Buy to Let Holiday Home Mortgages in Nottingham

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.

What is a holiday let mortgage?

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.

Am I eligible for a holiday let mortgage?

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.

Are holiday let mortgages worth it?

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:

Pros to owning a holiday let

  • Receive an additional source of income
  • A large investment that would be worth a lot in the future
  • Gain more profit from peak holiday seasons
  • Deduct expenses on fully furnished holiday homes
  • Possible tax benefits (speak with a qualified advisor about this)

Cons to owning a holiday let

  • High-interest rates
  • Running costs can be quite high
  • In off-peak times, you may lose more than make a profit

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.

How are holiday let mortgages different from buy to let mortgages?

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.

How Do Buy to Let Mortgages in Nottingham 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.

What is a buy to let purchase and 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.

Am I eligible for a buy to let mortgage in Nottingham?

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.

Affordability

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.

Minimum Required Deposit

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.

Credit Score

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.

How do I apply for a buy to let in Nottingham ?

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.

What type of buy to let in Nottingham could I apply for?

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.

How much can I borrow for a buy to let mortgage in Nottingham?

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.

What documents are needed for a buy to let in Nottingham?

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.

Are there any additional costs included with a buy to let in Nottingham?

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.

Can I remortgage a buy to let in Nottingham?

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.

If I am a first time buyer, can I get a buy to let mortgage in Nottingham?

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.

Can I Remortgage and Extend The Term in Nottingham?

There are many different reasons as to why a homeowner may look to take out a remortgage in Nottingham. You can find lots of information about this on both our website and across the internet, whilst you are researching this option.

From remortgaging to release equity, to taking out a remortgage for home improvements, there are plenty of options out there for homeowners. One that people maybe don’t talk about enough though, is that you can actually remortgage in Nottingham to extend your term.

Yes, that’s correct, you may be able to remortgage in Nottingham and extend the length of your mortgage term!

Why would I remortgage in Nottingham to extend my term?

Your term is how long you have to pay back your mortgage, based on the contract you signed with a mortgage lender. Popular choices are usually around 25-30 years, which is a long time to be financially liable for something, though also provides long-term security.

Once you get through part of your process, maintaining your payments might be difficult, perhaps your bills have risen. In taking out a remortgage to extend your term, you spread the cost of your mortgage over a longer term, lowering your monthly mortgage payments.

This in turn can then free up much more disposable income that you can use per month. It’s not sunshine and rainbows, however, as the downside is that your interest will be spread across that extended mortgage term as well.

What this means, is that whilst it will be cheaper in the short term, giving you that extra disposable income per month, you will actually be spending more on your mortgage overall by the time your term has finished.

Can I remortgage in Nottingham to extend my term if I’m borrowing more money?

Yes, you may be able to look at extending your term if you would like to borrow additional funds or remortgage to release some equity that is in your home.

Truthfully, you can probably extend your term on any remortgage path you’re looking to take, with popular options for homeowners being to remortgage home improvements or to take out a debt consolidation remortgage in Nottingham.

It is again important to remember though, whilst you will be extending your term over a longer period of time so you can lower your monthly mortgage repayments, you will be paying more interest overall by the time your term has finished.

You should think carefully before securing other debts against your home. By adding your unsecured debts to your mortgage, which is secured on your home, you are potentially putting your home at risk if you cannot make the required repayments.

Although the total monthly cost of servicing your debt may have reduced, the total cost of repayment may still have risen as the term of your mortgage is longer than it may have taken to repay the debts originally.

When wouldn’t I be able to remortgage in Nottingham and extend my term?

Though there may be variances from mortgage lender to mortgage lender, there are lots of factors that could potentially limit your ability to remortgage in Nottingham and extend your term. These include, but are not limited to, your age, mortgage type and any mortgage debts.

If this doesn’t work for you, please remember that there may still be options to help you lower your monthly mortgage payments. Your dedicated mortgage advisor in Nottingham will review your case, and look for the most appropriate outcome to help you.

Can I remortgage in Nottingham to extend the term of my interest-only mortgage?

This can be a little complex, as not many mortgage lenders will give you the option of extending the term of your interest-only mortgage. Some may not have an issue with this, though you will still owe the lump sum of interest once your term concludes and they may want to avoid payment delays.

Additionally, the majority of residential properties will be on some variation of a repayment mortgage, as a residential interest-only is much less frequently occurred in modern times. Instead, it is much more common to find an interest-only attached to a buy to let property.

This in itself with have its own challenges, as not only will you have the same problems of paying back the lump-sum, but a mortgage lender might not allow you to extend your term if the property still has a tenant living inside of it.

In any situation, your best route may be to look at taking out a remortgage on your property, so that you can replace your interest-only mortgage with a repayment mortgage. This would allow you to continue by paying back both the capital and interest combined.

We would absolutely recommend speaking to an expert member of our remortgage advice team, so that you can better understand the options that may be available to you, prior to making any decisions.

What if I want to reduce my term instead?

Perhaps you actually wish to reduce your term instead, which once again can also apply to pretty much every mortgage situation. In this circumstance, quite the opposite to extending your term, you would pay back much less overall, though would likely have much higher monthly payments.

Alternatives to extending your term

Rather than taking out a remortgage so that you can extend your term, you may actually have other options out there available to you, if you would like to go the route of saving money per month. In this article, we have already looked at remortgaging, but what about downsizing?

Downsizing means that you sell your current home, and move into a smaller home instead. As a general rule, a smaller home could cost less, reducing the need for a big mortgage, which in turn could have lower monthly mortgage repayments if taken over the same term.

Another option, for homeowners over the age of 55, with a property that is worth at least £70,000, is equity release in Nottingham. This could allow you to release funds tax-free from your home, either as a lump-sum or in occasional payments, through a lifetime mortgage.

Even then, equity release in Nottingham might not be the most suitable path for you to take. There are also options for homeowners over the age of 50, such as retirement interest-only mortgages and term interest-only mortgages, known as RIO’s and TIO’s.

Similar to how it would work when taking out an equity release plan, with a RIO or TIO, your loan will only be repaid when you are dead or have moved into long-term care, with your home being sold at either stage.

A professional, trusted and dedicated later life mortgage advisor in Nottingham will be able to review your possible options and alternatives as a later life homeowner, advising on the most appropriate path to take, based on what you wish to achieve, as well as your future plans.

To understand the features and risks of equity release and lifetime mortgages, ask for a personalised illustration.

A lifetime mortgage may impact the value of your estate and it could affect your entitlement to current and future means tested benefits. The loan plus accrued interest will repayable upon death or moving into long term care.

How to Save For a Mortgage in Nottingham

Cost of living and increased house prices are the two main factors as to why it can be difficult to save for a mortgage. We know that you can’t suddenly decide to buy a home, you have to prepare and plan for months, years in advance.

Although your credit score will factor into how much you are able to borrow and how much you will need to put down for your deposit, usually, if you save for long enough and prepare in advance, you should stand a good chance of getting a mortgage.

Work Out How Much You Need to Save 

When you are trying to save for a mortgage as a first time buyer in Nottingham, your first task is to work out your monthly disposable income. Once you have deducted your expenditures and monthly outgoings from your overall monthly income, you will have a rough estimation of your total leftover income. A portion of this could be used towards your mortgage savings.

You could work out the amount that you want to save each month by dividing the total amount that you want to save by the number of months that you wanted to move in by. For example, if I wanted to save £10,000 over 24 months (2 years) I would need to save £416 a month. The amount that you save and the length of time can be reduced with multiple incomes saving at once.

When putting down a deposit for a mortgage, you will usually need to provide at least a minimum of 5% of the cost of the property. As a Mortgage Broker in Nottingham, we’ve seen that buyers even try to aim for a 20% deposit so that their mortgage payments are significantly lower. A deposit around this size may be required anyway if you have a bad credit score; you may be asked to put down 15%-20%.

If you have good credit and manage to save for a higher deposit, you could potentially open yourself up to more competitive interest rates. Lenders also see you as a reliable applicant with a higher deposit. They always want to try and minimise the risk of repossession.

How much can you borrow?

At Nottinghammoneyman, our Mortgage Advisors in Nottingham will be able to work out how much you are able to borrow. They will factor in your total deposit amount, credit and other various factors.

We would also recommend saving some money aside to factor in the additional costs of buying a property. Your mortgage and protection advisor will offer you insurance or cover for you and your property.

Are there any schemes available?

The government have developed various schemes to help struggling buyers get more out of their deposit. This could be a boost in their total amount or an option to purchase a percentage of the property, hence lowering the deposit required.

One example would be the Help to Buy Equity Loan scheme. This scheme allows you to boost your total deposit amount to 25%. The minimum that you have to put down is 5% and the maximum is 20%; whatever percentage that you choose to put down, the government will then loan you the remainder to make up a 25% total.

Another scheme example would be the Shared Ownership scheme. This allows you to purchase a percentage of a property (anywhere between 10%-75%), where the rest of the property is owned by the housing association or local councils. The way that this works is that you will put down a deposit on the property based on the percentage that you are buying. For your monthly payments, you will have to account for your mortgage plus rent which goes directly to the co-owner of the property.

There are many more schemes available, these are just the most popular options. Other schemes include the Lifetime ISA, Mortgage Guarantee Scheme and many more. Visit OwnYourHome.gov.uk for more information about these schemes and further options.

Help From Elsewhere 

If you are lucky enough to receive a gifted deposit from your parents, this could give your deposit a huge boost. Combining your parent’s funds and your own deposit, you could surpass the 5% minimum mark!

Gifted deposits are becoming more and more popular, especially with the rising costs of housing prices. Sometimes we would even say to ask your parents. We have seen that many parents are more than happy to contribute to their children’s deposit (maybe it is because they want them out of the house!).

Review Your Outgoings

If you are saving your deposit, you may also want to review your monthly outgoings and see whether you can save money anywhere. If you take a look at some of your subscriptions, contracts or broadband packages, it could be possible to save some bits here and there and allocate your savings into your mortgage funds.

Mostly, people tend to save money in places such as gym memberships and streaming services. You could look at what you use regularly, and what you hardly use and try to see whether you can save money in some places.

Have you considered buying a property in Nottingham with a friend or partner?

When it comes to saving for a deposit, if you are combining your savings with another applicant, you will find that you save much more quicker! Obviously, if two applicants are saving rather than one, you are more likely to reach your goal than if it was just you saving up.

There are different types of mortgages designed for those looking to buy a property with their friend or partner, these include:

Joint Tenants

This involves both applicants purchasing the property as a whole and owning equal shares within it. If one of the owners passes away, 1005 of the ownership will fall to the remaining owner. Since you both own the property, you will have to come to an agreement if you want to sell or remortgage the property.

Tenants in Common

This is where both owners have a percentage share of the property that doesn’t have to be equal. As a Mortgage Broker in Nottingham, we see this option being more popular with relatives or friends who are buying together. Because you don’t have an equal share, you can act individually and have the right to sell or give away your share.

Saving For a Deposit if You Have Bad Credit

If you have bad credit, you may need to work that little bit harder to save up for your deposit. Alongside your savings, you should try and improve your credit score in the meantime. This could mean that once you reach your target deposit, you may have opened yourself up to better rates due to your increased credit score.

Our Expert Mortgage Advisors in Nottingham

Whether you are a first time buyer in Nottingham, or moving home in Nottingham, saving for that deposit and reorganising your finances to compensate for the additional costs of taking out a mortgage can be difficult. We want to help by taking some of the stress off your shoulders.

Whether you just want to talk to a Mortgage Advisor in Nottingham about your mortgage plans or you need help starting your application, we are here to help. We have been working in the mortgage industry for over 20 years now and have experienced all kinds of mortgage scenarios and answered almost every mortgage question there is!

You can book a free mortgage appointment online or give us a call, we will be there to answer 7 days a week.

Can I Remortgage Early in Nottingham?

Remortgage Advice in Nottingham

If you are closing towards the end of your fixed term, you are probably thinking about your remortgage. Most homeowners will start their remortgage process three months before their deal is coming to its end, however, what happens if a deal crops up and you want to start the process earlier to capture this deal?

In most cases, you will be able to remortgage early, however, this can sometimes differ between lenders. If you are able to remortgage early, you should carefully think about the implications of doing so before rushing into it!

Type of remortgage

Typically, when you are taking out a mortgage, you will be presented with three different mortgage options: fixed-rate, tracker and discount rate. You will also find more niche options to choose from such as interest-only deals etc., however, you will most commonly find these three on the market.

Fixed-rate mortgages

Fixed-rate mortgages are exactly what they say on the tin. Your interest rate will remain the same for a fixed period of time, meaning that your monthly mortgage payments will be the same until your fixed mortgage term ends.

When you come to the end of your fixed term, you will automatically switch onto your lender’s standard variable rate of interest (SVR). Their SVR will undoubtedly be higher than your current rate because lenders track the Bank of England’s rate and add their own percentage on top. Your monthly repayments will likely increase if you end up on their SVR. This is why it is a necessity to remortgage in Nottingham before your deal comes to an end.

Tracker mortgages

Tracker mortgages use your interest rate plus the Bank of England’s base rate to determine your monthly mortgage payments. Since the Bank of England’s base rate can go up and down, your payments may change monthly. This could save you money but also cost you more each month.

For example, if your tracker mortgage product has a 1.5% base rate and the Bank of England’s base rate is 0.5%, you will receive 2% overall interest on your mortgage. In six months’ time, if the Bank of England’s base rate has increased, you would expect to pay slightly more on your payments going forward until it goes down (if it does).

Discount rate mortgages

Discount rate mortgages track a rate set by your lender, however, this rate can increase or decrease at any time, it’s completely up to your lender. People often compare these mortgages to variable rate mortgages as your rate and payments can change each month.

Why would I remortgage in Nottingham early?

As a mortgage broker in Nottingham, we see many different reasons why people choose to remortgage. Some reasons are more common than others too; usually, they won’t find a better deal, fund home improvements or consolidate debt.

When we say that you can remortgage early, usually, this is within 6-3 months prior to your current mortgage term ending.

Avoiding lender’s SVR

The most common remortgage scenario could be considered a regular remortgage. If you are coming towards the end of your mortgage term, you may want to remortgage to avoid falling onto your lender’s SVR.

If you are looking for a new mortgage product and need remortgage advice in Nottingham, get in touch and we will try and help you find the perfect remortgage product for your personal and financial situation.

Finding a better deal

You may be searching the market for a better deal and come across one that you like the look of, however, your term hasn’t ended yet! If you are worried about missing out on this product you may want to remortgage early to get a hold of it before it goes. If you remortgage too early, you may face an early repayment charge to do so.

Funding home improvements

People sometimes remortgage early to fund their home improvements. They may want to get the work on their home started sooner rather than later, wanting to combine the costs of the improvements with their mortgage.

To Protect Against Interest Rate Rises

When it comes to remortgaging early, this is one of the most popular reasons for doing so. It can often be the smartest thing to do, despite the fact that you could likely face an early repayment charge.

If you are midway or over halfway through your mortgage term, and you can see that the interest rates are rising dramatically, you may want to remortgage in order to avoid these rates. If you manage to secure a fixed-rate deal prior to the rates rising, you may be able to keep your payments down for a lengthy amount of time.

Debt consolidation

If you are in debt, you can possibly incorporate some of your debt into your mortgage to make the payments more manageable. If you are unable to do this, you may need to consider a debt management plan.

In turn, just like home improvements, your monthly mortgage payments will rise, however, your debt will be a lot more manageable.

You should think carefully before securing other debts against your home. By adding your unsecured debts to your mortgage, which is secured on your home, you are potentially putting your home at risk if you cannot make the required repayments.

Although the total monthly cost of servicing your debt may have reduced, the total cost of repayment may still have risen as the term of your mortgage is longer than it may have taken to repay the debts originally.

Early repayment charges (ERCs)

Early repayment charges may put off those looking to remortgage early. ERC costs can rise depending on how early into your term you are. For example, if you are halfway through your term, you can expect to pay a lot more than someone who has less than six months of their term left.

These costs can get very expensive, however, you have to consider that switching mortgage products could also end up saving you hundreds further down the line, particularly if you are remortgaging to avoid interest rate rises etc.

It is always worth speaking to your mortgage lender or mortgage broker in Nottingham prior to this. They will be able to tell you roughly how much the ERC will be and help you decide whether this is the best solution for you.

Should I remortgage early?

At the end of the day, it is completely up to you whether you choose to remortgage early or not. If you feel like it will benefit you in the long run, it could be well worth starting your process sooner rather than later, so that you don’t miss out on the rates available.

Before you do, make sure to speak to a remortgage advisor in Nottingham to ensure that you are taking the best option for you.

How to remortgage early in Nottingham

You can remortgage early by starting your process with a free remortgage review with Nottinghammoneyman. Our mortgage advisors in Nottingham are here to help you find the most appropriate remortgage deal for your personal and financial situation.

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.

Cashback Mortgages by Moneyman TV

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

How to Make an Offer When Buying a House in Nottingham

Making an Offer on a House in Nottingham

If you are a First Time Buyer in Nottingham, and just found the right property for you, you’ll be needing to negotiate the asking price and put down an offer fast to avoid any other potential buyers sweeping up your desired property, at the same time you want to put down that ‘magic number’ to secure the property but, would prefer not to overpay for it. As a First Time Buyer in Nottingham, you may not be familiar with negotiating a property price. Below are the steps you may need to take to put you in a much better position when you make an offer.

What You Need to do Before Making an Offer

Agreement in Principle

Remember that there are other potential buyers. Therefore, it is vital to get your portfolio looking as good as possible to get yourself ahead. This will give you an advantage in getting your offer accepted. Another good tip is to work out how much mortgage you can afford, add your deposit, and set money aside for the costs of buying a property too.

We also recommend sending over a copy of your Mortgage Agreement in Principle, also known as a Mortgage in Principle and Decision in Principle. It gives you a better idea as to which properties you can afford and makes it easier whem making an offer. A Mortgage Broker in Nottingham like ourselves can help you with this, our team can usually turn around an Agreement in Principle within 24 hours after your initial contact with us.

What are the best ways to go about offers?

Getting a mortgage is about negotiating. It will most likely turn out that your initial offer will be rejected but rest assured, this is expected. If this happens, you will be given an option by your Estate Agent to increase the offer. It is best to be sensible and go for the amount which seems the most reasonable price to which you can afford.

If your second offer is also not accepted, the possible reason for this could be down to willingness towards the payment of the asking price. Therefore, if the property is new to the market and the asking price seems too high, sometimes the best option is to be prepared to find another property.

“Sold” prices on Property websites such as Zoopla and Rightmove can be a great insight to giving you a right estimate on correct asking prices depending on the area. A lot of this data is compiled from the Land Registry, meaning it should be reliable.

Certain properties may stand out because they may seem much lower in price compared to the other houses that surround them, there will be an underlying reason for this. The most common reasons include:

  • The house has been repossessed.
  • The landlord has sold it for a discounted price.
  • It was sold between family members.

In our service we will guide you with your offering strategy. It may seem nerve-wracking but it is also a very exciting part of the process.

How to make an offer on a property?

Making a good offer is an integral part of getting the property you liked but there are certain things you need to consider when you are making an offer on any property that you wish to purchase. It is not enough just to be giving asking price to be a good buyer and stand out from other buyers but there are other things the seller considers while making the decision on choosing the buyer.

Make an offer on a property – submitting an offer:

While you can get submit a verbal offer either in person or on phone, most of the agents now ask for you to send your offer via email these days, for records for both parties. This offer is then taken to the seller who chooses to accept or reject your offer. An agent is liable to pass any offer he received to the seller for their consideration.

How to stand out:

The all-set buyer

The seller will take you more seriously if you come across as a well-prepared buyer who can show evidence that they can afford the property with a ‘mortgage agreement in principle’. You should also have a solicitor in place so you can advance their details when the offer on the property is accepted.

Chain-free buyers

Any buyer without baggage of previous mortgages, first time buyers in Nottingham or buyers with pre-organised mortgages will have a benefit of preference from the seller.

Swift and easy processing

Your transactions and agreements will process more swiftly if you are a chain free and organised house buyer.

Tip: If the seller is in hurry to sell or has been trying to sell the property for some time, they might accept a lower offer than the asking price as well, especially if your purchase will pass through quickly.

Property value

Some sellers are not constricted by time or other factors and hence will wait for the buyers who can offer a higher price to maximise the value of the property.

Confidence

No matter what price you are offering for the property, do it with assertiveness and confidence. Most negotiations include several rounds of offers and counter-offers.

Things to remember when making an offer:

While you might be attracted to a certain property, you should always have a budget ceiling in mind. This will help you decide the maximum you can offer for a property and if the investment is worth for you in long term. An agent is required to be transparent and will let you know if other parties are interested in the properties to help you make your case.

Once the offer is made:

Ensure that it is clear to all parties that the offer is:

Subject to Contract (STC) – the final sale is made when lawyers have exchanged and signed contracts.

Subject to Survey – allows any cost for faults and issues to be taken in account.

Once the offer is accepted:

Ensure that the agent has taken the property off the market otherwise, you risk a chance of being gazumped.

Do I Need An Agreement in Principle? and Other Frequently Asked Questions

A Brief Summary of an Agreement in Principle

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.

Frequently Asked Agreement in Principle Questions:

Will obtaining an agreement in principle affect credit score? 

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.

Should I avoid hard credit checks? 

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.

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

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.

Can I make an offer without an Agreement in Principle? 

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.

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

One of our dedicated mortgage advisors in Nottingham can typically obtain an Agreement in Principle within 24 hours of your initial appointment.

How long does an Agreement in Principle last for?

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.

Agreement in Principle Mortgage Advice in Nottingham

To learn more about what an Agreement in Principle is and how they can help, take a look at our YouTube video below.

What is an Agreement in Principle? | MoneymanTV

8 Factors to Help you Decide Where to Live in Nottingham

First Time Buyer Mortgage Advice in Nottingham

There are a lot of different things that potential home buyers in Nottingham must take into consideration, whether their journey will be as a first time buyer in Nottingham or you’re moving home in Nottingham.

The sort of things you’ll have to bear in mind will include your personal finances, any mortgage arrangements and the finding the best deal you possibly can for your personal and financial situation (this is something we can help with).

Before all that though, before even deciding on the house you wish to buy, you have to know where it is you want to live. What do you want nearby, what’s important, do you like thriving scenes or quiet settings?

Below we have collated a list of the various factors you’ll need to consider when you start looking for your new home.

Things to Consider When Moving Home in Nottingham

1. Where to Live: City Centre or a Rural Location

First of all you need to decide what type of setting you wish to call home.

Maybe you prefer the hustle and bustle of the big city and are looking to live closer to the centre? Maybe you prefer the quiet life and wish to live on the outskirts, perhaps near some countryside?

You will need to carefully consider your choice here, as determining this will have an impact on any potential commutes to work, the choice of local amenities, shops and schools.

2. Transport

Although we see more and more people in the UK working from home, for a vast majority of homeowners, you’re going to have to factor in the way you will be getting to work.

It’s not just work of course, you’ll also have to factor in local convenience accessibility, such as how easy it will be to get to the local shops or any other businesses/services you require the use of.

Will you be able to walk where you need to go, or do you need to drive? If you do, will you need to access any motorways to get there?

Beyond that, what if you don’t drive? Are there are buses, coaches, taxi companies or train stations nearby? Depending on location, these options may be limited greatly, especially if you’re looking to buy in the middle of nowhere.

3. Education

If you happen to have children, it is generally considered important to factor in what schools are in the area and the quality of those schools.

By taking a look at school league tables online, you will be able to judge for yourself what the best options for your children may be and plan accordingly.

There are some great schools across Nottingham for kids to get a good education, as well as options for further education beyond that.

Check the catchment areas too, as the area you’ve been looking at may not fall into the catchment area for a particular school that you may have wanted for your children.

4. Local Amenities

Depending on the type of lifestyle you lead, the sorts of things you will be looking for in an area may differ. Some people may have the preference of having nearby shops to visit.

Others may not be so fussed about that (especially now that home deliveries of your weekly food shop exist!) but may want to be close to a gym or a local pub.

Some that have children or pets may prefer to live close to parks or open spaces. We highly suggest that you make a shortlist of the things you need and what you would like to prioritise nearby.

When you find a house you are interested in, you can then take a look at your compiled list and see how much of it you are able to tick off.

5. Family & Friends

This is a personal choice and will be dependant on your circumstances. Some people will rely on family support, often when it comes to children. You may need family nearby for childcare or school runs.

Having a social life is also usually a crucial part of people’s lives. Do you want your friends to be as close as possible? Would you prefer to have some distance between them so you can visit sporadically?

6. Value For Money

Your choice of home location will also determine how far your money is going to go. Depending on location, you may have a different option of houses to choose from.

For example, some areas may allow you to find a 4 bedroom house for the price of a 2 bedroom flat in another area.

You may have to compromise on some of the things you previously listed as wanting nearby, in order to find an affordable property near the area you were set on.

7. Where to Live – Local Community

Some of us would prefer to be a part of and contribute to a local community.

With this in mind, you may possibly wish to surround yourself in a local area that is involved in arts, crafts, book fares and local events at the community hall or town/village green.

Take the time to look and see what activities occur in the local area. For best results see if there are any local or even town websites.

Maybe even visit the area beforehand and get to know some of the locals. They will likely be able to inform you on current events and what is available nearby.

8. House Prices – Long Term

The chances are your new home is a long term investment and you’ll be wanting to see house prices increase, in the event you ever do decide you want to look at moving home in Nottingham.

In order to be more informed about this you could look to see if the local area has any investment plans, new road links, planned development projects, shops, sports facilities or if there are any companies looking to call it home base.

All of these can have an affect on the future of your new homes value, so if this is something that is important to you, you should definitely make sure that you do plenty of research ahead of time.

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