{"id":821,"date":"2024-01-29T17:53:32","date_gmt":"2024-01-29T17:53:32","guid":{"rendered":"https:\/\/www.kinnison.finance\/?p=821"},"modified":"2024-01-29T17:53:32","modified_gmt":"2024-01-29T17:53:32","slug":"importance-of-researching-your-mortgage","status":"publish","type":"post","link":"https:\/\/www.kinnison.finance\/importance-of-researching-your-mortgage\/","title":{"rendered":"The importance of researching your mortgage and some factors to take into consideration"},"content":{"rendered":"\n
In the last few months, mortgage interest rates have fallen significantly as speculation grows as to when the Bank of England will begin to reduce the Bank Base Rate. So, whether you are stepping on, up\/down the property ladder or considering purchasing\/refinancing a buy-to-let property, your mortgage is likely to be more affordable than a few months ago.\u00a0 However, careful thought and research needs to be undertaken to ensure the right mortgage product and lender is selected to meet your personal circumstances.<\/strong><\/strong><\/strong><\/strong><\/p>\n\n\n\n <\/p>\n\n\n\n\n\n\n\n <\/p>\n\n\n\n Purchasing your first home is likely to be your single largest financial transaction. It is therefore critical that you consider your mortgage options carefully:<\/p>\n\n\n\n Both lenders and the government provide FTBs with assistance through innovative mortgage products and initiatives:<\/p>\n\n\n\n Whether you are relying on family assistance (e.g. \u2018Bank of Mum and Dad\u2019) or using savings, the size of deposit ( i.e. the sum of money you have to put towards the purchase of your first home) is critical to understanding all the mortgage options available to you.<\/p>\n\n\n\n As a \u2018second stepper\u2019 taking your next step up the property ladder, you have the advantage over FTBs as you would most likely have already been through the mortgage process. However, your personal circumstances may have changed from the time when you applied for your current mortgage; e.g. family circumstances, income, expenses etc. Additionally, the mortgage industry has experienced a significant tightening of regulations over the past decade with a particular focus on how lenders are required to assess your affordability.<\/p>\n\n\n\n If you are \u2018stepping up\u2019 the property ladder, it is highly likely that your new home will cost more than your existing home and potentially require a higher mortgage amount. Like first time buyers, you will need to establish the size of your deposit and potentially agree a \u2018mortgage in principle\u2019 before you start viewing properties. If you decide to keep your existing property, you will need to discuss your current mortgage with your existing lender and potentially transfer it from a residential mortgage to a buy-to-let mortgage. This may require you to re-mortgage to a different lender.<\/p>\n\n\n\n For over-55s who may be considering retirement, \u2018down-sizing\u2019, helping children onto the property ladder or raising additional liquidity for everyday or one-off expenditure, lifetime mortgages have become an important financial planning tool.<\/p>\n\n\n\n A \u2018lifetime mortgage\u2019 is a loan secured against your home \u2013 you retain full legal ownership of the property and usually there are no monthly repayments to make as the loan plus rolled-up interest is repaid when you pass away or go into long-term care. Many lenders offer the flexibility of allowing you to pay part of or all the monthly interest rather than have the interest roll up. Unlike normal mortgages, a \u2018lifetime mortgage\u2019 does not have a fixed end date. The amount of mortgage you will be eligible for will depend on facts such as your age (minimum age of 55), health, value of your home and existing outstanding mortgage.<\/p>\n\n\n\n Lifetime mortgages can provide you with the financial flexibility to:<\/p>\n\n\n\n This is a lifetime mortgage. These are only applicable to those 55 and over, and it could affect eligibility to state means-tested benefits and the inheritance you may leave. To understand the features and risks, ask for a personalised illustration. Equity release includes lifetime mortgages and home reversion schemes. We can advise and arrange lifetime mortgages and will refer to an approved specialist for home reversion schemes.<\/p>\n\n\n\n In the last decade, the introduction of stricter lending regulations and tax changes has forced lenders to tighten their lending criteria, in particular by raising rental cover requirements from 125% to 145% AND using a stress rate much higher than the actual pay rate.<\/p>\n\n\n\n The introduction of a new definition for professional\/portfolio landlords (borrowers who have 4 or more mortgaged buy to lets) requires lenders to carry out additional detailed checks on whether borrowers meet stricter affordability criteria.<\/p>\n\n\n\n Due to rising interest rates during 2023, some landlords have struggled to re-mortgage and\/or expand their portfolio. However, with rates falling in 2024 and rental affordability criteria easing, landlords can start to review existing finance arrangements and consider buying opportunities.<\/p>\n\n\n\n Whether you are a FTB, second stepper or landlord, it may be advisable to ascertain the size of mortgage lenders would potentially be willing to lend to you \u2013 \u2018mortgage in principle\u2019 \u2013 before you start viewing properties. Some lenders may carry out a credit check for an agreement in principle.<\/p>\n\n\n\n You should also understand the maximum loan to value (\u2018LTV\u2019) which the lender is willing to provide. LTV is the amount of mortgage expressed as a percentage of the property value. For example, if your mortgage amount was \u00a385,000 and your property is valued at \u00a3100,000, your loan to value is 85%. Armed with this information and coupled with the size of your deposit, you will be able to establish the value of properties to view. It is important to understand that such a \u2018mortgage in principle\u2019 is an indication and not a formal offer. The actual amount a lender is willing to lend may differ from the \u2018mortgage in principle\u2019 amount.<\/p>\n\n\n\n Once you have found your property and had your offer accepted, this is the time to make a formal application for the mortgage which meets your personal circumstances. It is critical that you receive a formal mortgage offer from the lender before you exchange contracts. <\/p>\n\n\n\n If you are currently looking for a residential mortgage or to refinance your existing mortgage and would like to discuss your personal position, please contact the Kinnison team:<\/p>\n\n\n\n Email: info@kinnison.finance <\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" In the last few months, mortgage interest rates have fallen significantly as speculation grows as to when the Bank of England will begin to reduce the Bank Base Rate. So, whether you are stepping on, up\/down the property ladder or considering purchasing\/refinancing a buy-to-let property, your mortgage is likely to be more affordable than a…<\/p>\nFirst Time Buyers \u201cFTBs\u201d<\/h2>\n\n\n\n
The \u2018second stepper\u2019<\/h2>\n\n\n\n
The \u2018second stepper\u2019 mortgage<\/h2>\n\n\n\n
Mortgage options for over-55s<\/h2>\n\n\n\n
Buy-to-Let Mortgages<\/h2>\n\n\n\n
When to apply for a mortgage<\/h2>\n\n\n\n
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Get in touch<\/h2>\n\n\n\n
Call: 0203 871 2823<\/strong><\/p>\n\n\n\n