remortgage in Newcastle for a better mortgage term, by reducing the length or switching to a more flexible product.

Reducing the size does mean you won’t be paying back your mortgage for as long, so aren’t entirely tied down forever, but as such your monthly repayments will be a lot higher. The longer your term, the lower the payments will be over time.

Remortgage For Changes to Your Term

Some opt for a more flexible mortgage term when they remortgage. The benefits provided by this option can prove appealing to some homeowners. You may gain the ability to overpay,

Resulting in being able to pay your mortgage off as quickly as you’d like, as well as being able to carry the same mortgage and rates over to another property, should you decide to move at any point in the future.

Though a flexible mortgage sounds near perfect, they usually come in the form of a tracker mortgage, which as mentioned earlier on follows the Bank of England base rate. Meaning one month of your payments could vary based on interest, making them a little unreliable.

Equity Release

Everyone has a level of equity in their property, how it works is with a difference between the remaining total on the mortgage, and the current value of the property.

As touched upon briefly, you can choose to opt-in for some for home improvements; however, there are more options available for you out there.

Some use it 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.

In some cases, we find that Buy-to-Let landlords will use Equity Release as a means of covering their deposit for buying a future property to add to their portfolio.

Remortgage to Consolidate Debt

On the topic of Equity Release, another big one people use it for, is to pay off any unsecured debts you may have accrued over time.

Firstly though it may seem easy enough, Debt Consolidation bases not only the amount on how much you’re entitled to and the value of the property, but also your credit rating. Additionally, this could mean you are limited in the amount you can borrow.

Secondary, to pay off your previous mortgage and your debts, you will need to borrow more than your outstanding mortgage amount. In any case, your monthly repayments will most likely be higher.

Though not an ideal situation, at least you can rest assured that should you find yourself dealt an unfortunate hand, you do have some options out there.

Should you find yourself with a significantly damaged credit rating, you do still have options to choose from. However, these will not be easy and require very Specialist Remortgage Advice in Newcastle before going forward.

Even then, there is no guarantee. You should always seek mortgage advice in Newcastle before choosing to consolidate and secure any debts against your home.

Experienced Mortgage Advisors in Newcastle – Get in Touch Today

If you are reaching the end of your term and are wondering what your option may be for Remortgaging. It is worth your time to Get in Touch with an experienced and trusted mortgage broker in Newcastle.

An advisor will be able to discuss your circumstances and future goals to create the best plan of action for you in the next step of your mortgage journey. We aim to ensure this process quick and smoother approach than your first time.

Nothing But Open & Honest Mortgage Advice in Newcastle

Mortgage Advisor in Newcastle

Business as usual

COVID-19 has had a noticeable effect on the mortgage market thus far, but that won’t stop us from providing the same level of Mortgage Advice in Newcastle our customers know and love. At Newcastlemoneyman, we are still working the same way we were before these hardships.

We still have hardworking Mortgage Advisors working remotely from their homes in order to answer all of your mortgage questions. Our number one aim is to ensure all customers have the option to speak to a Mortgage Advisor in Newcastle if they need to.

Recurring situations

You may be worried you’re unable to meet your monthly mortgage payments or you’ve reached the point where you are looking for a better remortgage deal. We have noticed that these two situations have been mentioned by quite a few customers.

As a Mortgage Broker in Newcastle, we would highly recommend speaking with one of our advisors before you go directly to the bank or lender. We’re able to assess your personal and financial situation, in order to recommend the best route for you to take.

We’ll do our best to help all those who come to us for help with their mortgage during these difficult months. We’re all in this together and look forward to you getting in touch.

Customer service

We’re still working through various different situations every day, keeping our business flowing as usual. We won’t let anything get in the way of us providing expert Mortgage Advice in Newcastle.

Customers have still been leaving excellent reviews over the last few weeks, something we’re incredibly proud of. We take great pride in our work and it warms our hearts to know that as a Mortgage Broker in Newcastle, we’ve done right by our customers.

Here is what a few customers have recently said about our service here at Newcastlemoneyman:

“Absolutely fantastic service from Chris setting up my application, to Kayleigh sorting out the right remortgage for me, nothing was too much trouble. Cannot recommend them enough for sorting this out in a timely manner and during this pandemic. Thank you to each and every one of you.” – Mandy H

“Brilliant service from Jonathan and Megan, very smooth process and they have secured me a great mortgage deal. Will highly recommend Newcastlemoneyman. Thank you.” – Daniel D

Speak to your Mortgage Advisor in Newcastle

Remember, we’re still available for you to get in touch 7 days of the week. Sincerely from everyone here at Newcastlemoneyman, we hope you’re safe and well. We look forward to hearing from you soon.

We won’t let anything get in our way, especially during the COVID-19 outbreak. It’s still our aim to help with all your mortgage problems, it wouldn’t be fair to just leave you confused and concerned. We’ll do our best to get you over these hurdles and through the mortgage process with ease.

Mortgage Advice in Newcastle

Brexit & The Effects on The Property Market in Newcastle

Fast & Friendly Mortgage Broker

With the Brexit deadline once again being extended, we’re thinking about what the next move is. With everything up in the air and uncertainty becoming the norm, it can be hard to find reliable advice about anything, including mortgages.

The Property Market and Brexit

We have found that many people are sitting on their hands when it comes to property. No-one is quite sure what right path is. As a result, people are potentially missing out on golden opportunities which could have benefitted them in the long-term.

With previous experience of how the market has been influenced by external factors such as national political issues, our Mortgage Advisors are looking towards the future to evaluate the potential outcomes for customers post-Brexit. And in our opinion, there is lots of pent-up demand out there.

Because of this, we are advising clients to research all their options. Especially if their current plan is to “wait and see” because that approach may not work out in their favour.

You Should Be Planning Ahead, Brexit or No Brexit

If you’re planning to move in 2020, then it would be advisable to chat with us sooner rather than later. Now is a great time to reach out to us and to look at getting your home valued because Estate Agents are quiet.

Getting your home prepared to go on the market typically takes a few weeks. This is because time is needed for 2 or 3 valuations, choosing your preferred Estate Agent, signing your agency agreement and getting the photos finalised. This can be a timely process and could, unfortunately, be delayed at any stage.

Furthermore, if everyone else looking to enter the market has the same “wait and see” mindset, it will work against you. By the time your home goes live, so will theirs. This means there are more houses on the market, meaning there are more options for a potential home buyer, therefore driving prices down.

Why

There a few benefits to getting ahead of the market and getting your home valued now.

  • You’re prepared. Whatever happens with Brexit, you have all the information there available at your fingertips.
  • There’s no obligation. By getting a valuation, you’re not committed to anything. The decision to sell is all yours.
  • Improvements can be made. If you know the figures and the feedback regarding home improvements, you can decide what to carry out and you’re in no rush.

So, if you’re thinking of moving home in 2020 or the near future but are concerned about Brexit, contact us to discuss your mortgage options. We offer all customers a free no-obligation consultation.

Mortgage Advisor in Newcastle

Newcastlemoneyman.com & Newcastlemoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.

Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk

The information contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.
Should you have cause to complain and you are not satisfied with our response to your complaint, you may be able to refer it
to the Financial Ombudsman Service, which can be contacted as follows

The Financial Ombudsman Service, Exchange Tower, London, E14 9SR
www.financial-ombudsman.org.uk

© 2022 Newcastlemoneyman

Newcastlemoneyman – Clavering House, 1 Clavering Place, Newcastle Upon Tyne, NE1 3NG.

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