By the time your mortgage ends, you will have ended up with one of these outcomes; a dream family home, a stepping stone property you’ll later leave to climb the property ladder, or a buy to let investment property.
No matter which path you took primarily, soon enough you’ll find that your fixed period is ending. At this point you might be wanting to look at the options you have for moving into a bigger or smaller home. Sometimes a landlord may look to sell up their portfolio.
As a mortgage broker in Grimsby, however, we tend to find that most people will look to take out a remortgage.
Before we get on with the topic, let’s look at the definition of a remortgage in Grimsby. To summarise, a remortgage is the process of using funds that you have raised from taking out a new mortgage, to pay off an existing mortgage in your name. .You can do this a lot of different ways and there are a lot of different benefits to each.
The “Moneyman” Malcolm Davidson (host of MoneymanTV, our YouTube Channel) has well over 20 years of experience in the mortgage world. Using his knowledge, we have compiled a helpful guide to all the remortgage options that a homeowner may have access to.
Your fixed period will usually last within the range of 2-5 years. The fixed rates or potential discounted rates here tend to be lower. Depending on the situation you are in, you may even find yourself placed onto a tracker mortgage, which will fluctuate based on the Bank of England’s base rate.
Once you reach the end of your fixed period, you will most likely be put onto the lenders Standard Variable Rate (typically shortened to SVR). In simple terms, an SVR is a mortgage with an interest rate that can completely change depending on what the lender wishes to charge.
Whilst this mortgage type does not change with the Bank of England’s base rate as a tracker mortgage would. These changes often occur at times when the base rate or the market changes. For example, if the base rate goes up, your lender may choose to increase their rate too.
Because of this, Standard Variable Rates are often considered to be pretty expensive choices to stick with, which is why a lot of homeowners often choose to remortgage their property for better rates. The hope is that this will save you money down the line.
A couple of years into occupying your property, you may have something different in mind. Rather than finding a new place to live that covers what you would like in a home, many homeowners instead prefer to remortgage to release equity, in order to cover the costs of upgrading their current home.
We hear of customers looking to achieve all kinds of things in their homes. Some like to create more space to live in. Others are unhappy with their kitchen and would like it refurbishing. An increasingly popular one is converting the loft into another room or something else.
The prospect of planning and managing your own project, as well as getting permission from the authorities when necessary, can seem daunting. That being said, a lot of customers who have done just that would argue it’s a lot less stressful than finding a new house, and is a lot more rewarding.
This may benefit you further down the line too, as creating more space and having a solid, well built home is something that will likely increase how much the house is worth. In the event you did decide to sell up and move home, this would come in handy.
Depending on the situation you are in, you may just prefer to take out a remortgage in Grimsby in order to access a better mortgage term. This can be achieved either by reducing how long your mortgage term is or by switching onto a product that is more flexible.
When you reduce your mortgage term, you won’t be paying back, nor will you be restricted for as long. That being said, it tends to mean higher monthly mortgage payments for you. The longer you make your mortgage term, the less you’re likely to have to pay per month.
A lot of the time, customers may choose a more flexible mortgage term at remortgage time. This may give you the option to overpay more than usual (this comes with a cap typically), meaning you could pay your mortgage off quicker. Also if you wish to move, you may be able to carry that mortgage onto a new property.
Though this could be the best route to take, they will typically come in the form of tracker mortgages. As we looked at before, this will correlate with the Bank of England’s base rate. This means your monthly payments could be a little unreliable, as they may change.
Unless the country were to experience another serious market crash, every homeowner will have a certain amount of equity existing within their home. This can be worked out with the difference between what you still owe on the mortgage, and the value of the property.
As mentioned previously, people usually look at taking out a remortgage to release equity as a way of assisting with the funding of home improvements, though you may have something else you wish to use this for.
Popular choices include to cover long-term care costs, provide an income boost, cover the costs of a large holiday, pay off an interest-only mortgage or to simply free up some extra disposable income.
From time to time, we also find that Buy-to-Let landlords will look to remortgage to release equity from one of the properties in their portfolio, as a way to cover the deposit for a future purchase.
For homeowners who are aged 55+ and have a property that is worth at least £70,000, it may be beneficial to take at your options for Equity Release in Grimsby. Speak to a trusted later life mortgage advisor to learn more about lifetime mortgages and equity release.
Following on from the latter section, some may remortgage to release equity, to pay off any built up, unsecured debts.
Though it sounds simple, how much you can borrow for a debt consolidation remortgage depends on how much you owe a creditor, the value of your home and the current state of your credit rating. This means you could be limited in how much you are allowed to borrow.
In addition to this, in order to pay your previous mortgage off entirely, as well as the debts you have accrued, you will have to borrow more than you actually require for a mortgage. This will most likely mean higher monthly payments.
It’s not at all an ideal situation, but you’ll at least have comfort in knowing that should you find yourself struggling, there are some options out there that you can take.
If you have a damaged credit rating, you’re not completely out of options. That being said, it will be a challenge and you will require specialist remortgage advice in Grimsby before you can go forward with it. Even then, you are not guaranteed to get a mortgage.
Homeowners should always seek out the advice of a specialist mortgage advisor in Grimsby before they consolidate any debts against their home.
If you are reaching the end of your initial fixed period and wondering what your options may be for a remortgage in Grimsby, please do get in touch.
Book your free remortgage review to speak with an open & honest mortgage advisor in Grimsby today. We work around your schedule, so you can speak to someone at a time that is convenient for you, whether it be early in the morning or later in the evening.
A trusted mortgage advisor in Grimsby will be able to go over your case and any plans you may have, in order to create a suitable plan of action for your mortgage journey. We always aim to make sure that this time around is as quick, if not quicker than your last process.
The majority of people will perhaps not even consider taking out a second mortgage. As it is, one mortgage can stress people, nevermind having a second one! Furthermore, it can also be even more costly to do so as well.
That being said, surprisingly, they are still pretty common with homeowners. Here are a selection of reasons as to why someone may wish to invest in an additional mortgage.
Quite often, people who have built up a portion of equity within their home may find that they would like to make some additional changes to their home. This isn’t a second mortgage in a sense of having two run alongside each other, but more of your second go around.
In order to release equity, you will need to remortgage from your current deal, onto a new one. We most frequently see people using the equity within their home to cover the costs of things like home improvements, modifications or alterations.
Additionally, whilst releasing equity can be an option, you may also be able to use your equity in other ways. Some may release it to fund the deposit of an additional purchase, whilst others may use the equity in their home to open themselves up to better deals.
The process of renting out your existing property in order to raise the funds to purchase a new home, is called a let to buy mortgage in Grimsby. This requires remortgaging your existing home onto a special let to buy mortgage, whilst you take out a new residential one.
We are starting to see more and more first time buyers taking out first time buyer mortgages in Grimsby and getting onto the property ladder, though there are still plenty out there who are finding it difficult. It’s not an easy transition to go from renting to buying!
One of the bigger factors we have seen in younger people doing this, is by having the help of a family member. Gifted deposits is the act of gifting money, either from savings or from the aforementioned remortgage to release equity, to a family member, to help them achieve their home buying goals.
In addition to this, there may also be the option of simply purchasing a new home for your family member to live in. For this to work, the mortgage would be taken out in your name, making it a literal second mortgage, though you would not be living there.
A mortgage lender may prefer you to live in a residential property you are going to be paying for, though there are mortgage lenders who will allow this. In order to have two mortgages running side by side, you will need to meet a mortgage lenders strict lending criteria and affordability requirements.
If you are already a landlord with a buy to let mortgage in Grimsby, you may be looking at expanding your investments into even more properties. The good news is that this is very common, with many landlords owning more than one property.
We have helped thousands of buy to let landlords over the years, securing them amazing buy to let mortgage deals and forming relationships, that see many of them returning for remortgages and additional purchases.
Book online and we’ll get the ball rolling on any further buy to let mortgages in Grimsby you are looking at taking out.
If you are currently named on another mortgage but do not want to be financially tied to another person anymore, you may be considering your options. This scenario is common with divorce and separation. In this case, you need to remove the financial ties as soon as possible.
You can achieve this by either yourself (if you’re planning to stay in the property) or your ex-partner (if they are staying within the property) remortgaging into your sole name. This has to be done with the consent of the other party.
If the mortgage lender determines that one party cannot afford the current mortgage in their sole name, you may not be able to get your name removed from their mortgage. As such, you will still be legally responsible for it, even if you agree that only one of you will maintain payments.
From here, you may want to purchase a home of your own, in your name. Though it can be tricky with affordability, there are specialist mortgage lenders who are willing to help customers who are looking to have a second mortgage in their name due to this circumstance.
Book your free mortgage appointment today and benefit from expert specialist mortgage advice for specialist mortgages in Grimsby, today.
You may not be aware but most mortgages are portable these days. This portability means that when you are Moving Home, you can transfer your mortgage from one home to the next without a penalty. This is great if you have previously secured a fixed rate deal that you are still in the middle of and decide you want to move and take it with you.
Not all mortgages are portable, you should check with your lender or Mortgage Broker in Grimsby before putting your house on the market. If you have had your mortgage for some time or if it is with a specialist lender there is a chance it might not be portable, so bear this in mind when arranging your mortgage.
Sometimes, we find that customers don’t consider the porting options available to them. There are several potential reasons for this. Maybe the new lender will not lend them the extra money they need to fulfil the move. When you port a mortgage, you can only port the amount you currently owe and any additional borrowing needs to be placed on a deal from the lenders’ current range and that might not be competitive.
If you do port a mortgage and borrow extra monies, the additional borrowing creates something called a “sub-account”. In other words, you have one mortgage but with two different rates of interest applying to it, and it may not be as good as the rate you already have.
This can be a real pain because almost certainly the two products will “overlap” each other and as such it’s difficult to get these to line up without having to let one drift onto the standard variable rate for a while. Customers tend not to like having to change their mortgage deals as often as this and some of them decide to take the “hit” and pay an early repayment penalty to swap lender and get it all lined up.
Like any mortgage application, you will have to check to see if you are eligible to borrow more money if this is what you are looking for. Porting a mortgage can sometimes be difficult and may require Specialist Mortgage Advice from a professional who has lots of valuable experience in Moving Homes.
As a local mortgage broker in Grimsby, we offer expert advice regarding porting mortgages, so if you are struggling or need any type of mortgage advice, get in touch with our fabulous team.
Throughout our time working as mortgage advice experts in Grimsby, we have seen all kinds of first time buyers in Grimsby who have found their footing on the property ladder by purchasing the home they are renting privately from a landlord in Grimsby. This process is called buying as a sitting tenant.
As a private tenant, you may find that your landlord will eventually offer you the “first refusal”. This is what we call the process of a landlord allowing the tenant who is living within their property, to purchase it directly from of the landlord, before it is put onto the open market.
If this is something that you would like to do and you have not been offered first refusal or are not sure whether or not this could be an option for you, we would definitely suggest getting in touch with your landlord and at least asking the question.
One of the main reasons that we have seen tenants purchasing from their landlord becoming more popular, is because of changes in government policy. Buy to let mortgages in Grimsby, in previous years, could benefit from government tax relief. This now no longer applies to landlords.
What this means, is that many landlords are now paying higher tax bills. When viewed as long-term investments, buy to let mortgages in Grimsby can be a fruitful endeavour. Even taking away these tax advantages, it can prove to be profitable.
That being said, the investments can end up being quite costly for the investor, which can sometimes lead them to sell their buy to lets in Grimsby and move on to pastures new. Because of this, you may find yourself being offered the chance to buy their property from them.
Regardless of their reasons for doing this, whether it is a personal reason, a financial reason or something else, there are many different positives to selling directly to a tenant, instead of selling to the open market and using an estate agency to help you do so.
When a landlord instead goes directly to the tenant for a sale, they can find themselves saving a large amount of money that would, the landlord can end up saving a good amount of money. That money would have most likely gone on estate agency fees otherwise.
If the landlord were to put the home up for sale on the open market, potential property buyers will have to schedule times to go and view the property. This would be quite a difficult aspect if the tenant were still living within the property.
Since the landlord will be directly selling the property to their tenant whilst they are still staying within the property, there will be no need for the landlord to do any further work on the property. This means you won’t need to pay for cleaners, make any major or minor repairs, or even repaint.
Of course these types of things would be very appealing to potential property buyers who are seeing it for the first time, but you don’t need to impress the tenant who has already lived there, no doubt made it their own and fallen in love with it. They’ll be happy to take it as is.
By putting their home on the open market and getting the tenant to leave (or if they leave by their own volition), the landlord will find themselves with a rental void, a period of time in which they will not be making any money from the property.
There is no guarantee you will find a buyer immediately. If the property were to take months to sell, you would be going months without additional income and need to be able to make up your monthly payments on your mortgage still, until your sale completes.
Selling to the tenant, however, means that you retain a flow of income until your sale is completed and the property becomes theirs.
You have spent years living within your home, you have grown to love all of it’s quirks inside and out. There is no element of surprise, you everything good and bad about it.
Buying a property that you have already been living in can let you make all of the changes that you had been hoping to make. If you were looking to perhaps take out some features and put new ones in, use paint more to your liking, or anything else, you have the freedom to do so.
Since it is very likely that your landlord will be saving money in selling you the property, you could find (at least we have seen) that they will offer you a discounted property price, as opposed to the price that would otherwise be available on the open market.
Property chains can become quite problematic for home buyers and home movers, making the process longer and more stressful. You’re basically waiting for one person to move out, so that you could move in, whilst that person themselves could be waiting on another person.
This can make it all a very difficult situation for all involved and has caused a lot of property sales to struggle because of it. Sitting tenant purchases, however, will not need to worry about any property chains, as you already live there! All you need to concern yourself with is mortgage lender criteria.
When customers like first time buyers in Grimsby have an offer accepted on a property your next job is to arrange a property survey. This will establish the condition of the property and ensure that it is worth what you are going to pay for it. If something is found on the survey you are then in a position by law to approach the seller to negotiate a price for the works required.
Here’s a short video from the Royal Institution of Chartered Surveyors (RICS) that explains the different types available to you.
There are 3 main types of property survey available to you:
A basic valuation is the cheapest option and you will be required to have one of these before you receive your mortgage offer. Please don’t confuse this with a full survey. The mortgage valuation confirms to the lender that the property is worth at least what it is lending you.
Your mortgage lender may even offer you a free basic valuation as part of your deal.
A Mortgage Valuation will not highlight any repairs that are needed. However, it may point out any obvious defects and recommend that you investigate further.
A Homebuyer’s report will cover structural safety and highlights problems, including damp, as well as anything that doesn’t meet current building regulations. This kind of report will give you an independent report of your property by an expert.
To ensure you are not paying for two surveys it is advisable to ask the mortgage companies surveyor to carry out this report for you – it will usually take a couple of hours to complete.
A Full Structural Survey is advisable for older properties and those of a non-standard construction.
Depending on the property size and type – a full structural survey can take as long as a day to complete.
A full structural survey provides a detailed report on the condition of the property and highlights issues that should be investigated further before going ahead with the purchase, providing you with peace of mind about the condition of your property.
You can find a surveyor to carry out a Homebuyer’s report or building survey through the Royal Institution of Chartered Surveyors.