Every now and again we come across a customer who would like to remove someone else’s name from a mortgage. As a mortgage broker in Cardiff, the main reason we hear for this is divorce or separation.
When encountering an instance such as this, sorting out your joint financial commitments should be your primary focus, to prevent any challenges down the line. Unfortunately, they’re often left until last.
Doing so makes the process a lot more difficult, stressful and much more time-consuming, so you should always do this ahead of time. Speaking to a mortgage broker in Cardiff is a good way to get on top of this.
Leaving your name tied to someone else financially can be problematic for you in the long run, due to a few reasons.
The first being that because your name is still tied, you will still be chased for missed mortgage payments, whether you live there or not. There is no getting out of that situation once you are in it, as you are legally responsible until removed.
Additionally, your credit score will also be affected by the financial association. If the other person’s credit score drops, so too will yours. Furthermore, if you were looking to take out a mortgage of your own, in your own name, you would be finding yourself in a difficult process.
For one, it will affect your affordability, as the mortgage lender will see it as an already large financial outgoing. This means you will not be able to borrow as much for your property purchase.
On top of this, you could be faced with higher Stamp Duty tax implications because you will be purchasing a new property whilst technically still owning one already. This can end up being quite costly.
All in all, it is best practice to remove your name from someone else’s mortgage as soon as you possibly can.
If you are the person who will be taking on the property and full responsibility for mortgage payments, the first step is to find out whether or not you are eligible for a remortgage onto a new deal as a sole name applicant.
Speaking directly with your mortgage lender/building society or getting in touch with a mortgage broker in Cardiff will help you to determine this.
Prior to removing someone else’s name from a mortgage, it is important that you both agree who will be getting the property. If you disagree, you may end up forking out on court costs to come to some sort of decision.
If you are currently experiencing divorce or separation, it will definitely be worth your while in seeking specialist mortgage advice in Cardiff. An expert mortgage advisor in Cardiff will be able to help you with your mortgage process.
If you require any help removing someone else’s name from your mortgage, it is absolutely worth your time getting help from a specialist mortgage broker to help you remortgage in Cardiff.
We are here to provide expert mortgage advice in Cardiff, 7 days a week including weekends and some bank holidays, to provide support and guidance throughout your remortgage process. Book your free remortgage review today and we will see how we can help.
The mortgage journey is a rewarding process. Owning your own home can give you many achievements further in life, like a sense of financial security and getting into a better position to start having children/starting a family. For some, First Time Buyers in Cardiff felt that owning their own home was one of their top financial goals.
Suppose your reason for wanting to own a home was that it provided a sense of security. Others felt that taking out a mortgage was cheaper than renting.
Despite and any hurdles you might have come across along the way, you will end up with a stepping stone to further boost you up the property ladder or in a position to make an investment purchase to provide some extra income.
Remortgaging is where you take out a new lender’s product on a property you already own to either replace your existing mortgage or borrow additional money against your property. Suppose you decide to stay with your current lender and negotiate a new deal with them. Then this is called a product transfer.
Whether you are looking to remortgage or take out a product transfer, you will notice that many products out there each have their own set of different deals and rates available. Further down, we listed the most popular remortgage products accessible to most homeowners, along with why remortgaging may be beneficial to you.
When is a good time to remortgage? Whether it is to secure a better deal, for home improvements, consolidate debts, to release equity or because your circumstances have changed.
A fixed mortgage term lasts between 2 and 5 years for the vast majority. During that period, you will be paying off some interest and capital. 2-5 years later, when it comes to your remortgage, you may be in a position to be in a lower loan-to-value bracket, allowing you to access better rates.
If you decide further down the line not to remortgage, you risk yourself going onto a lender’s standard variable rate of interest (SVR). Which could be much higher than what you are currently on.
However, if you remortgage before this happens and you fit into a better loan-to-value bracket. You could be moved onto a much better rate, resulting in saving you money each month.
If you have been placed on a tracker mortgage, you will find that your monthly payments and interest rate corresponds with the Bank of England’s base rate, which can fluctuate depending on the economy’s performance.
For example, if the economy has dipped, base rates may lower, and vice versa. Lenders may also add an extra percentage onto this base rate so that you are usually tracking a rate between 2-4%.
Once you are on the property ladder and settled into your new home, you may feel that the place needs some home improvements – whether that’s a new extension, conversion, or redecorating. If you choose to remortgage, there’s a possibility that you can get this work done for a reasonable price.
You will need to have the estimated costs of the improvements to get an idea of how much it will cost you. Then you can incorporate these costs into your mortgage upon taking out a new product. You will find that your monthly payments will increase depending on what you hope to achieve.
If you are looking to start having children/starting a family, want to add value to your home or add some home improvements, we would recommend remortgaging instead of going through the process of having to sell and buy a property simultaneously. In some circumstances, it’s easier to improve your current home.
If you are looking to extend or shorten their whole term to try and switch to a more flexible product shorten your term will lead to paying off your mortgage quicker. But, it can also mean higher repayments. Whereas extending your term can reduce your payments but you will be paying off your mortgage a lot longer.
During the process, you can decide whether to extend your term or not. Choosing to shorten your term will lead to the option of overpaying, which can help pay off your mortgage faster.
Although a flexible mortgage sounds like a good idea, they usually coincide in the form of a tracker mortgage. A tracker mortgage matches the Bank of England’s base interest rate, which changes depending on how the economy performs.
Equity is the difference between what is still owed on the mortgage and the property’s current value. The longer you’ve owned property, the more equity you’re likely to have in it. At some point, you’ll be able to remortgage and release some of this equity to turn it into a lump sum of cash.
You can spend this cash however you want to. Some choose to use the equity to put down another deposit on another home to help a family member.
As a Mortgage Broker in Cardiff, we often see that landlords with a Buy to Let in Cardiff release equity to put down a deposit onto another property to expand their portfolio.
If you are over the age of 55 and have a property valued around at least £70,000, it may be worth looking at your options for Equity Release in Cardiff. Speak to an expert later life mortgage advisor to learn more about this.
If you’ve built up some unsecured debt and want to incorporate it into your mortgage, this can be made possible in some cases. However, you will need to get in touch and speak to Mortgage Advisor in Cardiff, as debt consolidation is a ‘complex’ subject.
Debt consolidation is based on how much you owe, your property value, and your credit rating. You need to consider that you’re trying to incorporate large sums into your mortgage. Therefore, your total mortgage amount will increase.
If you have bad credit and need help from a mortgage expert, don’t hesitate to contact us. We have debt consolidation experts at Cardiffmoneyman that will be happy to help you with your needs.
It may be time to start your remortgage journey if you are coming towards the end of your fixed mortgage term. If you aren’t quite ready for that stage yet, we can take that stress away and do it for you!
We would advise that within 6 months of your deal ending, it may be time to start looking around for deals.
Book your own free remortgage appointment online today. We have advisors who are experts in giving Remortgage Advice in Cardiff. It’s our job to help you through your process and try and find you the most suitable deal that matches your personal and financial situation.
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.
We understand that going through a divorce or separation with your partner when you have a joint mortgage together can be difficult. This guide provides you with a list of frequently asked questions that you may want to know when it comes to divorce and separation.
In any case, you still need to keep paying your half of the mortgage even if you are living elsewhere in the meantime.
Regardless if only one of you is living there at the moment, you are both held equally liable for the debt as you and your ex-partner both agreed to take out a joint mortgage. Therefore, you need to keep paying half of your mortgage until it gets paid off.
If you fail to pay your mortgage on time, it can harm both you and your ex-partner’s credit history. Failed mortgage payment could lead to repossession of the house if you do not keep up with repayments on your mortgage or any other debt secured on it.
It’s best to inform your lender sooner rather than later. We recommend you mention this to your lender when you know you are separating.
If you have both agreed it is best to move out, sell up and pay off the mortgage, any equity left after the mortgage has been paid off will be split between you and your partner. In terms of who gets what in the leftover funds is a matter between yourselves.
Our trusted mortgage advisors in Cardiff are here if you decide to move out and look to purchase a new property. They can recommend you with the best deal, offering honest mortgage advice.
In some cases, where the divorce is on good terms, you can decide to stay and pay the existing mortgage. This option can be beneficial if your mortgage is fixed for a couple of years.
In the situation in which you or your ex-partner will live in the property, then the remortgaging of the property would be under the current resident in their sole name.
You will need to remortgage if you decide to become the sole owner of the property because there is an existing mortgage in joint names. From this, you will then need to take out a new mortgage in your sole name, meaning your affordability will be reassessed.
Depending on your circumstance, yes you can get a second mortgage. When applying for a second mortgage, each lender will have different credit scoring systems they use and consider a range of factors. One main factor to look at when applying for a second mortgage is your current financial commitments. From this, you can determine if you can afford the second mortgage as there could be a risk of your application getting declined which could negatively affect your credit file.
The good news is that, here at Cardiffmoneyman, we can perform a search for you that won’t damage your credit file. The maximum amount you will borrow will be confirmed when we have the necessary information gathered.
From this, you can have a good idea of your budget and how much your monthly mortgage will be on top of your current financial commitments.
Moving away from your current financial commitments can be a challenge, however, this is why having an expert Mortgage Advisor in Cardiff by your side could be beneficial.
An experience like moving home can be stressful, especially when a complex situation like divorce or separation is added to the mix. Our caring and knowledgeable Mortgage Advisors in Cardiff will do their best to help you with this process.
Negative equity can happen when the value of your property falls. In the situation where your joint home is in negative equity and you are divorced, it can become a challenge to sell the house and pay off the mortgage in full.
The outstanding debt might have to be split between the two of you or follow and agree with your mortgage provider’s advice.
A Remortgage is when a mortgage deal comes to an end and you have to either renew your deal or switch onto another one. If you are approaching the end of your mortgage term and you need a new deal to switch onto, perhaps it’s time to get Remortgage Advice in Cardiff.
If you leave a Remortgage too late, you could find yourself dipping straight onto your lenders’ standard variable rate (SVR). A lenders’ variable rate will always be a higher rate than your current fixed-rated, so make sure that you know when your deal is coming to it’s end and it’s time to remortgage.
When it’s time to remortgage, you should consider all of your available options:
More often than not, your lenders’ standard variable rate will have a greater interest rate than most of their fixed-rate mortgage deals. If you want to save the hassle of searching for another deal or are more than happy to match their payments, this could be an easy option for you. It depends on your lenders’ standard variable rate.
As a Mortgage Broker in Cardiff, we must inform you that in the majority of cases, applicants who are on their lenders’ SVR are able to access much better rates.
The only real positive to being on your lenders’ standard variable rate is that you are not tied into any particular mortgage deal, therefore you can shop around and look elsewhere for other mortgage options whenever you want to. You can’t do this whilst linked with a fixed-rate product. You are essentially overpaying for freedom.
If you were happy with your mortgage payments, you may be able to renew your current deal. Your lender will know that you are coming to the end of your deal, however, they may not tell you. It’s your job to know when it’s coming to an end and you must get in touch with them if you want to discuss teh possibility of renewing your deal.
When a deal suits your circumstances, we know that there is rarely a reason to swap products. The only time it really happens is when someone can get the same product from another lender for slightly cheaper.
In our opinion, this is your best option if you are looking at Remortgaging in Cardiff. Most of the time, there’s a better deal out there that’s available for you, it’s just the case of finding it. Remember that you are under no obligation to stay with your current lender, so when we say to “shop around”, you can look anywhere.
Lenders will never reward you for your loyalty, they are more likely to offer better rates to First Time Buyers in Essex. No matter how long your term was, they will never offer you discounted rates or products.
When you are looking for external deals, you have to be careful where you look. For example, if you choose to switch everything over online, you need to make sure that you pick a deal that is right for you. If you end up with the wrong deal, you will have to deal with consequences as you chose not to take Mortgage Advice in Cardiff and did everything yourself. If this results in you paying more than your previous rate, you can’t do anything about it, you will still have to pay.
There are ways to get out of a wrong deal, however, they include high fees and a lot of trouble. If you take Mortgage Advice in Cardiff you will avoid all risks of getting it wrong, as a Mortgage Broker like ourselves aim to get it right the first time!
Once you have chosen your Remortgage route and have a new/the same deal in place, you are free to continue as you were prior to remortgaging. You will continue paying your mortgage payments as usual.
Hopefully, you managed to get a competitive rate out of your remortgage and are happy with the product that you now have. Until your term is over, you don’t have to worry about remortgaging for a while now. On the other hand, if your personal or financial circumstances change in Cardiff, you should know that you can remortgage again if you need too. If your situation has changed, your lender will take it into consideration and may be able to work something out for you.
If your situation is complicated, approaching a Specialist Mortgage Advisor in Cardiff could your best option. You can also Remortgage for home improvements and to raise capital, so don’t hesitate to get in touch if you need help with this.
When you take on any mortgage type, you will be paying capital (the balance) and the interest (at a percentage of the remaining balance) at the same time. If you are looking to lower the amount of interest you pay per month, you may find it beneficial to take out an offset mortgage in Cardiff.
When an applicant looks to get an offset mortgage in Cardiff, their mortgage lender will open them up a savings account, to run alongside their mortgage term length. You won’t be paying back the capital balance of your mortgage from this savings account, instead, you’ll lower your interest.,
To use an example of this, you had a £100,000 mortgage to pay off and you chose to put £20,000 into your savings account, there will still be a £100,000 mortgage for you to pay per month, but you would only be paying interest on £80,000, with the remaining amount free from interest.
The amount of interest that you will usually pay is calculated at a percentage of your mortgage balance, which increases how much you pay overall. With this in mind, the more interest you offset into your savings account, the less you’ll have to pay overall, which can save you money.
As we said, the money that you will put into the savings account is to be offset against your interest, lowering your overall mortgage payments. Unlike you would for a standard savings account, you do not pay tax on this savings account. This is definitely more beneficial for higher rate taxpayers.
One of the possible downsides to this type of mortgage, is that your savings also won’t grow like a standard savings account. No interest will be earned on an offset mortgage savings account.
Even with this, a potential offset mortgage applicant may still not be deterred, especially as you could be saving so much by offsetting the interest. Another good side to it, is that there is a lot of flexibility in the account.
Looking back at the previous example of a £100,000 mortgage and savings of £20,000, if you then needed to use some of your savings, in perhaps an emergency situation, you can do this. It’s important to remember though, you would once again be paying interest on a higher amount.
So whilst perhaps you are only paying interest on £80,000 at that time, if you were to draw out £10,000, you would then be paying interest on £90,000 again until you had enough funds to deposit back into your offset mortgage savings account.
You will always remain responsible for your monthly mortgage payments, but you would be paying much less on your interest overall.
If you ever got to a point where you could offset the whole balance nearer to the end of your term, maybe through some handy work bonuses or inheritance, you would still be responsible for your capital repayments, you would just have much less interest.
What this means, is that whilst offsetting your entire mortgage balance would effectively reduce your interest rate to nothing, the capital will still be there (your mortgage will be made up of both capital and interest) and need to be paid back.
Depending on who your mortgage lender is, you may be able to make overpayments to your mortgage by a specific additional amount per year. As a general rule, it’s up to 10% per year, though it is always worth asking your mortgage lender first.
Overpaying too high per year can possibly lead you to being required to pay an early repayment charge.
Whilst you may have limitations on how much you can overpay your mortgage balance, you have the freedom to put as much as you want into your savings, whenever you would like to do this.
There are lots of factors to think about when taking out an offset mortgage in Cardiff, as to whether or not it is the most suitable option for you. This can be a difficult choice to make, especially if you are a first time buyer in Cardiff.
Really it’s all about the pros and cons. As we said, higher rate taxpayers will definitely benefit from it, as their savings are tax-free. You are also able to utilise the flexibility to withdraw and deposit funds as you wish to do so.
Another positive, especially if you are applying for a first time buyer mortgage in Cardiff, is that someone else may have the option to offset against your mortgage, meaning a family member or friend could help bring your payments down, though this depends on mortgage lender.
At the end of the day, you at least need to be making significantly large payments into this savings account to see the benefits and to outweigh the costs that are involved with offset mortgages.
Book in for a free mortgage appointment today and we’ll look to see if an offset mortgage, or an alternative mortgage type, is right for you.
First Time Buyers or any applicants with high credit scores are more likely to get accepted for a mortgage over applicants with a lower credit score. Lenders study your application carefully in order to ensure that you are able to afford a mortgage with them. You will never be guaranteed a mortgage and this is because every lender has different lending criteria and the chances of you matching every single one of these is unlikely.
Each lender has developed their own way of identifying whether you match their criteria or not. It is your Mortgage Advisors’ job to try and find you a lender who has the most criteria you match up to. They will also try to find the best deal for your personal circumstances. Whether your advisor is from your bank, the mortgage lender or a Mortgage Broker in Cardiff, your advisor will try their best to match your personal circumstances.
By going with a Mortgage Advisor in Cardiff, you will always know what is going on and will always be updated if anything changes or something comes up. We are a dedicated mortgage broker, here to help improve your credit score and help secure that perfect mortgage deal. Whether you are a First Time Buyer, Moving Home or Self Employed, we think that you would benefit from fantastic Mortgage Advice in Cardiff.
There are many different credit reference agencies in Cardiff that you can go to, with the most popular are Experian and Equifax. Before you make a decision, research each agency as it is a possibility that some of them could be holding incorrect data and discovering any discrepancies will be very beneficial to you.
Improving your credit score can be difficult but there are ways you can do this effectively in a manner that allows you to reap the rewards down the line.
Making multiple credit searches could actually have a adverse impact on your credit score. Price comparison websites are risky as they can also damage your score, so be extra careful. We also advise you to not apply for credit during the mortgage process as this may signify to the lender that you are struggling financially, even if you are not. It is a good thing in the long term though as it shows that you are reliable in making recurring payments.
Another simple but useful tip for improving your credit score is by registering for the Electoral Roll. In the eyes of the lender, it shows stability which they will favour. When registering, you must spell your name correctly and set your address to your current one and not a previous one. If you are not registered then you definitely should do this asap, as it’s quick and easy to set up and it could have a really positive impact on your credit score. Make sure everything is correct though to maximise the benefits!
Maxing out your card each month is not recommended and is bound to reduce your credit score. The lender looks at your credit card statements to check whether or not you have paid off balances by the due date. If you are meeting due dates and have never exceeded overdraft limits then a lender will see that you are more than capable of handling your finances well and it could prove beneficial towards your mortgage application.
On the flip side, if you don’t manage your finances carefully then the lender will believe that you don’t take payments seriously, thus reducing your chances of being accepted by them for any amount.
We often find that people who have moved house have not told their previous credit provider, which means that on their records you still are shown as living in the other property. Make sure you are on top of this as lenders don’t like to see your address history all mixed up and shown as living in two different places when you are not.
Some people, without even realising, have a family member or ex-partner connected to their financial commitments. It’s worth checking just to be sure, as you can’t get the financial association removed if the account is still live. If you are trying to remove any of these links then you should contact the credit reference agencies and make a request with them directly.
Applicants see credit scoring as being an unfair approach to accessing whether or not they can obtain a mortgage. Lenders disagree as this method provides a faster, fresher approach to their system of credit scoring. It’s also a lot cheaper for the mortgage lender and it provides always provides a result that they deem trustworthy.
If you want to get ahead of the game, you should send an up-to-date copy of your credit report in advance to your Mortgage Advisor in Cardiff. Starting early will increase your chances of being accepted for a mortgage the first time. The more that your advisor knows about your financial situation the better your chances will be.
Also, there are still some lenders that will want to do the process the old-fashioned way and will prefer a manual approach. They will have certain rules that they stick by about the number of defaults and CCJs that they will allow.