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!

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.

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.

Should You Rent or Buy a Property in Hull?

Mortgage Advice in Hull for Home Buyers and Renters

Why should I buy a property? 

A sudden market boom or drastic plummet is an event that we never truly will happen because of the ever-changing nature of the market. For those buying a property and it quickly does down in value, your disappointment will be understandable. Throughout the years we have experienced this often, history does evidence that this happens. As done before, the value may eventually start to rise again. This all comes down to the assumption that you’re still financially able to keep the property.

Rewinding back to sold values during the Credit Crunch, known as one of the worst economic era’s in our lifetime. Less than 10 years later, the property market took a surprising turn the property market was booming and property values were improving. In the case where you have to, unfortunately, have to sell your home at the wrong time, you may be in a situation where you have a lot of money. This can happen due to circumstances like relationship breakdown or reduction in your personal monthly income, requiring a need for a cash injection through a home sale.

Prior to committing to buy a home, it can be beneficial to contact an experienced first time buyer in Hull as we will be able to explore mortgage insurance like critical illness insurance for you from circumstances that may affect you and your mortgage, like unexpected illness or even death. With this in mind, it’s not just an investment, this is your home, where you will be creating a life for yourself. The key thing here is finding something that is suitable for you and your circumstances.

Will a mortgage be cheaper than renting? 

Usually, your mortgage payments will be cheaper than monthly rental payments. This may not apply to everyone, but it is likely to be the case. Interest rates are known to go up and down, which means your mortgage payments vary depending on the month.

Generally, people go down the route of a fixed-rate mortgage as a way to prevent this. With a fixed-rate mortgage, you will keep payments consistent for a set duration of your term, creating a sense of stability for both yourself and the lender. When it comes to renting, your payments will go two ways, they may stay the same or become more costly. It is quite rare for a landlord to lower the rent.

Providing Security & Stability

For many, owning a home can create a sense of stability for some people and their families. In the case where you can afford your mortgage payments, this means that as long as you still wish to live there, nobody can force you to leave the property, which is something that isn’t always the for private tenants.

Even though you have some protection as a renter, the landlord may want their property back, resulting in your being stuck in what you can do. You may find that the landlord will give you first refusal (the ability to buy the property before it goes to market) so it can avoid the stress and costs of advertising with an estate agent.

Flexibility 

On the other hand, renting is a more flexible option compared to being a homeowner. For instance, if you found a job in a new area, you have more freedom to hand in your notice and relocate to that new area so you can pursue that career. This may be nice, but it doesn’t apply the same to homeowners, because you will then need to figure out regardless of if you want to sell your home or rent it out. Both processes can be expensive and time consuming.

If you do fancy a change in scenery or are unsure of how long you will be around the area, buying may not be the option for you to take. Home buying requires long-term stability and can be looked at as more of an investment in both money and time.

Repairs 

If you are in a rented property, it’s the landlord’s job for any repairs needed on the property they are renting out to you. When it comes to getting these repairs carried out, some landlords are better than others. Therefore, be prepared to fix some minor repairs yourself if you’re renting and encounter anything that needs carrying out. In terms of homeowners, they have full responsibility for their own repairs and normally the condition of a mortgage will include the property being insured to protect the lender from losing out in the event of something happening to it.

In spite of it being the more popular option, owning a home of your own isn’t the best option for everyone. Young couples may find that renting together is a brilliant way to get an insight in what living together would be like. In some cases, it may not always work out the way it should and removing a name from a mortgage can be a challenging process.

Home buying can be a big commitment and one something doesn’t do on a whim, it requires careful planning. If you are currently renting, you may be finding it challenging to save up for a deposit. At the end of the day, many people go for buying instead of renting, however, this isn’t always the case for everyone. Through our experience providing open and honest mortgage advice in Hull, we do find that customers rather buy as they see it as the better option compared to giving someone else the money to live in a house they have limited freedom of. It’s all about buying, therefore, you need to be in a financially stable position prior to buying a home.

Moving Home in Hull with a friend(s) / family member?

In the circumstance where you are looking to rent or buy with a friend or partner, as a mortgage broker in Hull, we do advise that you only get a mortgage if you have lived with your friend or partner before.

Sometimes, we find that issues arise from customers who have locked into a mortgage deal with a new friend or partner. This is definitely the case that circumstances have changed and one of you wants to move out of the property. It’s not as straightforward as simply removing your name from the mortgage.

For those looking at removing a new, you will need to reach out for Specialist Mortgage Advice in Hull to get things sorted.

Our team are available 7 days a week

With the knowledge you now have about the pros and cons of buying a renting, it’s now time to look at your options. Think about your situation, how each option will benefit you as well as if the option is in line with your future plans.

These are factors that will have a significant impact on your life. Many people list out pros and cons of each option which seems to be helpful to them.

When it comes to the overall data of these two options, most people look to buy instead of rent as it is a good option for them to start their homeowning journey as a first time buyer in Hull.

Furthermore, many of our customers would rather pay towards their own mortgage than pay towards someone else’s. For more information on buying vs renting, book your free mortgage appointment today to discuss your options with a dedicated mortgage advisor in Hull.

Agreement in Principle and Soft Credit Searches

During your mortgage process, you will have to pass your mortgage lenders affordability checks, credit searches and prove your income. Once you have done this, you will obtain an agreement in principle (also known as an AIP).

Having an agreement in principle will not only demonstrate that a mortgage lender is willing, in principle, to let you borrow the funds, but it can also be incredibly useful when negotiating on the asking price of a property, as the seller now knows that you are a serious buyer and ready to go.

How does your agreement in principle affect your credit score?

The way in which an agreement in principle could affect your credit score, depends on the type of credit search that the mortgage lender takes out. There are two main types of credit search that they will use; Hard Searches and Soft Searches.

Soft Credit Searches

Nowadays, mortgage lenders will much more frequently carry out a soft credit search over a hard credit search. Soft credit searches will generally be less detailed than a hard search, though they are still typically a good indication that your application could be accepted, if you do obtain an AIP from this.

Typically speaking, a soft credit search will not leave a credit footprint, meaning your credit score should not be affected by having these taken out.

Hard Credit Searches

Hard credit searches will be a lot more in-depth than soft searches. The main difference between hard and soft searches is that a hard credit search can affect your credit score, as it will leave a footprint. Anyone looking at your credit file will be able to see if you have one.

If you have a good credit score, you will generally be unaffected, though if you have a lower credit score, you could have problems. The reason for this, is that if you have a poor credit score and have multiple hard searches on file, it can look like you are trying to apply for lots of credit at once.

This is more than likely going to put off a mortgage lender.

Does an agreement in principle guarantee a mortgage in Hull?

You will never be guaranteed to obtain a mortgage. That being said, having an agreement in principle in place ahead of time will certainly work in your favour. Once you provide the lender with all your documents, an underwriter will review everything and make a final decision.

Agreements in principle will typically include lots of small print that home buyers, especially first time buyers in Hull, can easily miss. It’s reasons like this why you would benefit from speaking to an open and honest mortgage broker in Hull.

When customers get in touch with us for help about their agreement in principle, we find that in some cases they’ve been turned away at full mortgage application stage.

The documents that a customer will require include, but are not limited to, your ID, payslips and bank statements. As a fast & friendly mortgage broker in Hull, we take pride in helping you to prepare for your journey ahead.

If you are looking at starting your mortgage process, you may need to look at how to get prepared for a mortgage in Hull.

It’s necessary to have your agreement in principle in place when making an offer. Most credible estate agents will want you to provide evidence that you are able to proceed with your property purchase.

How long will my agreement in principle last for?

Normally, your agreement in principle will need to be renewed after around 30-90 days. As an experienced mortgage broker in Hull, we still recommend getting one as early as you can.

The reason why we would suggest this, is so that you can avoid disappointment if you were to find a dream property, only to not have this in place and potentially fall behind another home buyer who has their offer accepted instead.

Always remember, you don’t always need to buy the first house you see after you get your agreement in principle. It’s a simple process, so if it does happen to expire, you can just obtain another.

You may be a first time buyer in Hull or you might be thinking of moving home in Hull and are looking for mortgage advice in Hull. If so, we think that you will benefit from our dedicated mortgage advice services in Hull.

We offer a free initial mortgage appointment with one of our expert mortgage advisors, so feel free to book online today and we will see how we can help you!

The Different Types of Mortgages Explained

Regardless of if you are a first time buyer in Hull looking to take your first steps towards climbing the property ladder, or are going through the process of moving home in Hull, it will become apparent during your research that there or lots of potential mortgage options.

Some of these are more frequently found that others. We have put together a helpful list of the options we deal with the most. Each section s accompanied by a helpful mortgage video from our YouTube channel, MoneymanTV.

You can find more Helpful Mortgage Guides on MoneymanTV here or visit our “Mortgages Explained” playlist directly here.

What is a fixed-rate mortgage?

A fixed-rate mortgage will mean that your monthly mortgage payments will stay the same for a personally specified period of time, as you’ll be fixing your interest rate to a set amount.

It is entirely your decision when looking at how long you choose to fix your payments for, with common fixed-period lengths typically being between 2 to 5 years.

You are able to go higher than this, though many opt for shorter, as you don’t want to fix in for too long and then see rates drop, leaving you on a higher rate of interest when you otherwise wouldn’t want to be.

Regardless of any changes to inflation, interest rates or the economy you’ll be able to stay confident and happy, knowing that you are not only on the best deal, but your biggest outgoing, your mortgage, will stay the same.

What is a tracker mortgage?

A tracker mortgage will mean that the interest rate of your mortgage will track alongside the Bank of England’s base rate; the base rate that dictates things like inflation.

To explain this in much simpler terms, this will mean that the mortgage lender that you end up going with will not be the one to set your interest rate. Additionally, you will not be setting your own interest rate either by fixing in.

Instead, you will be paying a percentage above the Bank of England base rate. To give an example of this, if the base rate is 1% and you are tracking at 1% above base rate, that means you will be paying a rate of 2%.

What is a repayment mortgage?

Often seen as the standard mortgage you will come across, taking out a repayment mortgage will see you paying back both capital and interest combined each month.

Providing that you are able to keep up your payments for the entire duration of the mortgage term, you will be guaranteed to have your mortgage balance paid off once your term ends, with your home becoming 100% yours.

It is widely believed to be the most risk-free way to pay your capital back to the mortgage lender. Early on into your mortgage term, you will mostly be paying back interest and your balance will go down quite slowly, especially if you have say a 25+ year term.

This will work the other way when it comes to the final 10 years or so of your mortgage, as it will be more capital than interest that you are paying off, making the balance go down much quicker.

What is an interest only mortgage?

Whilst you will find that the vast majority of modern buy to let mortgages are set up on an interest only basis, it is much less likely for a mortgage lender to offer this type of product to a residential customer.

With a buy to let mortgage, you will typically have some form of investment vehicle (most likely the property itself) to be able to repay the capital at the end of the mortgage, as this type of mortgage will see you only paying the interest during your term.

This is not always the case for residential purchases. It may be applicable, however, if you are downsizing at an older age or have other investments that you can use to pay the capital back.

Mortgage lenders tend to have pretty strict rules when looking at offering interest only products to customers, and the loan to values are a lot lower than they once were, meaning you’ll likely have to put down quite a substantial deposit to cover the risk.

What is an offset mortgage?

If you are taking out an offset mortgage, your mortgage lender will set you up a savings account to run alongside your mortgage account, helping to offset the interest, in order to save you money.

This means that, let’s say you had a £100,000 mortgage balance and deposited £20,000 into your savings account. You would still have £100,000 to pay back, but you’d only be paying interest on £80,000 of that balance.

You have the flexibility to deposit and withdraw funds as you see fit, though for it to be beneficial you’ll need to be making substantial contributions into your savings. It can be very efficient for higher rate taxpayers.

Mortgage Market Update: Biggest Lending Surge Since 2007

Mortgage Advice in Hull for 2021

In light of the recent announcement from the British Prime Minister Boris Johnson, we want some share the positive news that came with the new lockdown rules.

Similar to the November 2020 lockdown, the property market is still open for business. You can take up house viewings, continue your purchase and still put your home up for sale.

Here is a mortgage market update from Malcolm the ‘moneyman’ himself:

Lockdown 2020 and getting a mortgage in Hull

During the last lockdown in November 2020, there was a huge increase in mortgage enquiries. The boom in home purchase approvals reached a massive 105,000 in November, which is the highest since August 2007.

In October 2020, purchase approvals were at 98,300. This increase of 6,700 is impressive considering we were in the middle of a national lockdown.

Lockdown 2021 and getting a mortgage in Hull

In terms of the property market, the January 2021 lockdown is very similar to the previous November 2020 lockdown. You can still begin your mortgage journey in 2021. It’s up to you how you start this, it could be by yourself or through a Mortgage Broker in Hull.

January is a popular time of year for First Time Buyers, Home Movers, landlords etc., and as time progresses we are seeing more mortgage products becoming available again, allowing for more mortgage options to those investing in the property market.

90% mortgages are still available

Yes, 90% mortgages are still available and lenders are getting more and more confident in the market. They know that the demand is there and that people will only start coming back when they know that they can get a deal with a 5-10% deposit.

There are also other ways to access a 90% mortgage, for example, this could be through the Help to Buy Equity Loan scheme or the Help to Buy Shared Ownership scheme. If you want a Help to Buy Specialist to talk you through how using these methods could help you obtain a mortgage with only a 5-10% deposit, make sure to get in touch right away.

Open as usual

The property market is still open and so are we! We have Mortgage Advisors in Hull available 7 days a week throughout the year to help you through your mortgage journey.

Don’t worry, our free mortgage consultation still applies to every customer in every mortgage situation. Start your 2021 mortgage journey with Hullmoneyman today.

A Guide to Remortgages in Hull: Top Reasons to Consider

Popular Reasons for you to Remortgage in Hull

The mortgage journey is rewarding. It has its fair share of both highs and lows, but in the end, you will end up with one of the following: either your dream property to settle down in and make that next step, to go further up the ladder or an investment purchase to provide some extra income.

Whichever path you took, there will ultimately come a time when your mortgage term is coming to an end. You could sell up and upsize/downsize into a new property. Perhaps you are looking to sell your portfolio to the tenant or another buyer and look at other avenues. The most popular choice though is to go down the remortgage route.

What is a Remortgage?

A remortgage is where you use the proceeds from a new mortgage to pay off a pre-existing mortgage. There are several different options available when taking out a remortgage, ranging from minor to major.

Having worked in the industry for over 20 years our resident “Moneyman” Malcolm Davidson (host of our YouTube channel MoneymanTV), thought it would be best to compile a quick guide to all the options you could have when remortgaging.

Remortgage For Better Interest Rates

Your initial mortgage deal will normally last 2-5 years and feature low fixed rates or perhaps discounted rates. In some instances, you may even be placed on a tracker mortgage, which follows the Bank of England’s base rate.

When your term ends you will likely be moved along to the lender’s Standard Variable. In sum, an SVR is a mortgage with an interest rate that can potentially change based on what the lender wishes to charge. This does not follow the Bank of England’s base rate like a tracker mortgage.

As such, these are usually the most costly paths to take, leaving many to look at remortgaging for better rates, which we hope will save you money on your monthly repayments.

Remortgage For Home Improvements

After occupying your home and living there for a few years or circumstances have changed, you might decide that you need the extra room or larger living space, a new kitchen, or a home office. Instead of moving into a larger house, many try to release their equity with a remortgage to cover the costs of these.

Though it may seem like a daunting concept having to obtain planning permission and fund/manage your own project, some say it’s a lot less stressful and more rewarding than the process of finding a new home, selling your current one, and moving your belongings.

Long term, creating more space and maintaining the property can increase the value of your property, handy if you ever decide to sell up or rent out.

Remortgage for Changes to Your Term

In certain cases, some choose to remortgage in Hull for a more suitable mortgage term, by decreasing the length or switching to a more flexible product. A reduction in the length does mean you will not be paying back your mortgage for as long.

Therefore, you are not completely tied down forever, but as such your monthly repayments will be a lot higher. The longer your term, the lower the payments will be over time.

A few opt for a more flexible mortgage term when they remortgage, benefits under this option can prove endearing to some homeowners. You may get the chance to overpay, resulting in being able to pay your mortgage off as quickly as you would like.

In addition to being able to carry the same mortgage and rates over to another property, should you decide to move at any point in future.

Although a flexible mortgage sounds close to perfect, they usually come in the form of a tracker mortgage, which as previously stated follows the Bank of England base rate. That means one month your payments could fluctuate based on interest.

Remortgage to Release Equity

Everyone has a level of equity in their property. The equity is worked out with the difference between what is still owed on the mortgage and the current value of the property. As touched upon at a glance, this can be used for home improvement. However, there may be other options available for you out there.

Some are using it to cover long-term care costs, supplement their income, go on holiday, pay off an interest-only mortgage or go on a shopping spree.

For Buy to Let Hull landlords, they will use a remortgage to release equity as a means of covering their deposit for buying a future property to add to their portfolio.

If you are a homeowner aged 55+ and have a property valued at a minimum of £70,000, it may be worth your time to look at your options for Equity Release in Hull. Get in touch with an experienced later life mortgage advisor in Hull to learn more about later life lending.

Remortgage to Consolidate Debt

On the topic of releasing equity, another big one people use it for, is to pay off any unsecured debts you may have accrued over time.

Though it may seem easy enough, debt consolidation not only bases the amount on how much you’re owed and the value of the property but also on your credit rating. This could mean you are limited in the amount you can borrow.

Additionally, to pay off your previous mortgage and your debts, you will need to borrow more than your outstanding mortgage amount. This means your monthly repayments will most likely be higher. Though not an ideal situation, at least you can rest assured that should you find yourself dealt an unfortunate hand, you do have some options out there.

Should you find yourself with a particularly damaged credit rating, you do still have options to choose from, though these will not be easy and require very specialist remortgage advice in Hull before going forward. Even then, there is no guarantee.

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.

Experienced Mortgage Advisors in Hull – Get in Touch

If you are reaching the end of your term and are wondering what your option may be for remortgaging, it is worth your time to get in touch with an experienced and trusted mortgage broker in Hull.

Our remortgage advisors in Hull will be able to discuss your options, to create the best plan of action for you in the next step of your remortgage journey. We aim to ensure this go around is a quicker and smoother process than your first time.