There are multiple different reasons why someone may look to obtain themselves a second or even at times, a third mortgage.
An example of this right off the bat, is that another mortgage could be used as a means to grow your property portfolio. Alternatively, it can be used to house a family member.
Obtaining a second mortgage can be quite difficult, more so than your first one, as now you’re having to account for two sets of mortgage payments, which could have a knock on your affordability.
If you are unable to afford the costs involved with a second mortgage, the mortgage lender will not accept your application.
As a trusted and dedicated mortgage broker in Sunderland, we’ve seen people apply for a second mortgage for all kinds of different reasons. These include;
If you happen to be over five years into your mortgage term, the chances are that you’ve built yourself up a suitable amount of equity in your home. You can withdraw some of this equity and turn it into cash, through taking out a second mortgage.
What you do with that money is completely your choice, after all, it’s equity you’ve built up in your own home. Some people use it to fund the deposit of another mortgage, whilst others may use it to take their dream holiday. There are no limitations once you’ve withdrawn that equity.
It is worth noting though that releasing equity within your home isn’t always an easy process. Speaking with a specialist mortgage advisor will definitely benefit you along the way. Our advisors have access to a unique and vast selection of second mortgage deals.
No matter if you’re a landlord with experience within the market already or someone who is looking into making their first purchase on an investment property, you’re going to need more than one mortgage to achieve your goals.
Buy to let landlords that have amassed themselves a suitably large portfolio will likely be used to the process of getting more than one mortgage. For those starting out as a landlord, sometimes you need help getting everything sorted properly.
Second mortgages in the form of buy to let work in a similar way to the first mortgage you took out. You still have to meet the mortgage criteria and put down a deposit (typically 15%-25% of the property), as well as passing affordability checks.
Affordability in this case isn’t always down to your own income though, as some lenders will look into what the predicted rental income will be expected and stress test this against their own multiples.
No doubt the cost of your mortgage payments should be sufficiently covered once you have found tenants and they have moved in. Initially though this might prove challenging, so you need to be able to cover the costs until the income starts to flow.
For buy to let mortgage advice in Sunderland, please feel free to speak with our buy to let mortgage experts here at Sunderlandmoneyman.
This sort of process is what is known as a let to buy mortgage. Some homeowners will have an option to get a second mortgage on a newly purchased home, allowing them to rent out their current home and move into a new home for themselves.
Let to buys are of course very similar to buy to lets, it just works a little bit differently. In this case you need to find a tenant for your current property, in order to move out yourself. Landlords may do this if they want to move themselves into a bigger family home.
Our buy to let mortgage advisors in Sunderland also have a lot of experience and knowledge in working with let to buy mortgages, so get in touch if you would like an advisor to help you with a let to buy second mortgage.
If you have any children or other family members that are having some difficulty in getting themselves onto the property ladder, you may have the option to take out a mortgage in your name and allow them move into the it as their new home.
Going down this route will likely land you with a guarantor mortgage.
Another popular option that some people go with is to gift the person in need their deposit. Gifted deposits are crucial to the property market and are always a fond option for helping a loved one find their footing on the property ladder.
As noted in this article, there are various reasons as to why you can be listed on two mortgages. Sometimes it’s something you’ve planned for, but in other cases it can be completely unintentional.
We regularly find through our work as a mortgage broker in Sunderland, that one of the most common reasons for someone taking out a second mortgage is divorce or separation.
The difficult part here is that it can be hard to remove your own or your ex-partner’s name from the mortgage you share. This is once again down to affordability, but also down to both parties having to mutually agree.
Though it may come with challenges, it is not entirely impossible to obtain a mortgage post-divorce or separation. If you are in a similar situation, there may be some mortgage lenders out there who will give a bit of leeway considering your current personal situation.
If you’re named on an existing mortgage for a home you no longer live in, you should look to get your name removed as soon as possible. Having financial ties to someone can sometimes bring your overall credit score down, especially if the other person is bad at managing their finances and getting into arrears regularly.
If you’ve been thinking about taking that step onto the property ladder, you may be wondering whether or not to use the assistance of a mortgage broker in Sunderland. We of course believe that our service is incredibly beneficial, especially for first-time buyers in Sunderland.
Despite this, we felt it appropriate to give a balanced overview of the pros and cons of coming to a mortgage broker in Sunderland, compared to direct to a mortgage lender.
People tend to think that they are more likely to save money by not using the services of a mortgage broker. It can seem a lot more cost-effective to just do everything by yourself.
With that in mind, you may be one of those who prefer going directly to the high street mortgage lender. Another reason why people used to prefer going to the bank directly, was that people felt their bank manager knew their finances inside and out, although this changed when credit scoring was brought into the mix.
There is also truth to the claim that some lenders have additional exclusive mortgage products only for the people who directly obtain a mortgage. The main intention behind such ideas is to attract customers away from the services of a mortgage broker.
Ultimately, it is a good way for them to spread the business. The interesting part is that it is arguably just as enticing to speak with a mortgage broker in Sunderland as well. You’ll find that some mortgage offers can only be obtained through a mortgage broker.
From 2014 onward, lenders were no longer able to sell mortgages to anyone on a non-advised basis. At that time, it was a common occurrence for non-advisors to forcefully advise their bank customers, meaning they’ll have had no benefits from consumer protection. Speaking to a professional mortgage advisor in Sunderland will allow those benefits.
It is also important to remember that taking an appointment with a bank can sometimes take months to try and get yourself booked in for. A mortgage broker in Sunderland is often able to get you booked in within the same week, usually within that same day.
These kinds of issues is why the importance of mortgage brokers has grown and changed the public perception over time. More and more applicants rely on the mortgage brokers than before for help with their mortgage process.
There is now a lot more trust for the mortgage brokers in Sunderland, who are typically able to offer their mortgage advice services within the same day. Our dedicated team are always ready to help you, so Get in Touch and we will put you with an experienced mortgage advisor in Sunderland, as soon as possible.
You might be wondering what exactly causes some of the mortgage applications to be more difficult than many applicants expect them to be. Here are some of examples of this:
In years gone by, it was a lot easier for mortgage lenders to get ahead of their other competitors by laying out more enticing offers than the others have. Times have changed and it’s now more than the deals, it’s the criteria, that differentiates between the lenders.
To make everything easier for you, you should speak with an experienced mortgage broker in Sunderland and see if they have come across a similar situation in the past or not, as they may be able to utilise their knowledge from that to help you through yours.
After undertaking lots research and working very hard, a dedicated mortgage broker will hopefully be able to guide you through your journey and be able to recommend the most suitable mortgage for your personal circumstances.
Even if your mortgage application seems rather simple, it may still be beneficial to use the services of an experienced and knowledgeable mortgage broker, as we will work hard to get the best deal we can for you.
We have a professional and trusted mortgage advice team that will be able to provide guidance on other services such as solicitors. By getting in touch with us, you will also be updated you about the surveys and protection information that will be available to you.
A key feature of our service that we love to shout about, is how we’re more quicker and responsive compared to the other mortgage brokers.
One of the biggest reasons why customers tend to require help, is that everyone nowadays is very busy and needs someone to take the weight off their shoulders, doing the hard work for them.
Our dedicated and loyal mortgage advisors in Sunderland will do everything they can to make sure the process goes smoothly for you.
If you are ready to chat with a dedicated advisor about your mortgage plans, please Get in Touch with a mortgage broker in Sunderland. We are available from early until late, all throughout the week, to help you find the perfect mortgage deal.
To be able to recommend the most appropriate mortgage for you based on the circumstances you’re currently in, it is of vital importance that our mortgage advisors gain a complete understanding of your financial situation. As a mortgage broker in Sunderland, the primary way we believe this can be achieved is by obtaining an up to date copy of your credit report.
We personally would highly recommend using Check My File to do this, as they are able to bring in your data from 4 different credit reference agencies, giving you a more accurate and detailed look at your personal credit profile. It’s especially handy, as in some instances, the data that is held by one agency, may differ to the data from another.
When it comes to sending your credit report by email, the steps necessary will be a bit different depending on what device and email client you are using, e.g., Android, iPhone or Desktop & Gmail, Hotmail or Yahoo, etc.
A member of our dedicated mortgage advice team in Sunderland will review your credit report, before they give you a call to discuss your mortgage plans in further detail.
As a mortgage broker in Sunderland with lots of experience across the industry, we have in-depth knowledge of lenders various criteria. Some of the lenders we work with are specialist lenders. Please take a look at our specialist mortgage advice in Sunderland page for more information on complex cases.
No matter if you are a first time buyer in Sunderland or looking to move home in Sunderland, we will use our knowledge and the information displayed in your credit report to work hard in finding the most appropriate mortgage deal for needs and personal circumstances.
Here are some of the reasons for customers looking to obtain a second mortgage:
If you have a large amount of equity built up in your home and are looking for a second mortgage to release some of the funds to put towards a new home or something else, then your experienced Mortgage Advisors in Sunderland may be able to help.
Usually if customers find they are currently on a lenders standard variable rate, our team are able to shop around and find a more competitive deal, whilst also being able to release capital. A further advance with your current Lender is also a route you could take.
Some customers consider Moving Home in Sunderland, whilst retaining ownership of their existing property with the intent to rent it out. Your second mortgage will be a new residential mortgage. This type of move is known as a Let to Buy and over the years has become a popular option amongst homeowners.
Maybe you are exploring the possibility of helping your children or grandchildren with in finding a spot on the property ladder. Nowadays there are many products that we can run through to make this work.
Is your name currently on another mortgage and you’re looking to purchase a new property to live in? This is something that we come across quite often, especially when factoring in things like divorce or separation and can often help.
Whatever your situation is in wanting to obtain a second mortgage, your experienced Mortgage Broker in Sunderland will be able to search 1000’s of mortgage deals on your behalf and recommend the most suitable product for you based on your personal circumstances.
When you start out looking for a mortgage in Sunderland, you will soon realise that there are lots of different options available, but with our Mortgage Advice in Sunderland, we’ll help you on your way to deciding which is best. Below you will see a list of the most popular types of mortgages available on the market and hopefully. Any questions regarding any of the mortgage options below, then don’t hesitate to contact our brilliant team of Mortgage Advisors in Sunderland.
A fixed-rate mortgage means that your mortgage payments are going to stay the same for a set period. You can set the length of which you want to fix your payments for, typically, this being 2, 3, or 5 years or longer. No matter what happens to inflation, interest rates, or the economy, you know that your mortgage payment, usually your biggest outgoing, will not change.
A tracker mortgage means that your interest rate will track the Bank of England’s base rate. So, in other words, the lender that you are with does not set the rate themselves. You will be paying a percentage above the Bank of England base rate. For example, 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%.
When you take out a repayment mortgage, this means each month you are paying capital and interest combined. Keep up to date with your payments during the full length of the mortgage term. The mortgage balance is guaranteed to get paid off at the end, and the property becomes yours.
A repayment mortgage is the most risk-free way to pay your capital back to the lender, in the early years it is mainly the interest that you are paying and your balance will reduce very slowly especially if you have taken out a 25, 30 or 35-year term. This situation switches in the last ten years or so of your mortgage, where your payments are paying off more capital than interest, and the balance will come down much faster.
While many Buy To Let Mortgages in Sunderland get set up on an interest-only basis, it is much more challenging to get a residential property on an interest-only basis.
It is much less likely for lenders to offer an interest-only product now. However, there are certain circumstances where this can be an option. These include downsizing when you are older or have other investments that you will use to pay the capital back. Lenders are stringent when it comes to offering these products now, and the loan to values are a lot lower than back in the day.
With an offset mortgage, the lender will set you up a savings account to go alongside your mortgage account. For example, let us 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, so in this case, £80,000. An efficient way of managing your money, especially if you are a higher rate taxpayer.
At the start of the Coronavirus pandemic, the Government promised that all borrowers would be allowed a three-month mortgage payment holiday if they needed it. Most lenders followed the Government’s guidelines and did their best to help their borrowers during these hard few months.
We have thought very carefully about what could happen to your mortgage over the next few months and are working closely with our panel of lenders to ensure that if anything changes, we can inform you right away and recommend the best option for you to take so that you still feel secure and comfortable with your mortgage.
Mortgage payment holidays are an agreement entered into with your bank, building society or mortgage lender to defer your monthly mortgage payments for a set period. In this case, 3-months.
It does not mean you never have to pay the amount back, but the interest you defer gets added back onto the loan amount, while your capital balance will not decrease. In other words, your mortgage amount will increase slightly, and you will continue to attract interest on the whole amount.
When you are ready to continue the payments, this could mean that either your monthly payments recalculated at a slightly higher level or your mortgage term increases to some extent.
Most lenders will probably prefer not to extend your mortgage term as this could take you past their standard retirement ages, but the detail on this will follow in due course.
Dependent on your mortgage deal, you may be able to pay off a lump sum later in the year to bring your mortgage back to where it would have been.
Mortgage Payment Holidays are available both for those with residential or Buy-to-let Mortgages in Sunderland, which means landlords also have assistance if rental payments are affected.
The full proposal is in detail below:
• Mortgage lenders will offer an automatic 3-month mortgage payment holiday for customers impacted, directly or indirectly, by COVID-19.
• The mortgage payment holiday will apply to customers who are up to date on their payments, not in arrears, and wanting to self-certify that COVID-19 impacts them.
• Meaning that lenders will not complete an income and expenditure assessment, or evaluation of alternate payment options as ordinarily required under MCOB.
• This proposal will allow lenders to be more responsive to customer needs and offer forbearance in a simple way to customers in an environment where COVID-19 also impacts the operation of collections teams made.
• Customers will be made aware that interest will accrue in the holiday period, and they will need to make up deferred payments in the future.
• Customers who wish to undertake a full assessment of their ability to pay or financial difficulty may still do so.
We would recommend speaking to your Mortgage Advisor in Sunderland. They will asses your financial situation first before looking to defer your payments as your situation may not yet be pressing.
Approaching a Mortgage Broker in Sunderland like us will allow you to explore all of your current mortgage options and could make things feel a lot less stressful.
For a customer, up to date with payments, not in arrears, and impacted by COVID-19:
• The customer would contact the lender and inform them that they are affected by COVID-19.
• The lender would accept these details from the customer and offer an automatic 3-month mortgage payment holiday.
• No evidence will be sought from the customer.
• The lender makes the customer aware that interest will accrue and will be contacted at the end of the three months to complete an assessment of the customer’s circumstances.
• At the end of three months, an arrangement to pay will be agreed with the customer according to their circumstances to recover any shortfall, while ensuring that the mortgage remains affordable and sustainable.
• The lender notifies the customer that if they wished to complete a full assessment now, there might be other forbearance options more suitable to the customer.
In some cases, a mortgage payment holiday can harm your credit score, but most lenders have now said that for matters linked to the virus, they will ensure that this is not the case.
You must ask this question to your lender directly and record the response, including the date and the name of the person you are speaking to avoid confusion later. Different lenders are doing different things.
At first, everything seemed like it would remain the same, and you would still be able to make changes to your mortgages as usual. Leading to a change over in the last couple of days, and lenders have been asking borrowers to avoid making changes while you are within a mortgage holiday period. So, at the moment, they are not allowing mortgages and product transfers.
Borrowers nearing the end of their existing product could get compelled to move on to the higher lenders variable rate, which means that borrowers who act too early could find themselves on a mortgage payment holiday that accrues interest on a costly variable rate.
We would highly recommend speaking to your Mortgage Advisor in Sunderland, and they will determine the best course of action based on your personal and financial situation. If possible, arranging your mortgage transfer first then asking for the holiday would seem to be the most sensible way forward.
At the moment, no Lenders have withdrawn mortgage offers; in fact, some are extending offers past the standard six-month expiration date.
You should not pull out of your purchase unless, for example, you are worried about losing your job as a result of Coronavirus. We are advising everyone to proceed as usual for now and “wait and see” – you are not committed to completing your purchase until contracts get exchanged.
In some cases, lenders can offer you a temporary switch to interest-only to reduce your monthly payments but not to add any further to the loan amount by still servicing the interest payments each month.
It may not be necessary to convert all your mortgage to interest only, and it may be that putting part of the mortgage on this basis could give you the breathing space you need.
People with savings may find that remortgaging onto an offset basis could give them a helping boost they were looking for, and they will be cutting down on their monthly payments while keeping hold of their savings.
For example, someone with a £400,000 loan and £100,000 in savings would only pay interest on £300,000. Meaning their monthly mortgage payments will massively be reduced.
For others, a straight remortgage to another lender, calculating the cost of any early repayment charges, may well be enough to ease the burden or simply extending the term of your mortgage.
If you still have any other questions on mortgage payment holidays or just want general Mortgage Advice in Sunderland, give us a call today. We want to help you and your mortgage journey through these tough few months ahead. Speak to an experienced Mortgage Advisor in Sunderland today.
Statistics provided by UK Finance showed from June 2019 the overhaul numbers of First-Time-Buyers in Sunderland are still increasing. The numbers are matching the numbers back when they were at their highest in 2007, before the credit crunch.
External economic factors such as Brexit has less likely to discourage First Timer Buyers than Home Movers in Sunderland, reasons being Home movers are rarely 100% certain that they ought to move, so when you add in extra factors such as political uncertainty it’s unnatural for them to say, “Let’s just wait and see what happens”.
Things are more apparent for First Time Buyers. The hardest bit if the deposit but if this is available then the choices are clear, they can either:
The number of First Time Buyers has increased by over 130% when reviewing statistics from the past ten years. 95% options are now available and access to Help to Buy Equity Loan Mortgages.
Over half of all homes purchased with a mortgage are by First Time Buyers with the remainder built up from Home Movers and Buy to Let Investors. The last time the first-time buyers had more than 50% of market share was in 1995 when only a small number of Buy to Lets in Sunderland were taking place.
The percentage of first-time buyers has been rising nicely for almost 20 years as the UK’s love affair with the property market stays as strong as ever.
In terms of value, homes in the North East of England are amongst the lowest. The average sits currently just shy of £140,000.
We found that First Time Buyers Value Advice from a Mortgage Broker in Sunderland. It’s not merely about finding the cheapest deal for them, and it’s about being there and helping them every step of the process.
Whether they want the technical language explained, advice on how to make an offer, what protection insurance to buy, what survey to go for, and a hundred other questions answering.
We love helping First Time Buyers achieve their goals, and we’d love to hear from you if you think you’d benefit from a Free Mortgage Consultation to find out more.