Typically speaking if you are a homeowner and you do not wish to sell your home (and you are also on a fixed period), you will most likely look to remortgage in Bristol around 3 months before your initial fixed period is set to conclude.
Whilst this is technically before it does actually end, it is not considered remortgaging early, as your remortgage process will usually take that length of time to complete. It’s not like you are getting everything finalised that same day!
Though this is commonplace for many, there are some that may want to remortgage in Bristol a little earlier than this, perhaps 6 months or so before that deal is due to come to its end, which is also acceptable.
So, can I remortgage early in Bristol? Well yes, you are able to do this. There is nothing to legally stop you from taking out a remortgage. That being said, you shouldn’t always necessarily remortgage, especially without remortgage advice in Bristol.
You will generally have a choice of 3 different mortgage types when the time comes to remortgage in Bristol. The most popular of these is a fixed rate mortgage, with the others being discount rate mortgages and tracker mortgages.
Tracker mortgages will follow along with the Bank of England base rate. This means if their base rate is low, interest rates are low. If it’s high, interest is high. They are not fixed because of the way they work, though you can sometimes get “collared” rates, meaning they don’t go below a specific figure.
Discount rate mortgages are a version of the variable rate mortgage. They will generally be offered to you by your mortgage lender, as a discount of the standard variable rate mortgage that they already offer.
Fixed-rate mortgages are no doubt the most popular of these options. They allow you to fix in to a specific interest rate that exists at the time, for however many years you want to fix in for (typically 2-5 years).
Whilst the interest rates could go down and leave you with more to pay than you would otherwise need to, you are more likely to benefit from a fixed-rate, as rates will most likely go up.
Homeowners may wish to take out a remortgage in Bristol for all kinds of reasons. This can be to remortgage onto a better rate, to fund some of your home improvements, to consolidate some debts and more.
This is something you are able to do before your mortgage deal is due to come to an end, so why would your remortgage early in Bristol?
Though you are able to remortgage in Bristol and move onto a better rate when your deal is set to finish, there may be times when you wish to do this at an earlier time.
For example, if you were on a set deal that meant you had to pay a higher rate of interest than you could be able to get, you might want to remortgage early.
Doing so will most likely mean early repayment charges, but your savings you make on this might actually outweigh those additional costs.
The way that the market usually is, this is something that you are more likely to encounter as a homeowner in Bristol.
It is fairly straightforward to just take out a remortgage in Bristol once your fixed period ends, fixing in again for whatever the current interest rate is, but at that point, perhaps 2-5 years in, it may have risen much higher than what you were last on.
In a market where interest rates could go up further, you may feel it best to remortgage in Bristol much earlier, maybe a year before, pay the early repayment charge and settle for an interest rate that, whilst higher than it was, could be much more in a years time. That may make the costs worth it.
Some may even wish to look at taking out a debt consolidation remortgage in Bristol, putting all of their unsecured debt into a much more manageable monthly mortgage payment.
This will no doubt mean that you pay much more money overall, but could allow you to have more disposable income for bills and other things that you need additional funds for.
You should think carefully before securing other debts against your home. By adding your unsecured debts to your mortgage, which is secured on your home, you are potentially putting your home at risk if you cannot make the required repayments.
Although the total monthly cost of servicing your debt may have reduced, the total cost of repayment may still have risen as the term of your mortgage is longer than it may have taken to repay the debts originally.
Again, as touched upon before, there are reasons why you may not wish to remortgage early in Bristol. This is typically due to the early repayment charges you most likely have to pay for this, with the costs varying depending on how much of your fixed-term is left.
A general rule of thumb is that you can expect to pay much less if you are closer to the end of your mortgages’ fixed period. Of course when it comes to tracker mortgages, there isn’t a fixed-period as such, but there will likely be an introductory period which can present a fee.
These costs tend to be quite expensive, which is why the majority of people will look to avoid them. That being said, it may still be worthwhile if you are able to save money over time.
It would always be recommended that you speak with your mortgage lender prior to making any decisions, to make sure you are completely aware of any early repayment charges that could occur if you were to leave early.
Really all it comes down to your choice. If you feel like you will benefit in the long run by doing this, then by all means make a start on your process. Make sure you are always aware of the costs involved and speak with a trusted mortgage professional to make sure it is right for you.
You are able to remortgage in Bristol early by booking in for your free remortgage review with an experienced mortgage advisor in Bristol today. They are able to give expert remortgage advice in Bristol and find you the most suitable mortgage deal for what you’re looking to do.
Following on from the 2008 credit crunch, our government decided that they needed a backup plan, in a bid to try and kickstart the heart of the mortgage market. Their primary focus were on first time buyers, bringing in “Help to Buy Schemes” to help them get onto the property ladder.
There are lots of different ways to take out a Help to Buy in Bristol, with a variety of schemes available. Some may be more appropriate for you, others you won’t meet the criteria for. Below we have listed the Help to Buy Schemes that are available to homebuyers.
The Help to Buy Equity Loan is the most favourably used of the available schemes, with many home buyers using this to get onto the property ladder. If you are a first time buyer in Bristol looking to make a start on your mortgage journey, this could be the perfect scheme for you!
The first thing to remember is that you must be a first time buyer in Bristol, before you can qualify for this scheme to be able to qualify for this scheme. Additionally, this will only apply to new-build properties and you’ll need a minimum 5% deposit.
This scheme functions in a way where you will put down your minimum of 5%, more if you can, with the government loaning you whatever the remaining percentage is, up to a total of 25% deposit. If you put down 10%, they’ll loan you 15%, 15% then 10% and so on, until you have 25% deposit.
In the end, this will give you a 75% mortgage, as well as the government loan to pay off. You will have 5 years interest-free to pay back your loan to them. If you cannot do this in 5 years, you will start gaining interest on the remaining balance, starting at a rate of 1.75%.
As an open & honest mortgage broker in Bristol, we know that balancing your mortgage payments and the equity loan repayment consecutively can be difficult.
There are lots of different ways around this, such as a remortgage to raise capital once you’re out of your introductory period, using this to pay off that loan (though this can increase your monthly payments.)
The Help to Buy Shared Ownership Scheme was also brought in as a way of helping applicants to purchase their home as only a percentage, rather than the full house, with the remaining percentage being paid as a rental amount to a local authority.
Typically speaking you will own between 25-75% of the property you are looking to purchase, with the percentage that is remaining being owned by a local council or housing association (known as a local authority).
This mortgage schemes works in a way where you will be paying back your monthly mortgage payments, but also a rental fee per month to the local authority, which means that you are paying 100% of the ground rent and service charge on your new home (even if you own the smallest amount.)
The good news is that this rental charge will not have interest, generally making it cheaper than paying the full mortgage amount. If you come into more money as your term progresses or if your property increases in value, you can increase your shares.
The Armed Forces Help to Buy scheme was brought forward back in 2014 after the vast success of the Help to Buy Equity Loan Scheme after the credit crunch.
This government ran scheme was created with the aim to build upon the foundations of the original Help to Buy Scheme, with a view to help members of the Armed Forces get onto the property ladder.
If you match the criteria for the Armed Forces Help to Buy Scheme, this is something that could prove to be incredibly advantageous when you are looking to get onto the property ladder as a first time buyer in Bristol.
The government has thankfully extended the deadline/review date of the scheme to December 2022 and we here at Bristolmoneyman genuinely hope it stays around, as the scheme is massively beneficial to Armed Forces members who want to buy their first home.
The Lifetime ISA, whilst technically not a Help to Buy Scheme, is a very helpful scheme that often slips people’s minds. It’s not high on everyone’s priority as a go-to scheme, though it could prove to be the scheme that helps you buy your home as a first time buyer in Bristol.
A Lifetime ISA is pretty much a savings account where your money is able to grow, completely tax free. You are also provided with a government top-up of an additional 25%!
This means that if you can put the maximum £4,000 in savings each year, you would receive a much welcomed and rather handy £1,000 bonus amount in your savings, to use later down the line.
In order to access this type of mortgage scheme, you have to meet rather specific mortgage lending criteria, which our dedicated mortgage advisors in Bristol can discuss with you. All of the information on this scheme is available on the government Lifetime ISA website.
Making an initial step onto the property ladder for the first time, or taking the next step once your fixed term ends, can make you feel a little nervous from time to time.
There are lots of different routes that homeowners and home buyers can take, but if you can help it, it would be ideal to get it right the first time, especially when you’re dealing with a large amount of money.
Of course, we are strongly in the belief that our service as an open and honest mortgage broker in Bristol, will be beneficial to anyone who is going through their mortgage process, especially if you are a first-time buyer in Bristol.
Whilst we have confidence in our ability to help out our customers, we are also fully aware that it is not necessarily for everyone. Some may even be unsure of how exactly we can help.
With this in mind, we have compiled a balanced overview of why in some cases you might be better off getting in touch with a mortgage broker in Bristol, and how in some other cases, going direct might be your best choice.
It is the opinion of many, that you are a lot more likely to save some money by going directly to the bank and finding a mortgage deal yourself. There is indeed merit to this, as a mortgage broker in Bristol may charge you a fee, though this is circumstantial and depends on who you speak to.
If you are already experienced in finding your own mortgage, have a pretty simple case and have a knowledge of lender criteria, going it alone will probably be easier and more cost-effective.
Where a mortgage broker stands out, is the ability to help people with complex cases or those who don’t understand lender criteria.
Without the correct, up-to-date knowledge, you could possibly end up with a bad deal, or even being unable to successfully apply for a mortgage deal. In any case, this could cost you a lot of money or damage your credit score. The latter would in turn hinder your chances of applying for a mortgage at any point in the future.
A dedicated mortgage advisor in Bristol will always make sure that they get their recommendation right the first time, at the cheapest deal that is available to you. Again, this may entail you having to pay a service fee, though it will likely save you a lot more money in the long term.
Another point of view that customers who are older may think is a benefit of going to the bank directly, is the way you used to be able to get a mortgage. Prior to technology and online banking becoming a big deal, generally you would be a loyal customer of a local branch, typically speaking with the same members of staff.
When you wanted to apply for a mortgage, you would converse with the bank manager themselves. They would “know your finances like the back of their hand”, and would be the ones to personally approve a mortgage for you. Times have changed though, and credit scoring is now done via digital means.
The bank manager will no longer personally go through your case. Instead, your information will be put against a complex online system, to find out if you qualify for that mortgage. Nowadays, everyone gets the same chance as each other, no matter who your bank is.
Relating to the previous point, many are in the belief that there are better, exclusive deals only by going to the lender direct. Once again, there is an element of truth to this, but it is only part of the story. See, a lender can indeed offer great deals, but only deals that are from their own company.
One of the main problems here is that not all mortgage lenders are actually banks, meaning there are lots of options outside of what you are familiar with. The best deal you could get with your bank, might not be the best deal overall that you could’ve had access to.
That’s another benefit of enquiring for mortgage advice in Bristol. A trusted and experienced mortgage advisor will be able to take a look at your case, and have you matched up with a suitable deal from one of our panel of lenders, rather than one place.
It’s also worth mentioning that there may also be deals that can only be found with a mortgage broker in Bristol. Regardless of if you’re a first-time buyer, are considering your options for a remortgage in Bristol or have a complex case, a mortgage broker will have more options for you.
Following on from the 2007-08 credit crunch, the mortgage market was in dire need of a change. As was outlined in the 2014 Mortgage Market Review, lenders no longer had the ability to sell mortgages to customers on a non-advised basis.
This meant that you couldn’t just approach the bank, tell them you want a mortgage and be approved without any prior checks. You also couldn’t obtain a mortgage from any member of staff, as this used to happen regularly, whether they were qualified or not.
Further to this, these changes also introduced consumer protection, that you otherwise wouldn’t have gotten from the bank.
You now had the right to make a complaint to the Financial Ombudsman if you felt mis-advised for one reason or another. You also have the ability to make a claim via the Financial Services Compensation Scheme.
This is positive thing for both mortgage brokers and mortgage lender alike, as this means no matter who you choose to speak to or what your circumstances are, you’ll be safe, secure and advised professionally.
An area where a mortgage lender has the disadvantage, is that oftentimes it can quite literally take months to speak book an appointment. Once you can eventually speak to someone and kickstart your journey, you’re not always guaranteed to be kept up-to-date about your case progression.
A unique selling point here at Bristolmoneyman, is that we are able to speak with customers at a time that is convenient to them. Our mortgage advisors in Bristol work from early until late, 7 days a week, including weekends. We may also work on some bank holidays too!
If you’re quick enough and lucky enough, you might find that you can book an appointment on the same day, though you don’t always have to do that. If you would like to speak with someone in a few days time, you have the freedom to book a slot in advance!
We are here at time slots that best suit your lifestyle. If you work 9-5 and want to speak with someone in the evening, we can do that too! Using our online booking feature, it has truly never been easier to get in touch with a qualified mortgage advisor!
In addition to this, we are proud of our ability to be responsive with our customers. No matter what stage of your mortgage journey you’re in, we will always make sure you’re up-to-date. If your case changes at any point, your advisor will inform you as soon as they can.
It’s because of expert mortgage brokers in Bristol like us, who are able to offer a high level of customer service, that the public opinion of mortgage brokers has differed over the years. This has led to more and more people getting in touch with a local mortgage expert, instead of going to a big high street bank.
Sometimes a mortgage case may be a little more complex than the average case. Common examples of this that we have come across over the years, include (but are not limited to);
In the past, mortgage lenders were able to easily compete, by offering better deals than the others. Times have changed though, and now the main difference in choosing a deal, is whether or not you match their strict criteria.
A deal could be cheaper, but you may not qualify for it. The mortgage lender will perform either a hard credit search (leaves a footprint on your credit file) or soft credit search ( this leaves less of a footprint on your credit file), to see if you pass eligibility checks for that mortgage.
If you apply for a mortgage with a lender and are declined an agreement in principle, this will likely cause harm to your credit file. Worst of all, you probably will not be given a reason for why you were declined, which can be understandably disappointing and frustrating.
On the other hand, a trusted mortgage broker in Bristol will be able to take a look at your case beforehand, making sure everything is correct and prepared, informing you of any other steps you should take to better your chances of being accepted for the mortgage.
Using the lenders that we have on panel, you’ll be matched up with deals that you could be eligible for and we’ll look to get you agreed in principle. Obtaining your agreement in principle through Bristolmoneyman typically takes no more than 24 hours of your free mortgage appointment with one of our advisors.
Of course, this still doesn’t mean you are certain to receive an AIP, nor does it guarantee that you will get a mortgage, but it is a lot better for your credit file to have an expert analyse it beforehand. As expert mortgage advisors in Bristol, we always look to make the right recommendation first time.
At the end of the day , it’s your choice. As you can tell from the information above, there are both pros and cons to choosing a mortgage broker in Bristol. Conversely, there are also a lot of pros and cons to going direct with a lender. It all comes down to how quick of a service you would like, and how secure you want to be on your journey.
As a trusted mortgage broker in Bristol, led by 20+ year industry expert Malcolm Davidson, we have helped thousands of customers to achieve their mortgage goals. From first time buyers in Bristol taking a step onto the property ladder, to people reaching the end of their initial fixed period, looking to remortgage in Bristol, it’s safe to say we’ve seen it all.
To get in touch with a responsive, open & honest, FCA regulated mortgage team of experts, feel free to book yourself in for a free mortgage appointment or remortgage review, with a member of our amazing mortgage advice team. We’re here to help with all your concerns and queries during your process, with time slots that are convenient to you, subject to availability.
If you would like to learn more about our service, take a look at our genuine customer reviews. They are an amazing reflection of the service levels we provide our customers regularly. If you would like to learn more about the mortgage world, take a look at our YouTube Channel, MoneymanTV.
Jumping straight into it, we can say that yes, depending on the circumstances surrounding your application, you will be able to obtain a mortgage over 40 years old.
If the mortgage term is going to extend beyond the age of retirement, the mortgage lender may wish to see a projection of what your expected pension income is going to be.
Over the years we have noticed that a lot of the instances we face with customers in or over their 40s tend to be with First Time Buyers in Bristol. When speaking to these customers, we also heard from a large majority that they were previously declined due to their age.
First of all, let’s take a look back at the past. Prior to the introduction of computerised credit scoring and the levels of regulation that are commonplace today, if you visited a building society in search of a mortgage, you’d probably speak to your branch manager.
From here they would take a look at your personal circumstances, including how well you have been able to manage your current account. Based on their findings, they would then decide whether or not to approve your application.
If you were accepted, you would then receive advice on the amount you could borrow, typically presented as multiple of your gross salary.
The issue here is that these income multiples didn’t account for the age of the applicant. Therefore, no matter if you were 30 years old or 50 years old, you could borrow the same mortgage amount either way.
Now at this point, you may be thinking “issue”? What issue, that seems fair? The truth is that if both applicants were due to retire at the age of 65, the outcome would be different for both individuals.
If we take a look at an example using a £70,000 (capital and interest combined) mortgage using a national interest rate of 5%:
In this example, we have two applicants who earn the same, set to retire at the same age, with the same mortgage interest rate and the same overall amount to pay back.
Where it differs, is that applicant two’s monthly payment is a lot higher. Because of this, if mortgage rates happened to rise, they would be at a much greater risk of arrears and repossession.
This is the reason why modern mortgage calculators now factor in the maximum term of the mortgage (i.e., how old you are) as well as the income you bring in and how much you have regularly going out.
Even though it’s always made very clear that we will continue to work until an older age due to State Pensions, but the banks don’t seem to bear this in mind when it comes to giving out mortgages to applicants.
Lenders may potentially consider granting mortgages beyond the age of retirement, though this only tends to be if you can demonstrate your ability to afford the payments post-retirement. You are normally able to evidence this with a letter from your pension provider and a projection of your future income.
This does come with it’s own problems though, as the majority of people reading this article will likely take a reduction in income when they reach retirement. Because of this, lenders will need you to prove that even with a reduced income, you would still be able to afford your mortgage.
In practice, this hardly ever works unless you are only needing a smaller mortgage, though that would also mean you likely wouldn’t need to stretch the mortgage past your retirement age anyway as a shorter term could be affordable.
If you cast your minds back, you may recall that the default retirement age was scrapped in 2011 and you can no longer be forced to retire by your employer. As a result of this, fewer lenders are using the State Retirement age as the standard age they want mortgages to be paid off, with some even letting people self-declare their intended retirement age.
Regarding what you could be doing in order to obtain a mortgage over 40, you must prepare yourself for questions about how you will afford your mortgage later down the line.
Remember, the regulations have been put in place so they can protect consumers and encourage more careful lending from lenders.
If you need the mortgage term to run past the State Pension age, you will need to prove to the lender your expected income, so that they have confidence in your ability to maintain your monthly mortgage payments.
Please remember that the above information is purely for reference only and should not be viewed as personal financial or mortgage advice.
Once you’ve saved up for your money for a mortgage, the next step is preparation. You need to prepare for your mortgage application and get in a position where you are ready to start your process. If you are a First Time Buyer in Bristol, this guide will definitely help you progress with your mortgage application. Also, if you are Remortgaging or Moving Home in Bristol, you will still benefit from this article as it features some useful tips and tricks to help fast track your mortgage application.
One of the first things that you should obtain during the preparation process is an up-to-date credit report. Having an up-to-date credit report is essential for your mortgage application; ideally, you should try and get yours arranged prior to approaching a Mortgage Broker in Bristol. Your report will be reviewed by your Mortgage Advisor in Bristol before passing it onto the correct lender.
Another thing that you should get ready is an agreement in principle. You need one to make an offer on a property!
If you want a fully credit-checked agreement in principle within 24 hours of your application, you should get in touch with us. As an experienced Mortgage Broker in Bristol, we can often turn around an agreement in principle on the same day of your application.
In terms of proving who you are you’ll need to produce a photo ID. Most customers use a Driving license or passport for this element. You can’t use a Driving Licence for ID though if you are also using it for proof of address. If you are a non-UK national working over here on a Visa, you’ll need to produce that too.
When looking at proof of ID, the required documents will have to be photo identification such as a Driving Licence or Passport – though if you’re using one for proof of ID then it can’t be used as a proof of address. If you are a non-UK national working in England on a Visa then this will also need to be presented.
In addition to proof of identification, you will also be required to prove where you live. This is usually in the form of a utility bill or bank statement within the last 3 months.
Your bank statements should reflect your income and regular expenditures. It will be displeasure to Lenders if they see gambling transactions on your account and they will also not be happy if you are seen to have surpassed an agreed overdraft limit or your direct debits have bounced regularly. The key factor is to get ahead of the game and get prepared as best as you can.
Not all lenders will ask to see your Bank Statements but it is an option that is available to them if they choose to utilize it – regardless of whether they do ask for your bank statements, they want to be confident that you take your finances seriously. The bank statements which you produce should consist if your salary going in and your bills going out.
A vital step in the mortgage application is evidencing your deposit for Anti-Money Laundering purposes. To help the process it is best not to move finances around your accounts too much as this will make it a lot more difficult and may delay the process.
Lenders like to see that you are saving your money responsibly, but that doesn’t exempt you from having to account for any large recent deposits into your accounts.
If you have been gifted a deposit, then there will need to be written confirmation stating it’s a non-refundable gift.
The most pivotal point of the application is proving your income. If you’re in employment then sufficient evidence would be your last 3 months’ payslips, though some lenders will also ask for your most recent P60. Lenders will take into account regular overtime, commission, shift allowance and bonuses. Additionally, extra earnings may also be considered with some lenders such as part-time jobs or self-employment.
Many applicants are Self Employed in Bristol nowadays – if you are a self-employed applicant then you may mean you will need to acquire your Accounts’ help to request your last two or three years’ proof of earnings from the Revenue. If you submit your own accounts then feel free to get in touch and we will be happy to advise you on how to go about downloading from the Government Gateway.
By working out an estimate of your expected outgoings after you move house means you can gain an idea of how much disposable income will be available to you to pay your mortgage after such things as regular expenditures, council tax, and utility bills have been paid out from your account. To help you with this, we are happy to send you our version of a Budget Planner to get you started.
As seen, there are many steps you must take in order to prepare fully for your mortgage application deeming it not an easy feat but it doesn’t mean you should worry. If you approach the mortgage application with due timing and an organized matter along with a Mortgage Broker in Bristol, you will be in safe hands.
When it comes to applying for a mortgage, it is important to keep an eye on your credit score. The higher your credit score, the more likely that it is that you will be successful when applying for a mortgage with a lender. There are a variety of different elements that can have some kind of effect on your credit score.
One that is quite simple in theory but does has a larger impact than you might expect, is your address. Generally, the fewer addresses you have on your record, the better it will be. In the past though, we’ve seen people try to get around this in the wrong way.
A lot of the applicants we have dealt with are first-time buyers in Bristol who have moved out of their parents address into rented accommodation, but are keeping their bank statements, credit card and electoral roll information registered at their previous home.
For some bizarre reason, people think that it is beneficial to them and their credit score to keep everything under one roof. Whilst theoretically that would lean into the statement of “the fewer, the better”, this actually causes a lot more harm than good. Almost without fail, if you have moved to a new address; whether you change it or not, there will be a record of you living there somewhere.
Anything from a general eBay or Amazon order, to an ASDA delivery, to something like your car, contents or home insurance are all linked to your credit history and will appear with your address on in some way.
Before you perform a credit search and apply for a mortgage, you have to be absolutely certain that as far as you’re aware, nothing will affect your credit score. You will need to make sure your current residential address is the one present on all accounts, be that electoral register, credit and debit cards, etc.
This only really applies to you if you have already moved out of your parents home, as up until that point you will be still only have your previous address to go off. Once you’re moved in, that’s when you should start moving everything over as soon as possible.
Regardless, when it comes to the point of applying for a mortgage, this all needs to be double and triple checked. We always find that people have a tendency to forget to update their address on their credit file and electoral roll. Please do your best to remember, it really does make a big difference!
Make sure that you definitely get the dates right too, knowing the exact date you moved into your rented property and the day that you moved out. Any mistakes made with these dates can sometimes give the lender the impression that you are occupying two properties at once.
By keeping your credit file super up-to-date, you are giving the lender the proof they need that you really know what you are doing and you are completely serious about what it is you’re looking to do.
It’s a more open and honest way of handling the mortgage application process. Your goal should be to impress the mortgage lender in any way you possibly can and keeping up to date with your address is a good starting point for doing so.
If you are in need of any further help or are just looking for some handy tips from a professional mortgage advisor in Bristol, please do get in touch and take advantage of our free initial mortgage consultation.
We know that being a first time buyer in Bristol with no mortgage experience can difficult and stressful, which is why we’re here to help. Get in touch with a dedicated and trustworthy mortgage broker in Bristol today and we’ll see what we can do for you.
You’ll likely have both your highs and your lows throughout your mortgage process, but when all is said and done, it will all result in one of the following outcomes: either a possible future home for your family, a property that will shift you along the property ladder or a purchase you can use as an investment to boost your income.
No matter which route you find yourself going down, you will eventually start getting near the end of your mortgage term. Some look to sell their home and move into a new property. Others maybe look to sell parts of their property portfolio with an aim to look at other areas to invest in.
More popular than these though, is taking up the route of a remortgage in Bristol.
Before anything else, let’s take a look at what a remortgage is.
A remortgage is where you use the loan that you gain from a new mortgage to pay off your existing mortgage. There are lots of different options that are available to customers when taking out a remortgage, with these options varying in scale of importance.
In utilising the experience of our director and twenty year mortgage expert, the “Moneyman” Malcolm Davidson (host of our YouTube channel MoneymanTV), we have compiled a helpful remortgage guide, reflecting on all of the options that may be available towards the end of your mortgage term.
In the case of most mortgages, the deal that you are initially set up on will last somewhere around two to five years, featuring low fixed rates or rates that are possibly discounted. Depending on your personal situation, you may even be placed on a tracker mortgage, which is a mortgage type that will follow the Bank of England’s base rate.
Once your term has ended, the chances are that you will be moving onto the lenders Standard Variable Rate (you may see this shortened to SVR). To explain what this is; an SVR is a mortgage with an interest rate that can potentially change, depending simply on what the lender is looking to charge you.
This does not work the same as a tracker mortgage as it will not be following the base rate of the Bank of England. Because of this, these types of mortgages usually cost a much larger amount to take, leaving many to just prefer looking at remortgaging for better rates, something that would hopefully save you a lot of money in the long term.
Once you have reached the point of being 2-5 years into occupying your home, you may feel like something is off and it needs to change. You may need to create an extra room or improve upon the size of your living space for your kids or personal belongings.
Some people would like to build a new kitchen or office. We actually hear of customers looking to build some kind of loft conversion. Instead of just packing up and moving home, lot’s of homeowners instead opt to remortgage as a means of releasing equity to fund these new projects.
Of course, obtaining planning permission and funding or managing your own project does sound big and scary, lots of homeowners would argue it’s a lot less stressful and more rewarding than it would be to just sell your home, and find somewhere else to live.
In the future this may prove to be quite beneficial to you as an investment. This is because creating more space and having good quality craftsmanship has a chance to increase the value of your home, which in term would come in very handy for if you do look to sell your home in the future.
In a lot of cases, homeowners may just want to remortgage in Bristol for a better mortgage term, either by reducing the length of the term they are on at the current moment in time or by switching to a different product that is a bit more flexible.
By reducing the length of your term, you will not be paying back your mortgage for as long, so you aren’t completely stuck there, but this does mean that your monthly mortgage repayments could be higher than anticipated. The longer your term, the lower your monthly payments will be.
Many homeowners take preference to more flexible mortgage terms when they take out a remortgage. There happens to be a few positives with this route that homeowners prefer. Some of these include having the chance to overpay, meaning you may be able to pay your mortgage off a lot quicker, as well as being able to carry the same mortgage and rates over to another property, if that ever becomes a need for you down the line.
Though a flexible mortgage sounds like it’s the most ideal situation to be in as a homeowner, they are usually found as tracker mortgages. As mentioned earlier on, tracker mortgages follow the Bank of England base rate, meaning one month your payments could change both positively and negatively, depending on the current level of interest rates. Some homeowners feel like this mortgage type is a little too unreliable.
Every homeowner will have some form of equity existing within their home. Equity is worked out by calculating the difference between what you still have left to pay on the mortgage and how much the property is currently worth.
Further onto another previously mentioned topic of discussion, this can be used for home improvements, however there are still so many different options people can take.
Some will use the equity in their home to cover any necessary long-term care costs, to provide themselves with an income boost, to treat themselves to a much needed holiday, to pay off an interest-only mortgage or to have some spare cash laying around to do whatever they’d like with.
We often find that with a buy-to-let in Bristol, landlords will use a remortgage to release equity as a means of covering their deposit for buying any future property portfolio additions.
If you are over the age of 55 and have a property that is valued around at least £70,000, it may be worth looking at your options for Equity Release in Bristol. Speak to a professional later life mortgage advisor to learn more about this.
Another topic relating to the aforementioned topic of equity release, is utilising the existing equity in the property to pay off any unsecured debts that may have been building up in your name over time.
Though it sounds like a fairly straightforward concept, debt consolidation not only bases the amount on how much you’re owed and the value of the property, but also the current status of your credit score and history. This unfortunately means that if your score is bad (which is likely to be the case if you’re needing to consolidate debts), the lender may limit how much they are willing to let you borrow.
In addition to this, in order to pay off your previous mortgage and your debts, you will need to borrow a much higher amount than the mortgage amount you’re already paying off. This will likely cost more than you wanted it to. Though not an ideal situation, at least you can rest assured that if you find yourself in hot water, a mortgage broker in Bristol may be able to lend a hand.
If you have a particularly damaged credit rating, there are still options out there that you can take, though these tend to be quite challenging and require very specialist remortgage advice in Bristol to lend both their knowledge and care, before proceeding with your mortgage process. Even with our help, there’s never a guarantee you’ll be successful.
You should always look to gain mortgage advice prior to consolidating any debts and secure any debts against your home.
If you are on your way towards the end of your current mortgage term and are wondering what kind of remortgaging options you may have, please do get in touch with one of our fast and friendly mortgage advisors in Bristol.
A dedicated and experienced member of our mortgage advice team will be available to discuss your circumstances and future goals, helping you create a strong plan of the next steps you would like to take in your home owning and mortgage journey. When dealing with remortgages, we always aim to make the process simpler and quicker than it went the first time around.
A gifted deposit is what it says on the tin, a deposit that has been gifted to you. It can either be the full amount or a portion of the deposit, and there has to be an agreement in place that you won’t be repaying the person gifting to you.
Gifted deposits are useful to have at hand when you have enough money to cover the costs of your monthly repayments but are unable to make up the amount required for the initial deposit.
The more deposit that you can have gifted to you, the bigger the potential for better rates from a mortgage lender.
If you happen to be on a lower salary and are struggling to find a means of putting money into savings, this again can be very useful.
Generally speaking, gifted deposits are normally given out by your parents (adopted parents & carers may also fall into this category, depending on lender). On the internet this is regularly referred to as the “Bank of Mum & Dad”.
It may not just be parents though, as there are other potential family members who a mortgage lender may consider accepting for a gifted deposit. This once again depends on the different lenders that you approach, which would require care when looking for the right one. It’s because of this that you might benefit from a mortgage broker in Bristol.
We often hear from our customers that they were never aware of their parents ability to provide a boost to their mortgage. Many of them also don’t feel like they can ask their parents to help. The truth of the matter is that most parents are more than happy to help their kids get onto the property ladder.
For the most part, it is widely believed that taking out a mortgage is a better option for first-time buyers in Bristol than renting, due to the possibility of being able to pay less money per month.
Setting out where your finances will be distributed as inheritance can often be contributed towards a deposit, though some parents do gift this to their kids earlier on in life if they have already saved enough to cover it or have released a certain amount of equity from their home.
The vast majority of lenders won’t accept you using a loan to fund your mortgage deposit. The reason for this boils down to the uncertainty that you’d have enough disposable income left over to cover the costs of both the loan and the mortgage at the same time.
There will be no maximum amount to how much deposit someone can gift you, though there are some lenders out there who would prefer their applicants to have at least 5% deposit saved themselves, with any gifts being used to increase this.
No matter whether you are a first time buyer in Bristol or you are moving home in Bristol, you will be able to reap the benefits of utilising a gifted deposit. It also comes in really handy when used alongside a Help to Buy in Bristol, as the required 5% deposit, depending on the lender that is used, can be boosted with a gifted deposit.
Usually you’ll find that all lenders will require a gifted deposit form to be filled in. Depending on the lender that you go with, you may also be asked to provide additional proof and ID (these can include such items as a donor ID or bank statements).
When you start out looking for a mortgage in Bristol you will soon realise that there are lots of different options available. Below you will see a list of the most popular types of mortgages available on the market and hopefully. If you have any questions regarding any of the below mortgage options, then please do not hesitate to contact us.
A fixed-rate mortgage means that your mortgage payments are going to stay the same for a set period of time. 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 actually set the rate themselves. You will be paying a percentage above the Bank of England base rate. In an 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 that each month you are paying capital and interest combined. So as long as you keep your payments going for the full length of the mortgage term, the mortgage balance is guaranteed to be paid off at the end and the property becomes yours.
This 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.
Whilst many Buy to Let Mortgages in Bristol are set up on an interest-only basis, it is much more difficult 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 very strict when it comes to offering these products now and the loan to values is 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. How this works is that let’s 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. This can be a very efficient way of managing your money, especially if you are a higher rate taxpayer.
An agreement in principle, known as an AIP, DIP, mortgage in principle and decision in principle (depending on where you look), is a document that shows a seller that you are ready to proceed with a purchase and mortgage. It also allows you to make an offer on the property in question, proving to be useful when negotiating on the asking price.
Once you have passed the lenders initial credit checks, you will be able to obtain your own agreement in principle. Many first-time buyers in Bristol aren’t too sure of how they work, however, so below we’re going to explain how they work, how they affect your credit score and the length of time they last for.
The effect an agreement in principle has on your credit score entirely depends on the type of credit search the lender decides to use. Generally you’ll find they will either perform a soft credit search or a hard credit search.
Understandably, especially for a first time buyer, you may not know the difference between the two. Allow us to explain;
For the most part, lenders these days will now carry out a soft credit search over a hard credit search. The reason for choosing this one is because they typically require less information and there is a lot less chance of your credit score being affected by a soft credit search.
Whilst whoever is undertaking the soft search will be gaining less information about you from it, than they otherwise would’ve gotten from a hard search, an agreement in principle from one of these lenders is usually still a very strong indication to the seller of the property you’re interested in, that your application is likely to be accepted.
Hard credit searches tend to be a lot more in-depth than soft searches are. The main difference between the two credit search types is that hard credit searches can have an effect on your credit score, by leaving what is known as a credit footprint. This means that previous credit searches will be visible to anyone else looking at your file in the future.
If you have a good credit score, this won’t really be a problem. Where it can be an issue, is if your score is lower and you have had multiple hard searches on your file. This is because, to a lender, it can look like you are trying to apply for lots of credit at the same time. It’s likely that this will put them off.
As much as we would like it to be so, nobody can ever be guaranteed a mortgage, but having an agreement in principle arranged in advance will definitely work in your favour.
Once you have given the lender with all your documents, an underwriter will review your case and proceed to make a final decision. Agreements in principle will often include small print that applicants can easily miss. It’s reasons like this why getting in touch with a mortgage broker in Bristol can be helpful to you.
We often find that in some cases when people get in touch, enquiring about an agreement in principle, they’ve been turned away at full mortgage application stage.
The documents that you’ll need to give the lender include, but are not limited to, forms of ID, payslips and bank statements. As a dedicated and experienced mortgage broker in Bristol, we take a lot of pride in helping you be prepared for your mortgage process. Once you start your mortgage process, it may be worth looking at how to get prepared for a mortgage in Bristol.
Making sure you have your agreement in principle in place when you’re ready to make an offer is a necessary step. Any estate agent with an ounce of credibility will ask for evidence that you are able to proceed with the purchase of a property.
Your agreement in principle will typically expire around 30-90 days. When this happens, your mortgage advisor can renew it for you. We are usually able to obtain one an agreement in principle within 24 hours of your initial mortgage appointment.
As an experienced mortgage broker in Bristol, we would suggest that you obtain one of these as early as you can. We say this so that you can try to avoid being told you aren’t eligible for a mortgage on your dream home.
The good thing about having your agreement in principle and it lasting a good length of time, is that you don’t just need to apply for the first home you see. You have time to look around and find one that suits you best.
If you are a first time buyer in Bristol or are looking at moving home in Bristol, please get in touch and take advantage of our mortgage advice service. We offer a free initial mortgage consultation, where you will get to speak with one of our expert mortgage advisors.