You may find that there are a lot of different circumstances wherein you are eligible for a second mortgage, as well as certain situations where a second person may be required to have more than one mortgage.
Some of these reasons for this can include:You are wanting to take out a second mortgage so that you can raise money for your existing home.
Maybe your name is already on an existing mortgage and you are looking at buying a new property?
If you have any existing equity that is in your home and you are looking to possibly take out a second mortgage as a means of releasing some funds, then our dedicated team of mortgage advisors in York will work hard to try and help you out.
In this kind of setting, a second mortgage is also called a secured loan.
You’ll likely discover that if you are currently on a lenders standard variable rate, a trusted mortgage broker such as ourselves will have the ability to shop around and find a more competitive deal for you, whilst helping you to release some capital.
A further advance with your current lender may also be an option that works well for you.
Perhaps you are wanting to move hold but would like to still retain ownership of your existing property, aiming to utilise it as a buy to let. Speaking with a specialist buy to let mortgage advisor in York will definitely work in your favour if this is the case.
The second mortgage that you end up with will be a new residential mortgage. Doing this is what is referred to in the mortgage world is a let to buy, which is always growing in popularity.
In some cases you might actually be exploring what options could potentially be available to you for helping your children or grandchildren in achieving their own goals of getting on the property ladder.
This is again something that is quite common these days and there are lots of products for people to choose from. Get in touch and this is something we will be quite happy to run through with you.
Perhaps you are looking to purchase a property that is a buy to let in York. In this circumstance you will be asked to put down a much larger deposit than you otherwise would’ve with a residential mortgage.
A lot of the customers who get in touch, tell us that they are currently named on another mortgage and are maybe looking to purchase another property.
Our mortgage advisors in York have come across this often enough to say we are well versed in dealing with a situation like this. A regular comment we hear is that this is due to divorce or separation. A member of our mortgage advice team will work hard to help in any way they can.
No matter the situation you find yourself in that would require a second mortgage, as an experienced, open & honest mortgage broker in York, we are able to take a look through 1000s of mortgage deals for you and on your behalf.
We will do all this so that we are able to recommend the most suitable product for you based on your personal and financial circumstances.
Whether you are looking to buy a home as a first-time buyer in York, are moving home in York, or are ready to remortgage in York, you’ll quickly begin to realise there are a lot of options out there for you when it comes to taking out your mortgage.
In this article we have put together a comprehensive list of the most popular types of mortgages available to customers on the mortgage market.
If you have any questions regarding any of the mortgage options that we talk about below, then please do not hesitate to get in touch with a dedicated mortgage advisor for expert, open & honest mortgage advice in York & surrounding areas.
A fixed-rate mortgage will mean that your monthly mortgage payments will remain unchanged for the duration of your mortgage term.
The length of which you want to fix your payments for is your choice, with typical choices being somewhere around 2, 3 or 5 years or longer.
No matter what happens with inflation, the interest rates or the nationwide economy, you know that your mortgage payment, which is usually a person’s single biggest outgoing, will always be routinely consistent.
A tracker mortgage will serve the purpose of providing you with a mortgage interest rate that basically mimics the Bank of England’s base rate.
This means that neither yourself or the mortgage lender will set the rate and it will change as and when the base rate does. If the base rate goes up, your interest rate goes up. If it goes down, yours will go down too. Of course, this happening is beneficial to you.
You will be paying back at a percentage that is above the Bank of England base rate. If we use this in an example; Let’s say the base rate is 1% and you are tracking at 1% above base rate, that means you will be paying back your interest a rate of 2%.
When you take out a repayment mortgage this means that each month you will be paying back a combination of both the interest and capital. This is the standard mortgage people think of when looking to buy a home.
Going off the basis that you are able to keep your payments going for the mortgage term duration, you will be guaranteed to have paid it off in full and own the home of your dreams by the end of it.
This is generally, across the industry and wider world, considered the most risk-free way to pay your capital back to the mortgage lender. Early on in your term, the amount you’ll be paying will be mostly the interest, with your balance reducing at a slower rate. This is especially the case if your term is 25, 30 or 35-years.
The process quickens up within the last ten years or so of your mortgage, where you will be paying back more capital than interest, with the balance reducing at a far quicker rate.
Whilst we do still regularly encounter many buy-to-let mortgages being set up on an interest-only basis (this is an option that works out much better for many landlords), it is increasingly more difficult these days to get a residential property on an interest-only mortgage.
The reason for this is because once you reach the end of your term, you will still have the full mortgage amount to pay off all in one go, with no additional income to fund the amount you’re required to pay.
That being said, there are various unique circumstances where this can be a suitable option for customers, including downsizing when you are older or if you happen to have other investments you are able to use to pay back the capital.
Lenders are often incredibly strict when it comes to offering these products now and the loan to values tend to be much lower than they were in previous years.
The way an offset mortgage works is that your mortgage lender will set you up a savings account that will work in tandem with your mortgage account.
To explain this using an example, let’s say that you have a mortgage balance of £100,000 and you deposit £20,000 is into your savings account, you will only be paying interest on the difference between those figures, which in this instance would work out at £80,000.
This can be a very efficient way of managing your finances, especially if you are wont to be paying higher rates of tax.
When the mortgage deal that you are on initially finally reaches the point of confusion, your mortgage lender may wish to offer you a new deal for you to accept, ensuring that you stay with them. This kind of deal is known as a product transfer.
Although it would be nice, you will not be rewarded by a mortgage lender for your loyalty. The offer that they make you may not be competitive with the kinds of deals you could have access to elsewhere.
What also tends to be an annoyance for customers, is that the mortgage rates for these product transfers are not as good as the types of rates they would be offering their new customers. Great for a first-time buyer, not so much for an existing homeowner.
It may look like a fairly simple, straightforward process to just swap onto your current lenders new deal, but please always bear in mind that it will be in your interest to at least have a look at what other deals you may be eligible for.
You might find that your lender tries to sway you onto their deal, without providing any mortgage advice.
This can be a really risky process, because if you go into their new deal without advice, you are essentially saying goodbye to all the valuable consumer protection you would otherwise have benefitted from by speaking to a Remortgage broker in York.
Over the years we have seen numerous examples of customers just agreeing to go onto these “follow-on” deals and locking themselves into a deal that is not appropriate for their circumstances.
The kicker here, is that because they agreed to move onto the deal out without taking any mortgage advice, they have waived a lot of their rights in terms of making a complaint about the lender or the deal.
We once had a mortgage case where a customer who was pregnant opted to take this route and was declined for a small further advance to fund some necessary home improvements a couple of months down the line.
She was then left with having to pay quite a large early repayment charge in order to swap from her existing lender onto a new one who was willing to lend her the necessary funds to accomplish her home improvement goals.
After we have taken a look at your case, if we think a product transfer is the most suitable deal for you we will absolutely recommend that as a course of action for you. If we don’t think so, then we’ll look at where to go next.
When we arrange the mortgage for you as a mortgage broker in York, then all the regulation and consumer protection will apply to you.
In short, even if the mortgage process seems pretty quick and straightforward, we will still always recommend that you seek expert mortgage advice. A second opinion costs nothing and making a mistake when taking a new product can be something that ends up costing more than you thought it would.
If you are looking to remortgage in York, you’ll find that the mortgage market is highly competitive and savings can typically be made by a dedicated mortgage advisor scanning the market for a new and more favourable mortgage deal.
Overpaying, even by a small amount, can make such a difference to the amount on the interest you pay back during your mortgage. The sooner you start to do this, the sooner these extra payments can take effect.
Most First-Time Buyers in York tend to be aware of the difference overpaying mortgages can have on the interest you end up paying back. Even if you do only overpay by small amounts. It’s also relatively well known that the earlier you start overpaying the better because the extra payments have a longer period to take effect.
Many homeowners cannot afford to make extra payments. However, it could be argued that the main reason that people end up not overpaying mortgages is that there’s always some more exciting thing you can be spending your money on!
A big part of the problem is remembering to overpay. It’s not something that’s particularly likely to cross your mind too often, except perhaps when your mortgage only has a few years left.
Therefore, we recommend setting up a standing order that’s payable to your lender each month. If you can organise that to go out on the same date as your regular mortgage repayment, the overpayments will quickly start to “feel” part of your mortgage.
A benefit of opting for a standing order is that, unlike a direct debit, you are in control, not the receiver. That means if you have a financial emergency you can quickly log into your online banking and cancel the standing order so that it doesn’t go out the next month. Whilst it’s not ideal to stop overpaying, at least you will have benefitted from the overpayments made up until that point.
Overpaying your mortgage is a great habit to get into, you don’t need to go overboard, but you’ll be pleased when you get to the end of your mortgage repayments and realise you’ve shaved off a year or two.
In some cases, lenders will let you make reduced mortgage repayments or take a payment holiday if you can demonstrate a history of overpaying. Before taking a payment break though, it’s important to check with your lender that you are eligible. Otherwise, you might end up with a negative mark on your credit report and this is something you should strive to avoid.
A 95% mortgage is as simple as the name would suggest; you are borrowing against 95% of the price of a property, and then you are covering the remaining 5% with your deposit. An example of this is if you looked at buying a property that was worth £150,000 with a 95% mortgage, you would be putting down £7,500 as your deposit and borrow the remaining £142,500 from the lender.
Off the back of the March 2021 Budget, Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, making 95% mortgages more readily available from the bigger high street banks.
This is fantastic news for First-Time Buyers and Home Movers alike, as this scheme will continue running until December 2022. Certain terms and conditions will apply though, which is something your Mortgage Advisor in York will be able to look at, to see if you qualify.
All our customers who opt to Get in Touch will receive a free, no-obligation mortgage consultation where one of our dedicated mortgage advisors will be able to make a recommendation on the best possible route for you to take.
95% mortgages are usually accessible by both First-Time Buyers in York & those who are Moving Home in York. Whilst saving for a 5% deposit sounds like a pretty straightforward concept, you’ll still need to have an acceptable credit score and prove that you are able to afford your monthly mortgage repayments, in order to access a 95% mortgage.
A good credit score is essential in the process of obtaining any mortgage, especially a 95% mortgage. Things like paying any current credit commitments on time, ensuring your addresses are updated and checking that you’re on the voters roll, can all help with your credit score.
Affordability is another one that is important to take note of. By giving the lender details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments, your lender will be able to get a general overview of whether or not you are able to afford this type of mortgage.
Nowadays we see lots of family members helping each other get onto the property ladder, especially parents looking to further their children’s lives. The way this usually happens is by gifting the person looking to find their home, the deposit required. Known through the industry as the “Bank of Mum & Dad, Gifted Deposits are only intended to be a gift, and not as a loan. The lender will need proof that this has been agreed, before it can be used towards your mortgage.
When looking for a 95% mortgage, you want to make sure you have the right type of mortgage. Each mortgage type works differently, with that choice allowing you to find one that is most appropriate for your personal and financial situation.
Some homeowners and home buyers prefer Fixed Rate or Tracker Mortgages, mortgage types which mean you either keep interest rates at a set amount for the term given or have your interest rates tracking the Bank of England base rates.
Alternatively, you might find that Interest-Only or a Repayment Mortgages are more your style. Interest-Only allows cheaper payments until you need to pay a lump sum at the end (mostly now used for Buy-to-Lets), whereas a Repayment mortgage (a normal mortgage if you’d like) means you’ll be paying interest and capital combined per month.
Seeing as a mortgage is such a large financial outgoing, you need to be prepared and need to be aware. You might find things like higher interest rates, remortgaging difficulties due to less equity and then negative equity all cropping up if you’re not.
There is no need to worry though, as all these can be avoided if you’re savvy enough with your process to begin with. The more deposit you put down for a property, the less risk the lender will see you as.
A larger deposit, of say 10-15%, would not only reduce the rates of interest by a noticeable amount, but would also give the property more equity and reduce the risk of negative equity, thanks in part to you borrowing less against the property.
So, whilst the risks may seem intimidating, planning ahead and saving for a bigger deposit to access something like a 90% or even an 85% mortgage will be a massive help in your mortgage journey and something you’ll be able to reap the rewards from in the future.
Nowadays, First-Time Buyers in York are becoming more attentive to their credit score than they used to be. The public seems to be more conscious of their credit score role in obtaining a mortgage, so most people who contact us for Mortgage Advice in York seem to have already checked their credit report.
Credit reporting agencies like Experian, Equifax, and many others have come in handy in helping people get their credit report. However, for first-time homeowners, we often recommend Check My File. They offer a 30-day free trial and monthly £14.99 subscription package, which you can cancel at any time. Check My File provides a detailed credit report arranged in color-codes for ease of reference and understanding.
When offering clients Mortgage advice in York, they always inquire to know if we will check their credit score. We understand that excessive credit search could reduce one’s credit score, so we do not do any search unless with their permission.
A hard credit search entails detailed scrutiny of your credit report. Financial institutions should seek a client’s permission before conducting a hard credit search. Lenders always want to get a more exact and in-depth knowledge of your financial history to know if you meet their requirements.
Meeting their credit criteria after a hard credit search highly improves your chances of getting your credit approved. You need to ensure that you can provide evidentiary support of the satisfactory documentation and ensure that there is no falsification or error in the details contained therein.
The downside of hard search is that it will be indicated in your credit report, which would be evident whenever someone performs a credit search on your account in the future. This isn’t such a bad thing, but when lenders see that you have multiple credit searches on your report within a short time, they could misinterpret it to mean that you’re applying for different credits concurrently.
They may not inquire to know the circumstances that led to these hard credit searches. Instead, they may conclude that other lenders performed these searches, and after their investigations, they threw away your application, so you had to move on to other lenders.
Soft credit search only assesses your finances to know what you can afford with your available credit. It basically applies to price comparison websites and identity verification.
In recent times, some lenders prefer to conduct a soft credit search, although it doesn’t provide them as much information about a client’s financial history as a hard credit search does. However, obtaining an Agreement in Principle from the lenders is a strong pointer that your mortgage application will be approved.
The significant advantage of soft searches is that banks and other financial institutions will not see how many soft searches have been done on your account. However, the number of soft searches will be visible to only you- and you’d be amazed at how many have been carried out on your account. Since banks and lenders cannot see this information, you can apply for an Agreement in Principle for a mortgage- and it won’t damage your credit score irrespective of the outcome of the application.
Every aspiring homeowner wants to present themselves as financially responsible individuals. Therefore, it is pertinent to explore all legal routes of improving your chances of getting the property you desire at the lowest possible price.
This is the reason why the bulk of our mortgage advice in York revolves around helping people increase their credit score and keep their record in good standing to make them attractive for lenders and other financial institutions.
When applying for a mortgage, having a high credit score improves your chances of being successful. But then, a high credit score alone doesn’t guarantee that the financial institution will approve your mortgage because different lenders have their internal grading system that determines the approval of mortgage applications.
Because each lender has its unique set of criteria for approving a mortgage, another could accept you if one lender rejects your application. This trial and error kind of occurrence is the reason why you need a Mortgage Advisor that can direct you to the right lender that will approve your application. A good mortgage advisor will also help you assess your chances with the different lenders and help you get the best deal.
If you want to get an explicit knowledge of your credit score, you can contact lots of credit reference agencies to know your credit scores. For people seeking mortgage advice in York, we always recommend consulting Equifax, Experian, and several other credit reporting agencies to get your credit report. It is necessary to consult more than one, just if any of these agencies make an error in your credit report.
To get a higher credit score, below are some recommendations we have for people seeking mortgage advice in York:
If you’re always searching for credit multiple times, you could ruin your credit score and chances of having your mortgage application approved. Instead of damaging your credit score with repeated searches, it is best to use approved price comparison websites to get the best prices and know what’s available for you.
The truth is, if you’d be applying for a mortgage soon, it may not be wise to do credit searches within that period. Although lenders know that you will repay your credit, they do not want you to have debts when applying for your mortgage.
People on the voters’ roll are considered more stable and organized than people who are not, and it reflects positively on their credit score. To improve your credit score, you may need to update your current address and provide correctly every necessary information to enlist yourself on the electoral roll. This enlistment will improve your credit score, and lenders will rank you higher.
Another way to improve your credit score is to know your maximum credit limit and make sure you don’t get there. Maxing out your credit limits your credit score and makes lenders regard you as one who can’t manage their resources. Lenders want only to do business with financially responsible people, so exceeding a card limit or overdraft is considered a red flag.
It is necessary to update your address history to ensure that your provider knows where exactly you live at a given time. Ensure that the details are correct, especially if you live in a flat- which could be quite tricky due to different address formatting.
If you have old credit accounts that you no longer use, contact the providers to close the accounts. At first, lenders may be skeptical in the bid to determine if you requested for the termination or if the providers closed it themselves. However, it will be beneficial in the long run as it streamlines your credit score and protects you from fraud.
If you have family, an ex-wife or husband, or any other person connected to the spending of your finances, you need to remove those links. The truth is, those links weaken your credit score without making it obvious. Reach out to reference agencies and request to terminate the connections between you and these persons. Doing this will surely improve your credit score.
Whether you’re a First-Time Buyer in York, looking to Remortgage in York, Moving House in York or any other kind of mortgage scenario, your credit score should always be one of your top priorities. Get in Touch with a Mortgage Broker in York and a dedicated advisor will talk you through any necessary steps for you to take.
Regardless of whether you are a potential First-Time Buyer in York actively seeking out your first home or a Home Mover in York with your house on the property market, you may have noticed that some of the larger estate agents and builders would prefer that you use their in-house mortgage advisor and conveyancing services.
We have spent many years working as a dedicated and individual mortgage broker in York. We don’t work with banks, building societies or estate agents, we work solely for the customer. As such, we do often find ourselves speaking with customers who have been pressured by some estate agents to use their own in-house financial services. Some of the stories we have heard include;
Many estate agents out there have track records of refusing to put an offer forward if you choose to use a different mortgage advisor instead of their own. At times they have also refused to put offers forward to the vendor, because someone who has used their in-house mortgage advice service has also made an offer that they’d rather show favouritism towards, even if it’s lower.
Another sales tactic we see often, is the estate agents quoting immensely overpriced conveyancing fees. In the past we have had clients who have unfortunately had this happen to them. One was quoted more than £1,500 for a regular purchase.
With our dedicated mortgage advisors helping out, we got this cost down. Following this, we suggested that the client use another conveyancer in the nearby area and were able to get this down to £750. That’s exactly half of the quoted price.
Once you’ve made an offer, you might then expect a phone call detailing whether or not you’ve been accepted. It seems like the next logical step right? However, what tends to happen with some cases, is the estate agent will call up and demand to know which conveyancer you have used.
What follows is the estate agent refusing to take the property off the market, unless you agree that you will use their own in-house service. As you might imagine, their quotations will be extortionately overpriced and completely unfair to the customers, but they will put you on the spot and make you feel like you have no choice to take enlist their services. This is something a mortgage broker in York can absolutely help you be prepared for. So the questions that need answering then are…
Absolutely not, they are highly illegal. You have the freedom to go wherever you wish when it comes to your mortgage process. You can use any broker, any conveyancing or any other financial service. It’s all down to what you would personally prefer. You are under no obligation to use the services on offer from the estate agent, as their job is simply to foresee the sale between yourself and the vendor.
Always remember, when negotiating a purchase price… Is it really within your best interests for the person selling the property you’re interested in buying, to know your personal financial situation and potentially know how much you’re able to borrow in order to pay for that property? Something which they can then use against you to convince you to use their own financial services?
Stay vigilant and make sure that if you don’t want to use it, they know this and do not guilt you into a trap. It’s your mortgage, your offer, your potential home. Getting in touch with a trusted mortgage advisor in York will help you be as prepared as possible, in advance of encountering these tactics.
When it comes to Gifted Deposits, we often find that we are asked lots of questions. Below we will answer these questions in the simplest way we can, so you’re more up to speed when it comes to the mortgage process.
Your gifted deposit can be either the full amount or a portion of the deposit gifted by someone who is able to confirm, with an agreement that you do not need to pay the gifter back in the form of a loan.
Gifted Deposits are incredibly useful when customers have enough money for their monthly repayments but can’t afford the initial deposit for their home. You may also open yourself up to better rates if you are able to put down more deposit.
A Gifted Deposit can also be really helpful if you’re on a lower salary and can afford the monthly mortgage repayments but are unable to save your deposit upfront.
Generally speaking it is your parents who can gift you the deposit, though this can be extended beyond just birth parents, to adopted parents and legal guardians. You may see this mentioned online as the “bank of Mum & Dad”.
You do have the possibility of using other family members for a Gifted Deposit, though this completely depends on individual lenders, so would require care when trying to find the right mortgage lender.
We commonly find that clients aren’t aware that their parents can help with their mortgage, or don’t feel like they can approach them and ask for help. In truth, most parents are extremely willing to help their children get onto the property ladder.
Statistically, taking out a mortgage works out better than renting, due to you being able to potentially pay less per month on a property. Gifted Deposit can often come from inheritance, although parents have been known to gift it earlier on in life if they have saved enough already or have released a certain amount of equity from their own home.
Most lenders won’t accept a loan as a method of paying for your deposit, as this is an additional credit commitment and leaves the lender with uncertainty that you’d have enough disposable income to pay back both the loan and the mortgage at the same time.
There is no maximum limit on the amount of gift you can receive, though there are lenders out there that will insist that you put in at least 5% deposit from your own savings.
The people who benefit the most from this tend to be First-Time Buyers in York and Home Movers in York. It can also be useful when in conjunction with the Help-to-Buy Scheme, as the required 5% deposit, depending on the lender, can be paid via a gifted deposit.
The majority of lenders will require a gifted deposit form. Depending on the lender, you may be asked to provide additional proof and ID (things like donor ID or bank statements).
For National Apprenticeship Week 2020, we thought we’d pause for a minute to think about to reflect upon our younger employees who recently completed their apprenticeships, as well as those who are currently working their way through one.
Following the success of earlier apprentices Thomas Bowes (formerly of the Customer Care team, now a Mortgage Advisor in York) and Laura Aves (a Dedicated Case Handler who assists our Mortgage Advisors in York), we decided that apprenticeships were the way to go when looking to hire new employees.
It gives us a feeling of pride and accomplishment, allowing youngsters to encounter an opportunity in what is likely their first employment, allowing them to learn and grow with skills they wouldn’t otherwise learn. We’re helping to build their futures whilst they’re also able to earn a living.
Former apprentice Michael Sallabank undertook a Digital Marketing Apprenticeship with the company.
Two years after his starting date and Michael is very much still a part of the Moneyman team. It’s been several months since he completed his apprenticeship and he’s now a fully-fledged digital marketer.
As a collective, the Marketing team helps create brand awareness, allowing potential home buyers to take their first steps towards Mortgage Advice in York.
Next, we have Chloe Masters, who is celebrating her 1st work anniversary today. Chloe is one of the youngest members of the Yorkmoneyman team, now becoming a Dedicated Case Handler.
Finishing her apprenticeship recently, Chloe now joins fellow former apprentice Laura in assisting the Mortgage Advisors in York with their work.
At this present time, the Yorkmoneyman group has three Apprenticeships. Lee Underwood, Daniel Beardsmore and James Lawson all joined the group in late 2019, undertaking a Digital Marketing Apprenticeship, the marketing disciples hope to take the mortgage head-on and create even more brand awareness for budding home buyers looking to find expert Mortgage Advice in York.
Here at Yorkmoneyman, we appreciate everyone who walks through our doors and we always enjoy watching our apprentices grow over time as both workers and people. We look forward to seeing who joins our team in the future!