Especially if you are new to the scene, the mortgage process can sometimes seem a little complicated. There are no loopholes or quick ways to do things! This is because it needs to be done right and in order.
When starting the mortgage process as a first time buyer, home mover or landlord, you will undergo your free mortgage appointment with us where we will talk you through your mortgage options and gather some information from you regarding your personal and financial circumstances. This is standard procedure for a Mortgage Broker in Newcastle, like us. On the other hand, what would happen if you were not buying a property and you wanted to remortgage or simply check up and see whether you are on the best deal? How would the process differ for an applicant looking to purchase a property?
The difference is that this process starts with a mortgage review and not a mortgage appointment. And, in a lot of cases, those which have taken a mortgage review have ended up saving a lot of money further down the line… Sometimes hundreds!
Primarily, you will hear ‘mortgage review’ over names such as ‘mortgage check-up’; in reality, they all mean the exact same thing. A mortgage review is simply a look at your current deal to make sure that you’re on the best product available to you. This comparison can sometimes save you lots of money in the long run, especially if interest rates are low and you are able to switch products.
Typically, your mortgage review will be carried out by your Mortgage Advisor in Newcastle, although, some people like to do it by themselves and compare products online. As a Mortgage Broker in Newcastle, we would still recommend speaking with an advisor so that you can get an accurate representation and make sure that you are looking at the right products that match your personal and financial situation.
A mortgage review works similarly to your typical remortgage appointments. Your credit will be examined, your income and affordability will be assessed, and your personal and financial situation will be considered. Don’t forget your current mortgage deal too.
With all of this information, your Remortgage Advisor in Newcastle will be able to compare your deal with others on the market that are currently on offer. Some products will not be suited to your circumstances. And, if there is not a suitable product, your advisor will be transparent and tell you so.
Getting your mortgage reviewed every 6 months does no harm. Some people review their mortgage within even shorter timeframes. There is nothing wrong with this either, in fact, there are tools out there that monitor your mortgage in live time, giving you 24/7 updates to whether you are on the best deal available. This is exactly what our free mortgage club offers!
If you are within the last year of your fixed mortgage term, we would always recommend checking every couple/few months so that if a deal that you want becomes available, you are able to action it right away.
As a Mortgage Broker in Newcastle, we advise our customers to set up a mortgage review reminder so that they are always on top of their mortgage.
In some cases, it will be possible to take out the deal that you have found following your mortgage review. If you want to pursue the deal that you have found, you may need to pay an early repayment charge (ERC), although, this does depend on how long you have left on your fixed term.
For example, if your deal is coming to its end and you find a competitive deal following a mortgage review, as long as that deal is still available when your term ends, you could switch onto that deal and avoid an ERC. In another example, if you found a deal following a mortgage review but you are 8 months from your fixed term ending, if you switch deals, you will face an ERC.
When signing on for a mortgage, you are stating that you will meet set payments until the end of your fixed term, therefore, if you decide to take out another deal mid-term, you are breaking this agreement and will receive a charge (ERC).
Sometimes this can be worthwhile if the rates are competitive and it will save you lots of money further down the line.
Some people will save more than others when taking a mortgage review and switching deals. Potentially, some people could save hundreds! It depends on how far you are into your deal, current products in the market, your personal and financial situation etc.
If you were to take a review at a time when interest rates are low, you could potentially find lots of competitive deals out there.
If you are looking to switch over to a new mortgage product online, we would still recommend consulting with a professional first. Online switching could potentially put you on the wrong deal and you would have to face numerous charges to revert back to another deal more suited to your circumstances.
If you choose to get Remortgage Advice in Newcastle, you will have a point of contact all the way through the journey. We have helping clients find competitive mortgage deals for over 20 years now too, and you could be next!
To contact us, simply give us a call or book a free appointment online. This way, you will be in safe hands when switching your mortgage deal and you’ll know that you are on the best deal for you and your circumstances.
If you have made the decision to stay in your current property as appose to moving home. Then Remortgaging in Newcastle will be the next step in your home buying journey.
Choosing to remortgage is a good way to stay in your current property with more favourable interest rates. This can be done by being transferred from your existing deal to a more suitable deal. As an expert Remortgage Broker in Newcastle, our team of experienced Mortgage Advisors in Newcastle can help.
The banks rely on their customers not knowing that they can shop around for a much more suitable deal. We tend to find in some cases you will find cheaper offers elsewhere. By speaking with one of our knowledgeable Mortgage Advisor in Newcastle, they can help compare deals or you can seek these out yourself through a price comparison site.
Going forward, you will find a suitable remortgage deals for your circumstances. However, price comparison sites usually look for your best deal on an interest basis.
As long as you have been on your current mortgage deal for some time, there is a chance that you could be on a low Bank of England tracker deal. You could even be paying less than 1% so, it may be best for you to stay with that mortgage deal. This could become an issue if the base rate eventually rises as well as your payments.
You can, depending on if you pass the affordability checks and there is a reasonable amount of equity in the property. Going forward, you may be able to increase your remortgage for future home improvements.
Remortgaging for home improvements gives you an updated home and the chance to increase the value of your property. Remortgaging can help customers in the process of updating their kitchen, converting a loft, or creating a home office.
As well as for home improvements, you may be eligible to borrow additional funds, this could include:
Adding more debt to your mortgage is not the best idea. Because, you will end up paying back more interest overall through extending the term of your debts to make the payments lower.
Another risk of this is that you are taking debt, which is not secured and securing it on your home. It could create the potential risk of having your home repossessed. Something that will likely be a problem would be consolidating debts that you can afford or credit cards that are 0% interest.
That said, this highlights the importance of speaking to a qualified Mortgage Advisor in Newcastle prior to securing any debts against your home. An option you could take is to reduce your monthly outgoings to avoid missed payments. By doing this, you are decreasing the risk of your credit rating being in a bad state.
A lender may offer a “Product Transfer” or “Retention” product. This allows the lender to provide you with a new deal to stay with them. You would need to contact your provider directly to see what is available to you, however, this option isn’t guaranteed.
We tend to find some lenders will allow you to make a product switch online without providing further information or advice.
Staying with the same provider and switching products might be an easier option, however, putting a new application to a different lender may save you a lot of money.
You will find that many banks would offer favorable rates to new borrowers over existing ones. There will be a time when lenders will take a more ethical approach that could have a positive change in customer loyalty.
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.
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.
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.
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.
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.
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.
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);
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.
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.
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.
As you move ever closer towards the end of your mortgages’ initial fixed period, the next step would be to take a look at your options for a remortgage in Newcastle. If you took out this remortgage with the same mortgage lender, you would be doing a product transfer.
Not all homeowners may be aware of this option, especially if you have been doing your own research ahead of your fixed-term ending and only reading about remortgages. In truth, product transfers are on par with, if not arguably more popular than a remortgage in Newcastle.
A remortgage is where you will take out a new mortgage to replace your previous mortgage, with a new mortgage lender.
Providing you have a straightforward case, this will come with likely lower interest rates and monthly repayments. You will need to submit documentation in order to qualify, however.
On the other side of the coin, with a product transfer, you will be taking out a new mortgage with the same mortgage lender you were previously with.
So long as your circumstances are the same, you will typically not need to submit any further documentation to the mortgage lender, meaning you’ll likely have a much quicker process as you choose a new deal you qualify for and switch to that from your previous one.
The main reasons as to why a homeowner may instead look to do a product transfer, are pretty appealing ones, the one that stands out the most being that you may actually save yourself money in doing so.
This is because you won’t have any need for solicitors or a valuation, so those fees will not be present. You also may save yourself from having to pay a redemption fee or early repayment charge (though you might still have mortgage arrangement fees).
It may also save you a lot of time during your process and allow for an easier service. Remortgages in Newcastle can often take some time, whereas because the mortgage lender already knows you and probably won’t want documentation, it can go much quicker.
Contrary to the latter discussion point, some homeowners may instead opt for a remortgage in Newcastle. The reasons this is a popular choice for many, is because you usually have a range of deals to choose from.
In remortgaging, you will have access to more financial institutions than just your current mortgage lender, with potentially better deals available if you were to go elsewhere. If you do find a better rate than you are currently on, you will no doubt save money in the long run.
Additionally, a product transfer only gives you the possibility of taking out a new mortgage on the same term. A remortgage, on the other hand, will allow for you to possibly reduce your term. This in turn, could make your next remortgage process go much easier.
Another popular reason why a homeowner may do this, is to remortgage to release equity (equity being the difference between what the property is worth and your remaining balance), as a means of funding possible home improvements, to put down a deposit for another property, and more.
Releasing equity doesn’t quite apply when you are taking out a product transfer, though you may be able to arrange a product called a further advance. Book a free mortgage appointment with a mortgage specialist to discuss your options for a further advance or product transfer.
As a general rule of thumb, because you will be staying in the same property, with the same mortgage lender, you will not need to hire the services of a solicitor for a product transfer.
Where this will become a necessity, is if you are looking to make any changes to your mortgage terms, such as removing or adding a person to or from your mortgage. You will most likely need a conveyancer or solicitor for this.
Generally speaking, you will not need to have a credit check taken out on you for a product transfer. This may vary between some mortgage lenders, however. The reason this tends to be the case, is because the mortgage lender will already know that you are trustworthy with repayments.
Alternatively, if you have had any credit problems during your current mortgage or you are remortgaging with another mortgage lender to achieve something like to release equity, you may have a further credit check taken out on you.
When you do a product transfer, you may need to look at whether or not you have any future plans for moving home in Newcastle. Your current deal may not give you the chance to port your mortgage to a new home.
Taking out a remortgage in Newcastle instead of a product transfer, can allow you to have the flexibility to port your mortgage if it becomes necessary.
When you contact a member of our dedicated team for remortgage advice in Newcastle, they will be able to take a look at your case and review what you are looking to achieve.
Not only will our team be able to get you through your mortgage process in a quick and efficient manner, but you’ll benefit from the selection of mortgage deals available to you, thanks to the vast amount of mortgage lenders we have on our panel.
Our service goes beyond just your mortgage process though, we truly do care about our customers. If you’re looking to product transfer and we think you’d be better off with a remortgage instead, we will say so. The same applies the other way around too.
We believe in a wholly transparent and honest service with the customer, putting you first. To discuss your options for a product transfer, or for further remortgage advice in Newcastle, book your free remortgage review and we will look at how we can help you.
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.
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 a remortgage to release equity as a means of covering their deposit for buying a future property to add to their portfolio.
If you are aged 55+ and currently living in a property with a minimum value of £70,000, then it’s worth taking a look at your options for Equity Release in Newcastle. To find out if you qualify for later life lending, book your free mortgage appointment and chat with a later life mortgage advisor in Newcastle.
On the topic of a remortgage to release equity, 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.
It can be unfortunate if you decide to separate from your partner and go through the divorce or separation process. It can also be a stressful time and something that couples never foresee. If you have a joint mortgage and other finances, this can make the situation even worse.
Below, we have compiled just a few of the most common questions we are asked when we deal with customers in this situation who need to rearrange their mortgage commitments.
No matter what situation you are going through right now, you still must keep paying your mortgage. This is still the case, even if you live elsewhere.
You still have an agreement with your now ex-partner to take equal responsibility for your joint mortgage. Because of this, you are equally liable for any debts until the mortgage is paid off, regardless of your situation and whether you live there.
If you do not pay your mortgage on time, you can be at risk of causing a lot of harm to both you and your ex-partner’s credit history. This applies equally if your ex-personal partner does not pay on time, you will be affected. This will result in the risk of your home being repossessed if you do not meet your monthly repayment date or other debts you have secured.
Once your separation is for definite, you should contact your lender as soon as possible to inform them. If you have trouble paying your monthly mortgage, this is even more important to notify your lender.
In this situation where you have both decided to move out of the property, sell and repay your remaining mortgage balance. The remaining equity will be split between you both. It is something to discuss between you and your ex-partner about who gets what from this remaining equity.
Here at Newcastlemoneyman, we have a team of specialist mortgage advisors in Newcastle. We worked around the clock to see if we can find you a suitable option to buy a new home under a single name.
Your dedicated mortgage advisor in Newcastle will work hard to find you the most appropriate mortgage deal for your situation. We will also provide you with appropriate and expert mortgage advice in Newcastle.
In the case where a homeowner has separated from their ex-partner but is on better terms with them. Sometimes one chooses to stay in the property and continue to pay the remaining mortgage amount.
This can be a convenient route, especially for those with fixed rate mortgage terms, if it works with your personal situation.
Taking a remortgage in Newcastle out in either your own name or your ex-partners can be helpful if you or your partner decides to remain to live in the property.
Being the sole owner of the property means you will need to take out a Remortgage if there is an outstanding mortgage to pay off in both you and your ex-partners’ names. This will work with the new mortgage in your sole name and involve the lender making another assessment of your affordability.
It may be possible for someone to have more than one mortgage; You can find that credit scoring systems can majorly vary from lender to lender. Applying for a second mortgage would mean you will be analysed on several factors.
Looking at your current financial commitments is one of the main factors they will consider. That is why you need to be sure you can afford a second mortgage with your financial commitments. You need to be sure that you can afford a second mortgage because being rejected for this could have a negative impact on your credit file.
Here at Newcastlemoneyman, we do have an expert team of mortgage advisors in Newcastle who can help you out with credit searches that will have less of an effect on your credit file. Once our team has collected the necessary information, you can get an idea of the maximum amount of mortgage you could borrow.
This allows you to learn more about your budget and estimate the amount your monthly mortgage payments will be with your current financial commitments.
Getting away from your current financial commitments can be a tough process which is why having a trusted mortgage advisor in Newcastle by your side is beneficial as they will be able to provide a helping hand throughout the process.
If you are moving home in Newcastle, you may find the experience stressful, especially those going through a divorce or separation. Contact a mortgage advisor in Newcastle today, and our team will be happy to see how they can help.
If you divorce in the house that both jointly own in negative equity, it can be difficult to sell the house and pay off the remaining mortgage balance. In terms of the remaining debt, you may need to divide this between the two of you or come to an agreement with your current mortgage provider.
You may eventually feel like you’ve outgrown the property you’re in, whether it’s due to having children, moving in with a partner or just wanting more space. You may also need some repair work carrying out, for example, re-roofing your property. These are things that we find customers are looking at doing.
Though moving home seems like the right choice, it can become a rather mentally challenging process for homeowners. Somebody has to come and value your property, you have to contact with the estate agent, the property has to go on sale. Following that you’ll have people coming in and out to view your home etc. It’s a long and stressful cycle that many aren’t fond of.
Not only do home improvements give you a better quality property with the option of more space, but there’s a chance you may save money on various fees and can also greatly increase the value of the property for when you do decide it’s time to sell up.
Whilst it can save money, it’s worth remembering that home improvements come with their own costs. These can include;
In order to progress forward with any home improvements, you may need to release equity from your home. To do this you will need to take out a Remortgage which will enable the equity to be released from the property to put towards the plans you wish to put in place.
You’ll need to speak with a Mortgage Broker in Newcastle in order to get this going. Remortgages tend to go a lot smoother and quicker than the first time around, so you’ll hopefully be enjoying a nice and easy process once you’ve been assigned your dedicated and experienced Remortgage Advisor.
At this time of writing, right now may be the best time to jump into this. Interest rates are incredibly low, allowing for your dream kitchen or conservatory plans to be underway.
We have Mortgage Advisors with many years of experience working all throughout the day to answer our customers’ enquiries. If you’re looking to Remortgage your current property for home improvements, or would like to further discuss the pros and cons of that versus moving home, get in touch and an advisor will run through any of your questions.