When purchasing or looking for a remortgage, one of the paramount factors to contemplate is the choice of mortgage. The optimal mortgage solution for your unique situation hinges on several factors, including your current circumstances, future intentions, and whether you intend to occupy the property yourself or rent it out.
A mortgage represents a substantial, long-term commitment, and it necessitates careful consideration regarding your preferences and financial capabilities. To assist you in navigating this crucial decision, we offer a concise overview of diverse mortgage options to help you identify the one that aligns best with your needs.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Fixed Rate Mortgages
Opting for a fixed-rate mortgage ensures that your monthly payments remain consistent throughout a specified period, regardless of any fluctuations in the market’s interest rates.
These fixed-rate periods come in diverse durations, including options such as 2-year fixed rate mortgage, 3-year fixed rate mortgage, 4-year fixed rate mortgage and 5-year fixed rate mortgage, 7- and 10-year fixed rate mortgages are available.
Tracker mortgages
Tracker mortgages are intricately tied to the Bank of England’s Base Rate, mirroring its movements. The interest rate on these mortgages is composed of the Bank of England’s Base Rate along with a predetermined margin.
Two primary categories of tracker mortgages exist: “lifetime” trackers, which maintain their connection to the Base Rate for the entire duration of the mortgage, and term trackers, which typically span periods of 2 to 5 years.
Some tracker rate products do not levy an Early Repayment Charge.
Porting – borrowing more
Step 1: Consult with a Mortgage Professional:
If you plan to take out a new mortgage for your new home, consult with a mortgage professional to discuss your options. They can help you understand the mortgage process. We will be able to check your credit file and work how much you can afford.
Step 2: Get Pre-Approved for a New Mortgage: Once we have checked your credit file, discussed your future outgoings and income, we can draft an Agreement in Principle, also known as a Decision in Principle.
Step 3: List your property: You should know how much you need to borrow, but in most cases, you will not be able to make an offer on a property until yours has sold (sold subject to contract / under offer).
Step 4: Secure Your New Home: Once you have sold subject to contract – time to start looking at properties.
Porting – borrowing less
Porting a mortgage, also known as mortgage portability, is a feature offered by some mortgage lenders that allows homeowners to transfer their existing mortgage from one property to another when they move or purchase a new home. This can be particularly advantageous for homeowners who have favorable mortgage terms and want to avoid penalties or fees associated with breaking their existing mortgage contract.
You have two options when porting, both which you need to consider carefully.
Non-simultaneous porting is the transaction process that involves the sale and purchase of two properties that do not occur simultaneously on the same day, in most cases you would pay the early repayment charge, but this would be refunded – terms and conditions do apply to be aware.
The most common is simultaneous porting, you would sell and purchase on the same day.
Porting a mortgage can be a beneficial option. It is essential to carefully consider your financial situation and consult with a mortgage professional to ensure that porting makes sense for your specific circumstances. It is important you work closely with a mortgage expert, the estate agent and your conveyancer.
Reviews
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I had 3 days before my mortgage rolled onto the variable standard rates. I called Anesh to help me out. Anesh made time for me out of working hours and helped me secure my mortgage renewal by going through the application and secured a good rate for me. I couldn’t vouch enough for Anesh. A good family man who cares about his client base as well and everything is very honest and upfront.
As things do in life I found Anesh through word of mouth from other happy clients who also happen to know me , Anesh made me feel safe and confident in the whole process right off the back , he took time to explain the process and ease my concerns , he took all the hassle out of the paper work to the point of it being stress free , even after the offer of Morgage he has remained invested in the process and is often at the end of the phone when I need advise or guidance in other steps of the process, Anesh thank you for the amazing work you do
I honestly cannot recommend Anesh enough, he works endlessly around the clock to make sure your every need is met. So quick and good at what he does. Never pushey, always gives you plenty of options and as much information as possible. Not only for your mortgage but for all your financial needs. So positive and has a smile on his face every time. I’m pleased he isn’t just a one off service, he’s an ongoing helper and builds a great relationship!
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FAQs
What happens to my current interest rate when I move home?
In most cases if you are porting your mortgage, your existing interest rate may be maintained if the lender allows it. If you’re obtaining a new mortgage or need to borrow more, your interest rate will depend on the prevailing rates at the time of application.
What if I want a larger mortgage for the new property?
If you need a larger mortgage for your new home, you may need to go through a mortgage application process. Your lender will evaluate your eligibility based on your current financial situation.
How do I compare first-time home buyer mortgage rates in Lincoln?
How do I compare first-time home buyer mortgage rates in Lincoln? A: You can compare first-time home buyer mortgage rates in Lincoln by using an online mortgage comparison tool or working with a local mortgage broker. Be sure to compare rates and terms from multiple lenders to find the best deal for your needs.
What if I can't sell my current home before buying a new one?
In some cases, you may consider a bridging loan to cover the gap between purchasing the new property and selling the old one. Be aware that bridging loans can have higher interest rates and come with some financial risks.
What mortgage products do you offer?
Fixed-Rate Mortgage: With a fixed-rate mortgage, the interest rate remains constant for a predetermined period, typically 2, 3, 5, or 10 years. This provides stability in monthly repayments, making it easier to budget.
Variable-Rate Mortgage: Also known as a tracker mortgage, the interest rate on this type of mortgage is linked to the Bank of England’s base rate or another benchmark rate. As the benchmark rate changes, your mortgage rate and monthly payments will fluctuate accordingly.
Standard Variable Rate (SVR) Mortgage: SVR mortgages are the lender’s default rates and are usually higher than fixed or tracker rates. Borrowers are placed on the SVR when their initial fixed or tracker rate period ends. While rates can change at the lender’s discretion, they can be more flexible than fixed-rate terms.
Discounted Rate Mortgage: These mortgages offer a discount on the lender’s SVR for a specified period. For example, you might receive a 2% discount on the SVR for the first two years of the mortgage.
Capped Rate Mortgage: Capped rate mortgages have an interest rate that can fluctuate but is capped at a maximum level. This provides some protection against rising interest rates while allowing for potential rate decreases.
Offset Mortgage: An offset mortgage links your savings and current account balances to your mortgage. The amount of interest you pay is calculated based on the mortgage balance minus your savings. This can help reduce the amount of interest paid and shorten the mortgage term.
Interest-Only Mortgage: With an interest-only mortgage, you only pay the interest on the loan each month. The principal balance remains unchanged. These mortgages are often used in conjunction with an investment plan to repay the principal at the end of the term.
Buy-to-Let Mortgage: Designed for those who want to purchase property for rental purposes, buy-to-let mortgages have specific criteria and typically require a larger deposit than standard mortgages.
Help to Buy Mortgage: These government-backed schemes aim to assist first-time buyers by offering low-deposit mortgage options. The Help to Buy Equity Loan and Help to Buy ISA are two common programs.
Self-Build Mortgage: These mortgages are for individuals looking to build their own homes. Funds are released in stages as the construction progresses.
Adverse Credit Mortgage: These mortgages are for individuals with a less-than-perfect credit history. They often come with higher interest rates due to the increased risk to lenders.
Flexible Mortgage: Flexible mortgages offer features like overpayments, underpayments, and payment holidays, allowing borrowers to adapt their repayments to their financial situation.
It’s important to note that mortgage availability and terms can change over time and may vary between lenders. Additionally, eligibility for these mortgage products depends on factors such as your credit score, income, and the amount of deposit you can provide. It’s advisable to consult with a mortgage advisor or broker to find the most suitable mortgage product for your specific circumstances.
