The Financial Conduct Authority does not regulate some types of buy to let or commercial mortgages.
Buy to let mortgages have become popular investment option for individuals looking to generate revenue from rental properties in Nottingham.
But what exactly is a buy to let mortgage, and how does it work? Here, we’ll delve into the fundamental aspects of buy to let mortgages including what they are, how they differ from standard residential mortgages, as well as the factors you need to consider before taking one out.
Whether you are an experienced buy to let property owner, purchasing your investment property or contemplating buy to let as a first time buyer, this guide can help you gain a strong understanding of how buy to let mortgages work.
A buy to let property can be viewed as an investment generating income through rental payments, typically used to make mortgage payments and possibly more.
The owners are obligated to mortgage the property with the plan to rent it out. A conspicuous pattern of previously rented properties being associated with buy to let mortgages exists.
Buy to Let mortgages have been specifically engineered for individuals willing to acquire a property to rent it out to tenants. Lenders typically enforce a larger deposit requirement in comparison to a traditional home loan, and the approval process is often influence by the potential rental income, as well as, the borrower’s personal financial status.
The lender will generally demand a rental income that exceeds the mortgage payment by a specific percentage, usually around 125%. Buy to let mortgages can either be interest only (only interest is paid back monthly) or repayment, where both the interest and capital are repaid on a monthly basis.
The outstanding balance must be cleared at the termination of the mortgage term. If you opt for a buy to let mortgage, ensure that you are aware of the slightly different criteria for eligibility as well as the associated fees.
It would be beneficial to collaborate with a mortgage broker in Nottingham, who can guide you through the application procedure to find a suitable buy to let mortgage in Nottingham.
Your potential rental income will be assessed by the lending institution during your application for a buy to let mortgage. Generally, as long as your projected rental income is consistent with your mortgage request, there would be no borrowing limits. While no strict limitations may exist, the lender may require the anticipated rental income to surpass the monthly payment by a specific percentage.
To be eligible for a buy to let mortgage in Nottingham involves being a UK resident and older than 18 years of age. A sound credit history along with a stable income to support the monthly mortgage payments is typically required.
The lender will assess your capacity to sustain the mortgage, accounting not only for your expected income, but also your projected rental income. The majority of lending firms enforce a minimum 25% deposit of the property’s value, although a lesser deposit may be accepted depending on individual situations.
Always consult with a mortgage broker in Nottingham properly credentialed to provide specialist buy to let mortgage advice to identify the best deal for your specific situation.
While applying for a buy to let mortgage in Nottingham, you must supply various documents to the lending firm including evidence of income, deposit, address, ID, bonuses, commission, and P60. Self-employed applicants are also required to present their SA302 tax return. Existing landlords must present evidence of rental income, usually through a certified ARLA report and mortgage statement for their current properties. Having these documents prepared in advance may expedite the application process.
Most buy to let investors typically opt for an interest only mortgage to reduce their monthly expenses.
With this type of mortgage, you only pay the interest every month, and the remaining capital balance is paid off by selling the property or remortgaging onto a repayment mortgage at the end of the term. Alternatively, you may have a repayment vehicle set up to cover the cost.
Although interest only mortgages are the norm and considered more tax-efficient, you can still apply for repayment mortgages on buy to let properties, where you’ll pay both capital and interest every month.
While this may result in higher monthly payments, it helps you build equity in the property and ultimately own it outright at the end of the term, without having to make any significant capital payments.
With a let to buy mortgage, the landlord rents out the property to generate income. A major difference is that let to buy mortgages are typically used by “accidental” landlords, who did not initially plan to rent out their property but subsequently made up their minds. In order to avoid the hassle of selling their home and buying a buy to let property, homeowners may opt to rent out their existing property and use the income to pay off their new residential mortgage. This enables them to generate additional income without having to buy a new property just to rent it out.
If you own your existing property, you may consider temporarily renting out your property without converting it into a permanent buy to let with the help of a provision known as consent to let. While this is not offered by all mortgage lenders, those that do may limit the number of days per year you can rent out your property, typically between 30 and 90 days in a calendar year, contingent on the lender. If you foresee a need for the consent to let, try consulting your lender to see if they offer this feature. Do remember this is a short-term solution, long-term renting without conversion to a buy to let may not be permitted and could lead to penalties.
If you are contemplating a buy to let mortgage, attention must be paid to the purpose of the property (short-term or long-term investment), size of the deposit, interest rates and associated type, and fees including those for arrangement and valuation. The choice of mortgage must be suitable for your financial situation and future plans, it’s always best to consult a mortgage advisor if you are uncertain.
With buy to let mortgages, you could own multiple properties either individually or through a limited company. While there may be some variation among mortgage lenders, there is generally no hard cap on the number of buy to let mortgages one can have. From application to application the lender will still have to assess if you can afford the additional debt. Many buy to let lenders require you to provide proof of rental income and may use this to assess your affordability, as well as, your personal income and financial obligations.
It is worth noting that buy to let landlords rarely reside in the properties they rent out as this may be viewed as a breach of contract that could lead to penalties, even legal action. However, if you no longer have a tenant in your buy to let property you might consider changing it to a primary living space, this would most likely require refinancing. For more information, get in touch with a buy to let remortgage specialist.
Transforming from a residential mortgage to a buy to let mortgage may involve contacting your lender and discussing potential options with them. Some lenders may permit a straightforward switch while others might require a new mortgage to be approved.
If you do decide to switch, the lender may expect a minimum income or a certain amount of equity within your property. They are also likely to assess the rental income potential. It’s always a good idea to discuss taxation with a financial professional or tax advisor to understand how this switch might affect your financial circumstances.
The Financial Conduct Authority does not regulate some types of buy to let or commercial mortgages.
If your circumstances align and your mortgage provider is in agreement, it’s definitely possible for you to change your residential mortgage to a buy to let mortgage in Nottingham.
After owning your home for some time, you may want a change. Maybe you’re planning to move in with a partner or friend who already owns property, or perhaps you’re eying a new home to stay in. In some instances, you might even be considering moving to a rental property.
Regardless of the scenario, retaining ownership of your current home and converting it into a buy to let property might appeal to you. This move could transform you into a landlord, as it provides a boost to your income.
If you are wanting to change your mortgage to a buy to let, firstly speak with your lender to ensure the change is an option they’ll accept. If you’ve got their go ahead, the next thing on your to-do list is to consult with a trusted mortgage broker in Nottingham.
This is because you’re basically looking at a remortgage – a swap of mortgage types. Whether you stick with your current lender or venture to a new one, seeking expert mortgage advice in Nottingham will help you land a favourable deal to transition to.
The reason why you will be remortgaging, is because the terms of your deal are changing. It’s not just as simple as asking the lender if you can do it, you’ll need to pass their lending criteria to be accepted for a buy to let mortgage.
First and foremost, you’re generally required to stay with your residential mortgage for a minimum of six months after making the change. Post this time, several other variables will be considered.
Your ability to afford the mortgage is dependant on your property’s rental potential. Most lenders prefer stress-testing your property to see if you can cover at least 125% of your monthly mortgage payment.
Even though there’s no explicit deposit to make, it’s crucial to have significant equity in your home for remortgaging onto a buy to let deal. Lenders typically demand a minimum of 20-25% equity in your property, a figure that might escalate for those with adverse credit histories. For securing a new property, more equity could be required.
Having a poor credit history can harm your chances of obtaining a mortgage, but it’s not impossible. There are bad credit mortgages tailored for buy to let cases, though past credit hiccups can be limiting. The key here is investing time and effort in improving your credit score and being far removed from any previous financial troubles.
If your aim is to convert your home into an HMO or holiday let property, you might find your pool of lenders and deals depleted. These are specialised circumstances requiring expert insight from a mortgage broker.
Some landlords might find their choice of deals and lenders limited. Some providers stay away from first time landlords, while those with prior landlord experience hold a clear edge. Nonetheless, we collaborate with a wide range of mortgage lenders, and plenty of them entertain first time landlords. We advise discussing this further with our mortgage advisers in Nottingham.
No, you cannot live in your buy to let property. This would be a breach of your mortgage agreement and could result in serious consequences for you and your home.
Shifting to a rental model with the objective of buying a new property is referred to as a let to buy mortgage in Nottingham scenario. This approach, popular amongst individuals aiming to enhance their income while relocating, is similar to a standard buy to let. The only difference is you’ll be juggling two mortgages instead of one, escalating the need for your lender to assess your financial ability to bear the load.
Even though there’s no strict cap on the number of mortgages, your financial risk profile influences your ability to secure additional mortgages. Our dedicated mortgage advisors in Nottingham stand ready to clarify this for you.
An alternate solution might exist in the form of ‘consent to let’, an option usually availed as a short-term measure. Depending on your lender, you’re normally restricted to 30-90 days within a year under this scheme. This option can only be considered if it’s available with your lender.
We invite you to consult a Certified Buy-to-Let Expert to understand the options for converting your home into a buy-to-let. Book your complimentary mortgage appointment today with a reliable member of our team, who will review your case and discuss potential deals that might interest you. Additional buy-to-let mortgage advice can also be provided.
To learn more about the options you have available for converting your residential property into a buy to let, book your free mortgage appointment today. A trusted member of our team will be able to go over your case and let you know what deals you have access to, as well as providing any further buy to let mortgage advice you need.
Buy to let provides an opportunity for people to gain extra income by gaining a profit from owning more than one property. Buy to lets are seen as investment properties that can come in many different forms.
The most popular and traditional buy to let property is one that is bought to rent out. Another popular example is a let to buy property where the landlord is looking to buy a property to move into so that they can let out their current property. In this article, we are going to focus on holiday home buy to let mortgage in Nottingham so that you can see whether this is the right option for you or not.
The holiday let mortgage is part of the buy to let mortgage family, where landlords let out their property to tourists and visitors for short-term over long-term stays.
With all types of mortgage, and even more so with buy to let, lenders need to know that you can afford to meet your mortgage repayments month-on-month. Buy to let involves being responsible for more than one property’s mortgage payments, therefore, if you do not have a tenant in the property, will you still be able to meet the payments?
This is why lenders are even more careful and have strict lending criteria with holiday let mortgages; depending on your type of property, you may receive an income from the property for half of the year. This would mean that your income would fluctuate, which can sometimes put off lenders.
To be eligible for a holiday let mortgage, you are going to need to pass their strict lending criteria. This criteria can vary from lender to lender, however, the vast majority of them will expect a good credit score and a large deposit in order to be even considered for a holiday let mortgage.
Your initial deposit amount for your holiday let mortgage will stand around 25% of the property’s value. You will also need a minimum income per year (on top of the rental income you will be making), a rental income to cover your monthly mortgage payments (with additional margins to meet) and holiday home insurance.
Lenders need to make sure that you account for potential booking cancellations or loss of income due to damages etc. Buying a holiday home comes with risks, as there will be parts of the year when you make zero profit or receive no income at all. This means that the interest rates that come with holiday let mortgages are usually higher.
At the end of the day, it is completely up to you! As a mortgage broker in Nottingham with experience with holiday let mortgages, we would recommend weighing up the pros and cons before rushing into anything. Here are some of the pros and cons that we have come up with for owning a holiday let home:
When owning a buy to let property, you cannot live inside it, however, you can when it comes to holiday lets. This could mean that you can enjoy cheaper holidays in the comfort of your own property. This is if you are not fully booked of course!
Remember that it is completely up to you whether you invest in a holiday let or not. Whilst the costs involved could seem like a lot, investing could mean that in the future you make more money back.
If you were to take out a buy to let mortgage in Nottingham, you would likely offer your rental property to tenants who are looking for somewhere to stay long-term. Depending on the type of property, tenancies usually start between 6-12 months. The amount you can borrow, depends more on potential rent, rather than income.
Holiday let mortgages, as mentioned before, are intended for people looking for short stays. A typical holiday let tenancy ranges from a few weeks to a month. Unlike a buy to let property, this may lead to your income fluctuating and being inconsistent across the year.
To work out how much you can borrow for your new holiday let mortgage, lenders will consider your potential income from the rental of the property (reviewing the various lettings seasons) as well as your personal income. This is usually how all types of buy to lets work.
The Financial Conduct Authority does not regulate some types of commercial or buy to let mortgages in Nottingham.
In the mortgage world, there are lots of different routes that a property purchaser can go down. From a first time buyers in search of their first home, to existing homeowners remortgaging, holiday let properties and even HMO’s, there is plenty for you to do.
One mortgage type we regularly hear of, that is perhaps one of the most popular options for customers, is a buy to let mortgage in Nottingham.
A buy to let in Nottingham property that you invest in; It’s not somewhere you can personally live, the sole purpose is to make money. If you have previously been a private renter, you have likely lived in a property that has a buy to let mortgage attached to it.
In order for a property to count as a buy to let in Nottingham, it has to be mortgaged with the landlord’s intent to be to rent it out. The tenant will pay the landlord monthly, with that payment being enough to cover the landlords mortgage fee, plus a little extra.
There are many different factors to look at when determining if you are eligible for a buy to let mortgage in Nottingham, or not.
Some of these factors can include what type of property you want to buy, how old you are (you must be at least 21 and there will be a limit on the mortgage lenders who let you take a buy to let beyond 75), as well as any buy to let landlord experience you have.
The biggest most important factors to look at are affordability, the minimum deposit requirements and also what credit score you have.
For you to be able to prove that you are eligible to take on a buy to let in Nottingham, you will need to prove that you are able to afford one, to your mortgage lender. A large portion of mortgage lenders will base their criteria on what your projected rental income is.
Projected rental income is the amount that the mortgage lender believes you will need to charge, in order for you to be able to cover the costs of your monthly mortgage payments, plus a little bit extra. There will be a set requirement that the mortgage lender will calculate using your properties value.
As well as using a projected rental income, some buy to let mortgage lenders will also use a minimum income requirement, which is typically £25,000, though this can be entirely dependent on which mortgage lender you are with.
A trusted and experienced mortgage broker in Nottingham, such as Nottinghammoneyman, with knowledge of buy to let mortgages in Nottingham, will look to find you the most suitable mortgage deal for what it is you are looking to achieve, with the most appropriate mortgage lender.
As it tends to be with any purchase, you will also be required to put down some form of deposit. As a rule, when it comes to a buy to let in Nottingham, the minimum deposit is usually somewhere around 20-25% of the value of the property, though this can vary between mortgage lenders.
The reason that this is often higher than a residential purchase, is to reduce the risk to the mortgage lender. By putting down a larger deposit, you’re borrowing less against your new property. This will also open you up to a 75-80% loan to value, which can help you access much better rates of interest.
If you are even higher of a risk, say you’re applying for a buy to let mortgage in Nottingham with bad credit, you may be required to put down an even bigger deposit.
It may be possible for you to obtain a buy to let mortgage in Nottingham if you have a poor credit score or bad credit history, though you may be limited on your selection of mortgage lenders. There are also some who won’t lend at all for bad credit.
Looking at those mortgage lenders who may accept this, they will most typically want to look at factors such as how bad your credit history is and how it got to that point. Furthermore, you may be required to put down an even bigger deposit.
Before you look to make an application for a buy to let in Nottingham, your first task is to make a purchase on a property you would like to own and rent out.
From that point, you should look to get in touch with an expert buy to let mortgage advisor in Nottingham, so that they can confirm eligibility, review the market for the best mortgage deals, and get your agreement in principle arranged.
Once those steps have been completed, you’ll be able to make an offer on the property you like, which will progress into your full mortgage application, providing the offer you made was accepted.
For the most part, we find that buy to let investors, especially the serious ones, will look to take out a interest only mortgage on their property. With this type of mortgage, you will only be paying interest per month, which will be much cheaper than a repayment mortgage.
Once your term has concluded, you will owe the remaining capital balance, a little caveat that might be off-putting for some. Typically a landlord will pay this back by selling the property in question, or remortgaging onto a repayment mortgage. You may also need to set up a repayment vehicle.
Whilst this mortgage type most commonly occurs and is considered to be the most tax-efficient, you are still able to make an application for a repayment mortgage on a buy to let in Nottingham. As it would be with most mortgages, this will have you paying both interest and capital combined.
This type of mortgage can mean higher monthly mortgage payments than interest only, though it would also allow you to grow equity in your property. Once your term is due to end, you would own your property outright, without the need to make back any large capital payments.
As discussed above, a mortgage lender will want to test what your projected rental income is, in order for them to figure out how much you need to earn, so that you can cover the costs of your monthly mortgage payments.
Regarding how much you are able to borrow, as long as your projected income can cover the amount you are asking to borrow, you likely won’t be limited. That being said, a mortgage lender may also want to see that the projected rental income goes beyond the monthly payments by a certain amount.
So you can apply for a buy to let mortgage in Nottingham, you must provide a mortgage lender with all kinds of documents, before you can proceed. These documents can be, proof of your income, deposit, ID, address, any bonuses and/or commission that you get, and your current or most up-to-date P60.
Self employed applicants will have to typically also provide their SA302 tax returns. Existing landlords may also be required to provide proof of rental income, something that usually comes in the form of an ARLA-regulated report, in addition to a mortgage statement for your existing properties.
Having as much of this to hand as you possibly can, ahead of applying for a buy to let mortgage, can see your mortgage application progressing a lot quicker than it otherwise would, so it is definitely recommended that you are prepared ahead of time.
As tends to be the case with any mortgage, you will have some standard costs involved. You will also be required to put down a deposit, could have mortgage arrangement, application and broker fees, as well as your monthly payments to make. All the usual costs you would expect.
On top of this though, there may be a selection of further fees that you could have to pay. Some of the more frequently encountered ones include valuation fees, product fees and also mortgage exit fees. Furthermore, there may be some solicitors fees and disbursement fees, as well as stamp duty.
Your dedicated and trusted mortgage advisor in Nottingham will be able to more accurately advise on what your stamp duty rate might be. If you ever make plans to exit your buy to let in Nottingham early, you could also have an early repayment charge (ERC), which can be quite costly.
Lastly, you will also have to consider costs that will go even further than just your mortgage process. Landlord insurance will be something you need to think about as well, along with letting agent fees, income tax and then your general property maintenance costs.
From time to time, you may find that your tenants need something to be looked at by a professional. Depending on what actually needs to be carried out on your property and the contractors you are hiring, this can vary from either quite cheap, to quite costly.
Every single cost that is involved in your buy to let mortgage process will differ, depending on mortgage lender, as well as the state of your personal and financial situation. Some of these won’t be involved, though your mortgage advisor in Nottingham will make sure you’re aware of everything that is.
For the most part, yes, you can remortgage a buy to let in Nottingham. We often find that the main reason a landlord could be looking to take out a buy to let remortgage in Nottingham, is so that they can release some equity from the property, to put down a deposit on a further property.
The equity that is within your buy to let in Nottingham will differ from your typical residential property, if you are going with an interest only mortgage. Normally your balance and the interest would come down at the same time, creating a much larger gap between your balance and the value.
When you have an interest only buy to let, only the interest goes down. That means the equity within your home entirely depends on how much deposit you put down and if the home has grown in value. Relating to interest only mortgages, you may decide that you want to pay capital as well.
This may actually be possible for you to do, if you were to look at remortgaging your interest only buy to let property onto a repayment mortgage. This would give you higher monthly mortgage payments, but would let you pay off interest and capital together.
Though the options present may be limited, it is actually possible to obtain a buy to let in Nottingham as a first time buyer! When looking at this type of route, you will most likely need a much bigger deposit, in order to access how much you are asking to borrow.
You should also bear in mind that you will also be losing many of the first time buyer benefits, such as stamp duty. This is because this won’t be your primary residence and buy to let landlords will typically have some level of stamp duty to pay on their portfolio.
For a lot of first time buyers in Nottingham, becoming a landlord can actually be a very smart way of supplementing your income, prior to affording your own mortgage on a property down the line, when you are ready to take that next step.
It is important to remember that in this instance, a mortgage lender will look to assess you on your second purchase, fully aware that you already have a mortgage that is in your name. This could affect your affordability or lower the amount that you are able to borrow.
In order for customers to qualify for a mortgage, they will need to obtain an Agreement in Principle from the mortgage lender. The point of this is much as the name suggests; the lender will agree, in principle, to let you take out a mortgage with them.
This is done prior to the final checks and whilst it is not a guarantee that you will definitely get a mortgage, it is a good indicator that you are on the right track.
You may see this being called a Mortgage in Principle, a Decision in Principle, as well as the abbreviations AIP and DIP. Though it may seem confusing at first with all those names, they are all the same thing.
Once you have obtained your Agreement in Principle, you will be raring and ready to go, fully prepared to support any offers you make on a property as a first time buyer in Nottingham.
In having this to hand, you may also even open yourself up to the possibility of negotiating with the seller on a lower price. The reason for this, is because it demonstrates to the seller of the property you are looking to buy, that you are a serious buyer and do in fact have the funds to proceed.
We regularly find that more and more lenders are choosing to go with soft searches over hard searches. Generally speaking, a soft search will leave your credit score unaffected, as they tend not to leave a footprint.
Hard searches do leave a footprint, so having too many done can cause more harm than good, especially if you don’t pass each time. That’s not to say a soft search will never affect you, but it is not something that tends to happen often.
Soft searches don’t go quite as in-depth as hard searches, though you can rest assured that no matter which one the lender chooses to go with, they have their reasons and will choose the right one either way.
If you are not having hard searches done on a regular basis, then having one done shouldn’t really make too much difference. When it starts to become a problem is if you start having a lot of different hard searches taken out on you within a short amount of time.
It’s important to keep in mind though that if you are well aware that you do have a good credit rating, you should not feel put off by the idea of getting one done, especially if a hard search with that mortgage lender is going to be the best option for you.
Though we would like to say yes and fill you with hope, unfortunately even with an Agreement in Principle to hand, we cannot guarantee mortgage success.
The mortgage lender still needs to see all your documents and only after they have done that will an underwriter be able to make their final decision.
We tend to find that customers contact us after being declined at the point of application, as they have missed a lot of the small print that is mentioned in their Agreement in Principle.
You will need to provide your mortgage lender with proof of ID, the last 3 months payslips and bank statements to show how you handle your money, all before a lender will offer your case.
The required documentation is slightly different for self employed mortgage applicants.
Technically yes, you can make an offer without an Agreement in Principle to hand, though we personally believe you would be much better off having one with you.
Any credible estate agent will ask you for one of these before they do business with you, as they will want to know that you can go ahead with the mortgage process.
One of our dedicated mortgage advisors in Nottingham can typically obtain an Agreement in Principle within 24 hours of your initial appointment.
An Agreement in Principle will usually expire after somewhere between the 30-90 days mark. That being said, please be aware that you don’t just have to jump at the first house you see. Take time and take care when looking for a home.
If your Agreement in Principle expires, there are no worries. We can quite easily get you a new one once you are ready to make an offer on a property that is right for you.
Finding your dream home only to be declined by a lender can be both frustrating and disappointing. To counteract this feeling, we recommend getting an Agreement in Principle as early as possible, to ensure you are readily prepared for the process.
To learn more about what an Agreement in Principle is and how they can help, take a look at our YouTube video below.
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.
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.
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.
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.
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.
There are a lot of reasons as to why a property owner may look to take out a second or even a third mortgage. Some examples of these include using an additional mortgage to expand your property portfolio or to help one of your family members to move into a home.
You may find it more difficult to obtain a second mortgage, compared to when you took out your first one, as you will now have two lots of mortgage payments to factor in. If you cannot afford the costs of both, you will likely not be accepted for a second mortgage.
As a mortgage broker in Nottingham, we’ve seen people apply for a second mortgage for lots of reasons:
If you are a good couple of years into your mortgage term, you have most likely built up a portion of equity within your home. Rather than a remortgage, some may look to take out a second smaller mortgage of sorts, to release some of that equity.
This type of mortgage process is known as a further advance. A further advance gives a homeowner the option to borrow more from their current mortgage lender, as a means of funding potential home improvements or the deposit for another property purchase.
It is similar in the way it functions, to a remortgage to release equity. A remortgage to release equity will allow you to switch to a better product with a new mortgage lender, releasing a portion of your equity.
A further advance is with the same mortgage lender, has its own interest rates and stands separately to your current mortgage balance. Whilst it means you will be paying two mortgage balances to the same mortgage lender, it can often be cheaper than the fees involved in a remortgage.
In order to get a further advance, you’ll have to pass an affordability check by your mortgage lender, to make sure that you are able to take out this additional mortgage. The amount you are able to borrow will depend on the equity in your property, though you likely won’t be taking it all out.
Our mortgage advisors in Nottingham will take a look at your case and help you to decide whether a remortgage to release equity or a further advance is a more suitable mortgage option for you.
Whether you are a landlord with a lot of experience already, with current buy to let properties to your name or an aspiring property buyer who is thinking of taking that initial leap into the buy to let industry, you’re going to need more than just one mortgage.
Buy to let landlords that have a large property portfolio will no doubt be used to the process of getting more than one mortgage by now, but if you are just starting off or own a couple, it will still most likely be beneficial for you to speak with a mortgage expert.
Having multiple mortgages on buy to let properties is still a similar process to your current mortgage(s).
You will still need to meet the criteria for the mortgage in question, put down a substantial deposit (typically at least 25% of the purchase price) and show that you are able to afford the monthly payments.
Of course, your mortgage payments will generally be covered once you find tenants to live inside the property, however, you may not find some straight away so you need to be able to manage the payments beforehand.
For expert mortgage advice in Nottingham for a buy to let mortgage in Nottingham, feel free to book yourself in for a free mortgage appointment today and we will see how we can help.
Otherwise known as a let to buy mortgage, a variation of buy to let, this is an option that can allow homeowners to get a second mortgage on a newly purchased home, whilst renting out their current property, becoming landlords in the process.
With this type of process, you are planning on finding a tenant to move into your current property, so that you are able to move out. This is often a popular choice for landlords who would like to move into a bigger home, but keep a property in their portfolio.
It also happens to be commonly occurred with “accidental landlords”, people who perhaps never initially planned to become a landlord, with that plan changing as time has gone on.
Our expert buy to let mortgage advisors in Nottingham also specialise in helping customers with let to buy mortgages, so book online today and we will see how we can help with your let to buy process.
If your children or family members are struggling to find their footing on the property ladder, you may be able to take out a second mortgage in your name, allowing them to move into the property.
Another popular choice for some, that doesn’t require a second mortgage, is to gift a deposit. Gifted deposits can be a great way to help you to get your family onto the property ladder when they are struggling.
In various instances, whilst you may have intended to take out a second mortgage, you may also find that you are listed on two mortgages purely by circumstance.
As an open & honest mortgage broker in Nottingham, the most common reason we see for people being listed on two mortgages is because they have become divorced or separated.
Unfortunately, it can be quite difficult to remove either your own or your ex-partner’s name from a mortgage, as not only do you both have to mutually agree on who gets removed, but you also have to prove the remaining party can afford to keep up payments by themselves.
If you happen to still be listed on a mortgage with an ex-partner, it is important to try and get your name removed as quick as you can. This ensures you are less likely to be affected by the financial links to your ex, as if they miss any payments, it could bring your credit score down.
Whilst this is the recommended route, if for some reason you are unable to get your name removed from a mortgage, there may still be mortgage options available to you. Some mortgage lenders will take your personal circumstances into account.
It’s completely your choice to go to a lender directly; some are a little more adept and can manage the process themselves. When it comes to this you can either go and visit a branch or do it online.
Whilst this sounds like the steps are easy enough, there are still many reasons as to why a person should use a mortgage broker in Nottingham. Our mortgage advisors in Nottingham have taken time out to put together a few pros and cons to help you decide between the two choices you’re faced with.
Some of the benefits of homeowners and home buyers going direct to their bank or building society means that you’ll be able to save some finances. In the past, you may have found that the bank manager knew your finances incredibly well, but that all changed when credit scoring came into place.
Other potential advantages are that you’ll find some lenders may offer exclusive products for your mortgage, ones that are only be able to be obtained from straight to the lender themselves. They do this so that it appeals to both customers and brokers alike, but these exclusive offers can be subject to change and can sometimes when they stop being available with the lender, can still be obtained by going to a mortgage broker in Nottingham instead.
From 2014 onwards, mortgage lenders were no longer allowed to sell mortgages on a non-advised basis, on a whim with any customer interaction. Up until that point, some applicants were under the impression that they were receiving advice when in fact they weren’t speaking with a qualified advisor. This meant that they had opted out unintentionally from consumer protection that they would’ve received by speaking with the right person.
Due to these changes, lenders had to change the way they ran their business, meaning that it could take up to a month to speak with an advisor. If you have had your offer accepted on a house, this is of course not a good thing, as obviously you really want it. Because of this, mortgage brokers became a more popular option. As a part of our mortgage advice service, we aim to give you same-day mortgage service. When you get in touch, we try and connect you with a dedicated mortgage advisor in Nottingham at a time that best suits you.
Back in the ’90s, it was a lot more challenging to compare mortgage deals. Through the advancement of technology, finding a competitive mortgage is now a lot easier, as everything is basically online now. The issue people are faced with, is not knowing whether you meet mortgage criteria and it’s hard to find products that are tailored to your individual circumstances. Wherever you’re searching, it is important to bear in mind that the deals with the lowest tend to carry high arrangement fees.
Another key factor that could determine where you go, is affordability. It doesn’t matter how good a deal might look to be, if you aren’t able to borrow the amount of money you need. Because of this and because of how serious of a financial commitment this type of process is, many prefer a mortgage broker to help them along the way.
As it can be seen with many lenders nowadays, there are various different factors that can make a mortgage application so much more complicated. For example, these may be:
As the years have passed, lenders have attempted to differentiate themselves from their competition by ways such as offering better deals than others. The main way they do this is through their differences in lending criteria. For example, some lend more towards those who are Self Employed in Nottingham, whereas some might take a more relaxed to blips on your credit report.
Our mortgage advisors in Nottingham understand that your situation will be unique to you. Through our experience as an open & honest mortgage broker in Nottingham, we have seen various unique and complex scenarios in the past. It’s our hope that we will be able to draw from that experience in order to recommend a more suitable mortgage for you at the lowest rate possible.
However, it’s not just about the mortgage. Even if the application itself is straightforward, we’ve noticed our clients rely on us for much more, we strive further than just sorting your mortgage deal. Our mortgage advisors in Nottingham will be able to recommend other professional services such as Solicitors and the array of different surveys and protection available to you as a home buyer.
It has already been covered previously, but mortgage brokers in Nottingham tend to be far more responsive than high street mortgage lenders. It is not uncommon for our dedicated and hard working advisors to provide out of hours (beyond the standard 9-5 shift) and weekend appointments. They are also able to respond to clients’ emails during this time to offer a more responsive service as opposed to restricted working hours.
One factor which is often overlooked by many as to why a mortgage broker in Nottingham is a highly preferred option to a lot of home buyers and homeowners alike, is that a person may simply prefer to let someone else handle the full transaction and take the stress out of the situation. Professional applicants, such as those who run a Buy to Let in Nottingham, have seen this to be very beneficial as they have their own customers to handle, so find it to be much easier having a helping hand do the work for them.
If you are in need of expert mortgage advice in Nottingham, whether you’re a first-time homebuyer, moving house, looking to remortgage, are a buy-to-let landlord or even something else that hasn’t been touched upon, please do get in touch. Our team of mortgage advisors will do their very best to bring you one step closer to mortgage success, keeping the process as clear and simple as they possibly can.
So you’ve been living with your parents your whole life and you now think that it’s time to move on and move out. It may sound like a simple answer, but do you rent or do you buy? If you are a first time buyer in Nottingham, you need to weigh up the pros and cons of buying or renting and then choose the option that is best for you.
As a Mortgage Broker in Nottingham, we always recommend that you take your time and make a decision that will benefit both your personal and financial situation. If you need help with this, our Mortgage Advisors in Nottingham will happily lend you a hand, we have worked with thousands of First Time Buyers in Nottingham before.
Parents often encourage their children to buy before renting; and depending on your situation, they may be right and it may be the best thing to do. However, there are always both sides to an argument, so it’s always best to do your research before rushing into a purchase deal.
When comparing a homeowner’s monthly mortgage payments to a tenant’s monthly rent payments, the homeowners are likely to have less going out each month.
Depending on the mortgage deal that you’ve taken out, your payments may fluctuate from month to month. For example, if you’ve taken out a tracker mortgage, your interest rate will be taken from the Bank of England’s base rate of interest. This rate is likely to change from time to time, which means that your mortgage payments will too.
There are other mortgage products available that won’t change your interest rate, such as a fixed-rate mortgage. If you are on a fixed mortgage rate, your rate stays the same throughout your fixed-term mortgage period.
If you choose to rent over buying, it’s possible that your monthly payments won’t stay the same. You have to remember that your lender has a mortgage too and their interest rate is also likely to increase from time to time. If their mortgage rate increases permanently, you shouldn’t be surprised if they also up your payments. With rising maintenance costs and increasing Buy to Let mortgage rates, it may prove worse off to rent over buying.
Also, you should know that landlords will rarely decrease your rent, the costs only ever seem to go up!
Assuming that you can keep up-to-date with your mortgage payments, you will always have that sense of security when owning a home. No one can force you to move out of your home as you own the property.
As a tenant, you have a little less security in situations where the landlord wants their property back for themselves. At the end of the day, you don’t own the property, so you can’t really argue against their decision. Of course, you won’t be kicked out instantly, you’ll always get a notice period. If your lender is lenient, they may extend the length of your notice period if you have a difficult personal situation. This worry won’t come with owning a home as you own all rights over the property.
The property market has a tendency to reshuffle things every so often, it’s always a surprise when it happens too. For example, in March 2020, as soon as the lockdown was announced the market went crazy. You really never know when a crash or a boom is around the corner. With this in mind, it’s likely that property prices are going to fluctuate during your time of owning a home. Sometimes they go up, sometimes they go down.
When owning a property during a period of time where property prices go up, this is good when you are selling your home but bad if you are trying to buy one – it works both ways. If you opt for renting over buying, then property prices rise, you may struggle to afford a deposit. This is another reason why buying over renting could end up being the best option for you.
However, you should know that if you are forced to sell your home at the wrong time, it may result in you losing money. You may have to sell your home quickly because of a relationship breakdown, a reduction of income or another personal situation.
As a Mortgage Broker in Nottingham, we always recommend that you never rush into a property purchase, especially if you are unsure on how the process works and what sort of mortgage that you’ll need. A mortgage is a huge financial commitment and you should only proceed with one if you are completely ready to do so.
If you are unsure on the mortgage process and need an extra helping hand, our Mortgage Advisors in Nottingham will be more than happy to help you. If the question of “Should I rent or buy?” is still on your mind, feel free to have a chat with our team and they will be able to lay out the pros and cons to each side for you.
Now that you’ve gained further insight into some of the factors that come with buying a home, let’s touch upon what it’s like to rent. Renting could be your best option, it’s down to your personal and financial situation.
Renting is your safest option if you want flexibility. If you look at your long terms plans and can see yourself moving within the next 5-10 years, renting is probably most suited for you. When renting, you are under no obligation to live in the property for a certain amount of time, you can leave whenever you want. For example, you may want to rent so that you have a place to live whilst you save for a deposit for a mortgage. Once you have saved, you can move out whenever you want, you just have to give your landlord your notice.
If you don’t see yourself living in a particular area for very long then it’s worth considering renting as an option. You can be as flexible as you like to when it comes to how long you live in the property for.
When you are renting, your landlord should be responsible for any major repairs on the property. There will always be better landlords than others, for example, some may take their time in getting back to you, some may be responsive and very quick at replying. As a Mortgage Broker in Nottingham that has a long history of working with local landlords, we would suggest that you take a look at their reviews before going ahead with one.
You may have to contribute to minor repairs though, for example repairing broken lights. Your landlord will expect you to take care of smaller repairs so that they can focus on the major repairs. In Nottingham, if you choose to buy a home you will have to take care of all of the repairs and damages inside of the property.
If you are planning to buy or rent with a friend(s) / family member, as a Mortgage Broker in Nottingham, we would advise that you look at renting first. If you want to avoid getting tangled in a mortgage deal with lots of different people, renting will be best for you.
Getting tied into a mortgage deal with multiple names on it could potentially cause problems for you further down the line if you want to move out of the property. It can sometimes be hard to get your name removed from a mortgage in all situations.
You may need specialist mortgage advice in Nottingham to get the ball rolling with any application with multiple names on it, so you should get in touch with a Mortgage Broker in Nottingham like us. We would love to help you out, so if you are in this situation and you don’t know whether to rent or buy, please get in touch.
Now that you are aware of some of the different things to consider when choosing whether to rent or buy in Nottingham, you should weigh up your options. Which one will benefit you most? Do you plan on living in the property for a long time?
We even suggest making a pros and cons list, we know that it’s cliché, but it definitely helps!
When it comes down to the numbers, most people choose to buy over rent, they see it as an early opportunity to get themselves onto the property ladder. People would also rather the money go towards their own benefit rather than someone else’s.
If you need more renting vs buying Mortgage Advice in Nottingham, feel free to get in touch with our friendly team today and claim your free mortgage consultation.
The mortgage journey has its fair share of both ups and downs, but at the end of it all, you will end up with one of the following: either a potential future family home, a property that will be able to propel you further up the ladder or an investment purchase that can be used as an extra source of income.
Regardless of the path you took, there will eventually come a time when you are reaching the end point of your mortgage term. You could now sell your home and upsize/downsize into a new property.
Maybe you are looking at selling your existing portfolio to the tenant or another buyer, with a view to invest in other areas? These aside though, there is one option that remains the most popular, and that option is a Remortgage.
First of all, let’s look at what exactly this means. A Remortgage is where you utilise the loan from a new mortgage to pay off your current ongoing mortgage. There are a large variety of different options when taking out a Remortgage, varying in scale of importance from minor to major.
By using the 20 years or so knowledge of our resident “Moneyman” Malcolm Davidson (host of our YouTube channel MoneymanTV), we worked hard to put together a quick guide regarding all the options you could have when it comes to taking out a Remortgage at the end of your term.
Generally speaking, your initial mortgage deal will normally last somewhere within the realms of 2-5 years, featuring low fixed rates or possibly discounted rates. Depending on your circumstances, you may even be placed on a tracker mortgage, a mortgage type that follows the Bank of England’s base rate.
When your term has come to its end, it is likely that you will be moved along to the lenders Standard Variable Rate (often referred to online just as SVR). To simplify, an SVR is a mortgage with an interest rate that can fluctuate both up & down, depending simply on what the lender wishes to charge.
This does not work the same as a tracker mortgage as it does not follow the base rate of the Bank of England.
Because of this, these types of mortgages are usually the most expensive paths to take, leaving many with a preference in looking at Remortgaging for better rates, an act which will hopefully save you money on your monthly repayments down the line.
when you’re around 2-5 years into occupying your home, you may decide that it doesn’t quite feel like you’d hoped. You may be in need of an extra room or larger living space for your kids or personal belongings, a new kitchen, a new office, or a loft conversion of some kind.
Rather than move into a larger house, many choose to take the route of releasing their equity with a Remortgage in order to cover the costs of these improvements.
Though the idea of having to obtain planning permission and fund/manage your own project may seem scary at first, some would argue it’s a lot less stressful and more rewarding than the process of selling your home, and finding and moving to a new one.
In the future this may prove to be quite a beneficial situation, as creating more space and having good quality craftsmanship will likely increase the value of your property. This is of course very useful for if you’d like to sell the property later down the line.
In many cases, people may simply just choose to remortgage in Nottingham for a better mortgage term, either by reducing the length of their current term or switching to a product that is more flexible.
Reducing the length means that you won’t be paying back your mortgage for as long, so aren’t completely tied down, but this will mean that your monthly mortgage repayments will be a lot higher. The longer your term, the lower the payments will be over the course of said term.
Some prefer to go with a more flexible mortgage term when they Remortgage. The positives that come with this option can prove endearing to some homeowners.
You may end up with a chance to overpay, resulting in being able to pay your mortgage off a lot quicker, as well as being able to carry the same mortgage and rates over to another property, should you ever decide that you’d rather move at some point in the future.
Though a flexible mortgage sounds like it’s the most ideal situation to be in as a homeowner, they usually come in the form of a tracker mortgage. As mentioned previously, this follows the Bank of England base rate, meaning one month your payments could change both positively and negatively, based on interest. Some homeowners feel this is too unreliable for their liking.
Every homeowner has some level of equity in their property. The way this is worked out is by calculating the difference between what is still owed on the mortgage and the current value of the property.
Further onto a previously mentioned point, this can be used for home improvements, however there are still an array of mortgage options available for you.
Some use the equity in their home to cover long-term care costs, to supplement their income, to have themselves a well deserved holiday, to pay off an interest-only mortgage or to have a surplus of extra cash to do whatever they’d like with.
We often find that buy to let mortgages in Nottingham landlords will use a remortgage to release equity as a means of covering their deposit for buying any properties in the future to add to their existing portfolio.
If you are aged 55+ and living in a property with a minimum value of £70,000, then it may be worth your time looking at your options for Equity Release in Nottingham. To find out if you qualify for later life lending, book a free mortgage appointment with a later life mortgage advisor.
Another topic relating to the aforementioned topic of remortgaging to release equity, is utilising the existing equity in the property to pay off any unsecured debts you may have accrued over time.
Though it may seem like an easy enough task, Debt Consolidation not only bases the amount on how much you’re owed and the value of the property, but also how good or bad your credit rating currently is. This could mean you are only able to borrow a limited amount.
Furthermore, to pay off your previous mortgage and your debts, you will need to borrow a higher amount than your outstanding mortgage amount. This means your monthly repayments will probably be higher than you’d have initially liked. Though not an ideal situation, at least you can rest assured that should you find yourself struggling, a mortgage broker may be able to help you get back on track.
Should you find yourself with a particularly damaged credit rating, there are still some options to choose from, though these will be no easy feat and require very Specialist remortgage advice in Nottingham before proceeding with your process. Even then, there is no guarantee things will go the way you’d like them to.
You should always look to gain mortgage advice before choosing to consolidate and secure any debts against your own property.
If you are reaching the end point of your current mortgage term and are wondering what your option may be for Remortgaging, please feel free to get in touch with an fast and friendly mortgage broker in Nottingham.
A dedicated and experienced advisor will be able to discuss your circumstances and future goals, helping you create a plan of action for your next step of your home owning and mortgage journey. We always aim to ensure this time around is a quicker and smoother process than your first mortgage.