{"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

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First Time Buyers \u201cFTBs\u201d<\/h2>\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

  • Fixed or variable rate mortgage<\/li>
  • Interest only or capital repayment<\/li>
  • Initial term of 2, 3 or 5 years<\/li><\/ul>\n\n\n\n

    Both lenders and the government provide FTBs with assistance through innovative mortgage products and initiatives:<\/p>\n\n\n\n

    • Help to Buy mortgages<\/li>
    • Shared ownership<\/li>
    • Mortgage guarantee scheme<\/li>
    • Family springboard\/boost mortgage<\/li>
    • Lender assistance with valuation\/legal fees<\/li><\/ul>\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

      The \u2018second stepper\u2019<\/h2>\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

      The \u2018second stepper\u2019 mortgage<\/h2>\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

      Mortgage options for over-55s<\/h2>\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