How to Release Equity From Your Home in Hull

Equity Release Advice Hull

As soon as you start paying off your mortgage, you are building up equity within your home. You can work out the amount of equity in your property by subtracting the amount of your mortgage that you have paid off from the initial mortgage amount that you took out.

For example, if you took out a 95% mortgage (5% deposit) on a £200,000 property and you have paid off £20,000, including your deposit of £10,000 you have put £30,000 into the property. This is the equity within your home. Usually, this is portrayed as a percentage; in this case, you would have 15% equity within your home.

Every homeowner will have a different amount of equity in their home. It all depends on how long they have been paying off their mortgage. In the future, once you have put a lot of money into your property, you may get the opportunity to withdraw some of the cash you have put in. This can be achieved in multiple ways, and they usually differ on the age of the applicant and what they are looking to achieve.

Remortgage to Release Equity in Hull

Those who are only partway through their mortgage may want to release a portion of their equity to gain some extra cash. The way that you can release part of your equity is through remortgaging in Hull.

When it comes to remortgaging, you will need to be starting your process up to six weeks in advance to give yourself chance to prepare for the remortgage process and allow time for your mortgage advisor in Hull to find you a perfect product for you and your property.

The remortgage process is usually much quicker than the typical mortgage process, however, you still need to allow time to switch to a new product. Starting your process earlier will also mean that you avoid falling onto your lender’s standard variable rate of interest. This interest rate is likely much higher than your current rate and the rate you could access if you were to remortgage.

Once you remortgage your property in Hull and release equity, you will be able to do whatever you like with the money. Most people use it to fund improvements for their property, however, some people use it to fund larger purchases such as holidays, weddings or a new car.

When it comes to releasing equity, it is important to weigh up the positives and negatives to decide what the best option is for you.

It is important to seek financial advice before releasing equity.

Equity Release & Later Life Mortgages in Hull

Equity Release is different to releasing equity through a remortgage. The main difference is that you do not have a mortgage on your property to qualify for it. Even if you have already paid off your mortgage, you can still qualify for equity release in Hull.

Like most kinds of mortgages, there are limitations to equity release. You will have to be over the age of 55 and have a property that is worth equal to or more than £70,000. Speaking with a later life mortgage advisor in Hull is essential for equity release.

Equity release comes in two forms: lifetime mortgage and home reversion plan. As a mortgage broker in Hull, we are able to help you with both kinds of mortgages.

To understand the features and risks, 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.

What makes a remortgage to release equity different from equity release?

When you remortgage to release equity, you will take out a new mortgage on your home with a higher loan to value than what you were previously on. Think of it that you are taking money back from what you have paid into your mortgage. When your new mortgage comes to an end you can either remortgage again or sell up and move home.

If you take out an equity release lifetime mortgage, your mortgage term will be extended over the rest of your life. You are able to withdraw that equity to use as you please with the balance being paid back upon either your death or if you were to move into long term care.

As a mortgage broker in Hull, we have seen how lifetime mortgages have become more flexible over the years and some lenders may allow for you to still move home. If you are looking to achieve this, it is important to speak with a later life mortgage advisor in Hull. Our advisors are able to compare different later life products with on another to determine which option is best for you.

Why release equity from your home in Hull?

As mentioned throughout this article, there are many different reasons why people may want to release equity. Let’s take a look at some of these reasons and how they can be achieved via a remortgage to release equity and through an equity release lifetime mortgage.

Home Improvements

Homeowners may want to invest in their property, particularly if some areas need improvements. Improvements could mean anything from modernising a kitchen to converting a loft to create more space; there are many different ways to improve your home.

Perhaps if you have had a change of personal situation, this option could be more beneficial to you and your situation, for example, if you have decided to grow your family and need more space.

As a mortgage broker in Hull, we would also recommend exploring a remortgage in Hull over moving home in Hull.

Consolidate Debts

If you have built up any unsecured debt, and are finding the repayments hard to manage, you may benefit from releasing a small portion of your equity to pay it off.

The more traditional route to take would be to consolidate this debt into your mortgage so that you pay it off alongside your mortgage payments in more manageable amounts. However, if you don’t want your monthly payments to be increased, using equity from your property could be a faster solution to get it paid off.

When applying this to equity release, we find that later life applicants who perhaps have had their debts catching up to them, will use some of their released equity to simply pay off these debts.

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.

Buying Another Property in Hull

Some homeowners may want to use the equity as a deposit on a new property purchase. This is entirely viable through the power of remortgage and equity release. Whether this property is an investment for a buy to let or for your family to help them get onto the property ladder, releasing equity can give your deposit a huge boost.

You must know that if you choose to take the equity release route to fund the mortgage deposit, you cannot live in this second home, you must only have one place of residence.

Family Inheritance

Equity can also be used to fund family inheritance, although, this is rarely done when people are relating equity through a remortgage.

Later in life, you may want to pass some of your funds on to family members or friends as their inheritance. If the applicant releasing the equity does not have anyone they want to share their inheritance with, we often see that they donate some of it to charity.

Fund Your Retirement

Some people, particularly those with a later life mortgage in Hull, may want to use the equity they have released to fund their retirement lifestyle. This is, of course, less common when remortgaging to release equity.

Furthermore, these funds could be used for the care you may require. This could include both short-term and long-term care.

Book a Free Remortgage Review or Later Life Mortgage Appointment in Hull

Whether you are looking to remortgage to release equity or take out a later life mortgage via equity release, you should speak with a remortgage advisor in Hull or a later life mortgage advisor in Hull. You can book your free mortgage appointment online and select a date and time that best suits you!

We provide a responsive service so that you are able to get in touch with a member of our team 7 days a week. We will also make sure that you are aware of the costs involved with a remortgage and later life mortgages.

To understand the features and risks, ask for a personalised illustration. Equity Release may come in the form of a lifetime mortgage or home reversion plan.

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.

A home reversion plan involves selling all or part of your home to a plan provider in exchange for a tax-free lump sum.

What is a Let to Buy Mortgage in Hull?

Let to Buy Mortgage Advice in Hull

The Financial Conduct Authority does not regulate some types of buy to let or commercial mortgages.

The let to buy process works in exactly the same way as buy to let, just flipped on its head. Instead of buying a new property in Hull to let out, you will be buying a new property to live in so that you can rent out your current one.

To begin your let to buy mortgage journey, you must first remortgage your existing residential property in Hull. This will allow you to switch over your property to a buy to let mortgage.

As well as remortgaging your current home, you will also need to take out a new mortgage on the property that you are looking to live in. Taking out a new mortgage can be costly, even more so when you are looking to invest in buy to let.

When taking out another mortgage on your new property, you will be required to put down a larger deposit. This is because you will now be accountable for two different mortgage payments, therefore, your lender needs to make sure that you are able to afford this. As a mortgage broker in Hull, we commonly see that people choose to remortgage to release equity from their current property to fund the deposit for the other.

Please note that remortgaging a residential property into a let to buy is not the same as a buy to let remortgage.

What is the difference between let to buy mortgage and buy to let mortgage in Hull?

A let to buy mortgage is a variation of buy to let. The mortgage part works in exactly the same way, it’s just the process that is different.

Buy to let mortgages are taken out on a property that is being let out. This property can provide additional income for the holder as a tenant would live inside the property. Usually, the amount that a tenant is charged is greater than the mortgage payments on the property.

The main difference between the buy to let and let to buy process is how they start. We see that most let to buy applicants don’t plan to invest, right until they decide on moving home. This is because, rather than moving and selling your current home, you could keep it and let it out. We call them “accidental landlords”.

This also avoids the stress of moving home. Let to buy landlords can simply keep the property in their name and advertise it to tenants once they have moved and settled into their new homes.

Stamp Duty Charges

There are many different costs that come with taking out a mortgage, the same applies for let to buy. One cost that you may come across is Stamp Duty. Some applicants may not face these charges as it depends on the value of the property that you’re buying.

Our job, as your mortgage broker in Hull, is to make you aware of all the costs involved with the mortgage process so that you are prepared and know what you may need to account for. One of our mortgage advisors in Hull will talk you through these costs in your free mortgage appointment.

How to get a let to buy mortgage in Hull?

In order to take out a let to buy mortgage, you must match the appropriate lending criteria. Not everyone will meet the specific requirements, therefore, it is important to make sure that you fit in before getting declined.

Usually, you will need to have a 25%-40% deposit for your let to buy property. This number can change depending on your affordability; that’s why people often release equity from their homes to help them make up this deposit percentage.

To qualify for let to buy mortgage, you will also need to prove that you can cover 125% of your mortgage repayments. You will need a good credit score too. Having a good credit score can be a factor that opens you up to more favourable rates of interest.

Can I get a let to buy mortgage in Hull with bad credit?

Buy to let and let to buy mortgage criteria is much stricter than traditional mortgages. The lender has to be sure that you are able to afford two sets of large monthly repayments.

If you have bad credit, your chances of getting a let to buy mortgage in Hull may be lower than an applicant who has good credit. If you have a CCJ or default in your name, your chances may be even lower of being accepted, though in some cases not impossible!

The Positives and Negatives of a Let to Buy Mortgage in Hull

Positives

Rather than going through the stress of selling your current home and being caught in a property chain, you could keep the property in your name and switch to a buy to let mortgage. This process can be simple and often completed quickly with the help of a let to buy mortgage advisor in Hull.

Having a let to buy mortgage in your name can provide an additional source of income. This profit can be used however you would like.

You still get to move home like you originally wanted, and the moving home process still remains the same for you.

You will need to consider how much both properties are worth. If the value of them go up, you could end up making a hefty profit in the future. This also applies to when you pay off your let to buy mortgage, you will no longer be accountable for the mortgage payments on the property, therefore, you will be making a huge profit on the property.

Negatives

Having two properties in your name means that you will need to account for both of the costs. You are fully accountable for your let to buy property. This includes repairs, damages, etc., as you are a landlord now.

Let to buy mortgages may come with higher interest rates (co-dependant on the economy), which may make your payments higher than your new mortgage. You will need to account for this when buying your new residential property to make sure that you can afford it.

Unfortunately, whilst the value of your properties could go up, they could also come down. This is sometimes to not worry about but to consider.

So, is a let to buy mortgage in Hull right for me?

Is a let to buy mortgage in Hull right for you? Well, that is completely up to you and your personal and financial situation.

It depends on what you are looking to achieve from your let to buy property. There may be other options more viable for you:

• Temporary Accommodation – If a let to buy isn’t quite right for you, but you still want to invest in property and become a landlord, perhaps you could move into rented/temporary accommodation and take out a buy to let mortgage.
  
  Yes, this can be costly, however, you may not match up with the let to buy criteria and this may be your way to meet it.
  
• Consent to Let – You could also consider consent to let. This is where your mortgage lender allows you to rent out your residential property for a length of time, giving you time to move into your new property.
  
  Although this sounds relatively straightforward, this depends on your mortgage lender. You may also find it difficult to find a new home when you have a consent to let going on.
  
• Sell your Home – An alternative could just be to straight up sell your home and move into rented accommodation until you have found a new one to live in. This could be better if you are in a rush to move on from your home. An example of this situation could be during a divorce/separation.
  

Speaking to a Mortgage Broker in Hull

Our let to buy mortgage experts in Hull are here to help. We have helped many landlords achieve their let to buy aspirations, now it’s time to help you!

We have been working with let to buy for the past 20 years. Our team are experienced and will do everything that they can to help! This includes making sure that you match the let to buy criteria, searching 1000s of deals to find a suitable one for you and delivering open and honest mortgage advice in Hull.

You easily speak with a let to buy mortgage advisor in Hull, simply book online or call us. We are available 7 days a week, so don’t hesitate to call!

What is a Shared Ownership Mortgage in Hull?

The Shared Ownership scheme is a mortgage scheme introduced by the government all the way back during the 80s. It was brought in under the Housing Act 1980.

The scheme is designed to help homebuyers get onto the property ladder. It is only available to permanent UK residents who are either first time buyers or moving home in Hull. If you are struggling to save up your mortgage deposit as a home mover or first time buyer in Hull, perhaps the Shared Ownership scheme could be the solution you need.

How does the Shared Ownership scheme work?

The Shared Ownership Scheme allows you to purchase part of a property, split with the housing association. The portion/percentage of the property that you are able to buy is usually between 10%-75%, where the housing association owns the remainder.

The way that this works is that you take out a mortgage on this percentage and then pay rent on the remaining amount. You will have mortgage payments and rent payments to account for each month. Your rent will be lower than if you had to pay rent on 100% of the property.

Furthermore, your annual, combined household income has to be less than £80,000 (less than £90,000 if you’re in London) and the home you are purchasing will almost always be a leasehold property. Leasehold means you will be purchasing the home for a set amount of time.

Updates to The Shared Ownership Mortgage Scheme

For anyone who has previously heard of or used the Shared Ownership Scheme, you may have been aware that the minimum percentage that you used to have to take out was 25%, however, now it has decreased to 10%.

This was a huge help to those wanting to utilise the Shared Ownership Scheme, but just couldn’t quite afford it. In turn, the lower the percentage of the property that you own, the higher your rental payments may be.

There have also been significant changes in the fees associated with a Shared Ownership mortgage. Landlords are now responsible for maintenance and repair costs for the first 10 years of ownership.

If you have taken out a Shared Ownership mortgage in Hull before April 2021, you may not benefit from these new changes as they applied to properties bought under the scheme following their introduction.

How do I apply for a Shared Ownership mortgage in Hull?

Shared Ownership is a Help to Buy Scheme, and just like all other Help to Buy Schemes, you must qualify for them before you can access them. Most schemes require you to be a first time buyer in Hull, whereas others are a little more flexible and can be accessed by more types of buyers.

As a mortgage broker in Hull, we would recommend speaking with an expert to work out whether or not you are eligible for the Shared Ownership Scheme. As mentioned, there are a variety of factors that go into deciding whether someone can access the scheme or not, therefore, it is always best to check before applying.

One of our mortgage advisors in Hull can look at your affordability and personal and financial situation to work out whether the Shared Ownership route is for you. We are open and honest with our customers, meaning that if you are better suited to another Help to Buy Scheme or the traditional mortgage route, we will make you aware that this is the case.

Our team will make you aware of the costs involved with the Shared Ownership Scheme and whether it is a viable option for you and your circumstances.

Pros & Cons of Shared Ownership Mortgages in Hull

With any type of mortgage, there will be pros and cons. This works for all Help to Buy Schemes also.

Pros

When taking out a Shared Ownership mortgage, the deposit total that you have to put down on the property is determined by the percentage of the property that you are purchasing. For example, if you are purchasing 50% of a property worth £200,000 and you need to provide a 5% deposit, you will need to put down £5,000 (5% of a £100,000 mortgage).

Sometimes, you may get the option to purchase your Shared Ownership property in the future. If you get this option further down the line, it may be within your best interests to take a mortgage out on the remainder of the property. Not all building associations will allow this. When taking out your Shared Ownership mortgage, it may state in your contracts whether this is an option in the future.

Cons

One con is that you would be paying more rent if you take out a mortgage on a lower share of the property. For example, if you take out a 10% share of the property, you will pay more towards your rent than you would if you were to take out a 50% share.

If you are able to purchase more of the property and increase your share passed 75%, unfortunately, you will have to pay Stamp Duty on the entire value of the property, though sometimes this land tax won’t apply to a first time purchase.

Since you do not outright own 100% of the property, you only own a percentage, you must obtain permission before you are able to make any structural changes to the property. This can take away some of your freedom, unfortunately; which you would have if you owned your own home.

Can I sell my home if I have a Shared Ownership Mortgage in Hull?

Like most homeowners, there may be a time when you decide to part ways from your current property and look at moving home in Hull. In most situations, this process would be simple, however, with a Shared Ownership mortgage, it is slightly different.

Unfortunately, in almost every case, you will need to own 100% of the property to sell your Shared Ownership property. This is because the Shared Ownership property is still partially owned by the housing association.

You must also know that the housing association will usually have ‘first refusal’ rights, for the first 21 years after you have bought the home. This means they are, by law, able to make an offer to buy the property themselves, before you put it on the open market.

Is a Shared Ownership Mortgage in Hull right for me?

The Shared Ownership Scheme is a great option for first time buyers and home movers struggling to save up for a deposit and to afford the usual mortgage costs. This is mainly due to the fact that you can put down a lower deposit on the property.

Shared Ownership is only available on certain types of property, which can complicate the process in some cases. We will make sure that you are fully prepared and know the ins and outs of Shared Ownership in Hull before purchasing a property.

You can easily contact our mortgage advisors in Hull by booking a free Shared Ownership mortgage appointment online. We work 7 days a week so that you can book an appointment for a date and time that best suits you. We will be more than happy to help!

You can learn more about the Shared Ownership Mortgage Scheme by visiting the government OwnYourHome website.

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.

Can You Get a Mortgage in Hull With a CCJ?

Mortgage Advice in Hull for Customers with Bad Credit

What is a CCJ and how can it affect getting a mortgage in Hull?

A CCJ (County Court Judgement) is a court order that is issued if you are unable to make your monthly mortgage payments. If you receive a CCJ, you will have a 30-day window to pay it off, resulting in a “satisfied CCJ.” If you pay within this time frame, the CCJ may be removed from your credit file. However, if you are unable to pay, the CCJ will remain on your record for six years, known as an “unsatisfied CCJ”.

Having a CCJ on your record can have a negative impact on your credit file and reduce your chances of being approved for a mortgage. If you have a CCJ and are seeking a mortgage, we would advise speaking with one of our specialist mortgage advisors in Hull to find out what options you have. We will be open and honest with you at all times; we only want the best for you.

Can you get a mortgage in Hull with a CCJ?

Depending on your specific circumstances, it may or may not be possible to get a mortgage with a CCJ. With the help of a specialist mortgage broker in Hull like ourselves, you may be able to access the specialist deals that are only available to those with a CCJ. We have a large panel of lenders that we can access, with a small minority of those holding deals for applicants with CCJs. You will need a very large deposit to access these deals, however.

Remember that if you are able to pay off your CCJ within the 30-day deadline, it can be removed from your credit report, which increases your chances of being approved for a mortgage. Generally also, the longer the time elapsed from the issue date, the more likely you are to get a mortgage. For example, if you applied for a mortgage three years after being issued a CCJ, rather than one year after being issued with one, you should be more likely to be accepted.

When a mortgage lender sees a CCJ on your credit file, they will want to understand the reason for it. If you received a CCJ after failing to meet your payments for a financial commitment and have fallen into arrears, your mortgage lender may not believe that you have the ability to commit to another. When you apply for a mortgage with a CCJ, your mortgage advisor in Hull will consider several factors, such as:

• How many CCJ’s are currently in your name?
• What is the value of the CCJ?
• Is your CCJ settled or unsettled?
• How much saved deposit do you have?
• What dates were the CCJ’s registered?
  

Can I dispute a CCJ?

While it can be difficult, it is possible to have a CCJ removed from your credit file with sufficient evidence.

If you believe that the CCJ was issued in error, you have the option to request the court to reopen your case. However, this process comes with additional costs and may not be the best use of your resources compared to simply paying off the CCJ within the 30-day window.

Additionally, failing to attend your hearing can result in your case being rejected and incur additional court costs.

If your appeal is successful and the CCJ is removed from your credit file, it will be beneficial for your chances of obtaining a mortgage. On the other hand, there is also the possibility that your appeal may be rejected, resulting in lost funds and the need to still pay off the CCJ. You must carefully weigh the risks involved.

To appeal a CCJ, you must fill out an N244 form and submit it to the court. If the court agrees that the CCJ was wrongly imposed and reopens your case, they may remove the CCJ from your credit file.

How can I rebuild my credit score after receiving a CCJ?

There are steps you can take to improve your credit score after receiving a CCJ, and speaking with a specialist mortgage broker in Hull like us, can be extremely beneficial in achieving this goal.

If you have a CCJ, it is important to keep up to date with your monthly repayment commitments. This includes anything from credit cards to paying off your CCJ. Even if you were able to pay off the CCJ within the 30-day period, it’s important to be vigilant with your finances to prevent similar issues in the future. Multiple CCJs can significantly harm your credit score and even make it even more difficult to obtain a mortgage.

If you have a CCJ on your record and are interested in exploring mortgage options, schedule a free appointment with one of our specialist mortgage advisors in Hull today. They will review your case and provide personalised advice tailored to your circumstances.

Remortgaging in Hull When Your House Value Has Increased

Buying a property is an investment, whether you live in the property or rent it out as a buy to let/let to buy, you would hope that the value of the home will increase over time. Not only is this the largest asset that you will own, but they also provide a roof over your head and your family. Generations to come may even benefit from this property if you choose to pass down the property ownership.

The property market is constantly fluctuating, there will be times were house prices slightly dip and sometimes they will soar. Whilst property prices are up surprisingly there are often more favourable rates in the market, therefore, it could be a great idea for you to look at your remortgage options to take advantage of the deals available.

What is a loan to value and why do people remortgage for a better one?

Loan to value (LTV) is the ratio of the mortgage to the property value. Your LTV ratio will be expressed as a percentage, for example, if you are purchasing a property in Hull worth £200,000 and you are planning to put down a 5% deposit (£10,000), you will need to take out a 95% LTV mortgage.

In the mortgage market, LTVs are broken down into tiers/brackets, with the lowest bracket usually being 60% and the highest 95%. Not all lenders will offer 95% LTV mortgages and not all lenders will offer 60% LTV mortgages, it all depends on the lender.

The lower the LTV mortgage that you take out, the more favourable mortgage deals you should be able to access.

In the future, say your £200,000 property has increased in value to £210,000 and your initial £195,000 mortgage balance has come down to £180,000. This means that your new loan to value is 86%.

Because your LTV has decreased, you should be able to access better rates of interest when you remortgage. In some cases, the economy can impact the rates available in the market, so even if your LTV has decreased, unfortunately, the rates may shoot up because of the economy.

The reason why lower loan to value mortgages have a more competitive rate of interest is that you are less of a risk to the lender.

How do I find out the value of my property in Hull?

Just like when your property price was valuated prior to your purchase, the same process will happen again before you remortgage. You won’t need a new property survey, such as a homebuyer’s report or full structural survey, you will just need a mortgage valuation. A mortgage valuation will determine the true value of your home.

When you remortgage in Hull you will be taking out a new product with your new mortgage lender, whereas when you take out a product transfer, you will be taking out a product with a different lender. This doesn’t make a difference to the process. A mortgage valuation will still be carried out with a product transfer.

It’s all a risk game for the lender, they always need to know the true price of the property that they are lending against.

Mortgage valuations can be carried out in two separate ways, the first is by using an Automated Valuation Model (AVM), also known as a desktop valuation. For this valuation, somebody will not come out to your property, they will look at databases to cross-reference similar properties in your local area to determine the value.

The other type of valuation is a physical inspection, where somebody will come and visit the property to look inside and outside to work out the true property value. An in-person valuation can benefit homeowners that have invested in home improvements or extensions, as these additions can add value to the property. AVMs will unfortunately miss these factors. If you would prefer a physical valuation, speak with your mortgage advisor in Hull so that they can mention your preferred valuation method to your lender.

Remortgage to Release Equity in Hull When Your Home Value Has Increased

Whilst having equity within your property can add the benefit of being able to access competitive mortgage products, in some cases you may want to release some of the equity during your remortgage.

The equity within your home is essentially how much you have paid off your mortgage. Using the same example from before, if your current mortgage balance is now at £180,000 (86% LTV from your newly valued £210,000 property) you have 14% equity within your home. Some property owners may want to release a small portion of this equity when remortgaging.

Releasing equity will mean that your LTV will increase though, potentially making your monthly payments increase again. However, if you use the equity for something such as home improvements, you may find that your property value increases and the investment in these improvements will benefit you financially in the future.

When dealing with such a large financial asset, it is important to know the positives and benefits of releasing equity. One of our remortgage advisors in Hull will be more than happy to help you with your remortgage if you need advice.

Can I remortgage early if the value of my home has increased?

Depending on how far you are through your fixed mortgage term, it may be possible to remortgage early.

The downside to remortgaging early is that you may have to pay an early repayment charge (ERC) for doing so. This is because you are breaking your initial contract terms. We will say that you should only remortgage early if you are certain that it is the best thing to do for your financial situation.

In some cases, remortgaging early when your home value has increased can allow you to access a better rate of interest, and paying the ERC could potentially save you money further down the line.

An example of a good time to remortgage mid-way through a fixed term would be during the COVID-19 global pandemic when the Bank of England base rate dropped. Remortgaging early would’ve possibly meant that you could’ve secured a better rate. Despite facing an ERC, if your new rate was significantly lower than your old one, you would end up saving money in the long run and it would prove that the ERC was worth paying.

This niche example is from a strange time in our lives, but it just shows how sometimes remortgaging early can save you money. We always advise speaking with a mortgage broker in Hull prior to remortgaging early, just so you don’t end up losing out on money.

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.

Can I Get a Right to Buy Mortgage With Bad Credit?

Anyone in Hull who has been renting from a local council or housing association may find they are eligible to purchase the home they are renting, via the government Right to Buy Scheme.

Typically, you receive a discounted purchase price (often acceptable as a form of deposit) which allows this. To qualify for the Right to Buy Hull, you must have been a public sector tenant for at least three years, with the longer you have rented impacting the discount you receive.

Every applicant has different circumstances, and what could be a straightforward process for some can be a different story for others. You may find that although you are eligible, you have bad credit to your name. This can severely impact your ability to obtain a mortgage.

Luckily, for those who want to know if you can obtain a Right to Buy mortgage with bad credit, the answer is yes. Of course, personal circumstances and the discretion of mortgage lenders are always a factor, but with the help of a mortgage broker in Hull, you could still have options to obtain a right to buy mortgage.

How do I know if I have bad credit? 

What is defined as bad credit depends on the mortgage lender you are dealing with. Some lenders may deem it to be things like missed credit card payments, phone contract payments or loan installments. On the other hand, there are some who may not classify them as such and look past them.

However, if you have gone through withdrawal, bankruptcy or CCJ tied to your name, you will be classified as having bad credit. In all these cases, bad credit will lead to a decrease in your credit score, with this impacting your chances of obtaining a Right to Buy Mortgage in Hull.

Having a low credit score can impact your situation negatively. Lower credit scores can make getting a mortgage challenging. Even though we have a large panel of lenders, many being specialist in bad credit mortgages, you will still be considered a higher risk.

To a mortgage lender, there is every chance you cannot repay your mortgage payments each month, leading to eventual repossession and a loss of profit to the mortgage lender. Because of this, applicants who are accepted tend to face much higher costs.

What types of bad credit will have an impact on my Right to Buy mortgage?

To simplify any bad credit can have a negative impact on any mortgage not just a Right to Buy mortgage. Bad credit affects everything from first time buyer mortgages to remortgages and everything in between.

As mentioned above, bankruptcy can be a big issue. Typically, if at least 3-6 years have passed since you were discharged from your directorship, you will have a better chance of finding a specialist mortgage lender willing to let you borrow.

Debt Management Plans and Individual Voluntary Arrangements (DMPs and IVAs) can also have an impact on this. This is a fairly stricter circumstance than some of the others. If there have been at least 3 years, you have a much higher chance of success, though if not, you are limited.

Being subject to repossessions can also make getting a Right to Buy mortgage difficult. There are some mortgage lenders who are willing to let you borrow under these circumstances if it has been a few years since, although we tend to find the vast majority will probably reject your application.

Of course, some of the more commonly encountered instances include things like CCJs (County Court Judgements), defaults, arrears, missed or late payments and just generally having a low credit score. As you can imagine, the latter is the least serious of the ones mentioned.

Overdue payments or missed payments can vary and a mortgage lender’s perception may also vary. Arrears, defaults and CCJs are much more serious, with mortgage lenders wanting to see that at least three years have passed.

In either of the latter cases, a specialist mortgage lender will also review the exact circumstances surrounding the bad credit, as there could be options depending on whether you have satisfied payments and are a few years removed from the situation.

How does having bad credit affect a Right to Buy mortgage?

With all bad credit mortgage circumstances, the better chance you will have will depend on the further you are from your bad credit problems. Trying to repair your financial situation also looks good in the eyes of a mortgage lender.

Things like cleared CCJs, a tidy credit file, could help improve your chances. Of course, this still does not guarantee anything and obtaining a Right to Buy mortgage with bad credit will still be challenging, but it means you could have options.

The best way to see if you have a chance at obtaining a Right to Buy mortgage with bad credit is to speak with a dedicated mortgage broker in Hull. Many mortgage brokers, like us here at Hullmoneyman, have access to specialist mortgage lenders on the panel that offer complex case deals.

Whilst the process may be a challenge and you could face higher interest rates, with a mortgage broker in Hull finding you the most suitable deal, based on your individual circumstances, is part of our job.

If I have bad credit, do I need to put down a deposit for my Right to Buy mortgage?

Those applying to buy their local authority home using a Right to Buy mortgage, the amount of discount that will be applied can often be accepted as a deposit on the property by the mortgage lender. This is because you already purchasing at below its market value.

Your circumstances may be different, however, if you are purchasing and taking out a Right to Buy mortgage with bad credit. The reason is that you are at a higher risk to the mortgage lender because of your bad credit.

If your discount is equivalent to a smaller deposit and you have bad credit, a mortgage lender may require you to deposit your own funds to increase that percentage. In other cases, if this discount is equivalent to a deposit of 10-20%, they may be more lenient.

Ultimately, it depends on how long you’ve lived there, your personal situation, such as your bad credit and the mortgage lender. With all mortgage instances, the higher deposit you can put down, the better the mortgage deals you can access.

This applies to a Right to Buy Mortgage Hull as well, as whether you have bad credit or not, putting down more deposit can open you up to much better mortgage deals, lowering either your monthly payments or interest rates. 

Can I Port My Mortgage to a New Property in Hull?

Porting Mortgage Advice in Hull

Any homeowner with a mortgage to their name will notice that the vast majority of high street mortgages on the market are portable.

A portable mortgage is where you move home, from one property to another, but still, take your existing mortgage with you and avoid the need to pay a penalty charge for doing so.

These come in handy if you are currently on a fixed rate mortgage deal with low interest rates, but looking to move into a new property. Doing so will give you the possibility to avoid having to pay an Early Repayment Charge (ERC).

Are all mortgages portable? 

No, not every mortgage deal on the market is portable. Especially mortgage product from a specialist lender, as their mortgage was probably quite complex to qualify for in the first place and they won’t want you to port it.

To find out whether porting your mortgage is the right option for you, get in touch and speak to your mortgage lender, they’ll be able to give you an answer.

Should I port my mortgage?

Even if the mortgage is flexible enough to port, some homeowners may decide that option is not for them and choose not to do so.

The reason that these customers may not wish to proceed with porting their mortgage, can be down to a variety of factors. This can include situations where perhaps a mortgage lender isn’t willing to lend the extra funds, or differing interest rates in those additional funds.

It may be worth your while accepting the Early Repayment Charge (ERC) and move to a different mortgage lender altogether, if it works out cheaper to go to that new deal. 

What is a sub-account? 

This is a type of account that will be attached to your mortgage when you look to port it and the additional funds will move onto a deal that is different to your original mortgage.

Because of this, each of these will be on two different rates of interest that are applied on both the mortgage and the direct debit.

In the future, the fact that the products can overlap may become problematic, and this might need looking at down the line, in order to get them realigned. This may mean one of the sub-accounts falling onto a lenders variable rate briefly. 

Mortgage Advice in Hull for Porting Your Mortgage 

If you are looking for Moving Home Mortgage Advice in Hull or you are looking for a Buy to Let Mortgage in Hull, get in touch and speak to a mortgage expert today. We are experienced in helping many kinds of mortgage applicants in situations like this, and will do what we can to assist with all of your mortgage needs