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Can I Have a Second Mortgage in York?

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.

  • Perhaps you are looking to rent out your existing home and purchase a new one to live in.
  • You’re maybe looking at your options to obtain a second mortgage in order to help your children out.
  • You need to have a second mortgage in order to purchase a buy-to-let in York.

Maybe your name is already on an existing mortgage and you are looking at buying a new property?

Second Mortgage to Raise Money

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.

Second Mortgage to Rent Out Existing Home to Purchase a New One

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.

Second Mortgage to Purchase a Home For Your Children

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.

Second Mortgage for a Buy to Let

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.

Named On Existing Mortgage and Want to Buy a New Home

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.

Life Insurance Cover For Homeowners in York

Life insurance is a vague term as there are numerous different types of life insurance. We put together this mortgage protection guide to explain what it is and why we always recommend any homeowner to take out life insurance.

If you’re in the market and looking to take out life insurance, it’s worth speaking with a mortgage & protection specialist in York. We offer life insurance Advice in York, and we would urge that you take up our offer on a free insurance consultation that we provide to new/existing customers. 

That said, if you are confused about the differences between the many various types of life insurance, you need to learn the most suitable policy that covers you best and how long it lasts before making any radical decisions, as not all policies will match your circumstances.

What is Life Insurance?

Life insurance pays out a lump sum of money to the deceased loved one/ friend in the event of their passing. With regards to your mortgage, you can choose how the payout gets distributed. Also, the person who took out the cover can decide to either payout through regular payments or a whole sum. Life insurance helps provide:

  • Additional financial support for loved ones.
  • Act as a replacement for lost income.
  • Pay off the outstanding balance on debts owed in the person’s name like a mortgage.

Different Types of Life Insurance Policies

As stated, there are various types of life insurance policies to choose from, and affordability will always play a large part in our lives. Whilst it would be wonderful to cover yourself for every potential opportunity, that’s not always possible. 

Here we have listed the different types of life insurance available. If you want to find out more, speak with one of our protection specialists in York today.

Level Term Life Insurance

With level term life insurance, you will only get covered for a fixed term as the payout is only valid within the time frame stated inside the policy.

People usually take out this policy that’s in line with their mortgage term. So a level term typically runs between 5-25 year terms in 5-year increments.

Decreasing Term Life Insurance

Why would you want to take out a policy that decreases in value? Well, this policy targets homeowners with repayment mortgages. Homeowners choose to take out this policy to pay off the outstanding mortgage balance should they die.

The policy’s value mirrors the outstanding balance remaining on your mortgage. As the amount owed on your mortgage decreases, so does the sum insured.

Increasing Term Life Insurance

This type of life insurance works in the opposite way to decreasing term life policy. The difference with Increasing the life insurance is that you are covered for increases as your term goes on. It will increase by a fixed amount until your policy term ends.

Increasing term life insurance can help protect the policy’s total value against inflation and is usually in line with the retail price index.

Whole of Life Insurance

The whole of Life policy helps cover you throughout your entire life. The costs of Whole of life insurance will be costly. However, if you keep up-to-date with your payments, you will be covered for your whole life.

This type of insurance is usually used for family protection and is part of inheritance tax planning.

Joint Life Insurance

If you are in a relationship/married, you could consider taking out a Joint life insurance policy that will pay out if one of you dies. You could still have two separate life insurance policies if you want to, but it is often cheaper than taking out two separate ones.

Death in Service

This type of life insurance cover may be offered to you by your place of employment. Your company is not obligated to provide Death in Service cover. However, some do as part of their employee benefits package.

Death in service is usually a lump sum of cash paid out to an employee’s family or a person of their choice if they die, and this sum can be up to 5 times their annual salary.

Taking out Life Insurance as a Single Homeowner

Just because you are a single homeowner doesn’t mean that you should disregard all life insurance options.

If you have settled into a new place and are currently living on your own without children or a partner, it’s not unusual for people to forget about life insurance. People also sometimes choose to ignore it, and this is because it doesn’t always apply to single homeowners.

This doesn’t mean you shouldn’t think about it though as your circumstances could change in the future, and if they do, then life insurance could become an essential thing to have.

Our Insurance Advice Service in York

We want to make sure that you have the right policies in place to allow you to leave your family in the best position possible if you die. Taking life insurance will give your family financial certainty and take a little stress off them in an already difficult time.

As a Mortgage Broker in York, we know that life insurance, no matter the type of cover, is highly beneficial and can put you at ease knowing that your family won’t have to pay for your debt payments.

If you want to learn more about life insurance, take up our free Insurance consultation in York. We will explain the policies available to you and why they could benefit your family’s personal and financial situation in the future. 

But don’t just take our word for it. Why not check our reviews to see what our trusted customers say about Mizna, one of our mortgage protection and specialist

We always ask our customers to review us. We do this because our reviews reflect a complete picture of our service from start to finish and highlight how amazing our team is. 

Some people didn’t know that life insurance can combine with other policies, depending on your situation. The other Insurance articles we cover include:

The Different Types of Mortgages Explained

The Different Types of Mortgage

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.

What is a Fixed-Rate Mortgage?

What is a Fixed-Rate mortgage? | MoneymanTV

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.

What is a Tracker Mortgage?

What is a Tracker mortgage? | MoneymanTV

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%.

What is a Repayment Mortgage?

What is a Repayment mortgage? | MoneymanTV

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.

What is an Interest-Only Mortgage?

What is an Interest-Only mortgage? | MoneymanTV

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.

What is an Offset Mortgage?

What is an Offset mortgage? | MoneymanTV

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.

Should I Go With a Product Transfer or a Remortgage?

Open & Honest Remortgage Advice in York

What is a Product Transfer?

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.

Are you rewarded for being loyal?

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.

Tempted by an online switch?

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.

You’ll Be Giving Up Your Mortgage Rights

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.

Always Seek Mortgage Advice in York

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.

Rent vs Buy: The Benefits of Owning a Property in York

First Time Buyer Mortgage Advice in York

Why should I rent if a Mortgage is Cheaper? | MoneymanTV

Is renting a “wasted money?”

Such a controversial topic; some say renting your home is a waste of money and they have saved up for a housing deposit instead. In any case, not everyone has an equal chance to put their foot on the property ladder and become first time buyers in York; for some, it takes slightly longer. Here we will weigh the benefits of buying or renting a property in York. 

Discuss all possible eventualities

Speaking to one of our dedicated mortgage advisors in York before committing to purchase, they can not only find you a suitable mortgage but recommend mortgage protection insurance as well. That said, taking out a mortgage is a big commitment, and priority is finding you a fair deal to match your circumstances.

Will a mortgage be cheaper than renting?

We tend to find that for some, their mortgage payments are cheaper than the rent they were previously paying, depending on the area. Interest rates vary, which means your mortgage payments can go up and down unless you take out a fixed-rate mortgage, so your payments stay the same for a set period. On the other hand, if you are renting your landlord may choose to increase your monthly rental.

Being in control of your living arrangements

Some people enjoy the security of home ownership with no landlord telling them what they can and cannot do in the property. Whereas if you are renting, your landlord could choose to sell the property and you may have to move out.

However, in some cases, if your landlord does choose to sell the property you are renting they may offer you first refusal. As this will save time and some fees such as estate agents fees.

The Flexibility

Of course, renting is more flexible than purchasing a property. Nothing is stopping you from giving your Landlord notice to leave if you decide to move to another area.

Whereas if you own a property and decided to move you will usually have to arrange the sale, which can take time. Alternatively, you could look to rent out the property however, this will be subject to your financial position whether this is possible or not.

If you think you may not be around in an area for very long, you should consider whether it is worth buying. Buying somewhere should be viewed as a long-term investment whereas renting is a short-term investment.

Maintenance

As a tenant, your landlord should be responsible for any significant repairs. Some Letting Agents and Landlords are better than others when it comes to repairs; however, you might end up doing some minor maintenance of the property yourself, even if you are renting.

If you are a Homeowner, then all this is down to you, insuring the property will be a condition of any mortgage you take out.

How our Mortgage Advisors in York can help

Contrary to what some people might say, owning your own home is not for everyone. Suppose you are young and moving in with your partner for the first time. There’s nothing wrong with renting for a while. Unfortunately, things don’t always work out the way we plan, and it can be tough to get removed from a mortgage.

Buying a home is an enormous financial commitment, and everyone should consider all the options before diving in if you decide to rent though it may take you much longer to save up for a deposit.

Ultimately, most people decide they would prefer to buy over renting. Whether you are renting or paying a mortgage, you are making monthly payments to live somewhere, and most would rather see this go towards their benefit than someone else’s. It is sometimes just a case of getting your timing right and being in the correct financial position to proceed.

If you are looking to purchase a property in York, we are more than happy to help and offer our mortgage advice service in York.

A Guide to Remortgage in York: Top Reasons to Consider

Remortgage Advice in York

Although the mortgage journey can sometimes seem quite stressful, in the long run, it can be extremely rewarding. You’ll go down one of two paths on your mortgage journey; one is that you find the property of your dreams that you can see yourself living in for the foreseeable future and two is that you buy your first home to get yourself onto the property ladder and keep going up until you find a home that suits you best.

Whichever path you choose to take, you will always find yourself coming to the end of your mortgage term. At this point, you are going to have to decide whether you want to remortgage or move home.

Another option could be to buy another property as well as keeping your current one and let it out as a let to buy. Also, this can work in the opposite way if you want to purchase a property as a Buy to Let.

What is a Remortgage?

A Remortgage is simply using the funding for a new mortgage to pay off your current mortgage. The term ‘Remortgage’ is very vague, it covers a lot of ground. You can actually Remortgage for lots of different reasons and in this mortgage guide, we are going to cover the most common reasons to why people Remortgage.

Remortgage for a Better Rate

When you take out a mortgage product, its term will usually be somewhere between 2-5 years. There are lots of different types of mortgages, some being more popular than others. Their rate will vary depending on the product that you take out. For example, a Tracker mortgage will follow the Bank of England’s base rate; this rate will fluctuate depending on the economy and how it’s performing; whereas a Fixed-Rate mortgage will have set monthly payments that will never change until your fixed-term has ended.

So, you have a mortgage product that is perfect for you, however, your mortgage term is ending in 3 months time – what do you do?

– Firstly, you should check whether you can access a better rate or not. Occasionally, if from the point of when you took out your mortgage product you had a lower credit score than you do now, you may be able to get a better deal. To find this out for free, you should get in touch with a Mortgage Broker in York like ourselves. We will review your mortgage and your options to see whether or not you can access a better product.

– Secondly, once you find out about the options that are available to you, it’s your choice whether you want to renew your current deal or Remortgage/transfer products through your same lender.

If you don’t Remortgage, you will fall straight onto your lender’s standard variable rate of interest once your mortgage term has ended. Their standard rate is likely to come with higher costs than your current mortgage deal; that’s why you should always Remortgage! Ideally, you want to begin the process 3 months prior to your product ending.

You may be able to save money in places you didn’t think you could by remortgaging!

Remortgage for Home Improvements

If you feel like you’ve found your dream home and have no plans on Moving Home in York, you have an option to Remortgage for home improvements. Home improvements can mean anything from a loft conversion to a garden extension – it can be anything you could class as improvements for your home.

In the middle of the coronavirus pandemic in 2020, we received enquiries left, right and centre about Remortgaging for home improvements such as a home office, gym, new kitchen and even bars. We think that everyone’s mentality was the same at the time. This investment has not only provided more living and breathing space inside of the property, but has also risen the property’s value.

When you Remortgage for home improvements, you will be adding more to your total monthly mortgage payments as your total mortgage amount will increase to incorporate the costs for the home improvements. So, at first it may seem like it’s costing you more each month, however, in the long run you may find that the home improvements massively increase your property’s overall value.

Remortgage for Changes to Your Term

You can also Remortgage in York to find yourself a better mortgage term. Homeowners often do this to reduce their term or gain more flexibility with their payments.

Doing this can result in you having a shorter period of time to pay back your mortgage, which means that you won’t be tied down for a large portion of your life. Yes, this will increase your mortgage payments, but it will allow you to finish your mortgage quicker than before you decreased your term. The longer your mortgage term is, the less your mortgage payments will be, and vice versa.

Once you’ve got that mortgage payment history associated with your name and your lender knows that you are a reliable customer, they may allow for flexibility with your mortgage term. Doing this can sometimes allow you to overpay your mortgage.

Equity Release

It’s likely that you’ll have some amount of equity within your home, even if it is only a little. You can work out the amount of equity that you have in your home by taking the difference between how much is still owed on your mortgage and the current value of your property.

You can release some of this equity and turn it into a lump sum of cash. This money can be spent however you want as it is your equity; for example, you may want to use it for home improvements, to put down a deposit on another property, to pay off a car loan or to go on holiday – remember, it’s up to you!

Some people, usually older homeowners, will release equity in the form of a Lifetime Mortgage. You can find out more about this in our Equity Release in York article.

Remortgage to Consolidate Debt

If you have built up any unsecured debts in your past, did you know that in some cases you can incorporate these into your mortgage through remortgaging?

It may not be the easiest of tasks to consolidate your debts into your mortgage. Before allowing you to do so, lenders will look at how much money you owe, the value of your property and what your credit rating is like.

Lenders will always be very careful when it comes to letting applicants consolidate debts into their mortgage. One reason for this is that your monthly mortgage payments will be increased; they will question whether they think you’ll be able to manage the extra costs of consolidating your debts. Another reason for this is that if you fall into arrears and your house ends up being repossessed, all of these debts have been secured within the property, which may make the lenders get no profit from the property.

Before consolidating your debts into your mortgage, we always recommend that you speak to an expert Mortgage Advisor in York – particularly a debt consolidation professional.

Free Remortgage Consultation

If you are approaching the end of your fixed-mortgage term and you are thinking about Remortgaging for a specific reason, even if it isn’t one of these, you should get in touch with our team. We offer a free remortgage consultation/review to every customer in York, so we advise that you take advantage of this if you are thinking of Remortgaging.

You will get to speak with your own dedicated Mortgage Advisor in York, who will guide you through the whole remortgage process, trying to find the perfect deal for you and your personal and financial circumstances.

Why are People not Overpaying Mortgages in York?

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.

Overpaying Mortgages

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!

So, if you would like to overpay what should you do?

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.

Mortgage Advice in York

What is a 95% Mortgage?

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. 

95% Mortgage Advice in York

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.

Can I get a 95% mortgage?

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.

Improving your credit score

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 

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.

Can my family help me get a 95% 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. 

How do I choose the right 95% 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.

How can a bigger deposit help with my mortgage? 

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. 

Information on Agreements in Principle and Credit Searches

Mortgage Advice in York for First-Time Buyers

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

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.  

What is Hard Credit Search?

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.  

What is Soft Credit search?

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.

Speak with a Mortgage Advisor in York

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.

How to Improve your Credit Score in York?

Way to improve your credit score | moneymanTV

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:  

Limit your Credit Search to a reasonable amount 

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.  

Ensure that you’re on the Voters’ Roll 

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.

Don’t max out your credit 

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.  

Ensure to update your address history properly 

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.  

Terminate dormant credit accounts 

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.  

End your financial Links to others  

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.

Get in touch with a Mortgage Broker in York

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.

Yorkmoneyman.com & Yorkmoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is authorised and regulated by the Financial Conduct Authority.
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