For first time buyers in Cardiff statistics show that in recent years property prices have increased at a faster rate than wages. We have found that many people look to purchase in joint names with a partner or friend in order to be able to afford a suitable home at a more reasonable price.
Purchasing in joint names usually will increase your maximum borrowing capacity, as the lender will look at all party’s income and take this into account when running the affordability calculations.
Surprisingly, we work with some lenders who will accept up to 4 people co-owning a property. If for any reason, one of the co-owners of the property decides to no longer contribute to the mortgage repayments, any joint owners will still have the legal right to reside in the property unless this is ruled otherwise by a court.
If you would like to increase the mortgage at a later date, you must gain consent from all co-owners involved. It’s therefore essential that you make long term plans about what will happen in the future should you end up wanting different things.
We find the most popular Tenancy for married couples or those in civil partnerships is ‘Joint Tenancy’. With this type of tenure, if either party were to pass away, the property would be handed over to the co-owner. If you have taken out relevant life insurance, at this point, your mortgage would be repaid.
With ‘Joint Tenancy’, when looking to remortgage or sell the property in the future. It would be required that all names on the tenancy agree to this.
When purchasing with relatives or friends, we find that ‘Tenants In common’ is the most popular tenure. You will still jointly co-own the property but are have the flexibility to do so not with equal shares. This works well if one party is making a more significant financial contribution than the other.
With ‘Tenants in Common’, another positive aspect, is that you can act independently. For example, you can choose to sell or give away your share of the property to someone else without the need to consult other parties.
All mortgage borrowers are jointly and severally liable for mortgage payments. If you find yourself paying all future payments without a co-owner, you will still be liable. You are preventing the mortgage from falling into any debt. As mortgage arrears showing on your credit file could have the potential to stop you from obtaining a mortgage in the future.
It is best to think of it like this: You don’t own 50% of a property, you own 100% jointly.
Lenders will need to be confident that you can keep up with monthly payments on your own before they can approve of this happening.
When purchasing a home with a partner, it’s a whole new chapter starting in your life and can be a great way to start fresh with another individual. In all the excitement of moving home, it can make you wonder about the justifications if things go sideways.
As seen from above, a mortgage is a big financial commitment and making changes is going to be a challenge.
With physical proof that you can maintain mortgage payments since your old partner moved, the lender may agree to your request to put the mortgage into your single name. However, Lenders like the idea that there are two people to pursue in the event of arrears occurring. To remove someone, they will carry out a brand-new affordability assessment, precisely in the same way as they would at the point of purchase.
Whilst a lender may not accept a request, it’s always beneficial to speak with a mortgage advisor in Cardiff beforehand, as there may be other lenders who could agree to your transfer request.
It can also be worth talking to family members to see if they can help you out to make life a little bit easier. They can do so by replacing your ex on your mortgage or by gifting you a lump sum to reduce the amount owed, meaning your savings can contribute to easing your future mortgage payments.
If you and your partner split up and you leave the family home, then your responsibility is still shared for mortgage payments even if an agreement was settled with your ex that they will make all the payments.
If you are sending your partner money each month, you should keep an eye on your credit report to ensure they are paying the mortgage. If they default, then it will impact your own score.
Is your name still linked with an existing mortgage? Then the payments for that will be considered if you buy a new home of your own. That will mean Lenders might not lend you as much as you would like.
Buying a home with someone is different from renting with them. It’s always better to agree on what would happen to the house should things not plan out as expected.
From a lender’s point of view, a bank statement provides an insight into your spending habits and determines if you’re trustworthy with paying on time. The presentation of your bank statements is essential because this evidence can be the difference in how much your lender will let you borrow or will lend you anything at all.
Knowing how much a lender will let you borrow is all down to risk, however, a lender needs to know that you can handle your finances and be responsible. Remember, a mortgage is likely to be the biggest financial commitment you will ever make and is not something to be taken likely.
There are different ways you can obtain your bank statement, such as receiving your bank statement through the post from your bank or going into your local branch and getting it over the counter. It’s common to see these days that people will retrieve a printable version from their bank’s online platform.
Presenting your bank statement in a positive light is important, so the main question is, what are lenders looking for on your bank statement?
Again, the lenders want to know if you’re responsible when it comes to your finances. Therefore, overdrafts will be something they will look into. An overdraft is there for you to use and on occasions using it is not necessarily a bad thing, however, if exceeding your limit becomes a daily occurrence, this is going to affect the lender’s trust in you.
Another factor to be careful with is potential returned Direct Debits because this could show you are not consistently reliable. Furthermore, failure to disclose loans at the application stage will not make you look good to the lender because, as mentioned, this is a process of trust.
Another element that you need to be aware of is missed payments for personal loans and things such as credit cards. It’s more likely that a lender will aim to lend an amount closer to what you would like to borrow if you can meet your monthly payment deadlines.
This is a commonly asked question we hear from customers when they are looking at their bank statements. A history of gambling can be an issue many get themselves into. While the odd bet is harmless, frequent betting with large amounts of money can be an issue. Whether you’re making it back or not, a lender will see this as a disadvantage
To learn more, please see our article on “Do Gambling Transactions Look Bad on My Bank Statements?”
When working with many first time buyers in Cardiff & home movers in Cardiff, we have found that the majority of mortgage lenders will require the applicants to obtain at least three months’ bank statements from an applicant. This can differ for the self-employed
With this in mind, you theoretically have three months to work on your finances. Start to think more about the future and begin working on your finances at this time. We recommend that you take a break for a while if you are a regular customer of the local bookmakers or online gambling scene. This can be a benefit to your financial state as well as your mental health.
Another step we would suggest is to try to save money. Reducing the number of times you eat out, cancelling unneeded subscriptions, and reducing your purchases on unnecessary items can all help. By doing this, you can free up additional cash to pay your bills on time.
This is all down to you being sensible and planning ahead of time to what you’re looking to do. Reducing the risk of bouts of debts and financial uncertainty will put you in a good situation with a lender.
If you’re a first time buyer, moving home, or self-employed, it’s always important to keep your finances on track. Getting in touch for specialist mortgage advice in Cardiff can help you if you’re feeling unsure when it comes to bad credit history. We are here to further your mortgage journey by advising the best we can.
When it comes to your bank statement, lenders will be looking at various factors to see if you can keep up the mortgage payments. Over the years, we have seen an increase in inquiries regarding if gambling transactions look bad on their bank statements.
There is nothing illegal about licensed gambling so an occasional bet on the world cup or regularly using internet betting sites isn’t a problem. However, like a lot of gambling adverts, they do urge customers to gamble responsibly and these principles are the same when applying for a mortgage.
The role of the lender is not to tell you how to live your life or spend your money or even lecture you about the ethical rights and wrongs of gambling, however, they do have a duty (underscored by mortgage regulation) to be responsible when accepting customers for a mortgage.
Lenders may need to prove to the regulators that they are making well-thought decisions. Therefore, it isn’t unreasonable for the lender to have expectations of the people they lend to when it comes to their finances.
Think about it. If you were lending your own money to a ‘friend’, would you lend it to someone who frequently gambles or the one who doesn’t?
Having the odd gambling transactions on your recent bank statement doesn’t automatically mean your mortgage application would get declined. As mentioned before, it is not illegal to gamble.
However, the lender will look into these transactions to see if they are reasonable and responsible. The factors that they will look at are the frequency of the transactions and the size of the transactions. Furthermore, they will take a deeper look into the individual’s account and the impact upon the account balance.
When it comes to these transactions, infrequent small amounts that make no impact on your regular credit bank balance are not likely to be regarded. If you’re in a situation where you bet most weeks or you have constantly overdrawn money, the lender is expected to see you as irresponsible and may decline your application
Providing bank statements to your lender is required as it’s a way to show how you manage your money and helps the lender when deciding if you are financially reasonable or not through your bank statements.
Lenders are financial institutions that, either directly or as part of a wider group, often sell current accounts, overdraft facilities, credit cards, and personal loans. Because of this, they have an understanding that these things can all play a role in financial planning.
You may find yourself using your overdraft, however, if maxing out your overdraft becomes a regular occurrence, this is not ideal. Lenders will look for things that could show your account is not handled well such as overdraft fees or returned direct debit.
Credit transactions from payday loan companies are another thing lenders will want to see (i.e. , if you put on your application that you have no other loans but regular loan payments appear then this could be a problem.)
As well as looking for any missed payments, they might also consider how much of a typical month gets spent overdrawn – i.e., measuring the sustainability of the mortgage by looking at situations such as if you only go into credit on payday and the rest of the monthly earnings get stretched.
The best way to improve things is to be sensible, and if possible, plan ahead. A bank would ask for up to three months of your most recent bank statements. This evidence will show your salary credits and all your regular bill payments.
If you know you’re likely to apply for a mortgage in the near future, it can be good to try to make sure that you avoid any of the above issues. Work on presenting your bank account in the best light and take a break from gambling.
You can find help from your mortgage broker in Cardiff as some lenders may ask for fewer bank statements than others or some may not even ask for them at all.
Being careful in the run-up to any mortgage application is best as lenders reserve the right to request bank statements in certain circumstances. Remember, if you do gamble, please gamble responsibly!
A mortgage advisor in Cardiff can provide specialist advice if you are a first time buyer in Cardiff. They will be there to help you through your mortgage application and guide you through the whole mortgage process as well as getting you on track so that a potential lender may be impressed with your credit history.
When you’re inexperienced as a first time buyer in Cardiff and have never taken that initial step onto the property ladder, the process can sometimes be a stressful one. Luckily for you, it doesn’t have to be like that. To help put you in the best position for your next house viewing and to get ‘mortgage ready’, we’ve put together a list of nine questions that you should always ask when buying a house as a first-time buyer in Cardiff.
Taking out a mortgage will more than likely be the biggest financial commitment you ever make in your life. As such, you may find yourself wishing to take some time to think about your options and what you really want to do.
In enquiring with the vendor or estate agent about the amount of viewings that have taken place at the house, you’ll be able to more accurately predict how much time you have to properly think this through, before you make a definitive decision. Of course, if the property is receiving lots of interest, you need to be ready to make a final decision as soon as possible, so to avoid losing out to another buyer.
A property being tied up into a property chain can have a huge influence on how your mortgage process will go down the line.
If there’s no onward chain (e.g. new home, bereavement or emigration), you’ll more than likely be able to move fairly quickly, especially if you’re not part of a chain either. If there is no requirement for you to sell your own property in advance, then you’ll have more leverage as a buyer, as you won’t be holding up the home buying process for anyone else.
Be sure to use this to your advantage when entering into property price negotiations.
If you’re not buying a new build property, then the previous homeowner may have left some items behind when they moved out. We often hear about white goods (which can include things like washing machines, fridges, freezers etc.) or even garden sheds being left behind for the next person who moves in.
For home buyers this can be fantastic, as it can not only save you money on buying those same items, but it can also save your time, as you won’t need to spend time finding these items and awaiting delivery.
On the flip side of this, if you don’t want or need these items, you will have to factor in the costs and time of disposing them. If you are buying a new build property, you might find that there are optional extras you can buy which will be ready for you on the day you move into your new home.
When moving into an area that you don’t have any familiarity with, it’s worth doing some research to see what the neighbours are like, as a good or bad neighbour experience can often be the deal breaker in what your experience of living in the property is like.
That being said, if you’ve had the opportunity to move into a new housing site that has been or is being developed, you will be creating an entirely new neighbourhood with people who are more than likely unknown to you. This itself can be a risk, as you cannot prepare for what the locals will be like ahead of time.
The running costs of a property can significantly differ, depending on the house and the location, so it is very important to do your research on these and ask the right questions.
Make sure you find out how much the Council Tax is, along with how much on average you might be spending on utilities, by asking the seller or doing some of your own research online. Obtaining this information can help you budget for each property you have viewed accordingly.
This may seem like a bizarre one, but it can be an incredibly important factor to many people. If you are fond of relaxing in the garden on late summer evenings or reading books with a good source of natural light, you need to find out which way the property is facing.
What’s unfortunate here is that through looking for this, you’ll often pay a sizable, more premium price for a south-facing garden, due to the fact that they receive the most sun during the daytime.
This is again something that can have quite the impact on your budget. You should always look to see if there is any work required in the property for improving energy efficiency, changing any decorations and addressing any problems with damp that exists in the property.
Getting started on negotiation discussions for a property you’d like to buy is a pretty common home buying step. As such, it’s important to make sure you are as prepared as you possibly can be to make an offer on a property that you are interested in. Once you are ready for this, the next step is for you to go and start making offers on a property.
It is also worth initiating a conversation with the seller or estate agent to figure out roughy what the seller of the home you are after may consider to be a lowball amount, as well as find out the maximum amount it is worth. You should also look to find out if any other offers have been made and rejected prior to you making your offer.
By picking a date in your diary that you ideally would like to move at, you are able to plan your other jobs around that date. This will be tasks such as instructing a conveyancing solicitor, packing up what you own ready to move and arranging a removal van to bring your belongings to your new home.
A 95% mortgage is as simple as the name would suggest; you are borrowing against 95% of the price of a property, and then you are covering the remaining 5% with your deposit. An example of this is if you looked at buying a property that was worth £150,000 with a 95% mortgage, you would be putting down £7,500 as your deposit and borrow the remaining £142,500 from the lender.
Off the back of the March 2021 Budget, Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, making 95% mortgages more readily available from the bigger high street banks.
This is fantastic news for First-Time Buyers and Home Movers alike, as this scheme will continue running until December 2022. Certain terms and conditions will apply though, which is something your Mortgage Advisor in Cardiff will be able to look at, to see if you qualify.
All our customers who opt to get in touch will receive a free, no-obligation mortgage consultation where one of our dedicated mortgage advisors will be able to make a recommendation on the best possible route for you to take.
95% mortgages are usually accessible by both First Time Buyers in Cardiff & those who are Moving Home in Cardiff. Whilst saving for a 5% deposit sounds like a pretty straightforward concept, you’ll still need to have an acceptable credit score and prove that you are able to afford your monthly mortgage repayments, in order to access a 95% mortgage.
A good credit score is essential in the process of obtaining any mortgage, especially a 95% mortgage. Things like paying any current credit commitments on time, ensuring your addresses are updated and checking that you’re on the voters roll, can all help with your credit score.
Affordability is another one that is important to take note of. By giving the lender details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments, your lender will be able to get a general overview of whether or not you are able to afford this type of mortgage.
Nowadays we see lots of family members helping each other get onto the property ladder, especially parents looking to further their children’s lives. The way this usually happens is by gifting the person looking to find their home, the deposit required. Known through the industry as the “Bank of Mum & Dad, Gifted Deposits are only intended to be a gift, and not as a loan. The lender will need proof that this has been agreed, before it can be used towards your mortgage.
When looking for a 95% mortgage, you want to make sure you have the right type of mortgage. Each mortgage type works differently, with that choice allowing you to find one that is most appropriate for your personal and financial situation.
Some homeowners and home buyers prefer Fixed Rate or Tracker Mortgages, mortgage types which mean you either keep interest rates at a set amount for the term given or have your interest rates tracking the Bank of England base rates.
Alternatively, you might find that Interest-Only or a Repayment Mortgages are more your style. Interest-Only allows cheaper payments until you need to pay a lump sum at the end (mostly now used for Buy-to-Lets), whereas a Repayment mortgage (a normal mortgage if you’d like) means you’ll be paying interest and capital combined per month.
Seeing as a mortgage is such a large financial outgoing, you need to be prepared and need to be aware. You might find things like higher interest rates, remortgaging difficulties due to less equity and then negative equity all cropping up if you’re not.
There is no need to worry though, as all these can be avoided if you’re savvy enough with your process to begin with. The more deposit you put down for a property, the less risk the lender will see you as.
A larger deposit, of say 10-15%, would not only reduce the rates of interest by a noticeable amount, but would also give the property more equity and reduce the risk of negative equity, thanks in part to you borrowing less against the property.
So, whilst the risks may seem intimidating, planning ahead and saving for a bigger deposit to access something like a 90% or even an 85% mortgage will be a massive help in your mortgage journey and something you’ll be able to reap the rewards from in the future.
The March 2021 Budget provided lots of positives to take in; the mortgage market was particularly blessed with great news. Chancellor Rishi Sunak introduced a new government led scheme called the “Mortgage Guarantee Scheme” and also annoced that the Stamp Duty Holiday will be extended to an even later date.
The UK’s mortgage market needed a boost like this. The government clealry see the mortgage market playing a vital part in the plan to get the UK’s economy back on track.
During late last year in October 2020, 90% mortgages made their way back into the forefront of the mortgage market, but there were still no signs of 95% mortgages returning. It looked like there was no end in sight, not until the recent Budget anyway…
In the recent 2021 Budget, we saw that 95% mortgages were going to be coming back sooner than we expected. Sunak announced a new way for First Time Buyers and Home Movers to get themselves up the property ladder, this was introduced as the “Mortgage Guarantee Scheme”. This name, however, is a bit misleading as you are never guaranteed a mortgage. Lenders will take lots of different things into account before accepting your mortgage application, they ill assess your credit score, make sure that you’ll be able to meet your monthly payments and various other things. Lenders won’t lend to someone who carries a risk of their home being repossessed, although repossession is the last resort, lenders will never risk it just in case.
Lenders have recently been worried about the idea of home values decreasing, so this new scheme should alleviate that concern although of course, the chances of negative equity occurring will naturally reduce should property prices increase as a result of these announcements.
Sunak included that both First Time Buyers and Home Movers will be able to take advantage of this scheme. It can also be used on any property too, not just new builds.
This new scheme will be available from April 2021 and will run until December 2022. We also learnt that many credible lenders are already backing the scheme.
As a Mortgage Broker in Cardiff, this news comes to us with nothing but positivity. We can only go upwards from here!
In the Budget, we also learnt that the stamp duty holiday has been extended until 30th June 2021.
When the stamp duty holiday was extended last year, we were all in the mindset of “it’s just a phase”, but we quickly learnt that things were going to take a while to change back to how they were. When the stamp duty holiday was introduced, people gained a bit more confidence in the market and it made people continue through with their purchases. We are hoping that this further extension, makes people do the same and continue with their purchase, even despite the current circumstances. The stamp duty holiday and the 95% mortgage scheme go hand in hand, we are hoping for the confidence amongst homebuyers in the UK to come back.
The stamp duty holiday has been extended, which means that property purchases up to £500,000 will remain tax-free until 30th June 2021 and those up to £250,000 will stay tax-free until September 30th 2021.
If this news is music to your ears and you are thinking that it’s time to look at Moving Home in Cardiff, it may also be time to start weighing up your mortgage options. You can always evaluate your mortgage options by approaching a Mortgage Broker in Cardiff, they will talk you through the entire process step-by-step. We are just one call away and would love to help you with this.
Now that the mortgage market is looking more and more positive each week, it may be time to start getting mortgage ready. With 95% mortgages on the horizon, you may be able to bag yourself a great mortgage offer within weeks of your initial enquiry. Now that the stamp duty holiday has also been extended, you should hopefully expect to pay fewer fees upon your completion.
Furthermore, lenders are still dealing with a lot of applications and have quite a backlog of mortgage applications to process and mortgage appointments to book. So if your nat to take advantage of the new 95% mortgage scheme and the stamp duty holiday extension, you should contact our Mortgage Broker in Cardiff and we will put you straight through to a Mortgage Advisor. Our responsive team will always be available for a chat from 8am-10pm, 7 days a week.
This will be very useful to you if you are a First Time Buyer in Cardiff, we can help you compare deals and check whether you match the scheme or not. For your free mortgage consultation, get in touch with our expert Mortgage Broker in Cardiff today. We can’t wait to try and help you!
After the perilous financial crash in 2008, known as The Credit Crunch, the government brought in some backup to try and provide a much needed boost the mortgage market. They brought in new ways to help First-Time Buyers get onto the property ladder, with these being called Help-to-Buy schemes.
There are a number of different Help-to-Buy schemes available in the market. Some you may be able to match with and some others maybe not so much. Here is a list of the Help-to-Buy schemes and some other similar schemes that you may have access to.
The Help-to-Buy Equity Loan is the most popular of the various schemes. If you are a First Time Buyer in Cardiff and want to get your mortgage process rolling, this could be the ideal way for you to do so.
Firstly, you have to be First Time Buyer to be able to access this scheme, as well as only being able to purchase a new-build property too. A minimum of a 5% deposit is also a necessary requirement.
The way this scheme works is that you put down a deposit of 5% or more and then the government loan you rest to make up a total of a 25% deposit. Two examples of this would be if you have a 5% deposit they will loan you 20% or if you have a 10% deposit, they will loan you 15%.
This will leave you with a 75% mortgage and the government equity loan which you will have to pay off. You will get a period of 5 years to pay off this equity loan interest-free. If you are unable to meet the 5-year cut off point, you will start building up interest on the amount of the loan that is remaining. This interest rate starting point is 1.75%.
As a dedicated Mortgage Broker in Cardiff, we know that it can be quite difficult to balance your mortgage payments and the equity loan repayment alongside each other. There are ways around this, such as being able to remortgage to raise capital for this loan. This one, however, will increase your mortgage payments.
The Help-to-Buy Shared Ownership scheme was introduced as a means to help applicants to purchase a percentage of a property and then pay the rest back on rent over time.
The percentage of the property that you own in your name usually has to be between 25-75%. The remaining percentage will most likely be owned by the housing association. This share can possibly be increased at a later date, maybe at a point when you have more money.
The way that your payments work is that you have to pay your mortgage as well as your rent. So what this means is that you are basically paying 100% of the ground rent and service charge on the property. This is still the case, even if your share is the lowest available amount.
The Armed Forces Help-to-Buy scheme was introduced in 2014 following the previous success of the Help-to-Buy Equity Loan scheme. This scheme had the same concept of the prior version, however, this one was specifically for members of the armed forces.
If you match the criteria of the scheme, it could be a great option for you to take. The government has now extended the deadline/review date of the scheme to later in time at December 2022. Here at Cardiffmoneyman, we are hoping that it stays around, as the scheme is incredibly helpful for existing armed forces members who really need that extra help with getting onto the property ladder.
The Lifetime ISA is often a scheme that is forgotten by homebuyers. It’s not a go-to scheme, however, it’s still very useful to be aware of it, it can help you secure a new home as a First Time Buyer in Cardiff.
A Lifetime ISA is basically a savings account where your money grows, free of tax. The government will also give you a nice little top up of your savings by an extra 25%, so if you meet the £4,000 maximum amount, you will receive a pretty handy bonus of £1,000.
You have to pass certain criteria in order to gain access to this type of mortgage scheme. All of these details are available on the Lifetime ISA website.
When it comes to purchasing a home, whether you’re a First Time Buyer in Cardiff or have been in this business before, the process can sometimes be stressful and rather costly. It starts to cost even more when you are buying and selling at the same time. Here is a helpful breakdown of some of the expenditures you will need to consider when exploring your avenues in buying a new home.
You should know that you only need to use the services of an estate agent if you are looking to sell a property. The price of these agents can vary, so you must make sure that you look for the best price and leading service before diving headfirst into anything. The cheapest estate agents tend to be online ones who don’t have to maintain the costs of running an office.
If you are not too worried about fees and you are interested in a more personalised and accessible service, you may have to pay an extra 1-2% of the price of your sale.
The fees are usually negotiable, especially when you’re in a “seller’s market”. What this means is that agents are fighting to get your instruction because of the lack of houses on the property market.
If you are in the market for taking out a mortgage, then the lender needs to know whether the property is worth the amount that you’re paying for it. If you are lucky, your lender may offer you a free service, although they may not send you a copy of the report.
Occasionally the Lender may not offer a free valuation, in this case, you may need to pay a few hundred pounds for the costs of one. Roughly, you can expect to pay double the aforementioned amount if you would like to upgrade to a more in-depth Homebuyer’s Report. The top of the range survey is the most expensive option and you can expect to pay a four-figure sum for those types of survey.
If you want to find out what each different survey consists of, you can ask your Mortgage Advisor in Cardiff, who will advise you and help you make an informed choice. If the property is old or not in the best shape structurally, you should consider upgrading the property survey so you can receive more details of what may need repairing or replacing and when the time comes to move in.
If you are looking for an experienced and dedicated Mortgage Advisor in Cardiff that provides Expert Mortgage Advice, look no further! Get in touch for a free mortgage consultation.
We often find that the cost to upgrade a property survey is a lot less than what it would cost you for repairs over the years. So rather than buying a property without knowing what you’re getting, you could upgrade and end up saving yourself a lot of money in the future.
Generally speaking, the mortgages with the lowest interest rates tend to be accompanied by the highest fees. It can occasionally cost you a fair amount to set up mortgages, with the fee ranging anywhere from zero to a few thousand pounds. Your Mortgage Advisor in Cardiff will recommend the cheapest and most appropriate product to meet your personal circumstances, calculating the total amount to pay over the product term including all fees.
If you are borrowing a larger sum of money, it is very likely that you will want to keep the interest rate as low as you possibly can. However, some may prefer to borrow a smaller amount of money. If you are in this boat, then you should know it’s usually cheaper to take out a mortgage without fees as a rule.
Lender arrangement fees can often be added onto your mortgage total. If you proceed with the choice of adding a fee, then you will be charged interest on the fee which can start to add up over the course of the mortgage term.
You will require the services of a solicitor to carry out the legal aspects of your property purchase. They need to go over a lot of different things, such as; does the seller actually own the property; who is responsible for maintaining adjoining fences and walls, and whether anyone has lodged any plans (for example to build future links for transport). These things could affect your ability to sell the house on later down the line.
When comparing solicitor’s fees (which could range anywhere around a thousand pounds depending on various factors) you need to make sure you look at whether the quote includes VAT and local searches.
We would recommend that you to be careful when trying to find yourself a solicitor, as not all of them are “on panel” for all lenders. A dedicated Mortgage Advisor can help you decide upon and recommend a solicitor that is best-suited for your circumstances.
Some purchases are subject to Stamp Duty which is a tax that you will pay to the government. The rules, on which purchases are captured by this tax, tend to change on a whim, so you should always check on the government website to see if this is payable.
Full details can be found here: https://www.gov.uk/stamp-duty-land-tax/
If Stamp Duty is due you will normally pay this at the time of completion, to your solicitor who will make the payment to the government on behalf of yourself.
Most mortgage brokers will charge you for their hard work, and that amount of the fee will often be a percentage of what the lender pays the broker for the work they do in their name. Most trusted mortgage brokers will only seek to charge you if they are successful in obtaining a formal mortgage offer for you.
Often, people tend to think that hiring a van and moving their furniture out themselves is easier than receiving help from a removal company. We can say for certain that from our experience, removal companies really are experts at manoeuvring furniture around. With that in mind, it is actually easier and less stressful to get them to help you out rather than trying to do it all yourself.
During the many years we have spent as mortgage advice experts in Cardiff, we have, together with many of our advisors, witnessed a continuous increase in the number of enquiries made by private tenants in relation to becoming First Time Buyers in Cardiff by buying their current home from their Landlord.
As a private tenant in Cardiff, this is possible as long as you have been presented the offer of “first refusal” by your Landlord. First Refusal basically refers to the fact that the Landlord has given the tenant the option of buying the home directly from them, as opposed to going to the open market. In cases where the tenant has not been offered first refusal or is unsure whether or not such an offer has been made, we always recommend reaching out to your Landlord to confirm.
One of the main reasons for this trend is a change in certain government policies. Buy to Let purchases were previously given a certain tax relief by the Government. This tax relief has now been completely removed and as such, many Landlords are faced with paying higher tax bills than they usually do.
As many Landlords will agree, the act of buying and renting out a home serves as a great long-term investment plan. This has been the case for a long time, and many still find it so in spite of the policy change of recent years and have decided to continue (even with the issue of higher tax bills), keeping the brighter future of the property market in mind.
However, for other Landlords, they have decided to sell their previously rented out homes and move on to other ventures, whether as a result of the aforementioned issue, general financial constraints, or other personal reasons.
Whatever their reasons may be, if you find yourself as a tenant of such a landlord, note that you would not exactly be doing them any special favours as there are a number of merits they will enjoy by selling the home directly to you.
By selling the home to their tenant, the landlord can save some money that would otherwise be spent paying estate agents.
If the landlord puts the home up for sale on the open market, would-be buyers will have to schedule times for viewing the property, an activity that would prove difficult with a tenant still occupying the property.
Since the landlord will be selling directly to their tenant while they still occupy the property, there will be no need to set some money aside for paying cleaners, making certain repairs (whether major or minor), and repainting if need be. Such activities would be necessary to make the property attractive to the would-be buyer, a stranger, and not for someone who already occupies the property and sees it as it is.
Putting the home on the open market and asking the tenant to leave (or in cases where the tenant leaves willingly) places the landlord in a position where they are unable to maintain the steady income they usually obtain from payment of rent – rental void. This is because it could take a while to find a willing buyer and complete the sale. Selling to the tenant however means that the tenant will continue paying rent until they are able to finalise the purchase.
You know the property in and out and understand the necessary improvements, if any, that need to be made.
Buying a home you are already used to and love gives you the liberty to make any changes you want – whether as regards interior decorations or the surroundings – without the usual permission and deliberation involved as a tenant.
Since you would be saving your landlord some money as the property buyer, he or she could offer you a discount from the open market price.
For other buyers or movers who own property already, the issue of property chain can bring about some discomfort as a buyer could be waiting for the occupant of the property to move out so they could move in, while that occupant is also waiting for someone else to move out of another property. This has hindered the sale of many properties. As a sitting tenant however, you are not burdened by this as you already occupy the property you plan on buying; you only need to meet lender criteria.
Offset mortgages are not the ‘go to’ mortgage for most, but they can turn out to be a great option to go on. It provides an opportunity to the customers to reduce the interest to be paid.
Offset mortgages can help pay off your mortgage quicker, as well as coming with tax benifits.
This is a form of mortgage that connects the outstanding balance with a savings account (normally through the same financial provider).
The balance you have on your bank account reduces your mortgage interest. You should only pay interest on £200,000 on your mortgage, for instance, if your mortgage was £300 000 and you had £100,000 in your associated savings account.
An offset mortgage offers flexibility, as you are able to add or remove funds from your offset savings account as and when required, meaning the cash is still available should you need it.
Also, you are able to reduce your interest and monthly payments by adding funds to your offset savings account. I.e. if you know you are going to be paid large bonuses these could then go into your offset account to reduce your payments. An offset could turn out to be the best way for a first time buyer in Cardiff who is looking to overpay on his mortgage.
Offset mortgages appear to be of special benefit to higher taxpayers or additional taxpayers and to persons who do not rely on the increased interest to fund their daily lives.
An offsett mortgage is a specialist subject and is not the right option for most. However, our mortgage advisors in Cardiff have vast knowledge when it comes to offset mortgages and will be able to advise if it is the right option for you.
Take some time to consider all the possible options and outcomes while speaking to Mortgage Advisor in Cardiff. It is necessary to consult an advisor to know more about the impact of Offset and how would you be getting the benefit from it in the long run.
If you need any sort of help or just want the questions to be answered or you have made the decision to remortgage in Cardiff. Then get in touch with our Mortgage Advisors in Cardiff. We will be more than happy to recommend you the most suitable mortgage for your individual financial circumstances.