A Guide to Offset Mortgages in Lincoln

Offset Mortgage Advice in Lincoln

Overall the popularity that surrounds taking out an offset mortgages has dipped since the rise of that mortgage type during the 1990s, though thankfully for customers who want this, they can still be a great option for home buyers.

They can especially be useful if you believe that you are due to receive a lump sum at any point in the near future, perhaps from say an inheritance.

How can an offset mortgage help?

When your offset mortgage begins, you will have a savings account opened in your name by the mortgage lender, with the aim of that being to run alongside your mortgage and help to pay it off. Rather than garnering any interest, it will instead offset your savings against the balance of your mortgage.

To provide an example of how this might work, let’s say that you had a mortgage that is worth £100,000 and you have saved up £15,000 with your savings account, then you will only pay interest on the £85,000 that is remaining on your balance.

Offset mortgages are considered to be much more flexible options for home buyers. The reason for this, is that until your mortgage has been completely offset, you are able to take out and put in as much into your savings as you see fit.

This provides you with an emergency backup, as you are able to take out funds at any point if you need to do so, though it’s important to note that withdrawing money will increase your balance, thus increasing your overall cost.

One of the positives around offset mortgages, is that it saves interest, as opposed to adding it on, so you won’t be paying any tax on any amount of funds that you put into your savings. Higher rate taxpayers are a big fan of these types of mortgages!

Things You Need to Know About Offset Mortgages

If you are due a lump sum at any point, such as an inheritance through perhaps a family member’s equity release, an offset mortgage can be a really great option. This is because it allows you to store your funds until you want to do something with it, free from interest.

You may also want to put any annual or quarterly bonuses you receive from your job into your savings, if you have no dependance on them. The more that is sitting in your savings, the better off you will be throughout your mortgage.

Thanks to the flexibility of this mortgage, you can freely dip into savings if you need extra funding, whilst leaving some still in to offset against your mortgage. It’s crucial to remember that you will need a substantial amount of money in there, to make an offset mortgage worth it.

An offset mortgage is a great choice for first-time buyers in Lincoln who are planning on overpaying their mortgage throughout their term. Looking ahead to the future, once you have finished your current mortgage period, overpaying could potentially allow for reduce interest rates or monthly payments.

With other mortgages that you could take out, any money that you put towards your mortgage cannot be taken back out once it has been paid. At this point, you may have limited mortgage options. This is certainly not great if you change your mind once you have overpaid or need emergency funds.

Of course an offset mortgage counters this, due to the freedom you have to put in and take out funds. So if you’re looking to overpay on your mortgage, this could also come in really handy.

In Conclusion

Before diving into a mortgage, it is important to consider all of the options you have available. Speaking to a qualified mortgage advisor in Lincoln is a great way to make sure you are on the right path when it comes to your mortgage.

We often find that any customers who opt for an offset mortgage, are more likely to continue with said mortgage, as opposed to remortgaging like other homeowners at the end of their fixed period.

As an open & honest mortgage broker in Lincoln, you will be assigned a dedicated mortgage advisor who will show you the impact of offset mortgages and how it could possibly save you money over the duration of your mortgage term.

For further questions regarding offset mortgages, or if you would like to remortgage in Lincoln, feel free to book online today and take advantage of the free mortgage appointment we offer to all customers, no matter their situation.

Types of Mortgages in Lincoln Explained

As a first time buyer in Lincoln taking on your first ever mortgage process, you will probably want to do a bit of research first. During that research, you will quickly realise the variety of options at your disposal.

Below you will see a list of the most popular types of mortgages available on the market and hopefully, our short MoneymanTV videos will give you a better understanding of what each option has to offer.

If you have any questions regarding any of the below mortgage options, then please do not hesitate to get in touch and we will do our best to help.

What is a Fixed Rate Mortgage?

A fixed-rate mortgage will mean that you will benefit from having consistent mortgage payments for a duration of your choosing. Typically first time buyers in Lincoln will select somewhere between 2 to 5 years.

The reason for this, is if interest rates were to drop below what you’re paying and you’re still tied in for a few more years, you could be paying more than you would need to, without a way to get out early (unless you were to pay a charge).

The good side is that no matter what happens to inflation, interest rates or the economy you know that your mortgage payment, which generally speaking is your biggest outgoing, will stay the same.

What is a Tracker Mortgage?

A tracker mortgage is a type of mortgage wherein the interest rate will follow alongside the Bank of England’s base rate.

So in other words, the mortgage lender that you are with will not be setting the interest rate themselves. Typically you will instead 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 an interest rate of 2% on your mortgage.

These were much more popular back in the mid-2000s, due to the interest rate only being a fraction above the Bank of England base rate.

They aren’t as popular as they used to be, though it is important to remember that it is a variable rate mortgage. This means that if the Bank of England base rate goes up, your mortgage payments will increase.

What is a Repayment Mortgage?

When you take out a repayment mortgage, you will be paying both capital and interest combined on a monthly basis.

So as long as you maintain your monthly payments for the duration of your mortgage term, the mortgage balance is guaranteed to be paid off at the end, with you retaining full ownership of your property.

This is considered to be the most risk-free way to pay your capital back to the lender.

Early into your mortgage, 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 works differently in the last ten years or so of your mortgage in Lincoln, where your payments are paying off more capital than interest, and the balance will come down much quicker than it otherwise would’ve.

What is an Interest Only Mortgage?

Whilst you will find that a lot of buy to let mortgages are set up on an interest-only basis, it is much more difficult to get a residential property on this type of mortgage in Lincoln.

Back in the ’80s and 90s interest-only mortgages were a lot more prevalent. As the name suggests, you would only be paying back the interest per month, which creates lower monthly repayments.

The idea was that you would take out a separate investment vehicle, such as an endowment policy or pension, in order for you to pay the balance back at the end of the mortgage term.

Whether or not there is going to be enough money to pay the balance of your capital will depend on the performance of your investment vehicle.

During the 00s some of these investments didn’t perform as well as people may have expected them to and some borrowers were left with a shortfall.

It is much less likely for lenders to offer an interest-only product to a residential purchaser nowadays, however, there are certain circumstances where this can be an option.

For example, if you are going to downsize when you are older or have other investments what you will use to pay the capital back, an interest-only mortgage may be viable for you.

Mortgage lenders are very strict when it comes to offering these products now and the loan-to-values are a lot lower than they were in years gone by.

What is an Offset Mortgage?

With an offset mortgage, the lender will set you up a savings account that will be left to run alongside your mortgage account.

How this works is that let’s say you have a mortgage balance of £100,000 and you were to deposit £20,000 into that savings account. You would actually only pay interest on the difference, so in this case £80,000.

This could actually end up being quite an efficient way of managing your money, especially if you are a higher rate taxpayer.

It is also very useful if you are looking at reducing your mortgage term, because your mortgage term will shrink as the money sits within your savings account.

Importantly, if you remove any funds from that savings account (which you are allowed to do at any point), your balance will go back up.

What this means, is if you deposited that £20,000, then paid off a further £5,000, bringing it down to £75,000 left to pay, then you drew out £15,000 for something, your balance would go all the way back up to £90,000, no matter what you have paid back.

This mortgage option was popular in the late 90s and early 00s, originally coming from Australia and becoming very popular in the UK when introduced by mortgage lenders.

Currently, however, this is not a very popular mortgage option. This could arguably be down to people not saving up as much money anymore. That being said, in the right circumstances, this could be a great option for you.

Costs of Buying a Home in Lincoln

One of the more frequently encountered questions we hear from prospective first time buyers in Lincoln, is them wondering how much their mortgage process is going to cost them.

To answer this, we have compiled a short list of all the fees you can expect to pay when you are looking to purchase a new home, and when they will become payable.

Estate Agency Fees

This will only apply if you are selling your home. With a surge in popularity of online estate agencies, you can be looking at the mid-to-low hundreds for a standard website listing.

That being said, for a more localised service, you could be looking at a fee around 1-2% of the property price.

Valuation Fees

Your mortgage lender will need you to have a valuation carried out on the property you are purchasing to ensure that the property is worth the amount you are looking to borrow from them.

Prices for a property survey can vary anywhere from nowhere (for a basic valuation with some lenders) up to several hundred pounds for a much more in-depth Home Buyers’ Report, maybe even more than that for a Full Building Survey.

The key to working around the cost, is that you always have an element of choice in the level of detail your survey goes into, with your decision depending on the age and property type, as well as any concerns you may have.

Mortgage Arrangement Fees

Sometimes you may have a product with a cheaper rate, but the benefit can be outweighed by the payable arrangement fee to the mortgage lender.

This cost doesn’t exist with every mortgage lender, so you may not have to pay anything at all, though in some cases it could be upwards of 3 figures, depending on the mortgage lender in question.

You may find that these costs can be paid upfront, though you may also be able to add these onto the balance of your mortgage. It is worth noting though, that this would mean incurring further interest charges.

As a team of expert mortgage advisors in Lincoln, helping with first time buyers and people moving home in Lincoln alike, we are able to compare deals for you in order to find a suitable one for your needs.

Solicitor’s Fees

You will need to hire the services of a qualified solicitor. The cost of this service can be quoted very differently depending on the firm you are speaking to. An estimation for a straight forward purchase with a local company is likely within the mid-hundreds.

You will need to give the property address, whether it’s leasehold or freehold and how much you are purchasing it for, in order to receive accurate quotations.

The key points to cover when asking for a quote are:

• Ensure the firm includes VAT.
• Ensure the firm includes the cost of any “disbursements.” These are fees such as Land Registry Fees and Local Authority Search Fees.
• Is your solicitor on your mortgage lenders panel?

Stamp Duty Fees

In addition to the costs and disbursements involved in paying your solicitor, depending on your circumstances, you may also be required to pay this tax which the solicitor collects on completion of the property purchase.

This doesn’t apply to everyone. The government have been known to change the criteria on Stamp Duty, with the latest change being in favour of first time buyers in Lincoln. The latest Stamp Duty updates can be found here.

Mortgage Broker Fees

A mortgage broker in Lincoln will typically charge for their service. The cost of this will vary from company to company.

In our case, your dedicated mortgage advisor in Lincoln will discuss this in more detail with you during your free initial mortgage appointment.

We would definitely recommend choosing a local company such as ourselves, rather than a big organisation. They are more likely only to charge on completion, as opposed to any application fees and additional costs that could be incurred.

Moving/Removal Fees

Of course if you are moving home in Lincoln, the cost of doing so in regard to the actual moving aspect, can be quite costly. This will depend on the level of service you are looking for.

Hiring your own van and doing the work yourself can be quite cheap. Opting for a local man with a van can be only slightly more than hiring your own van. A professional van service can be in the high hundreds, early thousands.

To further discuss the costs involved in buying a home, including anything we may have missed, book your free mortgage appointment today. A trusted mortgage advisor in Lincoln will be more than happy to discuss this with you.

The Top 5 Mortgage Hurdles in Lincoln

Guide to Mortgage Hurdles | Mortage Advisor in Lincoln

Every now and again we encounter hurdles that our customers are faced with, whether they are a first time buyer in Lincoln or looking to remortgage in Lincoln.

Though these potential qualms can lead to some slight disruptions in the process, perhaps halting any further action until they’re ironed out, the process doesn’t necessarily need to end there.

In utilising the experience of a trusted and knowledgeable mortgage broker in Lincoln, you have the best possible chance of overcoming these hurdles, hopefully being able to once again proceed with your mortgage goals.

Below we have put together a list of the 5 most commonly encountered hurdles we have faced, when either helping customers to buy their property or remortgage their home.

Divorce/Separation

When relationships come to an end, it can be awkward enough making arrangements between you, without having to factor in a mortgage as well.

If you made any joint financial commitments during your time together, such as your mortgage, you need to cut these ties as quickly as you can, to avoid running into any trouble.

Customers regularly ask us the following 3 questions when it comes to divorce and separation.

1. How can I remove my ex’s name from my mortgage?
2. How do I remove my name from my ex’s mortgage?
3. Can I have 2 mortgages?

Removing your own name or your ex’s name is imperative, as failing to do so could see your credit score drop if you move out and they handle their finances poorly.

The key to achieving this is to prove affordability, as the mortgage lender will be hesitant to lend to one name, when they previously had the security of two names. If you can afford it on your own and your ex agrees to leave the mortgage, it should theoretically be smooth sailing.

Affordability is also a factor in whether or not you can have 2 mortgages, as you will need to have enough income to live, but also afford two different mortgage payments.

The best way to determine your affordability is to speak with an experienced mortgage advisor in Lincoln. We have spoken to many customers in situations like these, so will do our best to help you overcome this issue.

Childcare Fees

In our experience as providers of mortgage advice in Lincoln, we find that families are typically not turned down for a mortgage because of childcare costs, though you may be offered a lower mortgage amount.

The reason for this is because with parents often working and forking out for childcare, their outgoings can often be in the hundreds of pounds on a monthly basis.

Many mortgage lenders would consider this type of cost as an outgoing, much as they would for a car loan or hire purchase agreement.

Even taking away the element of nursery fees that a parent may pay, parents are still generally offered less of a mortgage amount than their contemporaries, who perhaps have no children of their own running up costs.

The good news, however, is that if you have any childcare costs regularly going out, you may be in receipt of tax credits. There are mortgage lenders out there who will bear this in mind, along with child benefit too.

There are other mortgage lenders out there with an alternative approach, not treating childcare costs as a specific outgoing and relying more so on Office of National statistics data for typical outgoings and this often leads to a higher maximum mortgage amount.

New Job

Usually if someone is starting a new job, they will be in receipt of a bigger salary, being able to put their additional income towards a new or existing mortgage.

That being said, if there have been any gaps in employment, a new job can present itself as more of a problem than a blessing for some mortgage lenders out there.

Luckily there are a selection of mortgage lenders out there who will be able to work with a newly signed employment contract, even if you are only a month into your job or are yet to start. Probationary periods are usually also okay.

Benefit Income

Benefit income and how much of it can be assessed will be entirely dependant on the mortgage lender, as many of them take different views towards this type of income.

On a positive note though for customers with this type of income, benefits such as child tax credit, working tax credits, disability benefits, pension income can usually be taken into account by a mortgage lender.

It is in situations like these where speaking to a reputable and experienced mortgage broker in Lincoln will be of benefit to you, as they will be able to take a look at your case, review your circumstances and look to find you a mortgage lender where you are more likely to achieve mortgage success.

Evidencing your Deposit

For any type of purchase, all mortgage lenders and mortgage brokers alike will be required to evidence the source of all of the borrowers’ (the person buying a house and/or looking to take out a mortgage) deposit funds.

This is done in order to satisfy UK Anti-Money Laundering Legislation, which is incredibly strict and designed to protect against fraud. Additionally, your solicitor and estate agent may ask for evidence of your deposit.

It’s the belief of our team, that this is often one of the most complicated parts of the mortgage application process.

Whether you have put down a deposit from savings, premium bonds, the sale of another property, gifted from a family member or friend, from overseas family, or from taking out a personal loan, you are required to have the paper audit trail to show exactly where these funds came from.

Book a Free Mortgage Appointment

In order to be best prepared for your mortgage in Lincoln and to reduce the risk of potential hurdles, it is recommended that you speak with a mortgage advisor in Lincoln.

They will be able to best advise on how to handle your situation and will search through 1000s of mortgage deals to match you up with the most appropriate one.

Book a free mortgage appointment today and get started on your mortgage journey.

Please note that the above information is for reference purposes only and is not to be viewed as personal financial or mortgage advice.

Do Gambling Transactions Look Bad on My Bank Statements?

Why does the lender need my bank statements? 

Whatever the mortgage route that you choose to take, you will always be asked to provide a copy of your bank statements. Whether you’re a First Time Buyer in Lincoln, looking at Moving Home to Lincoln, or wanting to know your Remortgage Options, this will never change. Furthermore, they won’t just ask for your bank statements, they’ll ask for other pieces of evidence to support your mortgage affordability, and calculate the maximum amount you can borrow for a mortgage.

There are multiple different reasons why your lender will want to see your bank statements. They need to know whether you can afford a mortgage or not, make sure that you’re reliable, and know if you’re someone who manages their finances responsibly.

Planning your mortgage journey is essential. As a mortgage broker in Lincoln, we always recommend that applicants think about their bank statements and what’s going to show up on them a few months before their application. When a lender is looking at your bank statements, one of the main things that they will look for is gambling transactions, and here’s why.

What has it got to do with the lender whether l gamble or not?

We are not saying that it’s illegal to gamble during the upcoming months of your application, however, lenders do seem to judge applicants less favourably if they can see large amounts of gambling transactions on your bank statements.

Spending a little bit here and there on your gambling app won’t make a huge difference to your mortgage application. It can start to impact your application when you are consistently gambling and putting in large amounts of money each time. The number one rule is to always remember to ‘gamble responsibly’.

A mortgage broker in Lincoln like us, nor a lender/building society can tell you how to live your life. We can give you advice though. All we can ask of you is to be careful as lenders do have a duty to lend responsibly. 

Lenders need to prove to their regulators that they’re lending to responsible applicants. If you’re a frequent gambler and losing out on money every so often, they may not think that you fit into the ‘reliable category’. They want people to take good care of their finances. Would you lend to someone who is a frequent gambler or someone who hardly gambles?

Will gambling affect my chances of getting a mortgage?  

Moreover, infrequent gambling transactions are unlikely to your ability to get a mortgage. It’s all down to the size of the transactions and how frequent they are.

A big factor is how these transactions affect your overall account balance. Does gambling result in you dipping into your overdraft? Are you borrowing money to gamble/gambling money that you don’t have?

Acting irresponsibly with your money during the lead up to your mortgage application may put off a lender. Lenders notice gambling transactions straight away.

What will lenders be looking for on my bank statements? 

It’s not just gambling transactions that lenders will look for on your bank statements. Here are a couple more things that they’ll be looking for:

• Loan repayments
• Exceeding into your overdraft
• Other current accounts
• Credit cards
• Recurring payments

They need to be certain that they’re lending to a reliable applicant. From monitoring your accounts to asking you questions about your transactions, lenders need to know that they can trust you.

On the contrary, if you do fall into your overdraft now and again, it shouldn’t cause too much detrimental effect on your mortgage application. When you are always dipping into your overdraft or struggling to get out of it, that’s when it may hurt your mortgage application.

What can I do to show the lender I am reliable? 

Every lender will look for someone who is reliable and sensible. Get ahead of the game, plan your mortgage application nice and early in the process.

Since you’ll be asked to provide bank statements (typically 3 months’ worth), you could make them appear the best that they can. Ensure that these bank statements make you look reliable. A way to enforce this could be to reduce gambling and outgoings for these three months.

If you gamble regularly, it could be an idea to stop for a little while. There are usually spending limits on betting apps; this could be something to look into. As well as helping your mortgage application, this may also be good for your mental health. 

Get in touch with a mortgage broker in Lincoln

Our job as a mortgage broker in Lincoln is to hold your hand through the entire mortgage process. We will be with you from the very start! Firstly, we’ll take a look at your evidential documents with you, making sure that you are presenting yourself in the best way possible in front of a lender.

Our mortgage advisors in Lincoln are available 7 days a week, so don’t hesitate to book your free mortgage appointment today. They cannot wait to hear from you.

A Guide to Remortgages in Lincoln: Top Reasons to Consider

Remortgage Advice in Lincoln

Buying a home is likely to be the biggest purchase you’ll ever make, and a mortgage will be your largest debt. Nevertheless, your mortgage journey will have its ups and downs, but you will end up with one potential outcome once your term ends.

Either you will have a home to settle down in, a property that you can use as leverage to get a better property, or an investment to help boost your income. You will reach a point where your term is coming to a close, and you need to consider your options.

While some look to sell their home and upsize/downsize into a new property. Others may sell their portfolio to the tenant or another buyer to look for alternative ventures. However, we often find that people decide to Remortgage their property instead.

What is a remortgage?

Remortgaging means switching your current mortgage deal to another mortgage deal. You can choose to remortgage with either your existing lender or a different one. Your new mortgage will then replace your old one.

Utilising over 20 years working in the mortgage industry, the “Moneyman” himself, Malcolm Davidson, put together a helpful Remortgage guide for those looking at what they can do next when their term is ending.

Remortgage for Better Interest Rates

Generally speaking, your mortgage deal will last around 2-5 years and feature low and potentially discounted fixed rates. Although, you may find yourself placed onto a tracker mortgage, which will follow along with the Bank of England’s base rate.

A standard variable rate (SVR) is an interest rate set by your lender. It is the default interest rate that you move onto when their initial deal ends. If you choose not to remortgage, you will automatically move onto your lender’s SVR.

In most cases, the SVR can be considerably higher than the interest rate you were previously paying, so your monthly repayments will rise. Because it is a variable rate, your lender can also change the SVR at any time.

Compared to a tracker mortgage, a Standard Variable Rate will not follow the Bank of England’s base rate.

Remortgage for Home Improvements

Having adjusted to being a homeowner for several years, you might feel like something needs changing. Some might want an additional room or more living space, a new kitchen, an office to work from home, or even a loft conversion.

Rather than find a bigger home to move into, many homeowners preferably look at releasing their equity with a Remortgage to cover the costs of home improvements.

Once you have obtained planning permission and funding/managing, it can be a pretty stressful experience. However, most homeowners would agree that it’s a lot more rewarding at the end than it would be trying to get a new property and looking to move elsewhere.

Remortgaging for home improvements has many benefits, as opening up lots of space within the property and having a high-performance home is likely to increase the property’s value. Which can help if you ever decide you want to sell up or turn it into a rental property.

Remortgage for Changes to Your Term

Sometimes some homeowners look to Remortgage in Lincoln to gain access to a better mortgage term, whether this is achievable by decreasing the length of the term or switching to a more manageable mortgage product.

By reducing the length of your term, you are cutting short on how long you pay back your mortgage so you aren’t tied down. However, this means that your monthly repayments will be higher.

The longer you set your term for, the lower your payments will be.

In some cases, homeowners choose to take out a more flexible mortgage term when looking to Remortgage as a means to gain the benefits they may have for doing so.

For example, you may be able to overpay with this mortgage, leading to your mortgage paid off a lot quicker and being able to take the same mortgage and rates with you across to another property if you ever do decide to relocate.

Some felt like a flexible mortgage sounds more suitable, though they tend to be tracker mortgages, which, as we have stated before, will follow the Bank of England base rate.

This means your payments could vary depending on interest.

Remortgage to Release Equity

Everyone will have some amount of equity existing within their property. You can work out the amount by looking at the difference between what’s left on the mortgage and the properties current value.

Most homeowners choose to use the equity to fund home improvements. However, you can use the money for other things. Some choose to use their equity to cover costs, go on holiday, pay off an interest-only mortgage, or give them some additional spending money.

We tend to see Buy to Let landlords using a remortgage to release equity to cover their deposit for buying another property to expand their portfolio.

Equity Release in Lincoln is something that homeowners who are aged 55+, with a home that is valued at least £70,000, may be able to use. Explore your options by getting in touch with an expert later life mortgage advisor who can go into more detail about this.

Remortgage to Consolidate Debt

On the subject of Equity Release, we also find that many people will pay off any unsecured debts they may have gained over time.

Debt Consolidation may look like a straightforward process, but there are many factors in the amount you owe, how much the property is worth and the state of your credit rating, thus limiting the amount you can borrow.

To pay off any previous mortgage and debts, you need to borrow a much higher amount than your mortgage, making your monthly repayments much higher. Though it isn’t great, at least you know there are some options should these problems arise.

If you have a ruined credit rating, there may be options out there for you, and you are best speaking with a Specialist Mortgage Advisor in Lincoln before you go ahead with these. But keep in mind even talking to a Mortgage Advisor, you are still not guaranteed to get a mortgage.

We always recommend to all that you get professional Mortgage Advice before you look to consolidate and secure any debts against your home.

Speak to a Mortgage Advisor in Lincoln today

If your mortgage term is coming to an end and you would like to know your Remortgage options, get in touch to speak with one of our Mortgage Advisors in Lincoln and book yourself in for a free mortgage appointment.

We will take a look at your situation and look at your best options to see the next step of your mortgage journey. We aim to ensure that your mortgage process this time around is a lot smoother and quicker than previously.

Can You Have Two Mortgages in Lincoln?

Mortgage Advice for Homeowners in Need of Multiple Mortgages

Can I Have Multiple Mortgage? | MoneymanTV 

There are multiple reasons why some homeowners in Lincoln may look to obtain a second mortgage. One example of this would be if you are looking to expand your property portfolio and you need to obtain a mortgage to do this.

Alternatively, you may find that you need to take out a second mortgage if you have a family member who is unable to qualify for a mortgage themselves, obtaining a mortgage in your name and allowing them to live in the property.

If the lender can see that you cannot afford the costs involved with a second mortgage, then your application will be denied.

Why would I want a second mortgage?

As a trusted Mortgage Broker in Lincoln, we have seen people apply for a second mortgage for all kinds of different reasons. Here are a few reasons to consider one.

Raise Money

If you are over five years into your mortgage term, then by now, you should have built yourself up a reasonable amount of equity in your home.

This situation is known as a further advance. A further advance is when you borrow more from your current lender to fund something like home improvements or a second mortgage.

What you do with that money is completely your choice, after all, it’s the equity you have 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.

The amount that you can borrow from them will depend on the amount of equity in your property. Your lender will need strong evidence to prove that you can afford both mortgages. Our mortgage advisors in Lincoln can access competitive second mortgage deals and options through our large panel of lenders. 

Rent Out a New Property (Buy to Let)

Whether you are a landlord with experience within the market already or someone new looking into making their first investment on a property, you will need more than one mortgage to achieve your goals.

Buy to let landlords will likely use a suitably extensive portfolio to the process of getting more than one mortgage. For those starting as a landlord, sometimes you need Mortgage Advice in Lincoln to make sure everything gets sorted.

Second mortgages work similarly to other mortgages. You still need to put down a deposit (usually around 15%-25% of the property) and pass the lenders’ affordability checks. Affordability does not always come down to your income, and some lenders will look into the predicted rental income.

No doubt, once the landlord has found tenants and they have moved in, the costs of your mortgage payments should be sufficiently covered. Initially, though this might prove challenging, you need to cover the expenses until the income starts to flow.

For Buy to Let Mortgage Advice in Lincoln, please feel free to book yourself in for a free mortgage appointment to speak with one of our Mortgage Advisors here at Lincolnmoneyman.

Rent Out an Existing Home to Purchase a New One (Let to Buy)

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 into a bigger family home.

Our buy to let Mortgage Advisors in Lincoln 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.

Purchase a Home For Your Children/Family Member

If you have any children or other family members who are having some difficulty getting themselves onto the property ladder, you may have the option to take out a mortgage in your name and allow them to move into 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.

Are you named on an existing mortgage and want to buy a new home?

There are various reasons 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.

Through our work as a mortgage broker in Lincoln, we regularly find that one of the most common reasons for someone taking out a second mortgage is divorce or separation.

The tricky part here is that it can be hard to remove your own or your ex-partner’s name from the mortgage you share. Once again, this is down to affordability and to both parties having to agree mutually. Though it may come with challenges, obtaining a mortgage post-divorce or separation is not entirely impossible.

If you have your name on an existing mortgage for a home you no longer live in, we recommend you look at getting your name removed sooner rather than later.

Having any financial ties to someone may lower your overall credit score, especially if the other person is terrible at managing their finances and getting into arrears regularly.

Newly Qualified Teachers Mortgage Advice in Lincoln

Can newly qualified teachers get a mortgage in Lincoln?

Congratulations! You have passed all the necessary exams and are now a newly qualified teacher. If you haven’t already found a suitable teaching position, you now need to start searching to gain some experience.

As a Mortgage Broker in Lincoln, we find that newly qualified teachers are First Time Buyers, however, If your new teaching position requires you to Move Home in Lincoln we can help you with that too.

If you are a First Time Buyer in Lincoln, you’ll be needing a new home to start a life in. Once here, you’ll be trying to balance the struggle of homeownership whilst finding comfort within your newfound role in the education system. This isn’t something you’ll be alone in, as we’ve dealt with many customers who have felt the same way.

How a Mortgage Advisor in Lincoln Could Help

Hopefully, with the help of a dedicated Mortgage Advisor in Lincoln, your process will go a lot smoother and quicker, reducing your stress.

The process of finding a lender who will be willing to offer a mortgage to newly qualified teachers can prove to be a little challenging. This is due to having little to no work history or being on a temporary contract.

Even though this is the case, you can worry less knowing that you may still be able to obtain a mortgage as a newly qualified teacher.

Some lenders may even offer good deals with those working within the teaching industry. The key to this is finding the best lender for your personal and professional circumstances.

This is usually the tricky part. By getting the help of a Mortgage Advisor in Lincoln, you will be working with someone who can search thousands of deals and match you to the suitable lender’s criteria.

What are my mortgage options as a NQT?

You won’t fit into every lender’s criteria. Typically the main types of mortgage available for newly qualified teachers usually include:

• Help to Buy Mortgages in Lincoln
• Shared Ownership Mortgages
• Variable-Rate Mortgages
• Fixed-Rate Mortgages
  

Here are some things that lenders may consider during your process:

• No previous employment history is required.
• A 12-month first post-contract can sometimes be treated the same as a permanent role.
• Mortgages are available up to one month before starting the first contract (so you can apply in August, just as an example).
• Up to a 95% loan to value.

Speak to a Mortgage Broker in Lincoln

Our team of Mortgage Advisors in Lincoln have a lot of experience working in this industry, helping various people with the situations they are in relating to their mortgage.

During your process, you will find there are lots of different benefits to using a Mortgage Broker in Lincoln.

To take a look at your mortgage options, get in touch, and our team will take some details from you to decide whether or not you have the possibility of obtaining a mortgage suitable to your personal and financial circumstances.

Buying a Property with a Friend or Partner in Lincoln?

Joint Property Mortgage Advice in Lincoln

Even though there have been wage increases over the years, property inflation has had an effect on First Time Buyers in Lincoln affording current property prices. As a countermeasure, applicants may have the option of buying with someone else, if it is appropriate to do so. Lenders can take into account the two incomes when calculating your maximum mortgage amount, which may increase your chances of being offered a mortgage.

Even though it’s beneficial because you have someone to share costs with, it’s not as straightforward as you think. You can’t just move in with your partner, friend, or family member that easily.

Below are some questions that we get asked regularly as a Mortgage Broker in Lincoln, when it comes to applicants looking to move into a property with someone else:

How many people can jointly own a property?

Lenders are known to allow up to four people to jointly co-own a property. You have to remember that the more people that co-own a property, the likelihood of someone backing out can increase. In the case where one of the borrowers drops out of contributing towards mortgage payments, any joint owners will have a legal right to remain inside the property, except if a court rules otherwise. This is why you need to be sure about who you are buying with.

There is an option to increase your mortgage at a later date if you prefer, however, all borrowers will need to agree. Therefore, you need to think about your future as well as establish how long you are looking to stay within the property.

Joint Tenancy or Tenancy in Common?

Joint tenancy is an option we commonly see married couples or applicants go for. This means that in the unfortunate case where either applicant passes away, the property’s ownership would pass on to the other owner.

In the future, if you decide to remortgage or sell the property, both parties need to agree to the decisions before you proceed with anything.

If the applicants are relatives or friends that have bought together, ‘Tenants in Common’ is a potential option to go for. This is when you both equally own the property, however, you aren’t obliged to do so in shares. This circumstance can occur when one party is making a larger financial input than the other. If you are a ‘Tenant in Common’, you can act independently. For instance, you are allowed to sell or give away your share of the property to someone else.

What happens if one party stops making mortgage payments?

It’s required that all borrowers meet their mortgage payment when they sign on for a joint mortgage. In the case where one party decides to stop paying, the other individuals on the joint mortgage will have to pay in order to make up the shortfall and prevent the mortgage from falling into arrears. These arrears can become a risk of you not getting another mortgage in the future.

The best way to think of it is that you don’t own 50% of the property, you own 100% jointly.

How do I remove my ex-partner from my mortgage?

It can be a challenge to remove a person from a mortgage. Lenders will need to know that you will be able to afford mortgage payments on your own before allowing you to remove a name. As you can see, making changes to a huge financial commitment at a later date is not as simple as it sounds.

Furthermore, proving to your lender that you have been consistent with your payments since your ex has moved out doesn’t always mean that they will agree to your request to put the mortgage into your sole name. Lenders prefer having multiple incomes on the mortgage to reduce the chances of arrears.

As well as this, lenders will carry out an affordability assessment before anything is allowed to go ahead. This is where they assess your personal and financial situation to decide if you will be able to maintain your payments. This assessment is also done at the point of purchase. 

Get in touch with a mortgage advisor in Lincoln if your request is declined by your lender, as they may be able to help. As a mortgage broker in Lincoln, we will work hard to find you a lender that will suit your circumstances. In some cases, seeking Specialist Mortgage Advice in Lincoln could be very beneficial, especially in complex situations.

Talking to a family member to see if they can support and help you out might be a good idea. They could help by taking your ex’s place with your mortgage or gifting you a lump sum to reduce the amount owed.

How do I remove my name from my ex-partner’s mortgage?

In the instance where you and your partner split up and you are the person to leave the property, it’s still your responsibility to pay your part of the mortgage despite you and your ex agreeing that they will make the payments.

Removing your name off a mortgage is just like removing an ex off a mortgage. Therefore, your name can be removed only if the lender can be sure that your ex can afford the payments on their own. Again, they will perform an affordability assessment to check this.

You need to watch your credit report if you are sending your partner money each month. This ensures they are paying the mortgage as the risk of the payment defaulting could affect your score.

If you plan on moving home into another property and need a new mortgage, but you are still tied into the joint mortgage, your commitments will be taken into account. This means that lenders may unfortunately not lend as much as you would prefer.

People’s circumstances change all the time, which is why buying a property with anyone is always a risk. That’s why it’s good to keep an open mind when entering the home buying world by accepting that things may change unexpectedly, but understanding there is usually a way to work around them. Get mortgage advice in Lincoln if you are in a difficult situation with your joint mortgage.

Help to Buy Mortgage Schemes

Help to Buy Mortgage Advice in Lincoln

Following on from the infamous UK credit crunch in 2007-08, the government needed a way to try and bring some life back to the mortgage market.

In order for them to achieve this, they set about introducing new ways to help first time buyers get onto the property ladder. They called these Help to Buy Schemes.

There are a large variety of different Help to Buy Schemes that are available out there to customers. You may find that whilst you match with some of them, you also may not match with others.

Here is a list we have compiled, summarising each of the Help to Buy Schemes and a bonus scheme we feel would be beneficial to some customers out there.

Help to Buy Shared Ownership Scheme

The Help to Buy Shared Ownership Scheme was brought into the mortgage world with the intention of allowing applicants to purchase a percentage of a property and then pay off the rest of the cost as monthly rent.

For the most part, the percentage of the property that is owned tends to be between 25-75%, though this can differ.

The percentage that is left over will more than likely be owned by the local housing association. If you come into more money at a later date, you can increase the percentage of which you own.

Your payments will be a combination of both your mortgage payments plus your rent. This means you are more or less paying 100% of the ground rent and service charge on your home.

Even if your share is the minimum amount, this is still the case.

Help to Buy Armed Forces Scheme

The Armed Forces Help to Buy Scheme was brought forward in 2014 coming hot off the heels of the success that the Help to Buy Equity Loan Scheme had achieved.

This scheme worked in a similar way to its predecessor, though solely targets members of the Armed Forces.

If you are eligible for the criteria of this scheme, it could be quite the difference maker in your mortgage goals, especially as of 1 January 2023, The Forces Help to Buy Scheme will become an enduring policy, ensuring its availability to all service personnel now and in the future. 

We sincerely hope that this mortgage scheme stays around, as the Help to Buy Armed Forces Scheme is a massive help to existing members of the Armed Forces who need a boost to get onto the property ladder.

Bonus: Lifetime ISA

The Lifetime ISA is often a scheme left out of the conversation. It’s not everybody’s cup of tea, though it is handy to keep yourself aware of its existence, as it can help you secure your dream home as a first time buyer in Lincoln.

The Lifetime ISA is basically a fancy savings account where your money can grow free of tax. The government provides a nice little boost to your savings, giving you an extra 25%.

This means that if you are able to meet the £4,000 maximum amount, you will receive a pretty handy bonus sum of £1,000.

There is a catch of course, and it’s that you will have to pass specific criteria in order to utilise this scheme. You can find more information about this scheme on the Lifetime ISA website.