Your home may be repossessed if you do not keep up repayments on your mortgage.
Whether you’re Expanding or Downsizing, we’ve got you covered
Moving home is known to be one of life’s biggest causes of stress, so to relieve some of this stress we can provide a perfect opportunity to look for a better deal whether that be with your current lender or another lender.
Moving Home? Move Your Mortgage
Most mortgages are portable, meaning that you can transfer them from the property you originally borrowed against to the home which you want to move to with the same lender.
Alternatively, it is also an opportunity to look around for a better mortgage deal. Like any remortgage you should start by checking whether there are any penalties to pay on your existing home loan. In particular, there are likely to be fees and additional interest charges if you’re still in the special offer period of the loan – on a fixed or discounted deal rather than the lender’s standard variable rate.
In order to be better off by moving mortgage provider, you will need to find a deal that is sufficiently cheap to cover the cost of these penalties. That’s not impossible, though it will be easier to save money if your current deal is penalty-free.
Mortgages for those moving home are increasingly competitive and If you are trading up to a larger property, you may need to increase the size of your loan, but you will also need to ensure its affordable once you move into your new property, so it is crucial to get the right advice upfront
Take The First Step To Buying Your First Home
Buying your first property can be both exciting and daunting, there are important decisions to make and criteria to be considered before you take your first steps onto the property ladder. Your Right Choice Mortgages Adviser will assist you throughout the home buying process to ensure you receive the right guidance and advice.
Here is our First Time Buyers Guide
Ensure that you are realistic when working out exactly how much you can afford to spend on your new house. You should ensure the intended mortgage is affordable (by doing a budget calculation) and it is wise to seek a Decision in Principle certificate, so that you know how much you can offer once you have found a suitable property. Even a newly built house will require some sort of furnishings, whereas older properties may require extensive work, such as re- flooring, tiling or renewing the wiring. Make sure that you factor in all these likely expenses, in addition to the purchase price, and other fees such as conveyancing and stamp duty.
When buying for the first time, there may be a number of details in the houses you are looking at, which you may not pick up. Always take an experienced home buyer, such as one of your parents, or a home-owning friend, when looking at property. If this is difficult to arrange, then make sure you at least get some assistance once you have selected a property you like and are arranging a second viewing. It’s always a good idea to ask when the boiler was installed and last
serviced. If it has been a while, you can ask your conveyancer to request a certified boiler service check prior to exchanging contracts.
Best way to Improve your Credit Score
Register on the electoral roll
If your name’s not on there, you’ll find banks, building societies may not consider you. You can register to vote online or by post.
Check for mistakes on your file
Even having just a slightly wrong address can have an impact on your score. So, make sure you check all the details and report any incorrect information immediately.
Pay your bills on time
Paying on time any direct debits or credit agreements you may have is a great way to prove to lenders that you’re capable of managing finances effectively.
Check if you’re linked to another person
Having a spouse, friend or family member’s credit rating linked to yours through a joint account could affect your personal rating if they have a poor score.
Check for fraudulent activity
If something on your credit report is incorrect or doesn’t apply to you, i.e. if someone applied for credit in your name without your knowledge, contact the credit reference agency immediately to have your file updated.
County Court Judgements (CCJs)
Receiving any court judgments for debt will have a serious impact on your credit score. If you’re having problems keeping up with payments, find free debt advice online.
High levels of existing debt
Ideally you should eliminate as much outstanding debt before applying for new credit. This is because banks, building societies and credit card companies might be hesitant about lending you more if you already have a lot of existing debt.
Moving home a lot
Lenders feel more comfortable if they see evidence that you have lived at one address for a considerable period. Be sure to bear this in mind.
If you’re struggling to improve your score, it’s worth contacting ourselves to discuss ways of improving your credit score and discuss options available to you.
What information is in a credit report?
Each agency holds slightly different information about you, so it’s worth checking for a more accurate picture.
In general, your file will include:
- Name, address and date of birth
- Some search footprints on your file, such as credit applications
- Financial links to other people – for example, a joint loan or bank account
- Any late/missed payments or defaults
- How much money you owe to lenders
- Any County Court Judgments (CCJs) against you that are not paid in full within one month of receiving the notice
- If you’re on the electoral register at your current address
- If you have been declared bankrupt or entered an IVA (Individual Voluntary Arrangement).
It won’t include the following information:
- Your salary
- Student loans
- Criminal record
- However, you will asked for this information when applying for a mortgage.
When you remortgage, you are switching your mortgage to another deal, and frequently, another lender.
Get A Better Deal From Another Lender
Remortgages can be used for various reasons. However, most people simply switch mortgages because it will work out cheaper for them. For example, the introductory discounted interest rate may have finished with your current lender; therefore you could potentially get a new discount rate, or a lower APR, with another lender. Another example is when you may need to remortgage to consolidate debts.
It is worth noting that a remortgage is not the best option in all cases. Even if the lender you are considering switching to is offering a lower APR, you must take into consideration the facts that:
- The new lender may charge you for valuation and solicitors fees, even if you have already paid these for your mortgage with your current lender.
- If you switch mortgage remember to look at the overall repayment period. You may be able to pay less monthly, but check the final repayment date of the mortgage as well.
Also you may be able to switch your mortgage deal with your current lender, avoiding any unnecessary costs. Many lenders will allow you to switch your mortgage deal reasonably frequently.
Securing short term debts against your home could increase the term over which they are paid and therefore increase the overall amount payable.
You may have to pay an early repayment charge to your existing lender if you remortgage. You can choose how we are paid for mortgages; pay a fee or we can accept commission from the lender, or a combination of fee and commission.
Buy To Let Mortgages
The Different Types Of Mortgage
There are 3 main differences in buy to let mortgages:
- Rent Potential – the decision as to whether or not a mortgage will be offered is usually based on the rent you will earn as well as your income. In some cases your income is not ever considered.
- Interest Rate – buy to let mortgages have slightly higher interest rates.
- Larger Deposit – typically a minimum of 20% or 25% of the property’s value is required as a deposit.
When buying a second property to let, you will need to decide whether your primary objective is income or capital growth. In other words, are you looking to make a profit month on month or are you looking to make a profit through increased equity from the second property if it increases in value over time? The decision may affect the type of property you purchase, and the location.
When you manage a property there are many costs involved in addition to the monthly mortgage repayments. As a guide, you should be aiming to achieve a gross rent of about 135% of the rental property’s interest only mortgage repayments in order to cover your costs should anything go wrong.
These additional costs include:
- Property upkeep – maintenance costs for the property.
- Letting agent’s fees – letting agents charge around 10% of the monthly rent for finding and vetting tenants with an additional cost of around 5% if you require a full management service.
- Ground rent / service charges – applicable to leasehold properties.
- Legal insurance – to cover costs from evicting tenants in the event of non-payment, very important, as this can be very expensive.
- Insurance – building insurance and contents insurance for the items provided as part of the rental agreement.
- Furnishings – the purchase of any furniture. If the property is to be let furnished, make sure you are covered for this by your home insurance.
- Gas / electrical appliances – cost of maintaining appliances and ensuring they comply with any regulations such as safety tests.
- Decorating costs – the property may require work ranging from painting, to a new bathroom suite before it is suitable for letting to tenants.
When choosing a property to let, it is wise to take advice from local letting agents to determine; what types of properties are in need and which parts of the town are best or most wanted. They can tell you if there is a University in the town, and if students are looking for somewhere to live.
Please Note: Not all Buy to let mortgages are regulated.
Lynks Financial Services is a trading style of Lyncombe Consultants Limited which is authorised and regulated by the
Financial Conduct Authority under firm reference number 618025
Registered in England and Wales No.06030940
Registered address: Lyncombe Consultants, C/O Sense Network Ltd, The Brookdale Centre, Manchester Road, Knutsford, WA16 0SR
Tel: 01664 503759