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.
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.
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.
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.
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.
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%.
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.
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.
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.
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.
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.
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.
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.
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.
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%.
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.
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.
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.
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:
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
Remember, we’re still available for you to get in touch from 8am until 10pm, all 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.
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.
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.
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.
There a few benefits to getting ahead of the market and getting your home valued now.
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.
Whether you are a first time buyer actively viewing properties or a home mover with your house on the market, you may have noticed that some of the larger estate agents and builders are very keen for you to use their in-house mortgage advisor and conveyancing services.
Being part of a stand-alone mortgage business we receive lots of feedback as to what sales tactics can be used, examples of this are;
Remember, when negotiating a purchase price, do you really want the seller of your property having access to your personal financial situation and potentially knowing your maximum borrowing?
Here at Newcastlemoneyman, we work solely for you!
We are open and honest and only have your best interests at heart. As first-time buyers, we know it can be stressful. We’re here to save both your time and money.