Archives February 2019

Remortgage. Are you ready?

Remortgage. Are you ready?

With today’s tumultuous political climate, it is impossible to plan for the future. Or at least very hard. This week I read an article saying how much UK’s economy is going to boom after Brexit and an another, barely a day later, saying how much we will lose in the economy. It just makes me think that no one has a clue. And with the economy, if no one has a clue then that generates a lack of confidence and that is never good.

At Coleshill Mortgage Services we work with people every day helping them remortgage and get a better deal. We wanted to put together a list of things for you to think about or get ready when looking at remortgaging.

  1. Make sure your credit report is as good as it can be.

Sign up to one of the many credit companies, that will help you understand what you need to do to sort out your credit report. It is often very simple things, but they can take time. So looking at making sure your are on the electoral roll, keeping bills in line, making sure your credit card is in a good place (only half of the credit used is often good), having been at your address for a good while, having no defaults on your bill etc. These are just a selection so use a decent company that will give you the right advice. This will be the first thing any lender will look at when you remortgage.

  1. Start looking early.

You can have a remortgage deal in place months before it is to happen. You should be looking around 14-16 weeks before you are thinking of doing so. This gives you time to get all in order and to look at the best deal. Remember this is to potentially save you thousands of pounds so its worth taking your time. Even if you get a deal approved and offered by a lender, there is often an expiry date on the offer so you can have a good think about it.

  1. Avoid fees

Many mortgages have an initial incentive period that means if you remortgage and leave the deal you will incur fee. You will need to check with your lender when this period ends. There is often never a good reason to get a bill this large. Especially if you can wait. Speaking to your lender first may mean you have to wait some time and that can give you

  1. Get a value of your property

Things can change quickly in the property market, they can also move slowly, get an understanding of what your property is worth now. And then work out how much you own of the property. Every time you pay back part of the mortgage it means you own a little more. When you understand how much your property is worth you can then work out a loan to value rate. It’s easy too get this figure – divide what you owe on the mortgage by the value of your property and then multiply the result of that by 100. That’s your LTV.

  1. Try to drop an LTV band.

If your property has gone up in price – doing that action above and working out your LTV, you will realise that your LTV has gone down. This is brilliant as it means when you get a new deal on your mortgage you may have gone down a band in LTV – the lower the band the cheaper the payments on your new mortgage could be. Main pricing LTV bands are as follows – 95%, 90%, 85%, 80%, 75%, 65%, 60%.  If you are close to a lower band it may be a consideration to put in some extra money and get closer to that band. Only if it is affordable.

As always speak to someone you trust regarding all these elements. Getting proper advice will mean you can get the right deal that works for you.

 

Your home may be repossessed if you do not keep up repayments on your mortgage.

100% mortgage. Don’t panic, Don’t panic.

100% mortgage. Don’t panic, Don’t panic.

 

A few months ago we wrote a blog about the bank of mum and dad. We looked at a worrying trend where a huge amount of first time buyers were relying on their mum and dad or other close relatives to provide the cold hard cash for their deposit. With the cost of living just rocketing and wages barely keeping pace, young people are forced to rely on their wealthier family members to get their toe on the property ladder.

Now I hear you ask, what does this have to do with the 100% mortgage. Well all in good time. In the last week it was reported that Lloyds have released a 100% mortgage. So no deposit, the mortgage would cover the full amount of the property. You are not even buying a house, the bank (or lender) is and you are living in it and you are paying rent. Well you will own it after so many years. This was how it was reported on the headlines. 100% MORTGAGE is back!!!!. Very exclamatory.

When you looked into it more you realised the mortgage that was on offer was not quite 100% mortgage. The BBC took a more balanced view on the new mortgage.

“…However, a new mortgage launched by Lloyds, aimed at first-time buyers, actually requires a 10% deposit – but instead the money is put into a three-year fixed savings account by a family member.

Experts say that the deal is competitively priced and may grab the attention of young potential buyers who have the help of the Bank of Mum and Dad.”

Find the full article here

(you are now departing from the regulatory website, Coleshill Mortgage Services or Quilter Group are responsible for the accuracy for the linked site).

The sad thing is that it has come to this. Though this is not a new product, it shows that lenders are looking at any way they can encourage people to take out a mortgage. And that must be relied on the bank of mum and dad.

As always if you are looking to get on the property ladder make sure you speak to someone you trust and get the right advice for your situation. And if you need help then so be it. A lot of people are doing the same.

 

 

Your home may be repossessed if you do not keep up repayments on your mortgage.