“Can I get a mortgage in my situation?” and “How much can I borrow?” are two of the most frequent questions we find that we are asked by First Time Buyers in Newcastle & people who are Moving Home in Newcastle.
In this article, we take a look at the latter of those two questions;
It would be nice to sit and draw out some specific guaranteed figures, but that of course can’t quite work in this setting.
Everybody has a unique case to them and this amount will usually be different depending on what your situation is.
We can however reflect upon how this may be worked out by the mortgage lender, compared to how it was worked out in the past.
In 2014, following on from the mortgage and property markets recovering, the regulator launched the Mortgage Market Review (MMR).
This was a set of brand new guidelines that lenders had to follow, factoring in things like household spending habits.
Prior to 2014, two applicants who were earning the same income could borrow more or less the same amount, no matter what they were each spending.
Once it had changed, it was more about looking in-depth at what you were spending each month and why.
As an example of this, you could be earning the same amount, but have additional costs like childcare costs, which your counterpart may not.
This means they are likely to have access to more than you would from most lenders. There is still a “cap” to prevent the majority of mortgage lenders from going past so much of your annual income.
We regularly find ourselves being surprised by the variations between mortgage lenders. For example, some lenders have been known to penalise low earners, whilst others see pension contributions as a fixed outgoing.
Both of these factors can have an impact on the amount you’re able to borrow for your mortgage.
Of course, whilst it may be more streamlined nowadays, how did we get this far? Why is it the way it is?
Way back when, in the 80s and 90s, there was not a whole lot of technological intervention in the way the mortgage process worked.
How you would go about it, is you would make an appointment with your Building Society Manager who would then encourage you to a bank and save with them if you already weren’t doing so.
This would allow them to gauge if you were creditworthy. If you were, they would give you something akin to an Agreement in Principle, followed by mortgage advice and an outline of how much you could borrow.
You could argue this was a highly personalised, common-sense approach. The issue, however, was the inconsistent decision-making as the Building Society Manager would interpret the guidelines and the criteria in their own way.
Looking to get rid of the inconsistencies and to cut the costs involved, lenders moved to automated affordability calculations. This resulted in multiplier caps being applied so that managers could no longer lend more than a specific amount.
As the 2000s continued onwards, mortgage lenders were becoming more generous in how much they would lend an applicant. Some even offer self-certified mortgages, which required no background checks at all.
In 2008, as we likely all remember, the market crashed. This eventually led to a difficult couple of years for those trying to buy a home. Mortgage lenders tightened up on lending and became a lot more cautious in their lending habits.
This leads us back to the aforementioned 2014 MMR and where we thankfully are today.
If you are looking to maximise your borrowing capacity to buy your home, you will benefit from taking on the services of an experienced mortgage broker in Newcastle.
Our team of expert mortgage advisors in Newcastle will be able to analyse your situation and work out your finances to ensure that the repayments feel comfortable to you.
It is known that buying a property can be one of the most significant financial commitments of your life which is why you must be aware of what you’re expecting to pay for. All the additional costs can accumulate to a large lump sum and if you aren’t careful, you could be overpaying in some areas than you initially thought.
Below we have provided a full breakdown and look into the costs of buying a property in Newcastle along with the costs involved with property investment.
If you are a first time buyer in Newcastle and are looking for a simple breakdown of each cost and given estimated value to each. On the flip side, those who are looking to move home in Newcastle will benefit from this as it can be a great refresher to prepare accordingly.
When you’ve had an offer accepted, your lender will perform a valuation on the property, this assessment will determine multiple factors like structural damage, property age, location etc. By doing this, they can ensure that your offer matches the ‘actual’ value of the property.
Valuations can differ with some business models offering a free valuation whereas others may charge hundreds of pounds. Sometimes, a free valuation may be included in another cost or a freebie for taking out a certain product.
As well as this, there is a large variety of valuations, some being more expensive depending on which one you need. For instance, a full building survey will be required for those purchasing an older property and will be more expensive than someone who’s bought a new build.
In some situations, a lender may charge you for taking out a mortgage with them. This is usually the case with products with the cheapest rates. Not all mortgages come with an arrangement fee, however, this comes down to the product and lender you could be charged up to £2,000.
Some applicants can choose between paying the arrangement fee upfront or adding them to the mortgage balance. If you choose to add them to your mortgage, you may incur further interest charges. As a Specialist Mortgage Broker in Newcastle, we can search 1000’s of mortgage products to find you the most suitable deal for your circumstances with minimal additional costs.
You’ll need a solicitor to arrange the legal side of the mortgage process. The fees quoted by various firms may differ significantly. An estimated amount for a low-value property could set you back £600. You will provide the solicitor with the new property’s address, whether it’s leasehold or freehold. You’ll also need to provide the purchase price to obtain quotations. Additionally, make sure that:
Only when you decide to sell your property in Newcastle you’ll be faced with estate agent fees. Alongside property prices these fees are rising, you may expect to be paying between 1-2% of the property price.
If you are looking to sell your property, the lowest amount is usually £500. If you are looking for a more personalised service you may be expected to pay more.
Stamp duty is a tax that the solicitor will collect upon the competition of the property purchase, in addition to your solicitor’s fees and disbursements. More information regarding stamp duty can be found here.
A Mortgage Broker in Newcastle will usually charge a fee for their service. These fees will be discussed upfront so that you know what you’re paying for and how much your case is going to cost. We recommend trying to use a trusted pen and honest Mortgage Broker in Newcastle that charges upon completion only. Avoid any application fees where your money will be at risk.
Book your free appointment online to speak to a Mortgage Advisor in Newcastle today
The cost of moving all of your household items to another property can vary depending on the service you want, how far you’re moving and how much stuff you have.
If you are happy to hire a van and transport your belongings to your new house by yourself, the service will cost significantly less. Whereas if you prefer to pay for the full service and get someone to pick up their belongings and help them move. Some local services may charge several hundred depending on circumstances.
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.
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.
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.
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.
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.
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.
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.
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.
The government found that these schemes were becoming more and more popular so began creating more schemes to try and help struggling applicants get onto the property ladder. Although most of the schemes target first time buyers, they created a new scheme that was exclusively aimed at armed forces personnel. This scheme also comes under the ‘Help to Buy’ umbrella, being named the Help to Buy Armed Forces scheme.
The scheme is quite simple. It allows regular or retired armed force personnel to borrow up to 50% of their salary, interest-free, to buy a home. This can be used to purchase your first home or to move home if you are assigned to a different location or your family circumstances have changed.
From 1 January 2023, The Forces Help to Buy Scheme will become an enduring policy, ensuring its availability to all service personnel now and in the future. The scheme has an aim to address the low rate of homeownership amongst armed forces personnel.
However, there are some limitations to the scheme. You can only access the scheme if you’ve completed your pre-requisite length of service, have more than 6 months left to serve at the time that you apply or if you match the correct medical categories.
There may be some scenarios where there are exceptions to the who can and who can’t access the scheme. Usually, this relates to personal circumstances or other medical conditions.
Strictly, you can only borrow up to 50% of your annual salary, with the maximum being £25,000. It’s likely that this is going to be more than enough for a deposit, so you can use the rest on other expenses, e.g. solicitor, surveyor or estate agency fees.
As a Mortgage Broker in Newcastle, we do offer our help in getting a mortgage through the Help to Buy Armed Forces scheme. Alternatively, you can seek advice by approaching your chain of command or personnel agency.
If you are interested in the Armed Forces scheme, feel free to get in touch with our team for advice. If you’ve previously owned a property, it may be worth getting in touch to see whether you qualify or not. Even if you are a First Time Buyer in Newcastle, it may be worth checking anyway!
Congratulations, you have recently passed your exams and now a newly qualified teacher. All you have to do is find that perfect teaching position and get yourself started teaching that specialist subject, But First, your new job requires you to relocate to Newcastle.
By now, you are experiencing that stressful yet overwhelming time of searching for a property to move to and balancing the struggle of homeownership whilst starting your new role. Rest assured, we have confidence that you are not the only individual in this situation, and we may be able to help take that stress away.
It can be challenging to find a lender willing to offer a mortgage to newly qualified teachers, reasons being having no work history or having temporary contracts. But despite all this, you still can obtain a mortgage as a newly qualified teacher.
There are Lenders out there that can lend fairer deals with those working in the education section. However, finding the correct Lender can be a daunting task; this is where our Mortgage Advisors in Newcastle can help search thousands of deals to find you the best deals and rates tailored to your circumstances.
The different types of mortgage available for NQTs can include:
???? Shared ownership.
???? Variable-rate mortgages.
???? Help to Buy in Newcastle.
???? Fixed-rate mortgages.
Here are some of the reason why previous First Time Buyers in Newcastle choose Newcastlemoneyman as their go-to open and honest Mortgage Broker in Newcastle:
???? No previous employment history required.
???? A 12-month first post-contract can get treated the same as a permanent role.
???? Mortgages available up to one month before the start of the first contract (so you can apply in August, for example).
???? You qualify up to 95% loan to value.
Our dedicated team of Mortgage Advisors in Newcastle know the Lending criteria inside and out; they have years of experience helping people with their mortgage situations and trying their best.
To book your free mortgage consultation, get in touch, and our team will take some details from you to find out what your option(s) are and whether your circumstances make you eligible for a mortgage.
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.
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.
Following the credit crunch in 2008, the government proposed a plan to help the mortgage market get back up on its feet. Part of the plan included the introduction of the Help to Buy schemes.
Help to Buy schemes are quite self-explanatory, they are government-led schemes that Help you to Buy a property. There are limitations to each scheme and you’ll have to qualify for them first before you can take advantage of them.
Each scheme is different in its own way. Depending on your personal and financial situation, you may match for more than one scheme, however, you’ll probably only ever find one most beneficial for you.
The Help to Buy Shared Ownership scheme is very different to the rest of the government schemes. The scheme allows applicants to own part of a property and then pay the rest back on rent.
For Shared Ownership, you will usually own between 25% and 75% of the property. In some cases, we’ve seen applicants being allowed to purchase as little as 10%. Whatever the percentage is that you don’t own, it will likely be owned by the housing association. The share that you own can be increased earlier. we usually find applicants wanting to do this once they have more money or have settled in.
Shared Ownership lets you pay your mortgage as well as rent. The way that this works is that you essentially pay 100% of the ground rent and service charge on the property. This is still the same, even if you only own a 25% share of the property.
From 1 January 2023, The Forces Help to Buy Scheme becomes an enduring policy, ensuring its availability to all service personnel now and in the future. Introducing this scheme created an even better way for Armed Forces personnel to get onto the property ladder, as the scheme is specifically targeted at them.
You have to qualify for the scheme first before you can access it. The requirements are as follows:
– You have to have completed the pre-requisite length of service
– You can also apply if you have at least 6 months of serving time left
– However, you can also get accepted if you fit into the right medical categories
– Your personal circumstances will also be considered
The scheme allows you to borrow up to 50% of your annual salary; the maximum that you can borrow being £25,000. If you want to learn more about the Armed Forces Helpt to Buy scheme, you should check on the government’s website. Alternatively, you get in touch with a Mortgage Broker in Newcastle like ourselves.
We’ve considered this more of a ‘bonus’ scheme because it isn’t a Help to Buy scheme it’s a government-led scheme. The scheme can be used for one of two, to buy your first home or to save for later in life. As a Mortgage Broker in Newcastle, we offer help and guidance to those looking to utilise this scheme to buy their first property. The video below explains how the scheme can help a First Time Buyer in Newcastle like you.
The Lifetime ISA (Independent Savings Account) is simply a savings account where your money grows tax-free. The total amount that you put in each year will be topped by the government up by an extra 25%. The maximum that you can put into the account each year is £4,000. This means that you get an extra £1,000 if you manage to save £4,000 each year.
If you want to withdraw your money, as long as you’ve had the ISA for a year, you can do so. However, if you take money from the account and don’t use it to purchase your first home, you’ll be charged a 25% withdrawal fee. Although, if you decide to use it on your first home, you won’t be charged a single penny.
Of course, you have to pass the scheme’s criteria before you can start your Lifetime ISA account. To find out more, feel free to check out the government’s Lifetime ISA page, or contact us at Newcastlemoneyman. We can’t wait to hear from you and help you through your process.
A Gifted deposit can be either a portion of or the full amount of a deposit that is Gifted to you by a family member or friend, with an agreement that it is a loan and you don’t need to repay the money.
Gifted Deposits are useful for when you have enough money to cover your monthly repayments but can’t afford the initial deposit on the property, maybe down to a smaller salary or possibly something else. Having more Gifted Deposit available may present you with options for better rates from a lender.
Generally speaking, it is your parents who can gift you the deposit. This is acceptable both birth and adopted parents. You may see this mentioned online as the “Bank of Mum & Dad”, though there are potential other family members who could also be considered as options for a Gifted Deposit. This depends on individual lenders though, so would require care when trying to find the right mortgage lender.
If the person gifting you a deposit is over the age of 55, they may be able to help you out through taking out a Lifetime Mortgage and an Equity Release in Newcastle.
We often find that clients don’t always know that their parents can help with their mortgage, or if they do, they don’t feel like they can ask them for help. The truth of the matter is that most parents are more than happy to help their children in any way they can in getting on the property ladder.
It’s widely believed that taking out a mortgage is a better option than renting, due to you being able to potentially pay less per month. Your deposit can often come from inheritance, although parents have been known to gift it earlier on in life, especially if they already have enough saved or have released equity from their own home.
The majority of lenders won’t accept a loan as a means of funding your deposit. This is down to the uncertainty that you’d have enough disposable income to pay back both the loan and the mortgage at the same time.
There is no maximum limit on the amount someone can gift you, though there are at least a few lenders that will insist you put in at least 5% deposit from your own funds.
If you are a First-Time Buyer in Newcastle or Moving Home in Newcastle, a Gifted Deposit will be greatly beneficial to you. It can also be useful when in conjunction with a Help-to-Buy in Newcastle. This is because the required 5% deposit, depending on the lender you go with, is acceptable to be paid via Gifted Deposit.
Typically, all lenders will require a Gifted Deposit form. Depending on your lender, you may be asked to provide further proof of these funds, such as the donor’s ID or bank statements.
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.