Any homeowner in Newcastle wouldn’t dream that they’ll miss a mortgage payment, but something like an illness or family emergency can occur, causing a financial struggle, especially for those with low-income and minimal savings.
It can be more challenging for those who don’t have any insurance policies in place that could cover their mortgage payments should any unforeseen circumstances occur.
Here, we felt it was best to answer the following questions: what should you do if you are in this situation and think you will miss a mortgage payment, and how can you improve your credit score afterwards?
If you think or know you’re going to miss an upcoming payment on your mortgage, you must inform your lender immediately. Once you have missed a payment, this will instantly show on your credit record, which will heavily impact your ability to remortgage when your old mortgage is coming to its end.
Depending on your lender’s criteria and circumstances, there may be an alternative that can help you avoid missing a payment. Your lender will offer their support and guidance to borrowers going through a difficult time.
There is nothing wrong with feeling embarrassed. Chances are you are not alone – other people will be in a similar or worse situation. You won’t be the last or the first to contact their lender about being in this position.
If you miss one payment on your mortgage then this isn’t the end of the world, although this may have a negative impact on your credit rating, depending on how quickly this is resolved and how well you communicate with your lender.
Generally, if you fail to pay your mortgage, your lender will inform the credit referencing agencies, and this will have a negative impact on your credit score. However, as mentioned above, lenders will usually have a grace period after the payment due date. This will vary from lender to lender.
Your lender will usually try to work with you and help. In some instances they will set up a payment plan, a short term solution that can get you back on track with your payments.
Falling behind on multiple mortgage payments can lead to defaulting on the loan agreement, meaning that your lender could take repossession action. Repossession and eviction is the last resort for any lender, they will usually negotiate with you and help make a repayment agreement. It is recommended to reach out to a Mortgage Advisor in Newcastle prior to taking any payment plans etc.
Our Mortgage Protection Advisors in Newcastle will give you the option and recommend taking out the relevant insurance to protect you and your family from financial burden during any unforeseen health issues.
Depending on which protection insurance you take out, these will help pay for your mortgage and bills in the event you are off work sick or critically ill.
If you need any additional support or guidance, please get in touch to speak to one of our Specialists Mortgage and Protection Advisors in Newcastle and find out which insurance will benefit you.
Mortgage hurdles are more common than you think. As a Mortgage Broker in Newcastle, we frequently see applicants facing all different kinds of mortgage hurdles. Some of them will be more common than others, therefore we can advise how to solve these quickly, whereas others can be more complicated and require an in-depth look to solve the problem.
Our team loves a challenge. We’re offering you a helping hand to get you over your mortgage hurdles in Newcastle. Your mortgage hurdles may not be the same as someone else’s, however, we do regularly see some of the situations:
From 20+ years of industry experience, we can say that it’s extremely rare to be declined a mortgage due to childcare costs. Although expensive, lenders will usually give you some leeway when it comes to childcare costs and mortgage affordability. You have to remember that they have a duty to make sure that you can afford a mortgage and raise a child; to combat this, they may offer you a lower mortgage amount.
Someone in the same financial situation as you but does not have children may be offered a higher mortgage amount. Don’t see this is as unfair; lenders should still lend to you, it’s likely that they’re just factoring in child benefits and state benefits into account.
Unfortunately, one of the most common mortgage hurdles that we come across in Newcastle, is a mortgage following a divorce or separation. In most cases, finances are the first thing that you need to sort out following a divorce or separation.
There are three questions we’re frequently asked about this mortgage hurdle:
The answer to all of these questions is yes, you can do all of these, however, you may need assistance from a mortgage expert to do so. These subject areas are very specialist and it may take a professional to help you get by them.
We know that these situations are hard and you want it to be over as quickly as possible, however, it’s also important that we get it right and you get over the hurdles with no repercussions and a new mortgage deal that you’re happy with.
It’s not unusual for someone to want to take out a mortgage upon starting a new job. The deposit is not the problem. Usually, the applicant has either built up savings or are moving home in Newcastle and will have the funds from the sale to put towards the deposit. It’s the recurring monthly payments that the lender will be wary about.
If you are due to start a new job soon, you may be able to get a mortgage pre-hand if you have already signed a contract and had a job offer. Typically, lenders are okay with probationary periods, although, they will be cautious.
Gaps in employment can often be a worry. You want to show your lender that you’re reliable and will be able to meet your monthly payments. Regularly being unemployed with no income is a warning sign for them.
Proving your mortgage deposit can sometimes be the hardest yet simplest part of the process. This is mostly down to strict anti-money laundering measures. You will always be asked to evidence where you got your deposit from, it’s an essential part of your mortgage process.
Depositing large amounts of cash into your bank will be questioned by your lender. If you cannot prove how you received this money, your application may be rejected.
If your deposit or a portion of it has been gifted to you, it’s advised that the money is kept inside the gifter’s account. This allows your lender to easily monitor the money see exactly where the money is coming from.
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.
In some cases, a practical way to get on the property ladder as a first time buyer in Newcastle or home mover in Newcastle could be buying a home with a friend or partner. One benefit is that the deposit would be raised quicker and may increase your deposit amount more than if it was from a single income.
As well as this, the costs will be shared, because of there being two incomes. Despite this benefit, it’s key to know that if one defaults, then there is the risk of the other having to be responsible for the full mortgage.
The maximum amount of people that can jointly co-own a property is four. When you jointly co-own a property, you have a legal right to stay in your home unless a court rules otherwise. In the circumstance where one of the parties would like to sell or take out extra borrowing against the property, this is a matter all parties have to consent to unless a court state otherwise.
Civil partnerships or married couples usually prefer joint tenancies. In the unfortunate event that one of the parties passes away, the property will be in possession of the other owner on the mortgage. The law sees joint tenants as one unit, which means you can’t remortgage or sell the property without the agreement of the other owner.
Tenants in common are a more favourable choice for relatives or friends who are buying together. You may jointly own the property, but you do not have to own equal shares. Therefore, you can act individually. This means that you have the right to sell or give away your share of the property. There is a way you can mortgage your share of the property, but it would be difficult to find a lender that will lend in these circumstances.
All borrowers are jointly and severally liable, which is something a mortgage lender will highlight to you. If one of you stops paying your share of the mortgage, then the other(s) will make up the shortfall and pay the full amount.
In the case where a divorce/separation might occur, it’s crucial to understand that all parties are still responsible for any joint financial commitments. It applies even if a person leaves the family home, and this is also the case when the two parties come to an agreement where one person will make all the payments.
It’s best to speak to a specialist mortgage advisor in Newcastle to understand what your options might be. To look into this further, check out our article, “divorce & separation mortgage advice.”
If the consideration of buying a new property in the future should occur, the mortgage payment on the old property would be taken into consideration. In this circumstance, a person must seek out Mortgage Advice in Newcastle. It does depend on how generous the lender is as to how much they will lend, however, our mortgage broker in Newcastle will take this into account when recommending the most appropriate lender to apply for a mortgage agreement in principle.
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.
Whether you’re approaching the end of your fixed-mortgage term or you just want a better rate, there is usually always a valid reason for wanting to remortgage.
The difference between a remortgage is that when you remortgage, you are taking out a new mortgage with a different lender, whereas, with a product transfer, you are swapping mortgage deals but remaining with the same lender.
They both fit under the umbrella of ‘remortgage’, however, as mentioned above, they are slightly different to one another. In this article, we are going to cover the pros and cons of both.
If you have done your research and have looked at deals through your own lender as well as through others and you are still happy to stick with your current lender, that’s perfectly fine! However, make sure that you haven’t just stuck with them for ease and to save remortgaging costs. At the end of the day, getting a better rate through another lender could save you more money in the long run.
If you want a simple product transfer, you can get in touch with your lender or a Mortgage Broker in Newcastle like us if you are unsure of how the process works.
Unfortunately, sticking with the same lender may not be the most beneficial option for you to take.
Usually, you are rewarded with loyalty, however, this is not the case with all lenders. More often than not, you are able to get much better rates through other lenders than your current one.
Typically, product transfers can be self-executed online when you log into your online banking.
Although it’s something that we don’t recommend you do unless you are 100% sure of what you signing up for, it is possible to swap deals online if you want a quick switch.
You can use price comparison sites to check what you can access. You may find a great deal that matches you perfectly, or alternatively, you could end up on a wrong deal that you’ll have to pay to get out of.
If you decide to switch online and make a mistake, you don’t have the protection you would’ve had if you had used, for example, a Mortgage Broker in Newcastle like us. We will only recommend deals that will match your personal and financial situation and help you save money.
We’ve seen it before where applicants have mistakenly picked the wrong deal and it’s resulted in high repayment fees. This is why we always advise that you get Mortgage Advice in Newcastle before switching products on a self-executed basis.
When it comes to remortgaging and taking out another lenders product, you may find that doing so will allow you to access much better rates. When your fixed-mortgage term is coming to an end, it’s likely that you’ll fall straight onto your lender’s standard variable rate of interest (SVR). Doing so will likely increase your monthly mortgage payments, this is why recommend getting in touch with us three months prior to your fixed-term ending.
If you had adverse credit at the time of when you initially took out your current mortgage, it may be that your only option was to select a more specialist product at that time. However, after building up your credit score over your mortgage term, you may now be eligible for more competitive products and rates.
It’s always worth checking whether you can access a better rate through a remortgage or not. Even if you shop around and don’t find anything, there is no harm in double-checking.
To save shopping around, you could always take up our offer of a free mortgage review. In your free mortgage review, you will get to speak to a Remortgage Advisor in Newcastle who will check to see if you can access a better rate. If not, they will be completely transparent with you and recommend that you stick with your current deal. We want the best for you.
Whether it’s a remortgage, product transfer, or staying put that is right for you, we will always be open, honest and transparent, recommending what is best.
If you want to receive a free mortgage review/consultation, make sure to get in touch for Remortgage Advice in Newcastle. A second opinion costs nothing and making a mistake when taking a new product can be costly.
Part of the mortgage process includes providing evidential documents to prove that you can afford a mortgage and you are who you say that you are. There are lots of different documents that you’ll be asked to provide, this includes photographic ID, payslips, latest P60, proof of address and your bank statements.
Lenders need to be certain that you can afford a mortgage. Yes, you may have been given an Agreement in Principle (AIP) to say that they are willing to lend to you, however, you are only agreed in principle of you providing evidential documents to back up everything that you’ve said about yourself.
Bank statements show a lot about an applicant, they will show your latest spending at the pub to gambling transactions on your go-to betting app. Everything you spend will be on them, even bank transfers to and from different accounts.
Seeing how someone spends their money will show the lender whether the applicant is a trustworthy applicant or not. For example, if the lender can clearly see that an applicant spending too much money and is exceeding their overdraft limit every month, they will question whether you will be able to afford a mortgage or not.
It’s all down to risk. If the lender thinks that you are going to struggle with your mortgage payments due to how you spend your money, they are unlikely to accept your application.
The question is, what exactly are they looking for? What do I not want to pop up on my bank statements during my mortgage application?
Gambling transactions is actually one of the first things that your lender will look for on your bank statements. Believe it or not, depending on how frequently and how much money you gamble, gambling can affect your chances of getting a mortgage.
Occasional gambling will be harmless, however, if you are frequently gambling large amounts of money, no matter if you are returning a profit or not, lenders will not be impressed.
Remember, lenders need to trust you and know that you’ll be able to meet your mortgage payments each month. If you are gambling, you may be seen as unreliable.
Lenders need to know that you can afford a mortgage, so dipping into your overdraft and exceeding its limit every month is something that they won’t take lightly. We aren’t saying to never step into your overdraft, as a Mortgage Broker in Newcastle, we see it happen all of the time. We are suggesting that if you do it every month, it may be a little trickier to get accepted.
Another thing that lenders will look for on your bank statements is bounced direct debits. A bounced direct debit is a payment that fails to go out of your account, this usually occurs with monthly bills/subscriptions. This may sometimes be a complete accident, so one or two may not hurt depending on what you are paying for, for example, a missed mortgage payment will more detrimental effect than a missed phone contract payment. However, repeated bounced direct debits will reflect badly on your credit file, so be wary of agreeing to credit commitments when you can’t really afford them.
Furthermore, lenders will be checking for personal loans and credit card commitments. They need to make sure that you’ve declared these expenditures and that you’ll still be able to meet your mortgage payments as well as these outgoings.
After having worked with thousands of First Time Buyers in Newcastle and Home Movers in Newcastle, we have learnt that most lenders will want to see at least three months worth of bank statements from their applicants.
In light of this, you now know that you can’t change what your past bank statements show, however, you can change what appears on them in the future. Before you officially submit your final mortgage application, you should get prepared and make sure that your finances reflect you in the right way.
As a Mortgage Broker in Newcastle, here are some recommendations that we have to show that you are a reliable applicant:
For help with making your application stand out, you should get in touch with a broker like us for Specialist Mortgage Advice in Newcastle. We have been helping people achieve their mortgage needs for the last twenty years, it’s safe to say we know exactly how to help. You could be next!
We also offer a free mortgage consultation, so if you have any mortgage questions, it’s likely that we’ve helped many applicants in your situation before, so feel free to get in touch.
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.
Following the Help to Buy scheme, many builders started selling houses on a leasehold basis when in the past, homes had always been freehold. Over time this became a debatable topic at which the Government felt the need to intervene.
In the eyes of many, some of the country’s housebuilders were putting profits before their social conscience. Whilst aware that they need to build homes for families, they still have shareholders to please with their work.
The media made it no secret when they publicly stated that there was a situation with land banking. A real estate investment scheme, Land Banking is where someone buys large blocks of undeveloped land with the idea of later selling the land at a profit when development has been approved.
In some cases, builders have inherited land into their organisations thanks to consolidation. This is on a leasehold basis. It’s a debatable topic that they offer both leasehold and freehold properties for sale so that buyers can make their own choice based on their options.
Many First-Time Buyers in Newcastle, Home Movers in Newcastle and more had felt that the market had gone too far in the direction of leasehold when it came to light how much money the Builders had been earning off the back of the leases.
Things became even more strained when the Chief Executive of one of the UK’s most prominent Builders received a massive £100m+ bonus. At the time, this was one of the largest bonuses paid in corporate history.
Understandably so, some Leasehold Homeowners were shocked when they were being quoted thousands of pounds in fees when they requested permission to make internal and external changes to their properties.
The fees were being charged by their Leasehold Management Companies.
Some of the annual ground rents were set to double every ten years. Owners could realistically see that once these increases had kicked in, selling their home in the future would be more difficult.
After speaking with their MP’s and getting the subject debated in Parliament, the Government agreed that if you were purchasing a house (flats or apartments don’t count), then it is reasonable that you should own the freehold.
If you own a leasehold house, you should absolutely know you have one. Some however, are completely unaware that this is the case. If you feel that the Solicitor you went with did not give you the full facts about the lease you signed, you should re-contact them immediately and start looking into why this was the case.
The freeholder can be contacted at any time if you are looking to buy it from them.
In addition to leaseholds, there is the problem of service charges.
When Councils gives permission for Housebuilders to build on their land, they don’t always agree to adopt the common areas such as grass verges or roads. That means that the upkeep of these areas will need to be outsourced and this usually falls with private companies.
The owners in the area then make a financial contribution to this maintenance work on top of their council tax, this can happen regardless of whether the house is leasehold or freehold.
Service charge costs can increase. Sometimes the residents in the area collectively group up to form a local association which might allow them to choose a different service provider.
If you are interested in buying a leasehold property, please seek advice from your Solicitor regarding the lease.
It’s straightforward to get carried away with the excitement of purchasing a home, but you also need to realise it’s a significant investment decision that you need to think about long and hard.