The mortgage journey is one full of adventure and the potential for great reward. It has its fair share of both highs and lows, but ultimately you will end up with either your dream property to settle down in and maybe start a family, a stepping stone property to propel you higher up the ladder or an investment purchase to provide you with some additional income.
Regardless of the route you took, there will eventually come a time when you are reaching the end of your mortgage term. You could sell up and upsize/downsize into a new home, starting fresh. Maybe you are looking sell your portfolio to the tenant or another buyer and look at other investment opportunities? The most popular option that customers take, however, is a Remortgage.
First, let’s look at the definition of the term. A Remortgage is where you use the proceeds from a new mortgage obtained to pay off a pre-existing mortgage. There are a wide variety of different options when taking out a Remortgage, ranging from minor to major.
Utilising the 20 years or so knowledge of our resident “Moneyman” Malcolm Davidson (host of our YouTube channel MoneymanTV), we took the time to put together a quick guide to all the options you could have when it comes to taking out a Remortgage in Essex.
Your initial mortgage deal will normally last on average around 2-5 years and feature low fixed rates or possibly discounted rates for that time period. In some cases, you may even be placed on a tracker mortgage, which follows the Bank of England’s base rate, increasing and decreasing as and when their rate does so.
When your existing mortgage term ends you will likely be moved along to something known as the lenders “Standard Variable Rate” (you may see this mentioned across the web simply as SVR). In short, an SVR is a mortgage with an interest rate that can change depending simply on what the lender deems it necessary to charge. This does not follow the Bank of England’s base rate like a tracker mortgage does.
As such, these are usually end up being the most expensive paths to take, leaving many to look at Remortgaging for better rates, with the idea of hopefully saving you money on your monthly repayments.
2-5 years into occupying your home, you may have a complete change of heart. Maybe you feel that you need an extra room or larger living space for your kids or belongings, a new kitchen, a new office, or a handy new loft conversion. Rather than move into a larger house, a large number of homeowners seek to release their equity with a Remortgage in order to cover the costs of these additional projects.
Though the concept of having to obtain planning permission and fund/manage your own project may seem rather daunting, some would argue it’s a lot less stressful and more rewarding than the process of having to find a new home, selling your current one and moving your personal belongings.
Over the course of time, this may prove even more beneficial. Creating more space and having good quality craftsmanship will likely increase the properties value, something that is useful for if you ever do decide to sell up or rent out.
In many cases, people may simply wish to Remortgage in Essex for a better mortgage term, whether this be by reducing the length or switching to a more flexible and favourable product. Reducing the length does mean you won’t be paying back your mortgage for as long as you might have done, so aren’t completely tied down forever, but as such your monthly repayments will be a lot higher than you might’ve expected beforehand. The longer your term, the lower the payments will be over the length of said term.
Some opt for a more flexible mortgage term when the time comes to Remortgage in Essex. The benefits provided by this option can prove winsome to some current homeowners. You may gain the ability to overpay, resulting in the choice of paying your mortgage off as quickly as you’d like, as well as being able to carry the same mortgage and rates over to another property, should you decide to move at any time later on in life.
Though a flexible mortgage sounds like the ideal situation, they usually come in the form of a tracker mortgage, which as mentioned previously, follows the Bank of England base rate. This means one month your payments could fluctuate based on interest, making them a little unpredictable and unreliable in an instance where most would rather have financial security.
Everyone has some level of equity in their home or property. This is worked out with the difference between what is still owed on the remaining mortgage and the current value of the property. As touched upon briefly, this can be used for home improvements, however, there are still a variety of options available for you out there.
Some use it to cover long-term care costs, to supplement their own income, to have a nice family getaway, to pay off an interest-only mortgage or to simply have free spending money to do with as they please.
In some cases, we find that a lot of Buy to Let landlords will use Equity Release as a means of covering their deposit for buying a future property to add to their property portfolio.
On the topic of Equity Release, another big one people use it for, is to pay off any unsecured debts you may have built up over a period of time.
Though it may seem like an easy enough process, Debt Consolidation not only bases the amount on how much you’re owed and the value of the property, but it is also based on your credit rating. This could mean you are limited in the amount you are able to borrow.
Additionally, to pay off your pr-existing mortgage and your debts, you will need to borrow more than the amount of your outstanding mortgage. This means your monthly repayments will most likely be a fair bit higher. Though not an ideal situation, at least you can rest assured that should you find yourself in an unfortunate predicament, you do have some options out there.
If you have a particularly damaged credit rating, you do still have options to choose from, though these will be quite difficult and require very Specialist Remortgage Advice in Essex before going forward. Even then, there is no guarantee of a remortgage, so do not get your hopes up until you speak with a professional.
You should always seek mortgage advice in Essex before choosing to consolidate and secure any debts against your home.
If you are reaching the end of your term and are wondering what your option may be for Remortgaging, it can be very beneficial to Get in Touch with an experienced and dedicated mortgage broker in Essex.
An advisor will be able to discuss your circumstances and future goals, in order to create the best plan of action for you in the next step of your path to obtaining a mortgage. It is our aim to ensure this go-around is a quicker and smoother process than your initial mortgage journey.
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 from 8am until 10pm, 7 days a week, to help you out in finding the right mortgage deal.
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.
In the beginning of your mortgage process, if you choose to use a large estate agent, they will likely try to persuade you to use their in-branch Mortgage Advisor and their recommended conveyancers. You are under no obligation, however, to use their in-house advisor and you can still get the same or better deals from elsewhere! Unfortunately, First Time Buyers are often the ones that get caught out and end up being tricked into using services that they don’t want or need.
Searching for your own Mortgage Advisor in Essex could ultimately be the best path for you to take. An estate agent’s advisor will be biased to only their products, whereas a dedicated mortgage broker in Essex will be able to give you more perspective of each side.
If you do your research and still end up back with your in-house advisor, that’s your call and is far enough, though you should always remember that you have other options you can choose from, should you want that.
Our view consists of both transparency and efficiency, as we want to provide the best possible customer experience and also the best advice for your individual financial situation, whilst still delivering both a fast & friendly mortgage advice service.
If you do go down the route of using your estate agent’s in-house mortgage advisor and conveyancer, you need to take a look at where the cost of their service is coming from. They could be charging you for their services without asking you and adding it to additional fees, with the hope that you don’t notice.
Speaking with a trusted mortgage broker in Essex will eliminate these concerns, as you get exactly what you paid for, no strings attached. Your dedicated advisor will gladly break each cost down for you and relieve any uncertainty you may be feeling.
Even though it is a highly illegal tactic, if you choose not to take the estate agents in-house mortgage advice, they may refuse putting your offer forward on a property you are fully capable of being accepted on. For example, you could be using a broker and they may push another offer to completion over yours, simply because you aren’t using their services. Again, please note that these situations are illegal.
Estate agents may try even more underhanded tactics by doing things like trying to charge you with extortionate in-house conveyancing fees. Even with a straightforward purchase, they have been known to try and charge you with fees upwards of £1,500. If something like this happens during a purchase, you have full rights to ask them where they have got these prices from and for them to provide a full breakdown of where the costs have come from.
A trusted mortgage broker in Essex only has your best interests at heart, meaning a lot of the problems caused by going with an estate agent can be avoided.
Trying to choose the right Mortgage Advisor can be hard; but is there a way to make it easier?
Sometimes you will have a specific case that might require specialist care and attention. An estate agents in-house advisors will only care about making money off you. When you Get in Touch with a mortgage broker in Essex, you can be matched up with an experienced advisor relative to that field.
An example of this, is that in our company we have specialist buy-to-let mortgage experts who are able to help out buy-to-let enquiry is presented to them. Once you’ve had a free mortgage consultation and an agreement in principle (often turned around in 24 hours or less), you could be linked with your perfect advisor and get started on the mortgage process.
We have been providing mortgage advice for years now and have been helping struggling customer take that leap into the mortgage market for over 15 years. You can find out more about our expert mortgage advice service by looking at our incredible customer reviews.
If you would rather take matters into your own hands, you should know that it’s perfectly okay to do so. Most of the process can now be done online! Along with the use of price comparison websites, you may be able to find yourself the best deal for what you need.
The benefit of doing things online is that you have the chance to save money on additional fees. As long as you are confident in what you are doing and know what you are looking for, you could complete the process quicker than initially anticipated.
One thing to bear in mind is shopping around and comparing online may be a little trickier than you think. You will need to make sure that you’ve found the best deal before agreeing to something. Here are some things you should be careful of when choosing to find a deal by yourself:
Making an appointment with your bank’s Mortgage Advisor isn’t exactly a hard task, however, it may not be the right choice for you to make. If you do opt to do this, here are a few things you should keep an eye out for:
Getting in touch with a mortgage broker that is not associated with the estate agent ensures you have someone working purely on your behalf as an inexperienced First Time Buyer in Essex. This also reduces any conflict of interest risks.
The process will be kept between you and your designated Mortgage Advisor in Essex. We have no external ties to any building societies, banks or estate agents, working solely for you. Whilst we have lenders on panel, they’re purely there for the deals they offer, allowing us to find the best deal for your personal circumstances.
Our team of advisors and administrators only have your best interests at heart. Managing Director Malcolm Davidson is here to explain the pros & cons of using a trusted mortgage broker:
First and foremost, what is an Agreement in Principle? You may see this online shortened to AIP or under the name Decision in Principle (worry not, it’s exactly the same thing), an Agreement in Principle is a certification of passing a lenders credit score, allowing you to qualify for a potential mortgage.
Once you have obtained yourself an Agreement in Principle, you are ready to support any offers you make as a First-Time Buyer in Essex. Having one of these on hand may put you in a better place to negotiate a lower price, as it is a demonstration to the seller that you are making a serious enquiry and have the financial means to proceed.
More commonly these days we see lenders using soft searches as their primary method of credit scoring, however hard searches still do occur and it’s not impossible for either to affect your credit score. Generally it’s a hard search rather than a soft search that will do this, though it’s not unheard of completely. Remember with soft searches, whilst they don’t go as in-depth, they’re still valid forms of credit scoring.
If you infrequently have a hard search performed on you, then for the most part you should remain unaffected. Where this becomes an issue, is if you continuously have these done in a short space of time, as hard searches leave a credit footprint.
On the other side of the coin, if have a good credit rating and you know this, you should not be put off by a hard search, especially if it’s your best chance of obtaining a mortgage.
Whilst in theory this would be really nice, there are unfortunately no guarantees in the world of properties and mortgages, even if having an Agreement in Principle does make you look really good. At the end of the day, the mortgage lender will still need to see all your documents and only then will a decision be made by an underwriter.
We regularly encounter customers who have gotten to the point of a mortgage application and been declined, even with their AIP. This is usually down to some missed or misexplained small print in the Agreement in Principle itself.
You will be required to provide ID to prove that you are genuine, payslips to prove the amount you claim to earn is in fact true and bank statements to prove you conduct your finances. Once all this has been submitted, then a lender will offer your case.
Though you are able to make an offer without an Agreement in Principle, it is not something we would recommend. An Estate Agent with credibility will want you to prove you can proceed as expected.
It is possible to obtain an Agreement in Principle within 24 hours of speaking with a trusted Mortgage Advisor in Essex.
Typically speaking, an Agreement in Principle will expire after 30-90 days. The good news for you, is this does not mean you should just apply for the first house you see. If your Agreement in Principle expires, you can quite easily have it refreshed for when you are ready to make an offer on a property.
Getting declined on a mortgage can understandably be disappointing. As such, we recommend getting an Agreement in Principle as early on into the process as you can.
Whether you are a First-Time Buyer in Essex, Home Mover in Essex or someone looking to Remortgage in Essex, the lender is going to want to see your bank statements. The lender will analyse them, looking at all aspects of this, though at the end of the day, their aim is to determine whether you can manage your money responsibly and maintain regular monthly mortgage payments.
You need to be aware that your bank statements will say a lot about you. Something that often crops up and causes a fair amount of trouble, is gambling.
Whether you’re a regular user of gambling sites or spend money on the Grand National once a year, there is nothing illegal about gambling. With many bookmakers advertising on the mainstream media, to many people gambling is simply a fun hobby.
However, even the bookmakers and gambling advertisers themselves urge customers to ‘please gamble responsibly’, a message that also applies when it comes to the world of mortgages. Whilst the lender can’t tell you how to live your life, how you spend your money or indeed to moralise on ethical rights and wrongs of gambling, it is their job (underscored by mortgage regulation) to lend responsibly to their customers.
Lenders need to prove to their regulators that they are in-fact lending responsibly and being careful. As such, it isn’t entirely unreasonable of them to expect the people to whom they lend to adopt a similar approach when it comes to their own finances. If you think about it; Would you really lend your own money to someone who you know gambles?
As previously touched on, gambling is not an illegal form of entertainment. With that in mind, just because you have a few gambling transactions on your bank statements doesn’t mean you will be automatically declined for a mortgage. That being said, it is up to the lender whether or not some of these are deemed reasonable or responsible, checking how frequent they occur and the impact they have on your income.
If the transactions are small and infrequent, with no major impact to your overall regular credit bank balance, then the lender is likely to ignore these and proceed as normal. On the flip side, if you gamble frequently and are always overdrawn, the lender will likely see you as irresponsible and decline your application.
As you’ve read, lenders are basically looking at your bank statements to give themselves confidence in whether or not you are smart with your money.
Remember that these mortgage lenders are financial institutions that, either directly or as part of a wider group, often sell current accounts, overdraft facilities credit cards and personal loans. As such, they are well aware that these things can also be an issue.
When applying for a mortgage, the key is how the things are managed. For example, having an overdraft facility and occasionally using it isn’t necessarily a bad thing. If you regularly go over your overdraft limit, this will be a problem. Lenders keep their eye out for excess overdraft fees or returned direct debits because these would normally show that whoever owns the account is not great at managing their money.
Other things to bear in mind include;
Be smart and plan ahead. Generally speaking, a bank would ask for up to three months of your most recent bank statements, which will show your salary credits and all your regular bill payments. If you know you would like to apply for a mortgage in the future, try to make sure that you avoid any of the aforementioned issues.
Take a break from gambling for a short while and work on making sure your account is in the best shape for a future mortgage transaction. Your Mortgage Broker in Essex may be able to help, as there are some lenders who may ask for fewer bank statements than other lenders might want.
It is worth remembering that even these lenders would reserve the right to request bank statements in certain circumstances, so your best bet is to be careful and always gamble responsibly.