What is a Cashback Mortgage?

Cashback Mortgage Advice in Nottingham

With a plethora of mortgage types available to home buyers, a First Time Buyer in Nottingham may feel a little overwhelmed when it comes to choosing the right one for them.

Each mortgage types have its own unique purpose each with its own advantages and disadvantages. This is where an experienced Mortgage Advisor in Nottingham can help you with finding the perfect match.

This article will take a look at how Cashback Mortgages work along with the benefits it can have to borrowers and how they compare to other options.

You can also watch our Moneyman TV YouTube video about this topic. This channel features answers to popular mortgage questions, up-to-date news about the mortgage market as well as different cases Malcolm has encountered first-hand.

If you want to keep up with all things mortgage, give us a like and subscribe for more! Feel free to comment with any questions you may have as Malcolm will happily answer these and possibly post a video on this.

Cashback mortgages explained

What is a cashback mortgage?

Cashback mortgages are an option in which you will usually get some cash back at the end of your mortgage term. This sum is usually based on a percentage of what you borrowed and is around 1 or 2%.

When it comes to a cashback mortgage, your lender might specify a fixed price within the mortgage contract. Therefore, whether you are taking a mortgage over a long period of time, the amount will not change or increase over time.

Will a cashback mortgage benefit me?

Below are just some benefits to home buyers:

• Cashbach mortgages will come with additional benefits, like a free property valuation. Whatever the perks are, this could be very helpful with saving mone that you didn’t think of saving.
  
• Through our experience as a Mortgage Broker in Nottingham, cashback mortgage could be very popular amongst customers looking to have a lower end mortgage. You get your money back and the benefits, all while paying for a low-end mortgage.

As an open and honest Mortgage Broker in Nottingham, we would suggest that if the lenders offers you a reasonable percentage on your cashback mortgage, you may wish to consider taking this up because of how beneficial it would be in the future. Sometimes, people decide not to choose a cashback mortgage because the interest rates are usually a little higher.

Different types of mortgage in Nottingham

As mentioned, there are many mortgage options available, with cashback mortgages not being as popular compared to others. Regardless of this, our team do receive enquiries about them, as well as being a good backup choice if your first mortgage deal doesn’t quite work out.

For more information regarding the different mortgage types and your options may be, it could be helpful to contact an expert Specialist Mortgage Advisor in Nottingham. Whatever your circumstances, we will work hard to help you achieve your mortgage goals. We are always up for a challenge!

How Do I Remove a Person From a Mortgage in Nottingham?

Specialist Mortgage Advice Nottingham

Removing a name from a mortgage

Removing a name from a mortgage is not as easy as it sounds. Common circumstances for this include break-up, marital or otherwise, leaving joint ownership. Occasionally, you may find that you would rather have the mortgage in just one name. Either way, the process is complex.

Here at Nottinghammoneyman, we have expert Mortgage Advisors in Nottingham who are here to help you out. Through their years of experience within the mortgage world, they have helped many people through a financial separation.

Why would you want to remove a name from a mortgage?

Divorce & Separation

As mentioned, the most common reason as to why someone would want to remove a name from a mortgage would be if they are separating from someone who is on the mortgage. Usually, a breakup can create many emotions making things like finances less of a priority. However, we do suggest you put financial commitments at the forefront of your mind.

We do stress this to many customers in this situation because leaving it until late could build up a large amount of unnecessary stress that could have been avoided. Put yourself in the perspective of the companies you are financially tied to, they will need time to process everything on their end which is why providing them enough time and being patient is key.

In terms of your mortgage lender, they want to ensure that both parties have the ability to afford a comfortable life with a single income to draw from. Therefore, having only one person on the property does mean they will need to keep up with your monthly mortgage repayments as one individual.

Each party in the mortgage will need to come to an agreement to take off a name from the mortgage. With this in mind, if one party disagrees, you will need to pursue court proceedings. This can be a costly process that takes some time and create unnecessary negativity.

Seeking Specialist Mortgage Advice in Nottingham is beneficial for those experiencing a difficult divorce or separation as they can manage the mortgage side of your situation.

Transferring to a Family Member or Friend

Different to the process of removing a name from a mortgage, transferring to a family or friend is a lot more simple than you would expect. In particular, with a Mortgage Broker in Nottingham. If you are interested in the benefit of this, check out our article on ‘buying a property with a partner or friend‘.

The process will involve the homeowner transferring equity to whomever they wish, whether it’s a family member or a friend. Simply, the mortgage will get transferred with the equity inside of the home. Like with many mortgage situations, the new owner of the home will need to pass the lender’s eligibility and affordability checks.

A Party is Not Paying Their Share

In the event that a member of the party isn’t keeping up with their end of the deal, this can effect you financially too. This a situation we have seen many times when providing open and honest Mortgage Advice in Nottingham. Normally, this happens when some of the parties have fallen out.

You may be affected is one person misses their bills. This is why it’s important that you have full trust in the other party sharing the mortgage with you so that they can keep up their payments. Your credit score can be negatively affected on your credit score as well.

In the unusual case where this happens to you, it’s important that you contact your lender. Another option which can be helpful is having a conversation with a Mortgage Advisor in Nottingham who can help you with a solution before the problem becomes a bigger issue.

How easy is it to remove a name from a mortgage?

Look at your situation from the lender’s point of view. As much as you can afford to keep up your monthly payments and have a good financial reputation, the lender still needs to have their full trust in your one income instead of two (or more if it’s a joint mortgage) that they had originally.

A mortgage lender would prefer both on the mortgage if it is possible in order to improve the security of their finances. By doing this, they have a financial net if mortgage arrears or repossession occurs because they would be able to chase two parties for payments. Along with this, their chances of being paid are reduced if there is only one party.

Affordability plays a big role in affordability. Whether you are wanting the home to be in your name, without your ex-partner or housemate, you will need to go undergo all the criteria checks that you would have initially to show you are capable of affording the monthly repayments on your own.

You might that it’s not possible for your circumstance as it all comes down to the lender. This is where Mortgage Advice in Nottingham can be helpful to you.

After speaking to an advisor, you may come to the conclusion that it is more appropriate to switch mortgage lenders for a better deal in your sole name, which can potentially help with any ongoing problems.

We provide a tailored service that includes Specialist Mortgage Advice in Nottingham with the aim to take off some stress from the process. Our team are available 7 days a week to help you with any of your mortgage needs.

Trusted Mortgage Advice in Nottingham

Can I Port my Mortgage to a new Property in Nottingham?

Porting Mortgage Advice in Nottingham

You will find that a large portion of high street mortgages that are on the market are portable. To put it simply, a portable mortgage is where you can move from one property to another without the need to pay a penalty fee. If you are looking to move to a new house and are currently in the middle of a fixed rate deal, a portable mortgage could be beneficial as you potentially could be able to avoid an early repayment charge.

Are all mortgages portable?

Not all mortgages are portable and being with a specialist lender might not provide you with the option to port your mortgage to another property. To determine whether or not this is a possible option for you, get in contact with your lender and ask them.

Should I port my mortgage?

Some people may not proceed with the option of porting their mortgage even if they have had the option to. The reasoning behind why customers might not want to port can be down to a number of factors. Sometimes, customers don’t port because lenders aren’t lending additional funds that a person needs to move or that the additional funds will be at a different rate to the one you have on your existing deal. Overlooking the repayment charge and swapping to a different lender altogether might be something you decide to do if it fits well with the new deal you are offered. 

What is a sub-account?

This is an account that will be created onto your mortgage when you decide to port it and the additional funds will end up being on a deal that is different from the original one. This means there will be two different rates of interest that are applied even though you have one mortgage and one direct debit.

One factor that may become a nuisance for you in the future with your sub accounts is that different products could overlap. This means you may need to get them aligned back at some point which will involve one of the sub accounts having to go onto the lenders’ variable rate for a period of time.

Buy to Let Mortgage Advice in Nottingham

Get in touch with a buy to let and moving home mortgage advisor in Nottingham like ourselves if you are looking for an expert opinion. With our experience of dealing with thousands of applicants in this situation, we may have a good idea of how to help customers with their mortgage needs.

Types of Mortgages Available in Nottingham Explained

Specialist Mortgage Advice in Nottingham

At the start of your mortgage journey, you will come to realise there are a range of different types of mortgages. From first time buyers in Nottingham to people moving house in Nottingham, this allows you find the best option that fits within your needs when living in Nottingham. In this article, we will be talking about the type of mortgages that many people go for when looking into options on their mortgage journey.

If you are looking into mortgages and wanting any more information regarding these types, our knowledgeable mortgage advisors in Nottingham are on hand 7 days a week, so please feel free to get in touch.

Mortgage types

Feel free to use the points below and jump to a different mortgages type;

• Fixed-Rate Mortgage
• Tracker Mortgage
• Repayment Mortgage
• Interest-Only
• Offset Mortgage
• Capped Rate Mortgage
• Flexible Mortgage

Fixed-Rate Mortgage

A fixed rate mortgage is when your interest rates are on a fixed agreement that is between you and the lender. This fixed payment can span over the course of a few years with many usually being over 2 to 5 years long or longer for many home buyers and owners. 
 
Many people choose this option as their mortgage payment will stay the same throughout this period, even through any economic changes such as interest and inflation, so you can be rest assured that you will have no changes with your payment. 

Tracker Mortgage

Different to a fixed rate mortgage, a tracker mortgage doesn’t have a set rate that is between you and your lender. Instead, the interest rate will change depending on the Bank of England’s base rate, so interest rates can fluctuate at any time.

For example, when repaying your mortgage, if the Bank of England base rate is 1%, and you are tracking a 1% above base rate, this means the overall rate you will pay back is 2%.

Repayment Mortgage

A repayment mortgage is seen as the most common of mortgage options. This involves you paying a combination of capital and interest each month. The property will eventually become yours as long as you have kept your payments going for the mortgage term and can pay off your mortgage balance at the end of the payment period.

This method is recognised as being the most risk free way to pay back your capital to the mortgage lender. On the start of your mortgage journey, it is interest that becomes your main payment. If you have taken out a much larger term like 25, 30 years then your balance will reduce to a slower rate.

Later on in your mortgage term, your payment methods will change to paying off more capital than interest and your balance will lower at a quicker rate.

Interest-Only Mortgage

Seen as one of the cheaper options in terms of monthly payments, an interest only mortgage is a payment method that involves you only paying the interest per month. Whilst that sounds ideal this means that the borrowed amount has to be paid back in its entirety by the end of the term.

Many buy to let mortgages are seen to be on an interest only basis, however, trying to get a residential property on an interest only basis is near unheard of these days, due to the complicated criteria that needs to be met.

There are circumstances where this may still apply, with reasons including; downsizing your property when you’re older or paying back capital through other investments.

Lenders can be very strict when offering these products and the loan to values are a lot lower they were in previous years.

Offset Mortgage

A popular mortgage option in Australia, an offset mortgage is a blend of a conventional mortgage account with a savings account that runs alongside it. This mortgage type can allow you to be flexible by paying regularly in your offset account or withdrawing funds if needed. 

This is seen as the more appealing type of mortgage as it allows you to have a savings account opened alongside your main account. An example of this is if someone took out a £100,000 mortgage but in your savings you have £25,000. You can put this into your new savings account and pay the interest on the remaining amount which would be £75,000. 
 
There is the potential option to pay off your mortgage earlier if you keep your payments up as normal. 

Capped Rate Mortgage

Similar to fixed rate mortgages, a capped rate mortgage involves the customer making repayments each month with a maximum interest rate. However, this type has a percentage that is capped which means you won’t be paying any higher than the agreed percentage, For example if you’re capped at 5%, your rate will never go above 5%. 
 
This type can be beneficial if interest rates reduce, as your mortgage rate will follow this reduction. This should reflect in lower monthly mortgage payments.   

Flexible Mortgage

This type of mortgage allows you to be flexible with your payments with having the choice to either underpay or overpay any amount. You can only underpay if you have overpaid the first time and have come to an agreement to do this with your lender.

With the potential to pay off your mortgage early, overpayments can be helpful if you want to pay your mortgage off early and pay less with interest.

Reasons Why Your Mortgage Application Might Be Declined

Credit Score Mortgage Advice in Nottingham

Failing a credit score for a mortgage

Even though carrying out a credit score for a mortgage is not a challenging task, we do find that some applicants are unable to meet the lender’s criteria. This happens cause certain mortgage lenders have a high set of requirements to meet the lender’s criteria. In some cases, applicants may not be able to meet the credit for the mortgage and you may find the lender will not communicate to you the reason for this. This is usually the case if you approach a bank and can be a frustrating matter to many.

This is where we can help! If you approach a Mortgage Broker in Nottingham, you can get a better understanding of your credit score. Here at Nottinghammoneyman, we have a team of Mortgage Advisors in Nottingham who can recommend the most suitable lender and work hard towards achieving your mortgage goals.

Improving your credit score may involve you having to meet particular parameters. For instance, pay off your monthly balance in full when it comes to your credit card balance. Being on the voters roll in your local area can help with boosting your credit score. For even more of a positive impact, get rid of any bank account, store cards and credit cards that you are no longer using. Having a clean record does help.

In the case where one lender rejects you application, you may find that another lender accepts you. To determine this, you need to have the least amount of credit footprints registered in your name. This should be clean when your name is in the system and should not have a pending balance in order for your lender to trust you and your credit score easily.

Declined for a mortgage on affordability

For those who are looking for Specialist Mortgage Advice in Nottingham, you need to take into account that every mortgage lender uses a range of methods to work out the amount that you can borrow. Therefore, you might find 10 different approaches from 10 different lenders for the same mortgage application.

In some cases one lender may be more lenient if you are Self Employed in Nottingham, with your overtime and bonuses counting towards all of your income. Some lenders might not factor in bonuses as income, whereas, some might be lenient to accept tax credits, maintenance, as well as child benefit.

Approaching Specialist Mortgage Advice in Nottingham are very beneficial. An expert mortgage broker will have knowledge of how lenders work and speak about the chance of your application being successful. Contacting a professional for an expert opinion to see whether you will meet the lender’s requirements. From this, you can see what you need to do to meet those requirements so you can move forward with your potential mortgage.

As a Mortgage Broker in Nottingham, we do strongly suggest you to obtain Specialist Mortgage Advice in Nottingham prior to filing an application. If you do have a mortgage expert included in your process they can provide a helping hand and guide you on the best path. With this, you can organise yourself and reduce the risk of being approaching the wrong lender.

Do you find yourself outside of lending policy?

Each lender has their own refined lending criteria. As mentioned each lender’s criteria is different so you will find some are more fitting than others with your financial circumstance. Below are some of the reasons why an application may be declined because it does not reside inside the lending policy;

• Loan amount not meeting the minimum or maximum limit
• Mortgage terms do not meet the minimum or maximum age limit
• Sole mortgage requested by a married applicant
• Property construction not meeting required standards
• Insufficient deposit
• Non-satisfactory credit history
• Insufficient period of employment or self-employment

As a Mortgage Broker in Nottingham, we can utilise our knowledge and experience to find you the most appropriate product for your personal and financial situation. You might feel your situation is too complex, however, please don’t hesitate to speak to our team. Through our experience, we have encountered a variety of customers and it’s very likely we have encountered a situation similar to yours. If you are in difficulty with the mortgage process and are looking for a helping hand in overcoming any hurdles, book a free mortgage appointment with one of our advisors today!

Specialist Mortgage Advice in Nottingham

Gifted Deposit FAQ’s

Gifted Deposit Mortgage Advice in Nottingham

What is a Gifted Deposit?

As suggested in the name, a gifted deposit is a deposit that has been gifted to you. The amount can vary between the full deposit or a portion of it and an agreement will need to be in place to state that you won’t be required to repay it back to the gifter.

How can gifted deposits help?

Gifted deposits are brilliant if you have the costs for your monthly repayments but are having difficulty with paying the initial deposit.

If you have been gifted a lot more deposits, there is more of a chance to have access to better rates from a mortgage lender.

In the case where you are on a lower salary and are finding it a challenge to put some money aside for savings, this option can be very handy.

Who can gift the deposit?

As a Mortgage Broker in Nottingham, we have found that many customers get their gifted deposit from their parents (adopted parents and carers may be within this category, depending on the lender). Gifted deposits can be known as the ‘Bank of Mum & Dad’.

Sometimes, the parents aren’t the ones that provide a gifted deposit. Mortgage lenders may allow other family members to give a gifted deposit. This does depend on the lender so it’s important you are selective in order to find the right one. With this in mind, we would recommend that you seek open and honest Mortgage Advice in Nottingham.

Do your parents know you need help?

Through our experience in the mortgage industry, we are surprised to find the number of customers who are unaware of the fact their parents could potentially provide a boost to their mortgage. On the other hand, some customers are aware but don’t feel like they can ask their parents for help. It’s likely, however, that many parents are more than happy to help their kids get onto the property ladder.

Taking out a mortgage is generally the best option for First Time Buyers in Nottingham instead of renting because you could potentially be paying less money per month.

It’s common for a gifted deposit to be from an inheritance that parents may gift to their children earlier in life. You may find that parents save up enough for the deposit or release a certain amount of equity from their property.

Gifted Deposit v Loans

The majority of the time lenders won’t accept you using a loan to fund your mortgage deposit. With this being a loan, this can create uncertainty in a lender’s eyes as it can show to them that you may not have enough disposable income remaining to cover the costs of both the loan and the mortgage at the same time.

Who can benefit from a gifted deposit?

A gifted deposit can be a huge benefit to many types of buyers. You may be a First Time Buyer in Nottingham who is finding it difficult to pay to raise the deposit amount or you are Moving Home in Nottingham for a deposit boost and a gifted deposit could be your solution.

Those who are looking at starting their homeowning through a Help to Buy in Nottingham can utilise a gifted deposit which is really handy for raising the required 5% deposit.

Is there a maximum or minimum gifted amount?

There is no particular limit on the amount of deposit someone can gift you, however, there are some lenders out there who would rather have an applicant who has saved a 5% deposit themselves, with any gifts being used as a booster towards this.

What proof is required?

With a gifted deposit, all lenders will provide you with a form that you must fill in. You may need to provide additional proof and ID (like a donor ID or bank statements), however, this comes down to the lender you are with.

First Time Buyer Mortgage Advisor in Nottingham

What to Consider When Buying a Property With a Partner or Friend

Moving House Mortgage Advice in Nottingham

Over the years, property price inflation has far outstripped wage increases. It’s common to find mortgage applicants, especially First Time Buyers in Nottingham, find it difficult to raise enough funds to purchase a home with the current property prices.

In this circumstance, many home buyers will explore the option of moving in with someone else as a means to reduce costs. A joint mortgage can be a huge benefit with the mortgage lender taking two incomes into account when it comes to calculating the maximum amount you can borrow.

Furthermore, you have the chance to split costs making monthly mortgage payments more affordable for you. On the other hand, it’s not as straightforward as moving in with someone instantly.

The process will involve lots of mortgage lending criteria that you will need to meet and questions to ask yourself prior to making the big decision. Our extensive experience as a Mortgage Broker in Nottingham has given us the opportunity to answer many questions regarding joint mortgages.

Check out the video below which will answer a range of popular questions that will hopefully help you with your mortgage journey.

How many people can jointly own a property?

There is a chance to have up to four names on a mortgage as a way to co-own a property, however, this all boils down to what your mortgage lender offers.

In the circumstance where someone decides to get out of the mortgage, the joint owners left in the property will have a legal right to remain living in that property, except if a court overrules it. Therefore, it’s best to be wary of who you decide to buy a home with.

If the options are available to you, homeowners with a joint mortgage may look to increase the mortgage, however, all parties mentioned on the contract must agree to this. With this in mind, you need to think about the property’s future plans.

Joint tenancy or tenancy in common?

As a Mortgage Broker in Nottingham, we usually find that married couples or applicants in a civil partnership will decide to go with a joint tenancy, which means you have equal ownership of the property.

If you are looking into Remortgaging in Nottingham at some point in the future or looking to sell further down the line, each party will need to agree before you carry on with the process.

Tenants in common are generally popular amongst applicants that are relatives or friends. With this, you both have equal ownership of the property but are not obliged to do so in shares.

This normally occurs when one party is making significantly more money than the other. As a tenant in common, you can act individually. For instance, you can give away your share of the property to someone else.

What happens if one party stops making mortgage payments on a property?

One of the drawbacks to being a property co-owner is if a party stops paying their share of the property, which is sadly more likely with multiple people attached to a property. Just like with any mortgage, you need to keep up with the payments you contractually agreed to.

In the case where one party is struggling to keep up with their monthly mortgage payment and decides it’s best to stop paying, the other party will need to make up for this payment.

You are at risk of ending up in arrears if the payment isn’t paid which, in turn, may have a negative effect on your credit score and can affect your chances of getting another mortgage in the future.

The way you view this type of mortgage is that you don’t own whatever the percentage you pay but you’re a combined entity and own 100% jointly.

How do I remove my ex-partner from my mortgage?

In some cases, it can be a difficult process to remove a person’s name from a mortgage and this is due to a range of reasons.

Through our time providing open and honest Mortgage Advice in Nottingham, we have found that the main reason is that the mortgage lender is not confident in the applicant being solely on the mortgage and will struggle to keep up their monthly mortgage payments. If you are unable to do so, they are unlikely to allow you to do so.

You have got to remember that a mortgage is a very large financial commitment which is why it can be difficult to make changes to something that has already been agreed upon.

Regardless of whether you have managed to keep up with your payments since your ex has moved out, it’s required that a mortgage lender should carry out an affordability assessment on you (similar to what they did at the point of purchase), to make their own judgement on whether or not you can afford it.

A large number of mortgage lenders don’t particularly favour putting applicants on their mortgage as a sole applicant. This is because having more names on a mortgage lowers the chance of arrears occurring. By doing this, there is more than one source of income.

In the circumstance where your sole-name mortgage request is declined by your mortgage lender, we do strongly recommend speaking to an expert Mortgage Advisor in Sheffield about your situation. It could be incredibly beneficial to get seek Specialist Mortgage Advice in Nottingham and help you get a sole-name mortgage.

As well as this, we do advise you to speak to family members to see if they can help. One way they may be able to help your situation is by replacing your ex on your mortgage or through a gifted deposit which could help reduce the amount you owe on the mortgage balance.

How do I remove my name from my ex-partner’s mortgage?

In the unfortunate case where you and your partner split up and you are the one moving out of the property, you still need to keep up with paying your monthly mortgage payments, regardless of whether you and your ex have come to an agreement that they will be the one making the payments.

Similar to removing an ex’s name off a mortgage, it’s the same concept as removing your name. Your designated mortgage lender will only allow you to remove your name if they are confident in your ex being able to afford the payments through carrying their affordability assessment.

Sometimes, applicants will arrange with their partner to send them money each month, therefore, you need to look at your own credit report to see that they are paying their portion as well. There could be the potential risk of payment to default which has a negative impact on your own credit score.

For applicants that are still on their ex’s mortgage and are looking at Moving Home in Nottingham, into another property and obtaining a new mortgage, your mortgage lender will take into account your circumstance. This could result in you not being able to borrow as much as you’d like.

There are always potential risks when it comes to buying a property with anyone because of a change in circumstances. Here at Nottinghammoneyman, we do advise that you approach the world of home buying with an open mind. Don’t panic if your plans change unexpectedly, it’s very likely there will be a solution to this.

If you are having trouble with your joint mortgage, our team could help! Book a free mortgage with one of our friendly advisors to get Mortgage Advice in Nottingham. Simply get in touch with our team or book online today.