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The Financial Conduct Authority does not regulate some types of buy to let or commercial mortgages.
Buy to let mortgages in Essex stand out as a pivotal avenue for financial investment, attracting individuals keen on leveraging property letting opportunities in the region.
In this comprehensive guide, we delve into the fundamental aspects of these specialised mortgages, comparing them to conventional home loans, and providing essential considerations for both seasoned landlords and newcomers venturing into the realm of property investment in Essex.
A buy to let mortgage in Essex serves as a cornerstone for generating income through tenant rentals, typically aimed at covering mortgage expenses and potentially yielding additional profits.
As a property owner, your commitment lies in maintaining the mortgaged property with the intention of leasing it out. Notably, there exists a strong correlation between previously rented properties and the utilisation of buy to let mortgages.
Structured to accommodate individuals seeking to acquire properties for rental purposes, buy to let mortgages often entail higher deposit requirements compared to standard home loans. Lenders evaluate the applicant’s financial standing and rely on projected rental income to determine approval.
The lender typically expects rental income to exceed the mortgage payment by a certain margin, usually around 125%. Buy to let mortgages may be interest only or repayment-based, with the full outstanding balance settled at the term’s conclusion.
Despite differing eligibility criteria and associated fees, seeking guidance from a qualified mortgage broker in Essex can streamline the application process and identify suitable solutions.
Lenders assess potential rental income during the application process, with borrowing restrictions typically absent as long as the projected rental income aligns reasonably with the mortgage request. Certain lenders may require rental income to exceed the monthly payment by a specified percentage.
Eligibility for a buy to let mortgage in Essex necessitates UK residency, a minimum age of 18, a clean credit history, and reliable income to meet monthly mortgage obligations.
Lenders evaluate the applicant’s ability to sustain the mortgage, factoring in both projected income and potential rental earnings. While many lenders stipulate a minimum 25% deposit, variations may occur based on individual circumstances.
Seeking advice from a certified mortgage broker in Essex ensures access to expert guidance tailored to individual requirements.
When applying for a buy to let mortgage in Essex, applicants must provide evidence of income, deposit, address, ID, bonuses, commission, and P60.
Self-employed individuals must furnish their SA302 tax return, while established landlords must present proof of rental income through an ARLA certified report and mortgage statement for existing properties. Having these documents readily available expedites the application process.
Interest only mortgages are popular among buy to let investors as they minimise monthly expenses by requiring payment of only the interest each month, with the outstanding capital balance settled upon property sale or remortgaging.
Alternatively, establishing a repayment vehicle can offset costs. While interest only mortgages are prevalent and perceived as tax-efficient, repayment mortgages offer the advantage of accruing equity in the property and complete ownership at the term’s conclusion.
A let to buy mortgage enables landlords to lease out their property for income generation. Unlike traditional buy to let mortgages, this option is typically chosen by homeowners unexpectedly venturing into letting their property, instead of selling and purchasing a new buy to let property.
This arrangement allows homeowners to generate additional income without acquiring a new property solely for leasing purposes.
Homeowners considering temporary property leasing without permanent conversion into a buy to let property may explore the ‘consent to let’ provision offered by select mortgage lenders.
This provision allows temporary leasing, typically limited to 30-90 days per annum, depending on the lender. Appointment with the lender is essential to determine eligibility and understand any limitations or penalties associated with long-term rentals without official conversion.
Thoughts concerning buy to let mortgages in Essex should encompass factors such as short-term versus long-term investment goals, deposit size, interest rate types, and associated fees.
The final mortgage choice should align with the applicant’s financial status and future objectives. Seeking advice from a mortgage advisor in Essex provides invaluable guidance in navigating these considerations and identifying the most suitable mortgage option.
The realm of buy to let mortgages offers the potential for individuals, whether acting alone or through a limited company, to own multiple properties. Generally, there is no strict legal limit on the number of buy to let mortgages one can acquire, although this may vary among lenders.
With each new application, however, lenders will conduct a reassessment of your financial capacity to repay additional debt. Many buy to let lenders require evidence of rental income, which they may consider alongside your personal income and financial obligations to evaluate your repayment ability.
Buy to let landlords typically do not reside in the properties they let out. Doing so could breach the terms of the contract and lead to penalties or legal repercussions. However, if you find your buy to let property vacant, you may contemplate converting it into your primary residence.
Such a transition would likely necessitate refinancing. For tailored advice on buy to let remortgages and related matters, speaking with a specialist in this field is recommended.
Transitioning from a residential mortgage to a buy to let mortgage may require discussions with your lender to explore viable options. While some lenders may facilitate a smooth transition, others may require a new mortgage application.
If you opt for a switch, the lender might stipulate minimum income requirements or a certain level of equity in your property. Additionally, they are likely to assess the potential rental income.
It is prudent to seek guidance from financial professionals or tax advisors to fully understand the implications of such a switch on your financial circumstances.
The Financial Conduct Authority does not regulate some types of buy to let or commercial mortgages.
Depending on your circumstances and your current mortgage lender, it is possible to convert your existing mortgage into a buy to let arrangement.
Sometimes, homeowners find themselves in situations where they want to make a change, such as moving in with a friend or partner who already owns a home or exploring a new location.
In these scenarios, retaining your current property and transforming it into a buy to let investment can be a strategic move, turning you from a homeowner into a landlord. This transition can offer long-term financial benefits by supplementing your income.
If you’re considering converting your mortgage into a buy to let in Essex, the initial step is to communicate with your mortgage lender to ascertain whether this transition is feasible. Once confirmed, reaching out to a knowledgeable mortgage broker in Essex is essential.
This change requires remortgaging onto a new product, whether staying with the current lender or switching to a new one. Our experienced mortgage advisors in Essex will guide you through the process, ensuring you secure the most suitable deal.
Since you initially signed up for a residential mortgage, the switch entails a remortgage, subject to the lender’s buy to let criteria.
Before anything else, it’s typically required that you have resided in your property as a homeowner for at least six months. Beyond this period, various factors come into play, scrutinised by mortgage lenders.
The affordability assessment hinges on the rental potential of the property you’re converting. Lenders often stress-test the property to ensure that the rental income covers at least 125% of the monthly mortgage payment.
While a deposit technically isn’t necessary for the new mortgage, you must have sufficient equity in your property to remortgage it into a buy to let in Essex.
Lenders typically expect 20-25% equity, though more may be required with a poor credit history. Additionally, you’ll likely need extra equity to cover the deposit for a new residence.
Poor credit history may diminish your chances of securing a mortgage, but it’s not always insurmountable. Several mortgage options cater to individuals with adverse credit, including those interested in buy to let properties in Essex, however, recent credit issues might pose challenges.
Building up your credit score over time can enhance your prospects, especially as more time elapses since any past credit problems, like CCJs.
The type of property you intend to let out can impact the mortgage process. Financing options may be more limited for properties like HMOs or Holiday Lets, requiring specialised help from a mortgage broker in Essex.
Some lenders may be hesitant to offer products to first time landlords, while others have more flexibility. Our panel includes various lenders, some of whom cater to first time buy to let landlords. To explore your options further, speak with a mortgage advisor in Essex.
It’s important to note that living in a property with a buy to let mortgage is prohibited, constituting a breach of your mortgage agreement and carrying potentially severe consequences for you and your property.
Alternatively, you can explore let to buy as an option. This involves letting out your current property to purchase a new home.
The process mirrors buy to let arrangements, but you’ll be applying for two mortgages simultaneously. Your lender will assess your affordability for both mortgages, making sure you can manage both financial commitments.
Whether you’re venturing into the realm of property investment as a new landlord or seeking to expand your existing portfolio, you may be curious about the limits surrounding buy to let properties in Essex.
While there isn’t a strict numerical cap on the number of buy to let mortgages you can acquire, the feasibility of obtaining additional ones depends on various factors, primarily the perceived risk to the lender.
To gain clarity on your specific circumstances and potential opportunities for further buy to let mortgages in Essex, it’s advisable to speak with a knowledgeable buy to let mortgage advisor in Essex.
For some homeowners, there’s the option of obtaining what’s known as a consent to let. Typically utilised for short-term arrangements, this allows your primary residence to be temporarily converted into a buy to let property.
Each lender may impose different restrictions, often within a range of 30 to 90 days per calendar year. It’s essential to communicate with your lender in advance to ensure compliance with their policies.
For a comprehensive understanding of the pathways available for transforming your home into a buy to let property in Essex, consider scheduling a free mortgage appointment with a trusted mortgage advisor in Essex.
Our dedicated team at Essexmoneyman is equipped to evaluate your unique circumstances, provide insights into accessible deals, and offer tailored buy to let mortgage advice in Essex to address any queries or concerns you may have.
Embarking on the journey of property ownership presents a key decision between two paths: making an upfront purchase or opting for a mortgage with gradual repayment.
Each option entails its own set of expenses. While an upfront payment demands a substantial initial sum, choosing a mortgage spreads out the costs over the long term.
Opting for an upfront property purchase is a commendable investment, whether it’s for personal residency or engaging in buy to let in Essex. Entering the property market positions you favourably for future financial stability.
In most cases, cash buyers hold a distinct advantage over those relying on mortgages.
Their reliability is highly valued by sellers, as cash transactions ensure swift sales without the complexities of property chains, which often cause delays. By bypassing affordability checks, cash buyers can proceed promptly.
Moving home in Essex can inherently be stressful, but cash buyers streamline the process, bypassing potential hurdles associated with mortgage procedures.
While mortgage applicants can also expedite the process with thorough preparation, involving an experienced mortgage broker in Essex ensures a smoother journey through the intricacies of property transactions.
Opting for a mortgage entails a significant financial commitment, typically spanning 20-25+ years. A cash offer eliminates the need to repay a loan, avoiding interest payments that would inflate monthly costs under a mortgage arrangement.
When cash isn’t readily available, securing a mortgage becomes the alternative route.
Rather than depleting life savings for a property purchase, choosing to save while obtaining a mortgage presents a viable alternative. Both paths lead to property ownership, and with a good credit score, securing a mortgage may require only a 5% deposit.
Monthly repayments vary based on interest rates, mortgage products, and property specifics, allowing for gradual payment and potential overpayments.
Properties marked “cash buyers only” warrant caution, often indicating underlying issues or the need for repairs. While obtaining a mortgage for such properties might pose challenges, conducting a property survey is advisable regardless of the payment method chosen.
This precautionary step, recommended for both cash and mortgage buyers, ensures a thorough understanding of the property’s condition.
Undertaking a property purchase without guidance could put you at a disadvantage compared to those with a mortgage advisor in Essex. An advisor simplifies the moving process, and our goal is to provide swift and friendly advice service.
Consider reaching out to our team for a free consultation to navigate your moving journey effectively.
Acquiring a property stands as a significant financial commitment, often prompting numerous questions about the mortgage process.
As dedicated mortgage brokers in Essex, we’ve helped diverse buyers, and a common query, especially from first time buyers in Essex, is the duration of the mortgage approval process. Seeking expert mortgage advice is key for navigating these inquiries, considering the complexity involved.
The timeline for mortgage approval varies, typically taking 2-3 weeks for those with unblemished credit. However, this is a generalised estimate; individual circumstances play a pivotal role.
Complications may arise if there are credit issues, necessitating an in-depth examination that can extend the process, sometimes for months. It’s essential to understand that the approval timeframe is contingent on both the lender and the unique financial situation of the applicant.
Securing mortgage approval today involves a meticulous assessment of an applicant’s personal and financial standing.
Unlike the pre-credit crunch era, lenders now delve deeply into credit, income, and expenditures, gaining a comprehensive understanding of the applicant’s ability to afford the mortgage.
This intricate process acknowledges the individuality of each application but requires time, considering the multitude of applicants.
Our role as mortgage brokers in Essex involves a structured process leading to your mortgage application. This approach aims to simplify your journey, allowing you to focus on finding your dream property while we handle the intricate details of the mortgage side.
Initiate your mortgage journey by scheduling a free appointment with our mortgage advisors in Essex. With 7-day availability, you can select a convenient time online or contact our team.
During this appointment, lasting 30-45 minutes, our advisor will gather essential information to understand your goals along the mortgage journey.
Post your mortgage appointment; you’ll receive a mortgage agreement in principle (AIP), a key document when making an offer on a property. This pre-approval signals to estate agents that you’ve been endorsed by a mortgage lender.
With an accepted offer, we can swiftly progress to finding the perfect mortgage deal from our extensive panel of lenders, presenting it in a detailed mortgage illustration.
If you choose to proceed with our service, the next step involves preparing your mortgage application. Our support includes helping you compile necessary documents to evidence your affordability. Once ready, we submit your application to the chosen lender.
Upon submission, the mortgage lender takes charge, conducting thorough checks. Rest assured, we only recommend products aligned with your eligibility to avoid unnecessary declines. They verify documents, ensuring your affordability and confirming your identity and deposit source.
A mortgage valuation survey, distinct from a house survey, determines the property’s true value. Your mortgage advisor in Essex guides you on the appropriate survey type. The lender conducts this to safeguard their interests and ensure the property’s value aligns with your offer.
Following checks, successful outcomes lead to formal mortgage approval. Your mortgage advisor in Essex communicates this positive news, marking the transition to solicitors for contract exchange and completion of legal formalities. Once completed, you’re set to collect your keys.
Irrespective of your buyer status, whether a first time buyer in Essex, home mover in Essex, or investor, understanding the mortgage process is important. Starting the process early, possibly six months before plans materialise, is advisable.
If you’ve had an offer accepted or are contemplating a property purchase in Essex, now is the opportune moment to commence your mortgage journey. Act promptly by booking your free mortgage appointment online or contacting our team.
Regardless of the specific mortgage path you choose, whether you’re a first time buyer in Essex, moving home, or seeking to remortgage, your mortgage lender will invariably require a copy of your bank statements. In actuality, they will solicit various forms of documentation to establish your financial capability for obtaining a mortgage.
Lenders analyse bank statements for a multitude of purposes. These encompass assessing your mortgage affordability, evaluating your financial stability, and gauging your responsible management of monetary matters.
The preparatory phase of your mortgage journey holds the utmost significance. As a mortgage intermediary situated in Essex, we strongly recommend that you deliberate on your bank statements and contemplate the information you wish to portray within them during the months preceding your mortgage application.
Moreover, in terms of the elements that capture a lender’s attention on your bank statements, substantial emphasis is placed on transactions related to gambling activities.
While gambling itself is not illegal, it’s evident that lenders tend to view mortgage applications less favourably if they see significant gambling transactions on your bank statements.
There’s a notable distinction between gambling during events like the Grand National and consistently wagering substantial sums every weekend. This underlines the importance of practising responsible gambling, particularly in the lead-up to your mortgage application and throughout the process.
As a mortgage broker in Essex, like us, and also for lenders, our role isn’t to dictate how you live your life, but we do emphasise the need for caution. Lenders have an obligation to ensure responsible lending practices.
Lenders are obligated to demonstrate to regulatory bodies that they’re lending to applicants with financial responsibility. Consequently, they will not lend to individuals who display an inability to manage their financial affairs. Would you lend a large amount of money to an individual who consistently engages in gambling compared to an applicant with minimal gambling activity?
Infrequent gambling transactions should not significantly impact your eligibility for a mortgage in Essex. Moreover, lenders scrutinise how these activities influence your overall account balance. Do they lead to overdraft usage? Are you borrowing funds to gamble, or wagering money you don’t own?
If your financial behaviour in the period leading up to your mortgage application reflects irresponsibility, lenders will be put off by your mortgage application and may turn you away.
Lenders in Essex consider more than just gambling transactions; they will also look at various aspects of your bank statements:
Their aim is to ensure that you align with the type of applicant they seek to lend to. By observing your account activity and posing inquiries about your transactions, lenders aim to establish a level of trust in your financial reliability.
However, occasional use of your overdraft should not significantly hinder your mortgage application. The real concern arises when constant overdraft reliance becomes apparent, indicating financial difficulties.
Demonstrating reliability and being sensible with gambling is precisely what lenders seek. Take proactive steps, demonstrating your commitment to the mortgage process and your intention to present yourself in the best possible light.
Typically, lenders request your most recent three months’ worth of bank statements. Keeping this timeframe in mind, ensure that you manage your finances responsibly and sensibly during this period.
If you engage in regular gambling, it might be worth considering a temporary hiatus. Many betting apps offer features for setting betting limits, which could be a valuable option. Not only could this positively impact your mortgage application, but it could also have benefits for your mental well-being.
As a mortgage broker in Essex, our role is to guide you through the entirety of your mortgage journey, right from the very first steps. We’ll carefully review your supporting documents alongside you, ensuring that you present yourself optimally given your circumstances.
Our team of mortgage advisors in Essex will provide continuous assistance throughout your application process. We have availability seven days a week, please don’t hesitate to reach out for specialist mortgage advice in Essex at a time that suits you best.
By its own definition, a broker is a business that can arrange or negotiate for something in particular, on behalf of their client. A mortgage broker in Essex is a business that functions in that same way, for a homeowner, home buyer or landlord who is looking to take out a mortgage on their property.
A mortgage is a loan that you have secured against your property, which as a property owner, you will pay back over a particular length in time, through monthly mortgage payments.
Although a homeowner, home buyer or landlord are able to search for and apply for their own mortgage, you much more frequently find that they will look to utilise the services of a mortgage broker in Essex, because of the different services they can offer their customers.
Probably one of the most important jobs a mortgage broker in Essex can do, is that they are able to cross-reference your information against 1000s of unique products, across many different mortgage lenders. If you went directly to a bank, you will only be limited to deals from that company.
This isn’t completely a negative, as the best deal with that mortgage lender could still be the best one for you, but this can’t always be guaranteed. A mortgage broker in Essex is able to compare on your behalf, usually coming along with exclusive deals only available with that mortgage broker.
The job of a mortgage broker in Essex is more than this though, as there are lots of jobs that a mortgage broker in Essex can do, before and during your mortgage application and after your mortgage offer. They will also vary between companies; Not every mortgage broker works the same way!
For example, an area that we stand out in, is we are able to recommend suitable insurance options for our customers. Whilst it is an additional, optional cost (you don’t have to do it!), our mortgage and protection advisors have a duty of care to make sure you don’t lose your property, no matter the situation.
When your mortgage process begins, you will most likely be speaking with the appointment booking team of a mortgage broker in Essex. Their role will be to take some general information from you & help you to find a suitable time slot for you to speak with a mortgage advisor in Essex.
As an alternative to this, you are usually able these days, to bypass the need to call up first, as many mortgage brokers in Essex (much like ourselves) have a user-friendly and simplified appointment booking system online, where you can typically choose what type of appointment you would like.
Once you have gotten booked in, the next step will be to attend your mortgage appointment with your mortgage advisor in Essex. Generally you will provide them with some further information to help them better understand what you are looking to do, so that they can help you progress.
From that point, they’ll start looking at a variety of mortgage deals, to help you find the most suitable one for what it is you wish to do. Some mortgage brokers in Essex offer their customers a limited supply of obscure mortgage lenders, others offer more, with some offering a whole of market service.
Whilst we can’t say we are a whole of market company, we can confidently say that we have a greatly sized panel of mortgage lenders, with mortgage products that range from standard mortgage enquiries, to specialist, and everything else you’ll find in-between.
Your mortgage advisor in Essex will provide you with a recommendation on the deal they believe is right for you. If you like that deal, they will look to obtain an agreement in principle (AIP) for you. Our mortgage advisors in Essex are usually able to get this within 24 hours of your appointment.
Estate agents will want you to provide them with this when you make an offer on a property and it will also show the person that is selling the property that you are committed to the offer you have made and are in a position to go forward with the sale.
Also, when you are at this point, you will need to go ahead and submit your documents to the mortgage broker in Essex you are working alongside. The documents that are required can usually vary between each mortgage lender and what you wish to achieve in your mortgage process.
Standard document requests will include proof of ID, proof of your income and deposit, last 3 months’ bank statements and payslips, as well as proof of VISA or right to work in the UK, if you happen to be a foreign national (this is usually done with a share code if you have migrated from the EU).
Documents that are typically requested in more niche situations, include a P60 (not all mortgage lenders will need this), business bank statements and tax calculations/year overviews if you are a self-employed applicant, and possibly also an employment contract depending on what your job is.
After you have achieved all of the latter steps, a mortgage broker in Essex will then work to verify your documents and provide you with their mortgage illustration, which will detail the agreed deal before they move on to submission.
Following on with this, they will progress on to your mortgage application submission, to the mortgage lender. From there, it’s a bit of a waiting game until they get back in touch with your mortgage broker in Essex to confirm if you have been approved or not.
The work won’t be stopping there, as mortgage advisors in Essex still have further steps to complete. They will send copies of your documents to your mortgage lender, as well as liaise with solicitors. During this time, our mortgage advice team can recommend property surveys to you.
You will generally come across 3 different types of property survey. Basic valuation, which will work out the value and resale value of the property, home buyers valuation, which will goes a little more in-depth and a full structural survey, which alerts you to any areas that perhaps you need to look at.
Much as they had done when it came to your mortgage deal in your initial mortgage appointment, your mortgage advisor in Essex will be able to best recommend which property survey is right for you to have taken out.
As you wait for the conclusion of your mortgage application process, you may also have queries or concerns, about what is actually going on. Mortgage advice teams with good reputations will make sure you are informed regularly, often via email, so you are always in the loop with your mortgage progress.
Eventually, the mortgage lender will come back to us with an outcome on your mortgage application, hopefully a positive one! If your mortgage application is successful, you will then receive a formal mortgage offer from the mortgage lender.
From here, the job mostly goes on over to your solicitors to complete your mortgage deal, so that you can eventually be comfortable in your home. There is still more that a mortgage broker in Essex can do for you though.
Here at Essexmoneyman, when you reach about the 6 month mark, before your mortgage deal is due to end, if you had previously took out your mortgage with one of our mortgage advisors, we will be back in touch to offer you remortgage advice in Essex and help you take the next mortgage step.
As is clear, there is much a mortgage broker in Essex can do for you, such as saving you time and money on your mortgage process, whilst they work to reduce your stress levels and bring you one-step closer to completing your mortgage.
We are proud to say that here at Essexmoneyman, we really do care about our brilliant customers. After all, there is no Essexmoneyman, without you! We always put your best interests first, doing whatever we are able to do, to put you in the best position financially for your property goals.
To give you an example of this, if you wanted to take out a remortgage and got in touch with us for remortgage advice in Essex, but your mortgage advisor in Essex felt like you would benefit from taking out a product transfer, they will say so, as it is always about your best interests.
Furthermore, a mortgage broker in Essex may be able to get a mortgage lender to waive some of your mortgage fees, or maybe even look at incorporating them into your overall mortgage balance.
When you are in an appointment with one of our mortgage advice team, they will take a look through all of the costs and fees involved with your mortgage process, during your free mortgage appointment with a mortgage advisor in Essex.
Really, this is all down to you. If you would like to save time and money, stress and worries, then it may be beneficial to let an expert professional such as a mortgage broker in Essex, take on the bulk of the work for you.
We often find ourselves providing customers with expert mortgage advice in Essex, whether they be looking at first time buyer mortgages in Essex, to those looking for a buy to let mortgage in Essex and even more than that.
Book online today and speak with a member of our mortgage advice team, using our handy online booking feature, to benefit from a free mortgage appointment or remortgage review with a dedicated mortgage advisor in Essex today.
A fixed-rate mortgage is a mortgage that has been fixed for a particular set length of time, with the interest rates remaining the same for the entire duration.
Generally speaking, people within the mortgage world believe that the longer you fix your mortgage for, the higher that interest rate is probably going to be. With that in mind, if you are looking for the lowest rate possible, you should really look at taking out a short term fixed-rate mortgage.
The downside to a short-fixed term, is that you will be reaching the end of your term a lot quicker, meaning you will need to renew a lot sooner than you might have wanted. When the time comes to take out a remortgage in Essex, your monthly mortgage payments might be a lot more than they were before your term finished.
If you would rather not be searching for new fixed-rate deals every two years, but also have a preference to not reach the point where interest rates go too high, you might be better suited for a medium-term fixed rate mortgage.
Five-year fixed rates are some of the more popular choices that we come across when speaking to first time buyers in Essex, as they will provide you with the security of consistent monthly payments for the rest of your term. The downside with this one, is that if interest rates drop whilst you’re locked into that fixed deal, you will end up paying more overall than you otherwise would have had if you had gone with a shorter term.
The flip side to that, is if interest rates go up during your term, you’ll be sat comfortably at that lower rate for the duration. It’s because of this, that lenders may increase the interest rates on shorter terms, to future proof themselves, just in case. Usually, the longer your term, the more expensive it is going to be.
There are only a select number of 7 to 10-year fixed rates available to home buyers on the property market. These have always been the least popular of the choices, due to how long they are overall. Many feel that having a decade-long term is too long to be fixed in for a mortgage.
On top of interest rates, you will also need to consider the booking and arrangement fees that are involved.
A booking fee is payable upfront, whereas an arrangement fee is only payable on completion of the mortgage. You might know people who have added fees to the total of their mortgage amounts, but this of course increases the total amount you’d be paying off at the end.
Sometimes you might also find that your financial circumstances can suddenly change and you might need to repay your mortgage balance a lot earlier than had initially been planned for. When this happens, you will likely end up being charged for it.
This charge is known as an Early Repayment Charge (ERC for short). The ERC is calculated as a percentage of the amount that remains on the mortgage balance. If we say as an example, the mortgage amount you have remaining is £200,000 and you are able to pay that off earlier on into your term, with a percentage that is 2%, you would end up having to pay back £4,000 to cover the broken fixed contract.
Many homeowners aren’t aware of the Early Repayment Charge and think it’s as simple as paying off their fixed mortgage early. You are tied into a contracted deal and you can’t just jump out of it and pay it off early, unless you are quite content having additional large charges added to your account.
People who know about the charge may opt to just pay it off early anyway, in order to get a better deal that is currently on the market, especially if it is a limited offer that may not be available a few months down the line.
As an experienced mortgage broker in Essex, we would highly recommend that you avoid chasing after “headline” deals. Always make sure you remember that the lowest rates tend to come with the highest setup fees. Please get in touch today for any further fixed-rate mortgage advice in Essex.
Have you ever thought of using a mortgage broker in Essex? Well, you may not realise it initially but the fact is there are some good reasons for it. Although, it is quite possible to proceed by directly contacting the lender, most people prefer dealing with a mortgage broker.
People often consider it a great chance to save money by not hiring a mortgage broker. It seems a cost-effective idea to proceed with everything on your own.
So you may also be one of those who prefer going directly to the Bank or Building Society. Another pro that was previously in the minds of the people was that “the Bank Manager knows my finances inside out”, although this changed when credit scoring was introduced.
It is also true that some lenders have various mortgage products only for the people who directly reach out to them. The main intention behind such ideas is to attract the consumers directly and grab their attention with exclusive offers.
Ultimately, it serves as a great tool to spread the business. The interesting part is that it is equally enticing to speak with a mortgage broker as well. Some offers can be found only through a mortgage broker.
From 2014 onward, it was not possible for the lenders to sell mortgages to anyone on a non-advised basis. At that time, it was a common perception that non-advisors were forcing their advice on the customers and not letting them benefit from consumer protection benefits that should come with speaking to a professional mortgage advisor in Essex.
There’s also the fact that taking an appointment with a bank can sometimes take months to happen. A mortgage broker in Essex can often get you booked in within that week.
Now you can easily understand how these kinds of issues gave rise to the importance of mortgage brokers and diverted the minds of the people towards them. As a result, more and more applicants started relying on the mortgage brokers and were quite willing to pay their fees.
Now they had more trust for the mortgage brokers who are often able to offer their services the same day, like ourselves. We are always ready to help you, so get in touch and we will put you through the qualified mortgage advisors either immediately or within the same day if we can.
You might be wondering: what can be the reasons that make some mortgage applications far more difficult than they should. So let’s have a look at some of the examples:
In the past years, it was much easier for the lenders to get the competitive edge by just presenting more enticing offers than their competitors. But it is not as simple now and the thing that distinguishes one lender from the other is the lending criteria.
To make all this easier, all you need to do is to discuss your situation with an experienced and professional mortgage broker and ask them whether they encountered a similar situation in the past or not. After a lot of research and hard work, a mortgage broker will hopefully be able to help you through and recommend the most suitable mortgage that matches with your budget and does not break the bank.
Here it is worth mentioning that even if the application is simple, we have more experience and knowledge that will surely help you in getting the most appropriate deal. For example, we have a professional team of mortgage advisors in York that will guide you about other professional options and services such as solicitors. When you keep yourself in touch with us, we will also update you about the surveys and protection information available to you.
Our distinguishing feature is that we are far more fast and responsive compared to the other mortgage brokers. The biggest reason why customers often need the mortgage help is that everyone nowadays is very busy and needs someone who can lift off the weight. Our mortgage advisors will do that for you quite smoothly and you will definitely appreciate the benefits of having an expert on board.
Ready to discuss your mortgage plans? Feel free to Get in Touch with your specialist mortgage broker in Essex. We are available 7 days a week, to help you out in finding the right mortgage deal.
We cover Essex and surrounding areas: Mortgage Broker in Chelmsford – Mortgage Broker in Brentwood – Mortgage Broker in Southend-on-Sea
Regardless of whether you are a first time buyer in Essex looking to make that initial jump onto the property ladder, or are going through the process of moving house in Essex, it will soon become apparent that there are multiple different types of mortgage available to customers.
Some options are a little more popular than others and some are quite hard to come across. We put together a list of mortgage types we find that we encounter the most frequently and that you will likely come across in your search for a mortgage. You will also see each section accompanied by one of our MoneymanTV episodes, which we hope you will find very useful ahead of the mortgage process.
We have a collection of Helpful Mortgage Guides on moneymanTV here, as well as our “Mortgages Explained” playlist here.
A fixed-rate mortgage means that your mortgage payments, for a specific period of time, will stay the same, giving some consistency to your process. The length of your fixed payments is completely your choice, with generally homebuyers choosing common lengths of anywhere around 2, 3 or 5 years or longer.
Regardless of any changes to inflation, interest rates or the economy you can rest easy knowing that your mortgage payment, often your single biggest outgoing, will not drastically change, giving you some normality.
A tracker mortgage means that the interest-rate of your mortgage will follow the base rate of the Bank of England. What this means is that the lender that you are with do not choose interest-rate and neither will you. Instead, you will be paying a percentage above the Bank of England base rate, something which can change slightly. A prime example of this, is if the base rate is 1% and you are tracking at 1% above base rate, that means you will be paying a rate of 2% on interest.
When you take out a repayment mortgage you will be paying back capital and interest combined each month of your term. So long as you keep your payments going for the full length of the mortgage term, you will be guaranteed to have your mortgage balance paid off by the end, with the property then becoming yours to own.
In regards to mortgage payments, this is considered to be the most risk-free way to pay your capital back to the mortgage lender. Early on into your mortgage term, you will primarily be paying back the interest portion of the payments, and your balance will start to go down really slowly. This is especially the case if you have taken out a longer term of around 25, 30 or more.
Where this changes for you, is when it comes to the last ten years or so of your mortgage. Your monthly mortgage payments will be more capital than interest, with the balance coming down much faster.
Whilst many modern day buy-to-let mortgages are set up on an interest-only basis, you’ll find it a lot harder trying to get a residential property on the same basis. The likelihood of a mortgage lender offering an interest-only product to customers these days is not very high, though in some cases it is possible.
Situations where this might apply to a customer include downsizing when you are older or have other investments that can be used to pay back the capital. Lenders have strict rules when it comes to offering these products now and the loan to values are a lot lower than they used to be back in the day.
With an offset mortgage, the lender will set you up a savings account that will function alongside your mortgage account. The way that this works is that, for example, let’s say you have a mortgage balance of £100,000 and £20,000 is deposited into your savings account, you only pay interest on the difference between this, which in this case is £80,000. This can be a very efficient way of managing your finances, especially if you pay a higher rate of tax usually.
Generally speaking, regardless if you are a first time buyer in Essex, moving house in Essex, or looking to expand your buy to let mortgage in Essex, the higher your credit score, the more likely you are to get accepted for a mortgage.
Remember that lenders have internal credit scoring systems that use the information held on your credit report, as well as information within your mortgage application. Every mortgage provider follows their own credit scoring policy, so if you are declined by one, you may still have a chance with another.
When it comes to which credit reference agency to use, or which one will the lender use, unfortunately, this information is not always given out.
Sometimes lenders will switch between companies such as Experian, Equifax, and Call Credit. It is good practice when looking to obtain a mortgage to check yourself against multiple credit reference agencies. This is because the information on one agency’s file may be different to others.
Until you have registered with one of the credit reference agencies to check your score, the thing you need to do ahead of everything else, is stop applying for new credit checks. You may only be doing something simple like comparing car insurance, but this can still cause unwarranted credit checks that may leave a footprint.
Lenders will use the electoral roll to carry out identity checks, so it is very important to make sure you’re on there. You have to also ensure that your name is spelled correctly and you get registered at your current address. If you’re unsure whether or not you are on there, you can check with your local council, as credit checks will show this and it can work in your favour.
Mortgage Lenders like to see some “active credit”, so having some kind of regular credit coming in and going out each month, like say a credit card, can also give you the edge (providing you keep up repayments). You must also remember, however, that doing this short term could have a negative effect.
Consistently almost hitting your limit or going over it can have a bad effect if you have credit. Make sure that you are within a safe distance and again, able to pay it off each month.
Another key tip is to make sure that you do not appear to be living in two places at once. This can occur if you accidentally give across the wrong living-in dates for the properties you were in.
It is always worth your time double checking whether or not the address format is correctly formatted, though flat/apartment addresses can make this a little difficult.
If you have any credit or store cards that you are no longer in use of, please close these accounts. Once again, remember that this could have a short-term negative impact on your score.
The systems can’t tell whether it is you or the lender taking this action, but it helps over time. Also reduces the chances you’ll fall victim to fraud if you were to ever lose your cards for any reason.
Ensure that all of your open accounts get registered at your current address and not an old address you were previously living in.
If you hold joint accounts, a mortgage, or a loan with an ex-partner, their poor credit history could directly affect yours. It is vital to inform the credit reference agencies that you are no longer associated with that person and remove any financial links that you have.
Credit scoring as a system is here to stay and can directly affect how your mortgage process goes. It’s quicker and more consistent for lenders to rely on their systems than human resources.
Having an up to date copy of your credit report to provide to your mortgage broker in Essex will help fully demonstrate your financial situation and help them recommend the most appropriate mortgage for your situation. Get in touch and we’ll see how we can help.
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Essexmoneyman.com & Essexmoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.
Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk
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