Owning a property, whether it’s your family home or a buy to let investment, is a significant asset. It’s not just a place to live, but holds the potential for financial gain if you ever look to sell, as well as being something you can pass down to future generations.
The property market is dynamic and ever-changing, and property prices can skyrocket during certain periods. When this happens, it may be beneficial for you to explore your options for a remortgage in Leicester.
Doing so could give you access to a more favourable loan-to-value ratio and better interest rates, potentially allowing you to maximise your investment.
Loan to value (LTV) is the ratio of mortgage to the property’s market value, expressed as a percentage. For instance, if you buy a property for £100,000 with a deposit of 10% (£10,000), you’ll need a mortgage with a 90% loan to value.
Mortgage loan to values are divided into tiers or brackets. Typically, the lowest bracket will be 60% and increase to the highest ratio of 95%. The brackets or tiers offered will vary depending on the mortgage lender.
If you have a lower loan to value, you’ll have access to mortgage deals with more competitive interest rates.
In the example above, let’s say your property value has increased to £110,000 and your initial mortgage balance of £90,000 has come down to £80,000 after some years. This means that your new loan to value is 73%.
If you were to remortgage in Leicester, you would now be eligible for a 75% loan to value mortgage, which should have a more competitive rate of interest. Other factors such as market conditions will also determine this interest rate at the time of remortgaging.
The reason why lower loan to value mortgages have more competitive interest rates is that you pose less risk to the mortgage lender.
In order to access better rates or terms when you remortgage in Leicester, you will need to determine the current value of your property. This can be done by obtaining a valuation, which involves either an Automated Valuation Model (AVM) or a physical valuation.
An AVM involves using a database to cross-reference similar properties in the same area to determine the value, without someone physically coming to your location.
On the other hand, a physical valuation involves an inspector coming to your home to inspect both the interior and exterior, taking into account any home improvements or extensions you may have had.
If you prefer a physical valuation, you can discuss this with your mortgage advisor in Leicester during your free appointment. It’s important to note that when you remortgage, you’ll be switching to a new mortgage lender, unlike a product transfer where you stay with the same mortgage lender.
The new mortgage lender will want to know the value of the property they will be lending against as part of their risk assessment.
While leveraging the equity in your home can sometimes lead to better deals, another reason to remortgage in Leicester is to release equity for other desired purposes.
This is often done for home improvements or other reasons, but it requires careful planning. When you remortgage, you’ll be taking out a new mortgage to replace the old one, but with a higher loan-to-value ratio.
As a result, your monthly mortgage payments may increase. That being said, the goal is to invest in your home and increase its value so that when you remortgage in Leicester again, you’ll be on a lower loan-to-value ratio.
It’s essential to have a well thought out plan and gauge the markets, especially when dealing with such a significant financial investment like your home. A mortgage advisor in Leicester can provide guidance on the best approach for your situation.
There may be occasions where you consider remortgaging earlier than expected. Although remortgaging in Leicester before your fixed-term ends is technically considered “early”, you might have the option to do so even a year before.
Breaking your contract terms could result in paying an early repayment charge (ERC), which is a downside to this option.
While it’s impossible to predict housing market conditions, people usually choose to exit their mortgage early for compelling reasons. If you plan to remortgage early, it’s advisable to engage a mortgage broker in Leicester to help you assess your options.
For instance, during the COVID-19 pandemic, the Bank of England base rate dropped to historic lows, allowing those due to remortgage in Leicester at the end of their fixed rate period to enjoy low interest rates.
On the other hand, if you were a year away from your fixed-rate ending, you wouldn’t be able to benefit unless you remortgaged early and extended your period.
This scenario is rare and unique, given that mortgage lenders withdrew most of their products, limiting people’s options.
Yet, it exemplifies how remortgaging early could financially benefit you. If your property’s value has appreciated, it’s an opportune time to consider remortgaging early to take advantage of lower loan-to-value rates.
But keep in mind that you might still incur an ERC and other costs, such as arrangement, valuation, and solicitor fees, on your new mortgage.
So, it’s crucial to weigh the potential savings against the overall costs before committing. Speaking with a mortgage broker in Leicester is recommended to fully understand your options.
If you’re a homeowner in Leicester, there are many reasons why you might consider remortgaging your property. Perhaps you want to release equity to finance a large expense, like home improvements or debt consolidation.
Alternatively, you might be looking for a better deal on your mortgage repayments or want to switch to a different type of mortgage product.
Whatever your reasons, it’s important to explore all of your options when it comes to remortgaging. While many people focus on getting a lower interest rate or releasing equity, there’s another option that you might not have considered: remortgaging to extend your term.
By extending your mortgage term, you could potentially lower your monthly repayments, making them more affordable and giving you greater financial flexibility.
This could be especially beneficial if you’re experiencing financial difficulties, or if you want to free up some extra cash to invest in other areas of your life.
At Leicestermoneyman, we understand that every homeowner’s situation is unique, which is why we offer a range of remortgaging options to suit your individual needs.
Whether you’re looking to release equity, lower your monthly payments, or extend your term, our experienced advisors can help you find the best solution for your circumstances.
So if you’re considering remortgaging in Leicester, be sure to explore all of your options – including the possibility of extending your term – and get in touch with us today to find out how we can help you achieve your financial goals.
The length of time you agree to pay back your mortgage, known as the term, can significantly impact your monthly mortgage payments. Many homeowners opt for a term of 25-30 years, which can be daunting to pay back such a large amount over a long duration.
If you are part way through your mortgage term, you may find it challenging to keep up with your payments, especially if other bills have increased. In such a scenario, you may consider remortgaging to extend your term.
By extending your term, you can spread your mortgage payments over a more extended period, which can lead to lower monthly payments, thereby freeing up more disposable income. There is a downside to this option as you will end up paying more back overall, including additional interest.
It is crucial to weigh the pros and cons of extending your term before making a decision. While it can make your monthly payments more affordable, it may not be the best option for everyone. You may end up paying more in the long run, possibly even into your retirement.
If you are considering a remortgage in Leicester, there are several options available, including remortgaging to release equity or for home improvements. Extending your term is another possibility, but it is essential to seek professional advice before making a final decision.
Extending your term can be a viable option if you’re looking to remortgage in Leicester and need to borrow additional funds, release equity, make home improvements, or consolidate debts. It’s important, however, to weigh the pros and cons before making a decision.
Extending your term can lower your monthly mortgage payments and increase your disposable income, making it easier to manage your finances. This can be especially helpful if you’re going through a difficult financial period, facing unexpected expenses, or experiencing a change in circumstances.
On the other hand, extending your term will mean that you’re paying interest over a longer period, which can result in you paying more overall. This is something to keep in mind, especially if you’re approaching retirement age or have other long-term financial goals.
It’s important to note that extending your term may not always be possible, as some lenders may have specific criteria or restrictions. It’s also important to consider other factors, such as fees and charges, when exploring your options for remortgaging in Leicester.
Ultimately, it’s important to seek professional mortgage advice and do your research before making any decisions about remortgaging in Leicester.
Whether you’re looking to extend your term, release equity, consolidate debts, or make home improvements, there are a variety of paths you can take to achieve your financial goals.
You should think carefully before securing other debts against your home. By adding your unsecured debts to your mortgage, which is secured on your home, you are potentially putting your home at risk if you cannot make the required repayments.
Although the total monthly cost of servicing your debt may have reduced, the total cost of repayment may still have risen as the term of your mortgage is longer than it may have taken to repay the debts originally.
Remortgaging can be a great option for homeowners who are looking to ease their financial burden. However, it’s important to note that each lender has their own set of criteria that must be met before extending the term of a mortgage.
Factors such as age, type of mortgage, and any outstanding mortgage payment debts can all play a role in determining whether or not you are eligible for a remortgage in Leicester to extend your term.
Some lenders may have strict age restrictions, requiring borrowers to pay off their mortgage before they reach a certain age.
Fortunately, if remortgaging to extend your term is not an option for you, there are other paths to consider. A dedicated mortgage advisor in Leicester can help you explore alternative solutions that will help lower your monthly payments and improve your financial situation.
At our company, we believe that everyone deserves to enjoy the benefits of owning a home without the stress of high mortgage payments. That’s why we take the time to carefully review each client’s unique situation and recommend the most suitable options for them.
Our goal is to help our clients achieve their financial goals and find the best possible solution to meet their needs.
Extending the term of an interest only mortgage can be a challenge, as not many lenders allow it. While some may allow it, you will still need to pay the lump sum of interest at the end of the term, and some lenders may not want you to delay it any further.
Residential properties are typically on a repayment mortgage, and interest-only mortgages are now less common. Instead, they are more commonly attached to buy to let properties.
However, extending the term of an interest only mortgage on a buy to let property can also be difficult, as some lenders may not allow it while the property is occupied by a tenant. This makes it challenging to address the issue of paying back the lump sum.
In such cases, it may be a better option to remortgage your property and replace your interest-only mortgage with a repayment mortgage. This would allow you to pay back a combination of both capital and interest, making it easier to manage your mortgage repayments.
It is important to note that these are complex circumstances, and it is highly recommended that you speak to an expert member of our remortgage advice team before making any decisions. They can help you better understand your options and find the best solution for your individual circumstances.
A viable option to consider during the remortgage process is to reduce the term of your mortgage. This option can be applied to almost all mortgage situations and is opposite to extending the term.
Reducing the term would allow you to pay back less overall, but this would also result in higher monthly mortgage payments. It’s important to note that this option may not be feasible for everyone, as larger monthly payments may not be affordable.
To make an informed decision, it’s recommended to seek remortgage advice in Leicester from a remortgage expert who can guide you through the process and provide insights on the best option for your financial situation.
If you’re looking to reduce your monthly outgoings, downsizing may be a viable option to consider, rather than extending your term through remortgaging.
This involves selling your current home and moving into a smaller property, which typically costs less, resulting in a smaller mortgage and lower monthly payments.
Another option to consider if you’re over 55 and own a property worth at least £70,000 is equity release. This enables you to release tax-free funds from your home through a lifetime mortgage, either in a lump sum or through occasional payments.
However, equity release may not always be the best option, and alternatives such as “RIOs” and “TIOs” – retirement interest-only mortgages and term interest-only mortgages – may be more suitable for over 50’s.
With a RIO or TIO, the loan is only repaid when you pass away or move into long-term care, and your home is sold. To navigate the complex landscape of later life mortgage options, it’s best to seek advice from a qualified, honest later life mortgage advisor.
They can help you understand the pros and cons of each option and advise on the most suitable path for your future plans and financial goals.
To understand the features and risks of equity release and lifetime mortgages, ask for a personalised illustration.
A lifetime mortgage may impact the value of your estate and it could affect your entitlement to current and future means tested benefits. The loan plus accrued interest will repayable upon death or moving into long term care.
It’s essential to plan your mortgage journey, it’s that first step to take before starting the process. Doing so could give you the upper hand and put you in front of other buyers. Preparing a mortgage agreement in principle should be at the top of your list before you start viewing properties.
It’s always to consider every possibility. In this unfortunate situation, you may have planned a mortgage to the last detail but ended up separating. This will require you to take out a mortgage as the sole applicant with no time to plan.
As an expert Mortgage Broker in Leicester, when you are looking at Moving House in Leicester. We do recommend that you start planning your mortgage six months prior.
In some circumstances, the mortgage process can throw many hurdles which is why planning is essential. By preparing for any hurdles you may encounter, you should be able to work out what to do to overcome them.
Having worked in the mortgage industry for over 20 years, we have witnessed a large variety of mortgage problems. Even in the final stages of the mortgage journey, some occurrences can negatively impact the process, however, they can sometimes be solved if you prepare enough, or have a Mortgage Advisor in Leicester by your side.
Below are some common problems we have found customers encounter during their mortgage process:
By preparing six months before starting your mortgage journey, you may be able to avoid some of these problems.
For some First Time Buyers in Leicester, saving up for a deposit can be the most difficult part, especially for those who aim to achieve their mortgage goals while currently renting. Will understand that saving for a deposit is a timely goal.
In the circumstance where you are struggling to reach the initial deposit total, you may be able to get financial support from your family through a gifted deposit. This amount gifted can be either the entire amount or a contribution.
Maybe one of the Help to Buy schemes can help give you a small deposit boost. There are many schemes available that are designed for applicants needing support with deposits. These are usually popular with many First Time Buyers in Leicester as a way to get them on the property ladder. There could be a scheme out there that suits your circumstances.
Credit scores are a huge benefactor when it comes to applying for a mortgage. If you have a poor credit score, this can lower your chances of a lender accepting you for a mortgage.
We recommend you use Check My File to see your insights into your credit score. By doing this, you will be able to obtain a copy of your credit report which our team will be able to look at free of charge.
On your mortgage application, you must look after your finances. Every lender will carry out a thorough analysis of your bank statement and will look at all your income and outgoings. Gambling transactions are something that will catch Lender’s eye especially if they are frequent and erratic outgoings.
In the fortunate case where you can receive a gifted deposit, make sure to keep that sum of money in the gifter’s account. That way, you will not have a large bank transfer in your account that lenders would question about.
Therefore, it’s wise to keep this gifted deposit inside of your family member’s or friend’s account.
We tend to find some self employed applicants in Leicester, you may find the mortgage journey a little bit different compared to a regular full time employment applicant.
The evidence you will need to provide as self employed will include at least one year of accounts and three months of bank statements to show your income and affordability. In some cases, you may need to provide additional evidence, however, this just depends on the lender.
Through the mortgage journey, you may come across a range of mortgage hurdles that could stall your purchase completely. One of these includes a break in the property chain. A Mortgage Broker in Leicester like us will be able to help you overcome these hurdles. We are here to support you 7 days a week.
If you have a specialist or complex case, look at getting Mortgage Advice in Leicester. Our team can provide you with a helping hand through your mortgage journey.
A gifted deposit is either a portion of or the entire amount of deposit you need to put down on a property and obtain a mortgage, given to you purely as a gift (agreed in official documentation) and with an understanding that you will not repay it.
Gifted deposits in Leicester are very useful if you are financially capable of covering the monthly mortgage repayments, but are struggling to save up for the initial deposit as a first time buyer in Leicester.
This can occur perhaps due to a lower income or frequent larger outgoings, such as rental payments and home energy bills. We hear of this a lot when we speak to first time buyers in Leicester.
In receiving a gifted deposit, you may also allow yourself to gain access to much better rates of interest during your mortgage process, especially if that gift is above the minimum 5% deposit requirement.
Generally it will mainly be parents (birth and adopted) and carers who are able to gift you the deposit. This is often discussed online using the terminology “Bank of Mum & Dad”.
Other extended family members may also be able to help out with a gifted deposit. This entirely depends on the mortgage lender that you end up with though, so it is worth speaking to a mortgage advisor in Leicester ahead of time, if that is the case.
We’re often quite surprised at the amount of customers who have no idea their parents are able to help with their mortgage! We also encounter a good portion who feel like they maybe can’t ask their parents for help.
The truth is, the majority of parents out there are more than happy to help their children to find a home of their own, comfortably living as opposed to struggling whilst living in a rental property.
Typically speaking, taking out a mortgage may save you more money per month than you would get from renting, as depending on the conditions of your mortgage, you could be paying much less per month.
The deposit that is gifted often comes from inheritance, although parents can sometimes gift it much earlier if they have enough money saved or have released equity from their own home.
The majority of mortgage lenders won’t agree to accept a loan as a means of paying off your deposit. It will be often relate to the lender not being so sure if you have the ability to afford paying both back at the same time.
Whilst there aren’t limits to the amount that can be gifted to a home buyer, it’s worth remembering that some lenders will want you to have at least 5% from your own savings.
In general, the more you can afford to put down, perhaps combining savings and gift, the better the deals you are going to have access to.
It will usually be first time buyers and people moving house in Leicester who will benefit the most from gifted deposit.
You may also be able to use a gifted deposit to cover the initial 5% deposit for the Help to Buy Equity Loan Scheme, though this will again depend on the mortgage lender.
Your donor will be required to sign a gifted deposit form stating that it is not a loan and is in fact a gift. Additional proof such as ID, address and bank statements may be required.
As an open & honest mortgage broker in Leicester and surrounding areas, we always aim to provide our customers with the highest level of customer service, through a fast and friendly mortgage advice service.
We always rise above for our loyal customers, no matter the mortgage situation they are currently going through. When someone gets in touch with us for mortgage advice in Leicester, we will consider all cases, no matter how complex.
A trusted and experienced mortgage broker in Leicester is available seven days a week, from early on until late. Our advisors will be ready and waiting to offer their support at all times.
Book your free mortgage appointment today with an expert mortgage advisor in Leicester and we’ll see how we are able to help you on your mortgage journey.
Property price inflation has majorly overruled the increases in standard wages over the years. These days, a home buyer may look at the option to purchase a property with a friend or partner in order to be able to afford a property.
It all comes down to looking at affordability. Having two parties within the process, lenders will be calculating two incomes instead of one, which could lead to an increase in the maximum mortgage amount. Obviously, the mortgage will be more affordable between two people because the costs will be split between two people.
You may that many mortgage lenders will let up to four people co-own a property together. With many parties being involved, it can result in some debate with changes in circumstances. Let’s as one borrower decided to stop their contributions to the group mortgage payments, the lender will still go to the rest of the group for payment.
Therefore, it’s important that you are careful with who you buy with. All joint owners still hold a legal right to stay within their home unless a court rules otherwise. Because of this, the person failing to put forward their contribution doesn’t have to leave as they are still a part-owner of the property.
In the case where one of the parties is looking to increase the mortgage at any point in the future, then you need permission from all borrowers to do this. Planning ahead for the future is good practice just in case circumstances change.
Many couples who are married, in civil partnerships or simply cohabiting to go for joint tenancy for a mortgage. If you are looking to buy with a relative or friend, you may look at a Tenancy in Common. In the case that you are wanting to sell or remortgage the property in the future, you will need the consent of the other applicant.
When it comes to a tenancy in common, you will still jointly own the property, however, there is no legal requirement to do so in equal shares. Having this option is helpful if one party is earning a lot more per month than the other. As well as this you can act individually if you are a tenant in common. You can freely sell or give way your share of the property to another person, if you wish to remove yourself from the agreement.
If one of you were to, unfortunately, pass away, the property will be in possession of the other owner on the mortgage. We do recommend taking out life insurance to protect yourself from this in the future. The mortgage would be repaid at that point.
It’s important to know that all mortgage borrowers are jointly and severally responsible for mortgage payments. With this in mind, if one of the parties stops paying, then the other parties involved have to help with the shortfall to avoid the mortgage falling into arrears. This can stop you from getting another mortgage in the future. See it as you not owning 50% of a property but 100% of it jointly.
No one who buys a home with a partner does so with the intention of things not working out. If you are looking to remove a mortgage, it can be very challenging. This is because a mortgage is a big financial commitment so making changes to it later is not always straightforward. Before you can proceed with this, lenders will need to be certain that you can manage the mortgage payments on your own.
Regardless of if you can show that you have managed to maintain mortgage payments since your ex moved out does not always mean that a lender will agree to your request to put the mortgage into your sole name. Lender do prefer two people to pursue in case of arrears occurring.
When it comes to removing someone, they will carry out a brand-new affordability assessment, in the exact way as they would at the point of purchase if the lender declines the request. It’s best that you get in touch with a Mortgage Advisor in Leicester to look at if other lenders would agree to your request to transfer the mortgage into your name.
In the circumstance where you and your partner split up and you leave the family home, you are still responsible for mortgage payments with them. Regardless if you agree with your ex that they will make all the payments it’s still your responsibility. If you are sending your partner money each month, you should keep an eye on your credit report to ensure they are paying the mortgage.
Choosing to default, will impact your score. If you get connected to an old mortgage, then the payments for that will be considered if you subsequently want to buy a new home of your own. That will mean Lenders might not lend you as much as you would like. Buying a home with anyone is a risk, so you need to go into it with your eyes open.
It’s always better to agree on what would happen to the house should things not work while you are all still getting along well! It can be helpful to speak to an expert specialist mortgage advisor in Leicester to look at what your option might be. If you are looking for more information, check out our article ‘divorce & separation mortgage advice.’
When you are going through the mortgage journey, there is a small chance that you will encounter some kind of issue. Sometimes, these can be challenging to deal with!
Having worked in the mortgage industry for over 20 years, we have a vast amount of experience as a trusted Mortgage Broker in Leicester, and have encountered a vast range of mortgage hurdles throughout the years.
This means that it’s very likely we have encountered your situation before and will have an idea of how to overcome it.
On the rare occasions that we haven’t encountered your circumstance before, we will work hard in finding the best solution to help you along the mortgage journey. The hurdles you may face can be ones you are unaware of especially if you are First Time Buyer in Leicester, however, we hope to help you with this.
With a plethora of mortgage hurdles out there, it would be a challenge to cover them all. Below highlights the top five hurdles you may encounter in the midst of your mortgage process.
Having your mortgage application turned away due to you having children is a rare occurrence, however, it can put you at a bit of a disadvantage if do.
The lender wants to be fully certain that you can manage all your mortgage payments as well as current expenditures. Childcare costs do come under the expenditure umbrella each month.
The reason why lenders have to factor this in is because these costs can often go into hundreds of pounds per month. Generally, childcare costs never decrease, they are always going up! From a lender’s point of view, childcare costs are the same as a car loan or hire purchase agent cost.
Regardless of if you don’t pay nursery fees, having children can mean you are offered less than other buyers who don’t have children. One advantage is that this type of family can usually be in receipt of tax credits and some lenders will acknowledge this along with child benefits.
In the unfortunate circumstance that you decide to separate from your partner, you may encounter some problems relating to finances, especially if you have one together.
If you are still financially linked with someone else, lenders may struggle to accept your application. This is because they don’t want you to have two different sets of mortgage payments to meet each month as it might be a lot to handle.
Our team often get asked the same questions when people reach out to us for Specialist Mortgage Advice in Leicester, below are just a few:
If you are faced with mortgage hurdles like these, it can get very challenging, very quickly. The good news is that there is often a solution to these scenarios, it’s just working out the steps to overcome them. Having a Mortgage Broker in Leicester to provide a helping hand, you will have a lot of weight lifted in these difficult times.
When it comes to benefit income, different lenders will have varying viewpoints, one is how they are going to assess it. The good thing is that all benefit income like child tax credit, working tax credits, disability benefits and pensions can all be factored in one way or another. The lender decides whether to consider it or not.
Feel free to contact our team if you are looking for more information about mortgages and benefit income. Here at Leicestermoneyman, we will look over your situation for you and try to match you with a lender that will consider your benefit income, our goal is to get it right first time!
In many cases, a new job includes a larger salary. This additional income is usually put towards something like a new mortgage. You may think this means you have a higher chance of getting a mortgage, but this is not always the case.
It’s common to have a probationary period when you start a new job. Probationary periods are usually okay, but there will no doubt be some uncertainty there. You might a lender will only accept you when you have job security, it depends on the lender and mortgage costs.
To determine your work patterns, lenders will look at your previous places of employment. They need to know you aren’t jumping in and out of work. Gaps in employment can hurt your application.
You might find some lenders who will work from a newly signed employment contract even in month one or if your new job is about to begin.
All mortgage lenders and mortgage brokers legally need evidence of where the borrowers’ deposit funds come from. This is to prove that the applicant has raised funds legally and to combat money-laundering. Your solicitor and estate agent may request evidence of your deposit also.
This is the part of the process we feel is the most complicated when applying for a mortgage and can result in some mistakes if not carried out correctly.
Your deposit might be from savings, premium bonds, the sale of another property, gifted from a family member or friend, from family overseas, or from a personal loan, either way, you need to have the paper audit trail for the accumulation of funds.
It is a common practice nowadays to seek Specialist Mortgage Advice in Leicester when clients have bad credit or not paying off their bills on time.
Something as small as a missed or late payment from your bills may result in a default attached to your credit report. Which may harm your capability to obtain a mortgage because it implies that you cannot keep up with repayments on time.
But that doesn’t mean it’s impossible, having any missed payments or defaults in your credit file may require some additional help from a Mortgage Broker in Leicester like ourselves. This is because most High Street Banks will reject your application for a mortgage, especially if you only have a small deposit.
Your lender will need to know the date the default was registered against you and how long ago it was. The more details are given, the more likely it is that the lender will be able to help you. Especially if it was down to a life-related event such as ill-health, redundancy or separation.
We tend to find that clients often make mistakes in the past, and these financial mistakes can come back to haunt them. We may also be able to help you if you have had historic mortgage arrears or a CCJ (County Court Judgement).
Below are some helpful responses to frequently asked questions about Bad Credit mortgages in Leicester and nearby areas. If you can’t find what you need in our bad credit FAQs, one of our Mortgage Advisors in Leicester will be more than happy to get back to you.
Your advisor will need to see an up-to-date copy of your credit report and show any previous credit problems you had in the past. You can find a copy of your recent credit report online for free.
Before applying for any mortgage, doing multiple credit searches can damage your credit rating. However, it’s still vital that you obtain an up-to-date copy of your credit report.
This all comes down to your circumstances and affordability. Some customers find themselves a little perplexed by their credit reports. It might look bad, they may have had issues, but they have a stable income and enough deposit to reduce a rate and obtain a decent mortgage deal. It makes you wonder if you are in that same position but the lender still won’t let you borrow the amount you’ll like or need. That’s because it all comes down to risk.
After all, your lender needs to be convinced that you afford all your repayments on time without a likelihood of any arrears occurring. In the event of these arrears, the lender may need to repossess the home, which is something that everybody wants to avoid.
There may be a chance for those who are looking to get a mortgage while having bad credit, you just may have to pay higher rates. For more information, it’s best to speak to a Specialist Mortgage Advisor in Leicester, with their help they can hopefully find you a potential mortgage.
One day you may find yourself in financial trouble and no longer able to keep up with the mortgage payments. These circumstances are unfortunate, and whilst it could be a short blip that you can pay back not too long after, the damage is done, and it will be on your credit report as a missed payment.
You may be faced with other credit issues too, and when it comes to getting a Remortgage or a new mortgage after Moving Home in Leicester, you may find yourself struggling to obtain a new mortgage. As previously stated, this always comes down to risk. Can the lender trust you? Will you be in the same position again?
The good news is, with the help of Specialist Mortgage Advice in Leicester, we have had helped previous customers who have had a mortgage and have since ended up with Bad Credit. If you are in a similar situation, speak to a Mortgage Broker in Leicester like ourselves, we may be able to help you achieve your mortgage goals.
Customers may find themselves in a position to have adverse issues regarding their credit, all of which can impact your affordability for a mortgage. These issues vary from, but are not limited to;
Whilst this is an awful situation to be in, it’s not the end of the world. Your mortgage process may be longer, more challenging, and you may end up on a higher rate, but there are lenders out there, who might have a mortgage deal on their panel, who will accept your mortgage application.
To boost your chances of success and open yourself up to better rates, you need to focus on improving your credit score. We have a handy guide on different ways to improve your credit score, which will hopefully put you in a much better place for obtaining a mortgage in the future.
If you require any Mortgage Advice in Leicester regarding a Bad or Adverse Credit situation. Don’t hesitate to get in touch with a member of our team. Utilising their knowledge working in the industry, working extra hard to try and put you in the best possible position to eventually obtain you a mortgage.
The mortgage journey can have both positives and negatives along the way, but by the end of it, you will end up with one of the following outcomes; you’ll have a dream home to possibly raise a family in, a stepping stone property to help you climb the property ladder, or you could have an investment property that you are able to rent out.
Regardless of the initial path that you took, eventually you will find that your mortgages’ fixed period is coming to an end. At this point you could possibly look to upsize or downsize into a newer home. Some landlords perhaps look to sell their portfolio or sell a home to the tenant.
We find, however, that a more popular option is for homeowners to remortgage their home instead.
First of all, let’s look at what defines a remortgage in Leicester. In short, a remortgage is where you use funds raised from a new mortgage, to pay off a mortgage you already have. There are a lot of different ways this can be done, each with their own benefits.
Making use of the over 20 years of knowledge that the “Moneyman” Malcolm Davidson (host of our YouTube channel MoneymanTV) has, we have put together a useful guide to all of the options that may be available to you when the time comes to remortgage.
Your initial fixed period will typically last somewhere within the realm of 2-5 years and will generally have lower fixed rates or potential discounted rates. Depending on your case, you may even be placed on a tracker mortgage, which will follow along with the Bank of England’s base rate.
Once that initial fixed term ends, it is likely that you will be placed onto the lenders Standard Variable Rate (often shortened to SVR). Basically, an SVR is a mortgage with a potentially fluctuating interest rate that is dependant on what the lender themselves chooses to charge.
Whilst this does not follow the Bank of England’s base rate in the same way a tracker mortgage does, these fluctuations have been known to come about as and when there are any changes to the base rate or the market. For example, if the base rate increases, your lender may push their rate even higher.
Because of this, Standard Variable Rates tend to be pretty expensive options to take, which is why a lot of homeowners would much rather remortgage for better rates. The hope is that in doing so, you’ll be saving yourself some money on a monthly basis.
Once you have gotten a few years into occupying your home, you may be looking for a change. Rather than move home to accommodate these changes, lots of homeowners instead look to remortgage to release equity, to cover the costs of these.
There’s lots of popular changes we hear of customers looking to achieve. Perhaps you’re in need of more space for your family or possessions. Maybe you’ve been looking to refurbish the kitchen. Some may look to convert their loft into a bedroom or a spare room into an office.
Though the idea of obtaining planning permission and managing your own project can seem intimidating, many who have done so would argue it’s a lot less stressful and a lot more rewarding than finding a new home altogether.
This may work out a lot better for the future too, as creating additional space and having good quality craftsmanship is something that is likely to increase the worth of your home. If you were to ever sell your home and move elsewhere, this would be very useful.
Depending on your case, you may simply wish to remortgage in Leicester in order to access a better term. This can either be done by reducing the length of your mortgage term or by switching to a more flexible mortgage product.
Reducing the length of your term will mean that you aren’t paying back or restricted for as long, but it will most likely mean higher monthly mortgage payments for you. The longer your term is, the lower your monthly mortgage payments should be.
Some will choose for a more flexible mortgage term when the time comes to remortgage. Doing so may allow you to overpay, meaning you could pay your mortgage off quicker, as well as possibly having the option to carry the same mortgage and rates over to a different home, should you ever wish to move home.
Though this may sound like the ideal path to take, they are generally tracker mortgages, which as we touched upon before, will follow the Bank of England base rate. This makes your monthly payments a little unreliable, as depending on base rate changes, they could fluctuate in cost.
Unless a serious market crash were to occur, every homeowner will have some amount of equity in their property. Your amount is worked out as the difference between property value and your mortgage balance.
As mentioned before, people will generally remortgage to release equity as a means of funding home improvements, though there are other options for this also.
Some will use their released equity to cover long-term care costs, whereas others may use it as a boost to their income. Other popular options include to pay for a large holiday, to pay off an interest-only mortgage that is in your name or to free up some spending money.
Occasionally, we find that Buy-to-Let landlords will remortgage to release equity from a property in their portfolio, as a means of covering the deposit for a future property purchase.
Equity Release in Leicester is a possibility for those who are aged 55+ and own a home that is valued at least £70,000. Explore your options by getting in touch with an expert later life mortgage advisor who can provide further information and assist you through your process.
Another reason why a homeowner may remortgage to release equity, is to pay off any unsecured debts that you may have unfortunately built up over time.
Though it seems straightforward in concept, gaining access to a debt consolidation remortgage not only bases the amount you are looking to borrow on how much you owe a creditor and what your property is worth, but also your credit rating. This means that you could have a limited borrowing capacity.
On top of this, in order to fully pay off your previous mortgage and the debts you have gathered, you will have to borrow more than the mortgage amount. This means you will most likely have higher mortgage payments per month.
Though this is not at all an ideal situation, you’ll at least find solace in knowing that should your financial state take a turn for the worse, there are options for you to explore.
If your credit rating ends up particularly damaged, it’s not completely the end of the road, though it will likely be very difficult and require specialist remortgage advice in Leicester before you are able to proceed. Even in taking that step, a mortgage is not guaranteed.
Homeowners should always take out specialist mortgage advice before beginning the process of consolidating and securing debts against their home.
If you are nearing the end of your primary fixed period and are considering your options for a remortgage in Leicester, we would love to speak with you. Book your free remortgage review with a trusted mortgage advisor in Leicester today. We have time slots available all throughout the week, from early until late.
One of our dedicated mortgage advisors will be able to discuss your case and any future plans you have, in order to create the most appropriate next steps for you to take on your mortgage journey. We aim to make sure that this process is quicker and smoother than when you first took out a mortgage!
It can be tough saving money for a deposit, particularly if you’re paying rent as well. To help those struggling to get on the property ladder in Leicester, the government introduced various Help to Buy Mortgages.
This article will include the following:
All aimed to help First Time Buyers in Leicester who are struggling to save for a larger deposit to get onto the property ladder.
The Help to Buy Equity Loan scheme is popular amongst first time buyers in Leicester. To qualify for this scheme, you will need a minimum of a 5% deposit, and you can only purchase a new-build property.
Once you have saved up for a 5% deposit or more, the government will loan you 20%; if you have a 10% deposit, which makes up a 25% deposit.
You will be left with a 75% mortgage and a government equity loan to pay off. You get five years to pay off this equity loan interest-free.
If you can’t meet the 5-year cut off point, you will start receiving interest in the outstanding loan amount.
As a mortgage broker in Leicester, we understand the challenges of balancing your mortgage payments and the equity loan repayment at the same time.
There are ways around this. For example, you may be eligible to remortgage to raise capital for this loan, however, doing so may lead to your mortgage payments increase.
The Shared Ownership scheme allows applicants to purchase a percentage of a property and then pay the rest back on rent.
The percentage of the property that you own usually needs to be between 25-75%, though this can change. The remaining portion is likely to be owned by the housing association.
The way that your payments work is that you will have both your mortgage plus rent outgoings. So, you are paying 100% of the ground rent and service charge on the property.
Following the success of the Help to Buy Equity Loan scheme, this scheme had a similar concept as its predecessor, except you have to work in Armed Forces.
If you fit into the criteria, it could be an excellent option for you. The good news is 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 Lifetime ISA can be still beneficial, and it can help you secure a property as a First Time Buyer in Leicester. Essentially it’s a savings account where the money grows tax-free.
The government will also top up your savings by an extra 25%, so if you meet the £4,000 maximum amount, you will receive a nice £1,000 bonus.
You have to pass specific criteria to gain access to this scheme. All of the details will be on the Government Lifetime ISA page.
Once you have gotten past the hurdle of saving the deposit, the next steps you’ll be faced with will be providing the necessary paperwork for your Mortgage Broker in Leicester.
Here we have put together a list of tips and tricks on how to be best prepared for your mortgage process, hopefully making it quicker and smoother.
An up-to-date credit report is something that is vital to the process and should be something that you prioritise. By doing this you’ll make sure that you’re not caught off guard by any previously unpaid payments that could stop you from progressing your mortgage.
Our Mortgage Advisors in Leicester will take a look at which lender will be right for you to go with, so it’s best to make sure all your information is up-to-date and accurate, so that you can be placed with the appropriate one.
You can improve your standing on your credit report by making sure that you are on the voters roll and cancelling any old or unused credit cards that you still have in your name.
You’ll need to prove to your Mortgage Broker that you are exactly who you claim to be, by providing them with photo ID. You have the option of either using a Driving license or Passport.
If you are choosing to use your Driving Licence for your proof of address, you won’t be able to use it for your proof of ID and will have to use something else.
For those who are currently working within the country and using a Visa, then this is something you will also be required to provide.
As touched upon in the previous point, you will also need to provide your mortgage advisor with a proof of address. If you are using your Passport for photo ID, you will be able to use your Driving License for this.
Otherwise you can use either a utility bill or a bank statement that has been dated within the last 3 months.
The bank statements you provide will also help to prove how much money you earn, as well as giving some insight as to what your regular spending habits are like.
This is something that again, highlights just how important it is to prepare ahead of time and be careful as to how much money you’re spending and what you’re spending it on.
Not all mortgage lenders will want to see your bank statements, though the majority will, so it is important to make sure that you have these to hand just in case.
Whilst you may have already saved up your deposit for the property you’re looking to buy, you will still have to provide proof of how this was saved for anti-money laundering purposes and demonstrate that you have everything in place for it.
A useful tip that we would suggest here, is to make sure your finances are stable and in one place, so that when it comes to the audit trail, everything is simple and can be checked over quickly.
To show the mortgage lender that you can in fact afford their mortgage payments, you will need to prove your income.
For customers in regular employment, as touched upon before, you’ll need the last 3 months payslips. On top of this though, some lenders will want to see the most recent P60.
Lenders may also consider various other factors such as overtime, commission, bonuses and any earnings you have gained from other employers.
If you happen to instead be a self-employed mortgage applicant, then you will also need the help of your accountant who will obtain for you, your last 2 or 3 years proof of earnings.
For those of you who submit your own accounts, we will be more than happy to advise you on what you’ll need to obtain from the Government gateway.
By creating a solid plan of what your budget will be, you will be able to gain a wider perspective of where you will need to spend your money and what everything is.
It is best to make a list of things such as your council tax, utility bills, and anything that you have to regularly spend money on, such as food and drink. Doing this will help to determine how much disposable income you have overall once those payments have gone out.
If you are struggling with this, then we would be happy to send you a budget planner template so that you can get started.
In summary, preparation is crucial for a First Time Buyer in Leicester to get their mortgage sorted as quickly and efficiently as they possibly can, and this will only be made simpler by seeking out expert Mortgage Advice in Leicester.
The quicker you put in the time and effort to collect all of the essential information you need, the easier it will be to speed up your process and get an extra step further to achieving your mortgage goals.