How Does a Remortgage in Hull Work? Remortgages Explained

When you take out a remortgage in Hull, you are essentially taking out a new mortgage on the same property, usually with a different mortgage lender or a different deal from your current mortgage lender.

This can be a way to lower your monthly mortgage payments, access additional funds, or switch to a more suitable mortgage deal.

To remortgage in Hull, you will typically need to go through an application process with your chosen mortgage lender, provide documentation and information about your financial situation, and have a valuation carried out on your property.

Taking out remortgage advice in Hull can help with this. If your application is approved, you can then complete your remortgage in Hull and start making repayments on the new mortgage deal.

It’s important to note that remortgaging in Hull may incur additional fees, such as arrangement fees and early repayment charges, so it’s important to carefully consider whether it’s the right option for your personal circumstances.

Is remortgaging in Hull right for me?

Determining whether taking out a remortgage in Hull is a suitable option for you, will be dependant on your individual goals and circumstances.

Whilst many homeowners consider remortgaging in Hull to improve their quality of life or take advantage of their property, it’s not necessarily the best choice for everyone.

Here at Hullmoneyman, our dedicated team of remortgage advisors in Hull can help you assess your situation, evaluate your objectives, and determine whether taking out a remortgage is the right option for you.

We pride ourselves on offering a transparent service, and if remortgaging is not the right option for you, our dedicated mortgage advisors in Hull will inform you accordingly and suggest alternative solutions, if they are available.

Types of Mortgages Available When You Remortgage in Hull

As has been looked at above, taking out a remortgage in Hull will just be a new mortgage once your initial deal period has ended, replacing the previous deal. There are a wide variety of reasons as to why someone may look to do this.

You may still be curious of the different types of mortgage that could be available to a homeowner who is looking to remortgage in Hull, such as yourself. Below are the most popular of these options.

Fixed-Rate Mortgage

A fixed-rate mortgage is a type of mortgage where the interest rate remains constant for a specified period, usually between 2 to 5 years.

It provides homeowners with the assurance that their mortgage payments will remain the same, regardless of any changes in interest rates during that fixed period.

While circumstances can change during the mortgage term, such as a change in income or a need for a larger or smaller property, being locked into a long-term fixed-rate mortgage can be costly, as it usually involves paying an early repayment charge to exit the mortgage before the end of the fixed term.

For this reason, most homeowners opt for 2 to 5 year fixed-rate mortgages, as they provide stability and consistency for a reasonable length of time, while also allowing the flexibility to make changes if needed.

Although interest rate decreases are unlikely, a fixed-rate mortgage can provide peace of mind in a potentially volatile market.

Tracker Mortgage

A tracker mortgage is a flexible type of mortgage that follows the Bank of England base rate. While the interest rate on a tracker mortgage will typically be a few percentage points above the base rate, it will move in line with any changes to the base rate.

For example, if your mortgage is at a 2% interest rate and the base rate is 0.75%, you will pay 2.75% on interest. If the base rate increases to 1%, your interest rate would increase to 3%.

Tracker mortgages are usually fixed for a set period, after which they transition to the mortgage lender’s standard variable rate. While this gives mortgage lenders the freedom to adjust your interest rate as they see fit, some tracker mortgages come with caps to limit the maximum interest rate you’ll pay.

One advantage of a tracker mortgage is that you’ll pay less interest when the base rate is low. Whilst this is a positive, there are some downsides to consider. For instance, if you decide that a tracker mortgage isn’t for you, you may face early repayment charges.

Additionally, when the Bank of England base rate goes up, your monthly payments will increase. Some trackers come with a “collar” which means that even if the base rate drops, your interest rate can only fall so far.

Discounted Variable Rate Mortgage

At the end of your mortgage term, you may have the option to switch to a discounted variable rate mortgage. Mortgage lenders offer their own variable rates, such as a standard variable rate, which is what borrowers move onto once their fixed period ends, if they don’t remortgage in Hull.

The discounted variable rate is typically set at a percentage below the mortgage lender’s standard variable rate. For instance, if the SVR is at 3.99% and your mortgage has a discount of 1%, your interest rate would be 2.99%.

As with tracker mortgages, your interest rate will change in line with any changes in the mortgage lender’s standard variable rate. By opting for a discounted variable rate mortgage, you will benefit from a lower interest rate than the mortgage lenders SVR.

In addition, if the mortgage lender lowers its SVR in response to a Bank of England change, you may enjoy an even lower interest rate. Compared to other mortgage types, early repayment charges tend to be lower with discounted variable rates.

Remortgaging in Hull When Your House Value Has Increased

Purchasing a property can be considered an investment, regardless of whether you intend to reside in it or rent it out as a buy to let/let to buy property. The expectation is that the value of the home will appreciate over time.

Besides being the most valuable asset you’ll own, it provides shelter for you and your family. In fact, future generations may benefit from the property ownership if you decide to pass it down.

The property market is unpredictable and house prices may fluctuate, at times increasing or decreasing.

Interestingly, when property prices are high, mortgage rates may be more favorable. Thus, it may be advantageous to explore your remortgage options to take advantage of the available deals.

You can find out more about this topic in our article “Remortgaging in Hull When Your House Value Has Increased“.

What is a product transfer in Hull?

As you head towards the end point of your current mortgage deal, whether it’s a fixed or introductory period, a mortgage lender may offer you a chance to take out a new mortgage deal but stay with them. This type of process is known as a product transfer.

Although remortgages in Hull and seeking remortgage advice in Hull are often discussed as the more popular options for homeowners to take, product transfers in Hull are arguably just as sought after.

Nevertheless, you are not obligated to accept the deal offered by your mortgage lender, as remortgaging in Hull enables you to explore potentially better deals with other mortgage lenders, which a product transfer may not offer.

In any case, it is always beneficial to seek expert mortgage advice in Hull beforehand.

To understand how product transfers work, please feel free to take a look at our article “Should I Take My Mortgage Lenders New Deal? Product Transfers vs Remortgages in Hull“.

Popular Reasons for you to Remortgage in Hull

Remortgage For Better Interest Rates

Typically, your initial mortgage deal will have a duration of 2-5 years and offer low fixed or discounted rates. In some cases, you may have a tracker mortgage, which follows the Bank of England’s base rate.

However, when your term ends, you will likely be shifted to the mortgage lender’s Standard Variable Rate (SVR). In essence, the SVR is a mortgage with an interest rate that may change based on the mortgage lender’s discretion, unlike a tracker mortgage that follows the Bank of England’s base rate.

Consequently, SVRs can be the most expensive option, leading many to explore remortgaging for better rates, potentially reducing your monthly mortgage repayments.

It’s always recommended to seek expert remortgage advice in Hull before making any decisions.

Remortgage For Home Improvements

If you have been living in your home for a number of years now or your circumstances have changed, you may find that you need more living space, a larger kitchen, or a home office.

Instead of relocating to a larger property, you could consider releasing equity through a remortgage in Hull to cover the costs.

Although the idea of obtaining planning permission and managing your own home improvement project may seem intimidating, some believe it is less stressful and more rewarding than the process of purchasing a new home, selling your current one, and moving your belongings.

In the long term, creating more space and maintaining the property could potentially increase its value. This is beneficial if you ever decide to sell or rent out your property.

Read more about one potential option for a remortgage for home improvements in our article “Remortgage for a Home Extension“.

Remortgage for Changes to Your Term

Remortgaging in Hull can also be a smart move if you need to make changes to your mortgage term. You might opt for a shorter term, which means you’ll pay off your mortgage sooner, although your monthly payments will be higher.

On the other hand, a longer term will result in lower payments over time. Some homeowners may prefer a more flexible mortgage term, allowing them to overpay and pay off their mortgage faster. It also means that they can take the same mortgage and rates to another property if they move in the future.

That being said, flexible mortgages usually come in the form of a tracker mortgage that follows the Bank of England’s base rate. As a result, your payments may fluctuate based on interest rates, which may not be ideal for everyone.

Remortgage to Release Equity

Property equity represents the difference between what you still owe on your mortgage and the current value of your home.

This equity can be leveraged to cover various expenses, from home improvements to long-term care costs, from supplementing your income to going on a holiday or perhaps something else entirely.

Buy to Let landlords in Hull can also use remortgaging in Hull to release equity and fund their deposit for purchasing additional properties to expand their portfolio.

Remortgage to Consolidate Debt

One of the reasons people may choose to release equity from their property is to consolidate their debts.

Whilst this is the case, it’s important to note that the amount you can borrow is based not only on the amount you owe and the value of your property, but also on your credit rating, which may limit the amount you can borrow.

In order to pay off your mortgage and your debts, you may need to borrow more than your outstanding mortgage amount, resulting in higher monthly repayments. Although it may not be an ideal situation, it’s good to know that you have options available to you in case of financial hardship.

Even if you have a poor credit rating, there are still options available to you. That being said, these options may not be easy and require the assistance of a specialist remortgage advisor in Hull before moving forward.

Keep in mind that there is no guarantee of success, but it’s worth exploring your options if you’re struggling with debt.

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.

When is the best time to remortgage in Hull?

We suggest that you begin exploring your remortgage alternatives about 3 to 6 months before the conclusion of your initial mortgage offer.

This will provide you with sufficient time to consult with a specialist in the industry for remortgage guidance and prepare for your new mortgage, which will begin just as your current deal expires.

On the other hand, you may want to consider remortgaging in Hull early if your home’s value has increased since you initially purchased it, as this could allow you to raise capital for purchasing a buy to let property or making home improvements using the extra funds.

You can learn more about this by looking at our article “When is the Right Time to Remortgage in Hull?“

Can I remortgage early in Hull?

Although there are no legal restrictions, if you decide to remortgage prior to the end of your fixed-rate period, you may have to pay an early repayment charge (ERC).

If your current mortgage has a fixed rate period of five years, it’s advisable to begin considering remortgaging in Hull once the fixed term is nearing its end point.

Failing to do so may see you shifting across to your mortgage lender’s standard variable rate (SVR), which could potentially have a higher interest rate than your initial deal.

Can I remortgage in Hull with bad credit?

Providing you can show that you are capable of making on-time repayments, it may still be possible to remortgage in Hull, even with bad credit.

It’s more beneficial for you the further back your credit issues are, though some mortgage lenders may overlook minor issues such as disputes with mobile phone providers.

The interest rate for the remortgage will depend on your credit score and the amount of equity you have in your home. Additionally, when seeking remortgage advice in Hull, you can also consider capital raising options.

Can I remortgage to buy another property in Hull?

At some point as a homeowner, you will reach the end of your initial fixed period and will have the option to remortgage your property.

Remortgaging in Hull is essentially taking out a new mortgage on the same property, either to replace the current mortgage or to borrow against the equity in your home.

There are various reasons why people choose to remortgage in Hull, including capital raising, home improvements, and more. Additionally, some may not be aware that remortgaging can also be used to purchase another property.

How can I remortgage to buy another property in Hull?

Sometimes homeowners may have accumulated some extra savings that they can use to finance the deposit for another property. Typically, homeowners who receive extra income during their mortgage term will put it towards paying off their remaining mortgage balance.

Whilst this is the case, instead of using your savings or extra income, you can also think about your equity. Equity is the difference between the value of your property and the amount left on your mortgage balance.

If you have enough equity in your home, you may be able to release some of it through a remortgage in Hull, to fund the deposit for a new property. This is a smart way to use the money that is currently locked in your home.

Our team provides expert remortgage advice in Hull, and our mortgage advisors have a great deal of experience in dealing with remortgages to release equity, so they will be happy to assist you in this matter.

Lifetime Mortgages in Hull: An Age 55+ Alternative to Remortgaging

By now, you are likely more knowledgeable with the concept of equity, but there’s yet more to know. If you are over 55, you might want to consider equity release as an option. This is a little different from remortgaging to release equity.

Equity release in Hull usually comes in the form of a lifetime mortgage. At the end of your mortgage term, or even if you still have payments remaining, you could potentially release equity by taking out a lifetime mortgage.

This means borrowing money secured against your home while still retaining ownership.

It’s possible to ring-fence a portion of your property’s value, often used as an inheritance for your family. You will have to pay interest on what you owe, but it’s common to let the interest accumulate in the property.

When the mortgage borrower passes away or enters long-term care, the home is sold, and the sale proceeds are used to pay off the mortgage balance. Any remaining funds go to your beneficiaries.

Most lifetime mortgages come with a no-negative-equity guarantee, which means that you or your beneficiaries will never have to pay more than the property’s value, no matter how high the debt goes.

Lifetime mortgages in Hull are a highly specialised type of mortgage, so it’s crucial to get mortgage advice in Hull and talk to an experienced later life mortgage advisor before considering this option.

Virtually all lifetime mortgages in Hull, including all of the ones we recommend, follow the standards that have been set out by the Equity Release Council. This brings some vital protections for borrowers, that your later life mortgage advisor in Hull will discuss with you during your appointment.

To understand the features and risks, ask for a personalised illustration.

A lifetime mortgage in Hull 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.

Learn more about Lifetime Mortgages in Hull, by reading our article “What is a Lifetime Mortgage in Hull?“

Free Remortgage Review in Hull For Customers

If you are reaching the end of your introductory or fixed-period and are looking at taking out a remortgage in Hull, feel free to book in for a free remortgage review today. You’ll benefit from receiving expert remortgage advice in Hull, provided to you by a trusted mortgage advisor in Hull.

What is a Lifetime Mortgage in Hull?

A lifetime mortgage in Hull is a type of later life loan that is secured against your home. It allows eligible homeowners to access the process of equity release in Hull.

Your lifetime mortgage loan does not need to be repaid until you have either passed away or have moved into long-term care. At this point, your home would be sold, with the funds from the sale being used to pay back your balance.

When you take out a lifetime mortgage in Hull, you are able to free up some of the wealth that has grown in your home, which can be used for a variety of things such as home improvements, inheritance, to pay off debts, fund your retirement, care costs and more.

How does a lifetime mortgage in Hull work?

First of all, before you take out a lifetime mortgage in Hull, you need to make sure that you are eligible. This means you need to be at least 55 years old and in possession of a property that is worth at least £70,000. There is no prerequisite to have a mortgage either.

To get started on the lifetime mortgage in Hull process, the first step for you to take is to have a chat with a qualified and professional later life mortgage advisor in Hull. They will analyse your personal circumstances, to see if equity release in Hull or an alternative, is suitable for you.

Lifetime mortgages in Hull will most likely be seen in two main varieties. The first of these is a lump sum lifetime mortgage in Hull, with the second one being a drawdown lifetime mortgage in Hull.

A lump sum lifetime mortgage in Hull is what you pretty much expect from the name, it is an all-in-one release of equity, into a lump sum payout. This allows you to access as much as you need, as soon as necessary, but will mean you have a much bigger loan to pay back.

A drawdown lifetime mortgage means you have access to your equity funds and can draw from it whenever you need it. This means it isn’t all released in one go and you only use what is required at that time. Interest is only paid on what you release, which keeps what you owe lower.

With any type of lifetime mortgage in Hull, you are given the option to simply let your interest build up, though this has a big impact on the amount of inheritance that is left once your home has been sold and the balance has been repaid.

Thankfully, not only will a trusted later life mortgage advisor in Hull be able to help you ring-fence a portion of equity in advance, so it can be used for that purpose, but thanks to our Equity Release Council membership, you will benefit from having the “no negative equity guarantee”.

This guarantee means that whilst your debt will increase over time, your estate, those who are left behind after death or if you move into long-term care (usually family) won’t have to struggle with finances and will never owe more than the value of the property.

Pros and Cons of a Lifetime Mortgage in Hull

As is the case with any mortgage type, there are both ups and downs to lifetime mortgages in Hull, which all can vary depending on the person taking out the mortgage and what exactly you are looking to get out of your equity release process.

Of course one of the bigger positives is just how flexible they are, with you being able to release equity in your home either via the drawdown and lump sum variances of a lifetime mortgage in Hull. In addition to this, you also have how flexible payments can be.

You can simply just let your interest to roll-up, which gives you more money to enjoy, as you won’t be making monthly payments. Alas, the downside here is that doing this means when you die or move into long-term care and the property is sold, there will be much less equity for care costs or inheritance.

The topic of inheritance can be the biggest factor for many homeowners, with many looking at equity release in Hull with the sole purpose of providing an inheritance. Thankfully, you may be able to ring-fence some of your equity for this, as your later life mortgage advisor will plan this out with you.

The good news is that, so long as you can keep up your mortgage payments, there is more for your family after you are gone. Additionally, there is also the “no negative equity guarantee”, which means your family won’t owe anything more than what your home is worth.

Further to the above points, there are new safeguards that have been implemented in recent times, thanks to the standards set by the Equity Release Council.

Is a lifetime mortgage in Hull right for me?

This will always be down to what it is you wish to do and what your personal situation is. There are a variety of options for later life homeowners to look at, with equity release and lifetime mortgages in Hull only being one of many.

It is the role of a qualified and experienced later life mortgage advisor in Hull to review your circumstances and help you to decide whether or not equity release in Hull, and subsequently a lifetime mortgage in Hull, is actually right for you to take at all.

In a lot of cases, there will be an alternative that is much more suited for you. This is something your later life mortgage advisor in Hull will have a look at first, before they get started with you on the process of equity release in Hull and a lifetime mortgage in Hull.

More suitable routes may include things like a personal loan, a standard mortgage or remortgage, retirement interest only (RIO), term interest only (TIO) or maybe even something else altogether.

If a lifetime mortgage in Hull is the best option for you, your later life mortgage advisor in Hull will make sure that all of your needs are well met.

This will include things like helping you to plan out what your plans are for the future, how you feel your circumstances may change and any inheritance you want to leave behind. To look more at how we can help with a lifetime mortgage in Hull, please get in touch today.

To understand the features and risks of equity release in Hull and Lifetime Mortgages in Hull, ask for a personalised illustration.

A lifetime mortgage in Hull 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 be repayable upon death or moving into long-term care.

Are Mortgage Rates Going Up in Hull?

This is something that we find ourselves being asked regularly by both homeowners and potential home buyers in Hull. The answer to this question depends on entirely on what sort of market we are in and how it is performing.

In order to stay more up-to-date with the mortgage market, including hot topics such as mortgage interest rates and government schemes, take a look at “Mortgage Market Update” playlist on YouTube. We regularly post these types of videos to ensure that all of our customers are “in-the-know”.

What are mortgage rates?

Mortgage rates are the level of interest that a mortgage lender will be charging you on your mortgage balance. This will determine the cost of your monthly mortgage payments, as you are paying, generally, a combination of interest and capital. Lower mortgage rates typically means lower payments.

How are mortgage rates determined?

There are a lot of different factors that can affect what your mortgage rates will be. One that you can absolutely have control over, is any personal factors that will determine if you qualify for a mortgage.

This will include things like your credit score or deposit. The lower the risk, generally, the better the rates. An open & honest mortgage broker in Hull will be able to take a look at your situation, helping you to find the best mortgage deal that is available to you, for what it is you are hoping to achieve.

Our dedicated mortgage advisors in Hull have the ability to search through 1000s of deals, including many different specialist mortgage deals, for customers who perhaps have more complex cases.

What it all comes down to really, at the end of the day, is the current market position, the state of the economy and the base rate of the Bank of England. If the economy is performing well, there will typically be a higher demand for both goods and services, which includes properties.

Higher demand will also usually mean that the Bank of England base rate will go up too, which sees mortgage rates following. The mortgage rates set by mortgage lenders are usually set at a percentage above what the Bank of England base rate is.

Whilst a stronger economy could mean that home buyers can afford more, mortgage lenders aren’t made of money. Because of this, when the base rate is up, the cost of borrowing for mortgage lenders will also rise, which also brings up mortgage rates to cover their borrowing costs.

When the economy isn’t necessarily doing so well, this works conversely to how we mentioned above, as consumers will not be able to afford as much. Because of this, you will typically see interest rates coming down as a why to encourage people on the property ladder with potentially lower payments.

Mortgage Rates Affected by Inflation

As discussed above, one of the biggest factors for changes in mortgage rates, is changes to the Bank of England base rate. As a general rule, mortgage lenders will set their interest rates at a percentage above this. This means that depending on the base rate, this could fluctuate.

Something else that can have an effect on the Bank of England base rate, however, is any changes to inflation. The government ideally have a target in mind that they need to keep at, in order for the cost of living to remain affordable. Unfortunately, this has been known to go over the target.

In situation such as these, you may see the cost of living increase, though unlike the example of a strong economy meaning people may be able to afford more, this can be quite the negative and seeing people unable to afford as much as they would have done.

This of course isn’t exactly the best news for those with ending fixed-rates, as it means they may struggle to afford price increases that are set to take effect once their initial period has ended. In cases like this, a mortgage advisor in Hull can be incredibly beneficial.

Fixed-Rate Mortgages vs Tracker Mortgages

The Bank of England base rate tends to have fluctuations anyway, although usually only very slightly. Tracker mortgages are a type of mortgage that will be following along with this base rate, sitting at a percentage above and moving as and when the base rate moves.

When the base rate is a little low, this can work out quite well, as your monthly mortgage payments will be lower. Unfortunately, if mortgage rates were to go up, you would also be paying more on your monthly mortgage payments, which can change fairly quickly.

An option that could be better for this, which is actually one of the most popular mortgage types you could choose from, is a fixed-rate mortgage. These allow you to lock-in to the interest rate at the time, keeping your payments the same for a set period.

These time periods tend to be between 2-5 years, though they don’t necessarily have to be. An example would be, if your interest rate was 4% and you were fixed-in for 5 years, you might see rates rise to 6% during that time, yet still be paying 4% until that 5 years is up, saving you money.

In times where the economy is a little uncertain, a fixed-rate can provide certainty and stability, giving homeowners one less thing to stress about at home. The downside is that if rates have indeed gone up during this time, when your fixed-period ends, you will move onto a higher rate anyway.

This sort of thing occurring can actually lead some homeowners to remortgage quite early, even being willing to fork out for an early repayment charge, in order to fix in for a longer period and protect themselves from future interest rate increases that could be on the horizon.

How long should I fix my mortgage for?

This really boils down to predictions, how do you see the interest rates changing, as well as your own personal situation changing. As said before, personal factors also can impact mortgage rates, so having a higher deposit will potentially open you up to much lower rates anyway.

If you find that you are in that situation, taking out a fixed-rate mortgage could be beneficial, to stick to those interest rates you have given yourself access to. So long as the economy performs well also, fixing in for 2, 5, maybe even 10 years could see you reaping the benefits of those rates.

Of course this entirely depends on circumstance, and 10 years is a long time to wait. During that time period, you could even see interest rates drop lower than you first fixed in for, meaning you are paying more per month than you could’ve been, if you’d only fixed in for say 2 years.

A trusted and experienced mortgage broker in Hull will be able to best help you prepare for your mortgage future, as well as help you make any decisions based on your plans. They will use their knowledge to help you every step of the way.

Speak With a Qualified Mortgage Advisor in Hull

Interest rates can change without warning really, depending on the current state of the economy, the market and also, the Bank of England base rate. Match it up with your personal circumstances, and there can be much uncertainty.

By booking yourself in for free remortgage advice in Hull towards the end of your fixed-period, or first time buyer mortgage advice in Hull if this is a new experience for you, you can benefit from experts in the field helping you to find the best mortgage deal, with the most favourable mortgage rates.

Planning to Get a Mortgage in Hull?

Getting Ahead of The Mortgage Game

It’s incredibly important that you make sure you plan your mortgage journey ahead of time. There are various steps that should be taken before jumping into making offers and full mortgage application, in order to put you ahead of other first time buyers in Hull.

One of these that should arguably be top of your list, is getting a mortgage agreement in principle, prior to looking at properties. Sometimes your plans might not go to, well, plan. Unfortunate circumstances can often crop up, leaving even the most meticulous planners with a challenging process.

Some of these include poor credit, banks not lending enough, or even couples separating mid-process. The latter is not something people can always prepare for and it may lead to you needing to take out a mortgage as a sole applicant, with very little time to re-plan.

Why Planning For a Mortgage is Important

As said, you can often find your mortgage process being met with many different hurdles, the mortgage process can throw many obstacles which is why planning is important. Throughout our time in the mortgage world, we have across many of these.

Below are some common problems we have found customers encounter towards the end:

• The applicant doesn’t have a sufficient deposit.
• Previously ignoring your credit score because it wasn’t important.
• You have been too related when it comes to conducting your bank account.
• You are self employed and your latest accounts don’t look adequate.
  

By preparing yourself in plenty of time for all eventualities, you can potentially avoid as many of these as you possibly can, ensuring for a much smoother service. Of course some instances are unavoidable, which is where a mortgage broker in Hull can often lend a helping hand.

Saving For a Deposit

Saving up for a deposit can be quite difficult for some, especially when you are trying to make sure you achieve all of your mortgage goals. This is even more so the case for first time buyers in Hull who are currently renting, trying to make that next step.

To get onto the property ladder, you’ll typically need a 5% deposit at least, though this could be higher. The issue is, whilst this seems small, that can actually be a large amount of money, depending on property price. You generally won’t know the exact amount, until you find a property.

Sometimes when you are struggling to make up this percentage, you may be able to get financial support from your family or friends, via a gifted deposit in Hull. Additionally, you might also be able to make use of one of the various Help to Buy Schemes in Hull.

These are usually popular with many first time buyers in Hull as a way to get them onto the property ladder. There could be a mortgage scheme out there that is perfect for you.

The Impact of Your Credit Score

Credit scores are a large contributing factor to your mortgage application. If your credit score is in a poor state, you’ll have less of a chance of actually getting a mortgage, maybe even being unable to get one at all, depending on how low it is.

Obviously, this is all dependant on why your score is that low in the first place. Having poor credit because of something like a CCJ or bankruptcy will lower your chances greatly, with the length of time that has since passed being a factor in this also.

Check My File is a fantastic website we would recommend you use if you are wanting insight 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 completely free of charge.

Current Financial Position

When it comes to your mortgage application, it’s important that look at how well you manage your finances. This is because mortgage lenders will carry out a thorough analysis of these, checking your bank statement, income and outgoings.

Gambling transactions is something that they will be on the lookout for. Large and frequent outgoings can make you look unreliable with your money and drastically impact your chances of getting a mortgage. We recommend holding back for a couple of months, to paint yourself in the best light.

If you find yourself being fortunately being given a gifted deposit for your mortgage, we also suggest that the gifter keeps the money in their account, so that you are not having large bank transfers taking place, which would otherwise look suspicious to a mortgage lender.

Are you self employed in Hull?

If you are self employed in Hull, you may find that your process could be a little more challenging for you, than an employed applicant. This is because you will need to provide much more evidence than you otherwise could be faced with.

The evidence you will need to provide as a self employed applicant include your tax year overview and the last 2 years of accounts, to name just a few. More evidence may be required, though this depends on the mortgage lender you are going with.

Other Mortgage Hurdles

Through your mortgage journey, you may come across a range of mortgage hurdles that could limit the quickness of your process or even stop it altogether. Being prepared for these ahead of time can put you in the best position for if these occur.

A mortgage broker in Hull like us will work hard to help you overcome these hurdles. We are here to support you 7 days a week, from early until late. Book online and benefit from expert mortgage advice in Hull, today.

How Much Can I Borrow For a Mortgage in Hull?

First Time Buyer Mortgage Advice in Hull

When we speak to customers for the first time, especially if they are a First Time Buyer in Hull or a Home Mover in Hull, are wondering whether or not they can get a mortgage in the situation they are in, and how much can they borrow for a mortgage.

Modern Day Affordability – How much can you borrow?

In 2014, the Financial Conduct Authority (FCA) launched something called the Mortgage Market Review (MMR). This was a completely brand new way for mortgage lenders to do business, with new guidelines that they had to follow, in order to stop the “Credit Crunch” from happening once again.

The modern way of reviewing a customers credit history, includes looking at your spending habits, going more in-depth in making sure you can afford a mortgage. In the past, it was commonplace to borrow much more than your annual income, which thankfully is no longer the case!

Nowadays you can only borrow a multiple of your annual income, making it much less risky to lend and to borrow. Speaking of income, that’s the biggest factor in determining how much you can borrow. If you are a high earner, you are likely going to be able to borrow more than a lower earner.

Everyone’s situation is different, and those differences can also determine how much you can borrow. Some have childcare costs, student loans, other costly credit commitments. In this case, you will very likely be borrowing less than someone who has the same income, but is without those costs.

Credit history is a big factor in obtaining a mortgage too. Whilst it doesn’t necessarily directly affect the amount you can borrow, applicants with a poor credit score or adverse credit may either be declined altogether, or have to pay more on interest, to cover the risk to the lender.

Because of the interest-rates, you’ll be paying a larger sum per month to the lender. Let’s say your monthly payments are a specific amount, but you can only afford half that amount per month.

This could mean you aren’t able to borrow as much as you would’ve liked, due to a cause and effect of having adverse credit.

Additionally, how a mortgage lender assesses your income could determine how much you can borrow. Some will see something like pension contributions as a fixed outgoing, so may lend less to an applicant than another lender might, who wouldn’t factor in that outgoing into their assessment.

There’s a lot that goes into assessing affordability, as each mortgage lender will have their own unique lending criteria. You might have a good deposit and sufficient income, and still find that one lender may lend less than another, purely down to the smallest factor.

As a mortgage broker in Hull, we are able to take a look at your case and determine what you may be able to afford, prior to speaking with a lender. We’ll search through thousands of deals, matching your criteria up with the most appropriate product.

Why did the mortgage market review happen?

Taking a Look Back at The 1990’s

Whilst it’s helpful to take a look at how things are now, it’s also important to understand why they are like this now. In the 90’s, before credit scoring existed, mortgage applications would be manually underwritten.

This meant that the process of approving a mortgage wasn’t based on a streamlined, near foolproof algorithm on a computer, as it was instead looked at by real people, at their own discretion.

It was quite easy to just book an appointment with a bank or building society, sitting down with the manager and discussing your mortgage case. From there it would more or less be a sales pitch, in which they would push a savings account until you’re “creditworthy”.

From this point, you would be granted the previous equivalent of an Agreement in Principle, as well as mortgage advice regarding the amount you were able to borrow. This might sound personalised, straightforward, easy… Perhaps too easy.

The reason it was as such, was down to it once again, being that person’s discretion. The manager of that establishment could interpret the lending manual in any way that they saw fit.

What this means is not only were a lot of wrong decisions made, but you could have walked into any bank or building society branch, anywhere in the country, and received a different outcome each time.

To stop this from being the case and to cut unnecessary costs, mortgage lenders opted to use automated affordability. This meant that instead of the bank manager choosing your affordability and maximum borrowing, you were now only limited to a multiple of your annual income.

What Happened in The 2000’s

Skipping ahead to the early 2000’s, mortgage lending got a little too relaxed. Automated affordability checks were still in place, but these mortgage lenders were allowing customers to self-certify for a mortgage.

Self-certification was where an applicant can sign a document to self-certify their earnings, without having to provide evidential documents, such as payslips or tax returns.

Not only this, but mortgage lenders were also allowing for 100-125% loan-to-value mortgages, meaning not only were you self-certifying your income (sometimes with a falsely inflated figure), but you were also borrowing much more than the property itself was worth.

As you can probably expect from this information, or as you may have even experienced during 2007-2008, the economy crashed and we entered the infamous “Credit Crunch”. The years following, especially between 2008-2010, were very challenging indeed.

These challenges extended to the home buying market too, as people attempting to get onto the property ladder for the first time, found it near impossible to do so.

Mortgage lenders had to change, their lending habits had to change, strict criteria needed to be put in place to fix the mess that had been made. As such, the government introduced the Mortgage Market Review in 2014 that we mentioned earlier, and the market eventually recovered.

How can a Mortgage Advisor in Hull help?

As an open & honest mortgage broker in Hull, we believe you will benefit from our expert mortgage advice service, especially if you are a first time buyer in Hull.

We pride ourselves on helping customers find their footing on the property ladder. We can search through 1000’s of mortgage deals, reviewing your case against lender criteria, finding the best one for your circumstances.

To learn more about how much you may be able to borrow, or to get started on your mortgage journey, book a free mortgage appointment online today using our online booking feature. A trusted and dedicated mortgage advisor in Hull will review your case and answer all of your mortgage questions as best as they can.

How to Sell your Home Quickly in Hull

Mortgage Broker in Hull For People Moving House

If you are getting ready for moving home in Hull, taking the next step in your homeowners story and moving further up the property ladder, you will need to think about selling the home you already have.

Once you have gotten to the point where you have sold your home, the equity that is sitting within your property (equity is the difference between the value of the property and the amount on your mortgage balance), will be used as a deposit for your new home purchase.

This can be topped up by something like savings or a gifted deposit from a family member.

The way your home is presented and marketed to potential buyers will depend on a variety of factors. If you get it right, you could sell your home very quickly. If you get it wrong, you could be waiting for a sale.

In order to make the most out of your sale, you’ll need to do some research. Here are our top tips for selling your home quickly;

A Look at How to Prepare for Home Viewers?

How to decide on your asking price?

When it comes to deciding the asking price for your property, you’ll of course have a minimum in mind, but it’s also important to make sure it isn’t unreasonable and over the odds locally. An estate agent may tell you the potential highest price it could sell for, but it isn’t necessarily going to sell for that much.

Within the first few weeks of your property being listed, you’ll want to get as many eyes on it as possible. If you aren’t getting as much interest as you’d hoped, it’s most likely because your asking price is too high.

If at this point you have already found the place you would like to move to, you’re going to need to try and sell it as quick as possible. As such, getting the asking price right is the best way to start off your process of moving home in Hull.

How does your house look from the outside?

We have been hard at work as a Mortgage Broker in Hull for over 20 years now. One of the main things we hear brought up from home buyers on a regular basis, is how the property looked externally.

Making sure your home looks appealing from the outside will be the best way to make sure your potential buyers are engaged. You’re making a first impression on them, so it needs to be a good one.

Sometimes, it’s the simple things that make the most difference. A neatly cut front lawn, your driveway being jet-washed and clean, things like that.

They show a potential buyer that your home is well looked after and that you want people to be impressed by the quality of it. If the outside looks good enough, you may be more likely to attract attention to the inside.

Remember, you only get one shot to make it count, you might never get this moment again. So in order to maximise your chances of selling your home quickly, definitely pay some attention to the outside and make it look as appealing as possible.

How does it look from the inside?

Before you start allowing people to come in and view your home, you’ll need to make sure that everything is clean and tidy on the inside!

The idea is to ensure that the viewer feels a sense of welcoming, that they feel comfortable. After all, this is potentially their next home, so you want them to envision that potential.

Clean up your clutter!

Take away anything you have lying around, especially items left around the front of your property. Once again, it’s back to that first impression. This will be their first instance seeing the inside of your home in person, you want them to know you’ve looked after it.

Little things like buying a new doormat, cleaning any light fixtures, ensuring the doorbell works if you have one. This will all add up in the eyes of a viewer. People tend to remember negatives a lot more than positives, so reducing the amount of negatives they encounter ensures for a higher chance of a sale.

After your hallway is all clean and tidy, it’s time to take the cleaning supplies on tour, going room by room to ensure the whole place is looking as spotless as you can possibly make it. Cupboards and wardrobes are a go-to for most people, they will definitely want to see storage potential, so make sure they’re all neat and tidy.

Pay attention to the little things in your home

Make sure you give the kitchen and bathroom a good look over too, as they are going to be some of the most important areas in the house. If you happen to be a smoker, get rid of any lingering smells as that will definitely put people off. Air out the property and remove items that may still smell of smoke.

Tidying up clothes, new bedding, cleaned windows and things like that, will all leave a positive impression. New carpets will also go down well with possible buyers.

All of the interior doors should be painted and any fixtures should be polished. Also make sure that they definitely work, as you won’t want a potential viewer to see something like a broken door handle to a room.

Light is a big factor too, so you’re going to want to see that all the rooms are well lit. If there are curtains and blinds, you’ll want them open. The room should feel nice and warm but also not too hot. If it’s a hot day, you perhaps want a window open, so they feel comfortable.

Also make sure that your lightbulbs are working everywhere. Some have said before that the smell of “baking bread” will attract people to a room. This is an old fashioned approach, make sure it doesn’t smell of any food whatsoever.

Let the viewer feel at home

You will need to plan accordingly for each home viewing. The idea each time is to allow them to feel as relaxed and at home as possible. This means keeping kids or pets out of the way whilst they’re walking around.

On the other hand, if they’re a young family or they are making plans to be, having family pictures or any paintings dotted around will serve to remind the viewer that this is a family home.

Don’t be afraid to let them explore your home by themselves, but also don’t stray away from them too often. You’ll want to make sure they’re not crowded so they can discuss amongst themselves, but also be on hand to answer any questions.

Make space for them to visualise a future

Something that doesn’t always cross the mind of people moving home in Hull and selling their home, is that empty space can actually be a good thing too.

Showing empty space allows for potential property buyers to visualise what their home could look like. A buyer could see an empty wall and picture putting up a canvas on there, or sitting a bookshelf in front of it, that sort of thing.

Have a presentable garden

Another big factor in purchasing a home, sometimes even the deciding factor, is how the garden looks. Not only do people like their own piece of green to relax in, but it’s generally the last thing the viewer will see.

Your last impression is just as important as the first impression. The viewer will remember exactly how they felt when they entered and when they left. Just like the inside, make sure there is nothing laying around outside, tidy everything away that doesn’t need to be out.

Don’t just pile it all into the shed though, as if you have one of these, the viewer will more than likely want to see what kind of garden storage space they could be working with.

Make sure that your fences have slats correctly in place, with the wood either freshly painted or creosoted. People also love to see a colourful garden, so some bright, newly planted flowers could really sell someone on your home.

Liven up the place, remove any dead plants laying around, ensure the grass is neatly cut and that all grass clippings are binned. Do all of this well, and it could be the factor that plays the biggest part of selling your home.

Be yourself with the home viewer

People like people and you will also be leaving an impression on them. Be warm, be welcoming, but also be yourself. They are one of hopefully many potential buyers, so don’t worry if they don’t make an offer.

You’ll want to give a balanced view of the property, being transparent about different problems you have had, how easy it was to fix the issue and giving them full reassurance that they are unlikely to occur again.

Examples of this would be if you had a leak fixed. They’ll need to know of anything reoccuring too if there is something, as the last thing you want is for them to buy your home from you and then be riddled with surprise problems!

Estate agents will no doubt want to take on the property viewings themselves, so that they can earn their commission, but remember that nobody knows your home like you do. You’ve lived there, you’ve grown there, you know it better than any outside party could.

As such, don’t be afraid to jump in and make your own comments every now and again, filling in the blanks where an estate agent salesperson may not.

Last but not least, remember the emotions that will be tied to the purchase of your home. This could be a family looking for their forever home, a first-time buyer looking to purchase their first ever home, and so many more scenarios.

Point out that it has been a happy home, speak fondly of the place. If you’re speaking to a young family or find out that they are looking to start a family, make sure you talk about yours as this is sure to rub off on them and plant the seeds of potential.

Mortgage Advice for Moving Home in Hull

Remember that moving home in Hull can also be a stressful experience. Let a dedicated and expert mortgage broker in Hull like Hullmoneyman take the stress away, by getting in touch today.

Our team of mortgage administrators and mortgage advisors in Hull will do everything they can to keep you informed and up-to-date throughout your process, ensuring that your mortgage goes as smoothly as it can.

Book your free initial mortgage appointment using our online booking feature and we’ll see how we are able to help with your mortgage needs when moving home in Hull.

Buy to Let and Offset Mortgages Hull

Buy to Let & Offset Mortgage Case in Hull

Planning your pension – Offset Mortgages Hull

We tend to find a lot of buy to let landlords in Hull like to create a property portfolio as a means of funding their retirement. Not everybody likes to use a pension plan, but they do understand how the property market works. I know that over the past 20 or 30 years it has been a very strong long-term investment, despite the ups and downs.

In this case study, we will take a look at one way we helped a customer to take her initial steps to become a Landlord.

Remortgaging for a Buy to Let Mortgage in Hull

Carol is a self-employed mum with two children, and she is a Director of two small businesses in the Hull area. She and her partner had quite a lot of equity in their home and were interested in raising some capital in order to purchase a low value buy to let property, potentially at an auction. Carol felt that she was able to get some bargains at auctions, but she never had the money to attend one of these as a cash buyer.

She looked into Remortgage Advice in Hull for the possibility of Remortgaging her property. But had been told previously that it wasn’t possible unless they could provide an address for property they were looking to buy once they’d done this – a proverbial “chicken and egg” scenario.

Carol also mentioned that once or twice a year, she would receive a dividend somewhere within the region of £3000, from one of the companies she was in partnership with. She also mentioned that she had been prone to wasting some of that cash when she received it, perhaps unexpectedly.

Surplus funds allowing you to gain lower rates of interest

I could tell that Carol was always very busy, but also a very savvy businesswoman. The dividends she received could easily be put towards an investment, as there was never anything she was specifically spending it on. I recommended that she take out an offset Remortgage in Hull that Carol and her partner could secure against their home.

I found a Lender who was more than happy to release funds on completion, in order for it to be assigned to a future Buy to Let mortgage in Hull (without wanting to know the address of the specific property). Carol simply deposited the additional funds into the offset savings account that you get with that type of mortgage, and left the money to sit there until she needed it.

The offset savings accounts will not attract interest, though it is instead offset against your mortgage balance. To clarify, Carol had £85,000 surplus funds from a overall remortgage of £215,000. While the money is sitting in the savings account, Carol only has to pay interest on the £130,000 difference between the two figures. The £85,000 is on instant access and was available to jump into at any point in time.

It is choosing the right property and the right amount of investments

Three months after her remortgage had completed, Carol found a suitable property that was in a state of disrepair. It was likely not able to have a mortgage on it itself, but Carol had saved up enough funds to buy the house outright.

Carol secured the property at a knock-down price of £55,000, but this amount needed to be brought up to the total of £70,000 to cover all of the legal costs and a refurbishment program of works.

A further nine months went by, and with all of the work completed, Carol had no trouble finding a tenant to start paying rent. The house was now worth around £90,000, and we were able to raise a remortgage of £67,500 against it to help fund the purchase of a second buy to let property.

The successful outcome of a well-constructed investment property portfolio

Carol has no intention of changing career paths and becoming a full-time Landlord, but she can now see a way into the future where she might own three or maybe even four properties in the future, as a way of funding her retirement plans.

She loves the flexibility that her offset mortgage allows her to have, and while she may still ‘squander’ some of her dividend from time to time, which she is free to do, without fail, half of it at least is deposited back into her offset savings account each time. This means her money will essentially “do the work for her”, reducing the overall amount of interest that is repayable on the mortgage.

Speak to a Mortgage Advisor in Hull today

If you are interested in offset mortgages or building your investment property portfolio, please feel free to book a free mortgage appointment. Our Mortgage Advisors in Hull will be happy to help you in any way they can.

The Pros and Cons of Using a Mortgage Broker in Hull

As could probably be predicted from us, we firmly believe that there are some great reasons for customers to use a mortgage broker in Hull.

As a fair counter argument though, whether it’s via a branch or online, it is still completely viable to go direct to the lender yourself. Luckily we find that most people prefer to make use of a mortgage broker.

Here we will take a look at the pros & cons to both sides.

Pros & Cons of Going Direct

When talking about the option of going directly to a bank or building society, the first thing that immediately springs to mind is that you’ll be free from any broker fees. This of course will save you money.

Whilst that may be a point for, an immediate point against comes to mind too. In previous years, you may have thought “the bank manager will know my finances inside and out”, though when credit scoring was introduced, this no longer became a factor in the process.

One reason why going direct could be preferable, is that some lenders offer exclusive mortgage products that are only available by going direct. This is done so to attract a good spread of business from consumers and brokers alike, switching these exclusive products as they see fit.

On the contrary to this, some products may only be available by going with a mortgage broker. In this case, you’re not only able to see potential exclusive deals from your bank, but other lenders as well. A bank can only offer their own products!

Mortgage Market Changes in 2014

In 2014, the market changed and lenders were no longer allowed to sell mortgages on a non-advised basis to anyone who walked through their door.

Previously, it had been believed that non-advisors were trying to push actual advice on customers. This means they weren’t able to benefit from some of the consumer protection that comes with speaking to a professional mortgage advisor.

The changes meant lenders had to adjust. Heading towards the end of 2014, it was commonplace to be kept waiting over a month just to speak with an advisor. Sometimes today this situation still occurs, which is of course less than ideal when you have had an offer accepted and are ready to go!

Because of the issues that were occuring with these services, applications being made via mortgage brokers went on the rise. This is because many brokers out there, like ourselves, are able to offer customers a more flexible service, at times that best suit them.

When you book your free mortgage appointment with us online, you’ll be able to choose a timeslot that best suits your personal and work life. Oftentimes, your appointment can be booked in for the same day. There is no waiting around for somebody to get back in touch!

Affordability is definitely something that factors into people’s decisions to use a mortgage broker. No matter how good a lender’s deal might seem, you won’t get very far if they won’t lend you enough money!

Buying a house is so important to people, that many customers will opt to go with a trusted and dedicated mortgage broker for professional and personalised mortgage advice in Hull.

Handling More Complex Cases

Nowadays we find that a lot of mortgage applications aren’t as simple as they once were. For one reason or another, there are a lot of contributing factors that can make the mortgage process a lot more challenging now.

Some examples of these are, but are not limited to:

• Poor Credit History.
• Self-Employed Income.
• Mixed Source of Deposit (Savings/Gift).
• Let-to-Buy (Renting Out Your Property to Buy Another).
• Contract Workers/Zero Hour Contracts.
• Affordability.

In the past, it was a lot easier for lenders to stand out from the competition by simply offering a deal that was similar to, but better than another mortgage lender on the market. In modern times this is very different, with lending criteria being the big difference between one option and another.

An example of this is the differences in leniency towards those who are looking to obtain a Self-Employed Mortgage in Hull. Some lenders are willing to be a bit more sympathetic towards previous discrepancies on your credit report. Others, not so much.

A Tailored Process

Your situation is unique to you, it is very unlikely that someone will have the exact same circumstances as you. You could be looking for First-Time Buyer Mortgage Advice in Hull, ready to take the first step towards being a homeowner.

You might be in a tight spot and need some Remortgage Advice in Hull, ahead of consolidating some debts (something that definitely requires an expert opinion). When you explain your position to an experienced mortgage broker, they may have dealt with something that is at least similar in the past.

This allows them to personalise your mortgage advice service and guide you along each step. With a little luck and a lot of hard work, your mortgage advisor in Hull will hopefully be able to recommend the most suitable mortgage, at the lowest rate available to you.

Beyond that though, it’s about more than just getting a mortgage. Even if the application itself is pretty simple to run through, our clients rely on our expertise and industry experience for so much more.

We are able to run through how much the applicant is willing to offer on their potential new home. Our trusted team of mortgage advisors in Hull are able recommend other professional services such as solicitors and property surveys.

Responsive Service

Another reason why using a mortgage broker in Hull could be preferable, is that we tend to be far more responsive than the lenders might be.

Our hard working team quite regularly work late into the evening, outside of normal hours, giving maximum effort on customer cases to ensure the service is prompt but also effective.

Something that is often overlooked when looking at why customers may prefer a broker, is that people’s day-to-day lives are so much busier. A mortgage might be important, but you may have no free time! A mortgage advisor in Hull will take the weight off your shoulders.

Professional applicants especially see the benefits of using a mortgage broker, as they have clients of their own that they charge out their services to and they appreciate having an expert to do the work for them whilst they keep busy.

Mayhap in the future we will see lenders wanting to take business back from the brokers. In the event of this, we may see a more technological approach from them. The world seems to be more focused on that these days.

That’s great news for customers who are fine with speaking to bots or using automated systems. Even more so when the case is straightforward.

For most of us though, there’s an element of “realness” when speaking to a real person. We are getting that “human touch” that only speak to a mortgage advisor in Hull can provide for you.

Book your free mortgage appointment online now using the “Get Started” button. Time slots are available every day, from early until late, at a time that best suits you (subject to availability).

What is an Interest-Only Mortgage?

Interest-Only Mortgage Advice in Hull

There are thousands of interest-only mortgages across the nation that are maturing every year and the homeowners who have one of these may be caught off guard when it comes to having to pay off the capital sum that is owed.

In this article, we take a look at what interest-only mortgages are and what can be done when situations like this occur.

A Summary of Interest-Only Mortgages

Back in the ’80s and ’90s, it was actually really common for residential mortgages to be set up this way. The purpose of these mortgage types, was that you would only pay back (over the course of your term) interest on the amount that you borrowed, with the remaining capital lump sum being paid back once the term ended.

For anyone who had previously taken out an interest-only mortgage, it is likely that you will have been advised to set up a repayment vehicle, perhaps something like a low-cost endowment policy.

The policy would mature over time and was designed with the purpose of helping you to repay the capital balance in full, whilst also giving you sufficient life cover for the duration of your mortgage term. Unfortunately, there are a lot of people who weren’t made aware of the risks attached to this type of product.

One of the risks that cropped up, was that there was no guarantee the policy would actually mature enough to cover the costs of your mortgage debt, which in turn led to many applicants being compensated for them being mis-sold a product.

Nowadays, interest-only mortgages tend to be a popular option for customers who are looking at their options for Buy to Let Mortgages in Hull. These types of people are landlords who buy properties to earn some extra income.

Why do people still have interest-only mortgages?

It is not very common to come across customers who have taken out an interest-only residential mortgage in recent memory, as they are considerably difficult to obtain unless you can prove that you have a very solid strategy for paying back the capital at the end of your term.

For customers who took out an interest-only mortgage at any point in the late ’80s or ’90s and have not switched it to a capital repayment, then you should absolutely look to take action sooner rather than later.

What can I do if my interest-only mortgage is ending?

If you happen to be in this sort of position, the chances that your mortgage lender will send you a letter or give you a call, asking how you plan to pay the capital back will be slim.

It is important to always keep open a line of communication with the mortgage lender, remaining honest and open with them. Contrary to the belief of some, a lender truly does not want to take your property into possession and will only do so if they have no other choice.

Instead of letting things get to that point, here are some other things that you could look to do instead;

• Ask your lender to convert your interest-only mortgage into a repayment mortgage.
• Sell your current property and consider downsizing into a more affordable and manageable property.
• Use savings/other investments to repay whatever you have remaining on the mortgage balance.
• Remortgage to a new lender, for a better rate.
• Consider taking out a Retirement Mortgage.

The retirement mortgage market is an area of the world of homeowners that is currently thriving, largely due to the amount of interest-only mortgages that are reaching the end of their terms, without any concrete plans in place to actually pay back the capital.

There are a lot of retirement products available to customers across the country nowadays, and some providers may even possibly let you service the interest element by way of regular monthly repayments.

Creating this sort of agreement means that when you die, the capital balance that is left to pay, is repaid from the house sale and the surplus can be given out to your family.

Is it still possible to obtain an Interest-Only Mortgage?

Interest-only mortgage are still in existence and can be obtain, though there are limitations as to who can obtain one. For example, you may possibly be a landlord with an extensive property portfolio or have some other investments in place, which you can use to help you repay the balance.

Lenders will now take an in-depth look at your strategy for repaying the loan, analysing a lot more deeply than they would’ve done in the past.

They do this in order to ensure that they are only lending for a property that they are confident won’t default. In addition to this, they will also want a much larger deposit to go down, potentially as much as 50%.

They will also want to future proof any of your plans before going ahead. An example of this would be checking that you have enough equity in your home to potentially downsize to a reasonable property down the line.

As always, our team of dedicated mortgage advisors in Hull, here at Hullmoneyman, are always happy to run through the options that are available to you as a home buyer or existing homeowner in Hull. Book your free mortgage appointment online today and we will see how we are able to help you.

Agreement in Principle: Frequently Asked Questions

A Brief Summary of an Agreement in Principle

Customers will always receive an Agreement in Principle from the lender before they can obtain a mortgage on a property. The reason for this is so that you know the lender will agree, in principle, to let you borrow from them.

This part of the process is carried out before the final checks and whilst even with this we cannot guarantee that you will get a mortgage, being given this is certainly a good sign that you’re on your way to mortgage success.

You’ll often see this online being called a Mortgage in Principle and a Decision in Principle. Sometimes it will be shortened to AIP and DIP. Though the collection of names can be confusing to home buyers, worry not as they’re all exactly the same thing.

Once you have gotten an Agreement in Principle, you will be ready for the next steps of the process, fully prepared to support any offers that you look to make as a First Time Buyer in Hull.

By having this document, you may also give yourself room to negotiate with the seller of the property on a lower price.

This is because it will showcase to the seller of the property in question, that you are a serious buyer and have the necessary funds to move on with the mortgage process.

Frequently Asked Agreement in Principle Questions:

Will obtaining an agreement in principle affect credit score? 

We tend to find that a large amount of lenders these days are choosing to go with soft searches instead of doing hard searches. As a standard rule of thumb, a soft search will not affect your credit score, as they don’t usually leave a footprint.

Hard searches will leave a footprint behind, so having lots of them done can be quite damaging, especially if you fail it each time. That’s not to guarantee a soft search will have no effect, but it is very unlikely.

Soft searches offer less in-depth information than you would get from hard searches, though worry not as no matter which one the lender opts to use, they will be doing it for the right reasons.

Should I avoid hard credit checks? 

If you are not getting hard searches taken out on you regularly, then having one done should be pretty harmless. The problem arises is if you start having multiple hard searches taken out on you in quick succession.

Always remember that if you fully know that you do have a good credit rating, there is no need to be put off by the idea of getting a hard search done, especially if it will be the best option for you to go with.

Is an Agreement in Principle a guarantee that I will get the mortgage? 

Though it would be nice for us to say yes and lift your spirits, unfortunately even with an Agreement in Principle to hand, a mortgage is not always a guarantee at the end of the process.

The mortgage lender still needs to take a look at all of your documents and only after their checks are complete will a mortgage underwriter be able to make their final decision.

Customers often get in touch with us after they have previously been declined at the point of application, as they have neglected to read the small print that is stated within their Agreement in Principle.

You are required to provide your mortgage lender with proof of identity, the last 3 months payslips and bank statements to demonstrate your financial capabilities, before a mortgage lender will offer your case.

The required documentation is a little bit different for Self-Employed Mortgage applicants in Hull.

Can I make an offer without an Agreement in Principle? 

Whilst yes, you would be able make an offer without an Agreement in Principle to hand, you would be much better off for getting one prior to making any property purchase offers.

Whether you take the document, a lender will always have to agree in principle before the mortgage itself can proceed.

Any estate agent with credibility will want to see an AIP before they do business with you, as they need concrete confirmation that you have the funds to proceed and won’t be wasting anyone’s time.

How long does it take to get an Agreement in Principle? 

A trusted mortgage advisor in Hull will usually be able to obtain an Agreement in Principle within 24 hours of your free mortgage appointment.

How long does an Agreement in Principle last for?

An Agreement in Principle tends to expire somewhere between 30-90 days. Always be mindful though that you don’t just have to make an offer on the first house you encounter within your price range. Take as much time as you need.

If your Agreement in Principle expires, your mortgage advisor in Hull will easily be able to get you a new one, in order to help you make offers when you are ready to.

Finding the home of your dreams, only for a lender to decline you, can be both frustrating and crushing. To counteract this feeling, we would highly suggest that you get an Agreement in Principle as soon as you can, to make sure you’re wholly prepared for the mortgage process.

Agreement in Principle Mortgage Advice in Hull

To gain a better understanding about what an Agreement in Principle is and how they can be useful, take a look at our helpful YouTube video guide.