Mortgage

 

Whether you’re looking for a mortgage on a new home, or a remortgage to raise money against the value of your existing home, Mor-Invest will guide you every step of the way. When you’re making such a huge financial commitment, it’s important you get expert
mortgage advice. 

Mortgage Product we offer:

– Fixed rate mortgage
– Tracker mortgage
– Discounted Rate Mortgage
– Capped Rate Mortgage
– Variable rate mortgage
– Repayment
– Interest Only Mortgage 
– Cash Back mortgage
– Right to Buy Mortgage
– Shared Ownership mortgage
– Help to Buy mortgage

Getting a mortgage for the first time can be both confusing
and daunting. Which type of deal should you go for and how big a mortgage will you be able to take out?

We can take you through the mortgage application process from start to finish, offering expert guidance as to which kind of first time buyer deal might suit you best, so that you can get onto the first rung of the property ladder as painlessly as possible.

Your mortgage is likely to be your biggest monthly outgoing, so it’s important to get it right first time round.

When you take out a mortgage, you are basically borrowing an amount from a lender to pay for your property purchase. Like any other type of loan, you make monthly repayments to pay off the capital you’ve borrowed as well as the interest charged. Some mortgages are interest-only rather than repayment mortgages, whereby you only pay interest back each month, and you don’t repay the capital lump sum borrowed until the end of the mortgage term. However, it’s extremely unlikely that as a first-time buyer you would be offered this type of deal as most lenders will only consider lending on an interest-only basis if you have a very large deposit to put down.

The amount of interest you will pay on your mortgage depends on the particular deal you choose, but the good news is that record low interest rates mean that mortgage rates are currently very competitive. The bigger the deposit you have to put down, the better the mortgage rates you will be eligible to apply for.

When choosing a mortgage, you can see which deals you might qualify for based on the size of the deposit you have by looking at what is known as the mortgage ‘loan to value’ (LTV). The LTV is essentially the size of the mortgage you are taking out relative to the value of the property. So, for example, if you were buying a flat costing £100,000 and you have a £5,000 deposit to put down, you’d need to look for mortgages with a 95% LTV, as you will be borrowing 95% of the property’s worth.

Remember that when choosing a mortgage, it’s important not to look at the rate alone. You will need to factor in arrangement fees too, as these can sometimes substantially bump up the overall cost.

 

The best mortgages for First Time Buyers

There are several different types of first time buyer mortgages available – the right one for you will depend on your individual circumstances and whether you think you’d be able to cope financially with any change in payments in the future.

Fixed rate mortgages are often popular with first time buyers as the rate won’t change for the term of the deal, which can typically range from two to 10 years, or sometimes even longer. Your monthly payments will therefore remain the same regardless of what happens to interest rates, helping you budget with certainty.

If you think your finances could withstand potentially higher payments in future, then you may alternatively want to consider a variable rate mortgage deal. There are three main types of variable deal available.

Capped rate mortgages: Capped deals are variable rate mortgages, so the rate and your payments can move up or down over time, but there is a cap which the rate cannot exceed. For example, if a lender offers a capped rate of 4.5%, you will have peace of mind that your rate will never be higher than this.

Discounted mortgages: These are also variable rate deals, offering a discount on the lender’s standard variable rate. So if a lender offers a discount of 2% off its 4% standard variable rate, this gives you a payable rate of 2%, but this rate can change over time if the standard variable rate goes up or down.

Tracker mortgages: As the name suggests, tracker mortgage deals track the Bank of England base rate plus a set percentage. For example, a deal which tracks the base rate plus another 2% would give you a current payable rate of 2.25% as the Bank of England base rate is currently 0.25%.

Some lenders offer mortgages which enable parents to use their savings to help you buy your first home. Parents typically put a percentage of the property value into a savings account held with the lender which allows it to remain in the parental name, but results in a better mortgage rate for you. Other lenders also take a collateral charge on the parental property as an additional security.

There are lots of schemes available to help first time buyers who are struggling to get onto the property ladder.

Shared ownership schemes, for example, enable you buy a share in a property through a housing association. You then pay rent on the part you don’t own, and can buy additional shares in your home when you can afford to.

There is also the Help to Buy equity scheme, which allows you to borrow up to 20% of the value of a new-build home interest-free for the first five years. First time buyers purchasing in London can borrow up to 40% interest-free.

If you’re not sure whether or not you’re eligible for one of these schemes, contact us and we’ll talk you through all the available options.

If you’ve got a mortgage on your home, it’s well worth checking to see whether you might be able to remortgage to a better deal.

Remortgaging, particularly if you are currently languishing on your lender’s standard variable rate, could potentially trim tens or even hundreds of pounds off your monthly mortgage payments. There are plenty of other reasons you might want to remortgage, as well as saving money. Perhaps you want to borrow money against your property to cover the cost of home improvements, pay off more expensive debts or even raise money to purchase another property?

Whatever your remortgage requirements at Mor-Invest we are here to help. We can provide you with expert mortgage advice on the best mortgage deal to make the remortgage process as straightforward as possible. here’s what you need to know.

  • You have a good enough credit record for the lender to accept you
  • You already have a mortgage or another financial product with a lender.
  • You own enough of your property to match the loan to value (LTV). For example, if a mortgage has an LTV of 60%, you will need to already own at least 40% of the property’s value.

Whether you are looking to expand an existing rental property portfolio, or you are thinking of becoming a landlord for the first time, you will need to take out a buy-to-let mortgage rather than a standard residential mortgage. As the name suggests, a buy to let mortgage is a special type of mortgage which is specifically designed for people who are buying a property as an investment portfolio

What’s difference between a buy to let mortgage and a residential mortgage?

While both buy to let mortgages and residential mortgages involve you borrowing to fund a property purchase, there are some important differences. Rates on buy to let mortgages are usually higher than on residential mortgages, and you will need to put down a bigger deposit. Another big difference is that buy to let mortgages are usually interest-only, rather than repayment, so you don’t pay back any of the capital you owe until the end of the mortgage term. The advantage of this is that your monthly payments will be lower, but the downside is that if property prices fall while you own the property, there is a risk that when you come to sell it, you might not end up with enough to pay off the mortgage. Under current rules, you can claim tax relief on your mortgage interest payments at your marginal rate of tax, but this is due to change in April 2017 when tax relief will be at a flat rate of 20%. The effective way of operating a buy to let mortgages is to use the special purpose vehicles (SPV). This is a way of holding business property through a limited company, rather than the individual holding the property in their own name. The following expenses are deductible under SPV: Repairs and maintenance, Insurance, letting agent fee, ground rent and service charge on lease hold property and the actual cost of replacing furnishings (wear and tear)

You can’t apply for a residential mortgage on a property which you let out, as if your lender discovers you are doing this, they could either ask you to repay the mortgage immediately, enforce financial penalties, or switch you to a higher buy-to-let rate. It’s also worth bearing in mind that if you rent out a property without a buy to let mortgage, your household insurance would be invalidated in the event of a claim for damage caused by your tenants. If you are going to let your home, you therefore need to let your lender know and switch to a buy to let mortgage

 

NB: Some Buy to Let Mortgages are not Regulated by the Financial Conduct Authority.

With so many different buy to let mortgage deals to choose from, it’s not always easy to work out which one is going to be the right choice for you. That’s why we are here for you, so that you can see which buy to let mortgages are available, and how much they will cost. Remember that you should not base any mortgage decision purely on the rate alone, as arrangement fees can substantially bump up the overall cost. In some cases, depending on how much you need to borrow, it can work out to be more cost-effective to choose a deal with a low arrangement fee and a slightly higher rate. If you’re not sure which buy to let deal to go for, Mor-Invest can guide you through the process from start to finish, making finding the right mortgage as painless as possible.

When you move home you can either get a new mortgage or keep your current deal and move it across to the new property.

You can switch lenders or get a new mortgage with your current lender.

You can find out how much you can spend on a new property by Speaking to one of our adviser at Mor-Invest to check what you could borrow.

What happens to your mortgage when you sell your home?

You can use the money you get when you sell your home to pay off the full balance of your old mortgage. However, you will usually have to pay:

Exit fees: Most mortgages charge this when you pay them off or move to a new deal.

Early repayment charges: Mortgages with a fixed, tracker or discount interest rate charge a fee for leaving the mortgage before the initial rate ends. This is charged as a percentage of the mortgage amount, so can cost thousands of pounds.

After you have paid off your old mortgage, you can use any money you have left as a deposit on the new property.

They work like normal mortgages but let you buy one or more properties to:

  • Use for your business
  • Rent out as an investment

 

Depending on your business, you could be offered quotes for interest only or repayment mortgages. Some lenders offer interest rolled up mortgages, which you make no payments on until the end of the term.

The loan is secured against the property, and you can get a loan to value of up to 75%. This means you need a deposit or equity of at least 25%. Some let you use equity in another property you own instead of a deposit.

You pay them back monthly over a term of between a month and 30 years. You could borrow between £50,000 and £40 million.

Each lender decides if they can accept your mortgage application based on:

  • Your company’s income, assets and credit record
  • Your personal finances
  • If your profits are enough to meet monthly payments

 

If you plan to rent out the property, lenders may also look at the finances of your tenants.

We will look at your business’ finances to work out which lenders could offer you a mortgage.

Unlike other mortgages, commercial mortgages are not regulated by the FCA.

 

 

If you plan to build your own house, you need a specialist mortgage because most deals can only be used to buy houses that have already been built.

Many larger lenders do not offer them, but several building societies and smaller banks do. This comparison includes every self-build mortgage available in the UK.

If you need help finding the right mortgage, you could contact us at Mor Invest fs for advice.

How do they work?

Self-build mortgages transfer money to you in stages as you build your house. You can usually have money released to:

  • Buy the land
  • Build the foundations
  • Construct the house’s shell
  • Finish the plastering, plumbing and electrical wiring
  • Complete the project and get the home valued

 

When do you get the money?

This depends on whether your mortgage offers:

  • Arrears stage payment, which releases money when you complete each stage of the build and can prove how much it cost. You usually need to find a way to pay for materials and work in the meantime.
  • Advance stage payment, which releases money before you need to pay each bill.

 

How much do they cost?

You usually need a larger deposit if you  want to build your own home. Mortgages come with a loan to value (LTV), which is the percentage of the property’s value they can cover.

Self-build mortgages often have a separate limit on how much you can borrow for:

  • Buying the land (e.g. 75% of the total cost)
  • Your projected costs for building the house (e.g. 85% of the total amount)

 

You usually need to pay at least 15% towards the project yourself, but many deals need an even larger deposit.

The interest rate and any fees that come with the mortgage also affect how much it costs.

Click the link below for Mortgage Calculator.

(Note that this a 3rd party link and you will be departing from the regulatory site of Mor-Invest Ltd. Neither Mor-Invest Ltd. nor Quilter Financial Planning are responsible for the accuracy of the information contained within the linked site.)

MORTGAGE CALCULATOR

NB- Your home may be repossessed if you do not keep up repayment on your mortgage.

Click the link below for Stamp Duty Calculator.

(Note that this a 3rd party link and you will be departing from the regulatory site of Mor-Invest Ltd. Neither Mor-Invest Ltd. nor Quilter Financial Planning are responsible for the accuracy of the information contained within the linked site.)

NB- Your home may be repossessed if you do not keep up repayment on your mortgage.

Click the link below for Mortgage Affordability Calculator. (Note that this a 3rd party link and you will be departing from the regulatory site of Mor-Invest Ltd. Neither Mor-Invest Ltd. nor Quilter Financial Planning are responsible for the accuracy of the information contained within the linked site.)

MORTGAGE AFFORDABILITY CALCULATOR

NB- Your home may be repossessed if you do not keep up repayment on your mortgage.