Mortgages Archives - Page 14 of 21

£140,000 Mortgage Repayments Calculator

by Dax McLeanPosted on 14th January 2022 | Updated 20th January 2023

It’s advisable to determine how much a mortgage will cost you before taking one out, as repayments will likely be your most significant outgoing expense every month.

In this guide, we’ll explore how much repayments for a £140,000 mortgage can cost you per month, factors that influence monthly costs, and how to get the best rates available.

Repayments For A £140,000 Mortgage

Different factors will influence your monthly repayments for a £140,000 mortgage.

The most vital factors include the term or length of the mortgage and the interest rate you get from your lender.

It’s important to remember that every lender is different, and they’ll have their criteria to determine the rates they give you.

Factors like your credit history or profile and your deposit amount can influence the interest rate a lender is willing to offer you.

Apply for a mortgage today

Need more help? Check our quick help guides:

Interest Rates For A £140,000 Mortgage

Interest rates affect monthly repayments on any loan, and the mortgage rate you qualify for will mostly depend on your profile as a borrower and your level of deposit.

You can find rates from 1% to 5% for a £140,000 mortgage among lenders in the UK. The interest is usually added to a portion of the borrowed amount or capital and repaid each month for the loan duration until you clear the loan.

Interest Only Repayments

Lenders can also allow you to choose between an interest-only or capital repayments plan for a £140,000 mortgage subject to lender criteria. With capital repayment mortgages, you repay a percentage of the capital plus interest every month for the loan duration.

With interest-only repayments, you only repay the interest on the loan every month and nothing off the capital. The amount borrowed or capital becomes due at the end of the loan term in one huge lump sum.

To qualify for an interest-only £140,000 mortgage, most lenders require you to show a viable repayment strategy. It’s easy to pile up a huge debt that can be difficult to repay without a good plan. A repayment strategy will assure the lender that you can cover the entire balance at the end of the mortgage term.

You may also need a larger deposit to qualify for an interest-only repayment plan for a £140,000 mortgage. Most lenders will only consider a 75% loan to value (LTV) ratio. The good news is that you’ll have lower monthly repayments with an interest-only mortgage because you’ll not be paying anything off the capital amount.

Related guides:

The Term For A £140,000 Mortgage

The term or period of the mortgage will also significantly impact your monthly repayments and the total amount you’ll ultimately pay. Typically, you can get a period between 5 to 30 years to repay a £140,000 mortgage among lenders in the UK. Some lenders will offer a longer term than this.

With a more extended period, you’ll have cheaper monthly repayments. However, you’ll repay a higher total amount for the loan than a shorter period. Because the interest compounds each month, you can save thousands by repaying your loan over a shorter period.

The less the term or period of the loan, the less the total amount you’ll pay, but the monthly payments will be higher. The loan term you get will depend on your circumstances and affordability, and it’s wise to choose a mortgage term based on the amount you can realistically afford to repay each month.

How Deposit Affects Monthly Repayments For A £140,000 Mortgage

Mortgage lending depends on how much you want to borrow relative to the property’s value in what is known as the loan to value (LTV) ratio. A lender’s LTV ratio will influence the deposit you’ll need for a £140,000 mortgage.

The LTV ratio is expressed as a percentage, and it describes how much a lender is willing to offer you compared to the value of the property you’re buying. For example, if you have a £14,000 deposit for a property worth £140,000, you’ll own 10% outright and need to borrow 90%. The LTV ratio, in this case, becomes 90%.

Lenders will see you as a higher-risk borrower if you have a low deposit, which will translate to unfavourable terms and higher interest rates. While you can find lenders who offer mortgages of up to 95% of the property value in the UK, they don’t always include the best deals available.

The best terms and rates are offered to borrowers with low LTV ratios. To ensure you get the best terms with affordable monthly payments, you should aim for 20% and above deposits, which is the standard for attractive mortgages and interest rates.

With a higher deposit, you’ll have a lower loan amount and interest to repay monthly and in total.

Apply for a mortgage today

Related guides:

A £140,000 Mortgage With Bad Credit

Having bad credit isn’t necessarily a deal-breaker when you’re looking for a £140,000 mortgage. The number of lenders available to you can be limited, but you can still find lenders specialising in offering mortgages to bad credit borrowers.

With bad credit, mortgage providers will view you as higher risk, and they may charge you higher interest rates and require more significant deposits to offset the risk. Higher interest will translate to higher monthly repayments.

All lenders are not the same, and all borrowers are treated as individuals on a case-by-case basis. Different lenders will treat you differently depending on your circumstances and how the lender assesses risk. Each may offer different rates and require different deposit sizes for a bad credit £140,000 mortgage.

You can still qualify for reasonable terms and rates depending on the recency and severity of your bad credit issue. Borrowers with older credit issues are more favourable than those with recent misdemeanours.

It’s recommended to consult a mortgage broker or adviser with access to the entire market to ensure you get the best deals and rates based on your circumstances.

A £140,000 Mortgage For Buy To Let

The criteria for a £140,000 mortgage for a buy-to-let property is different from a residential property. Buy-to-let mortgage providers may require a 25% deposit, with others accepting a 15% deposit provided you meet their criteria.

Most buy-to-let mortgages are on an interest-only repayment basis which translates to lower monthly payments.

£140,000 Mortgage Final Thoughts

You can easily find various online mortgage calculators that give you a rough idea of how much a £140,000 mortgage can cost you.

However, many other variables are involved, and you may need to consult a mortgage adviser or broker for the best rates and more in-depth expert advice.

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

Further reading:

What’s the monthly repayments on a £140000 mortgage?

Kristian Derrick

by Dax McLeanPosted on 14th January 2022

It’s advisable to determine how much a mortgage will cost you before taking one out, as repayments will likely be your most significant outgoing expense every month.

In this guide, we’ll explore how much repayments for a £140,000 mortgage can cost you per month, factors that influence monthly costs, and how to get the best rates available.

Repayments For A £140,000 Mortgage

Different factors will influence your monthly repayments for a £140,000 mortgage.

The most vital factors include the term or length of the mortgage and the interest rate you get from your lender.

It’s important to remember that every lender is different, and they’ll have their criteria to determine the rates they give you.

Factors like your credit history or profile and your deposit amount can influence the interest rate a lender is willing to offer you.

Apply for a mortgage today

Need more help? Check our quick help guides:

Interest Rates For A £140,000 Mortgage

Interest rates affect monthly repayments on any loan, and the mortgage rate you qualify for will mostly depend on your profile as a borrower and your level of deposit.

You can find rates from 1% to 5% for a £140,000 mortgage among lenders in the UK.

The interest is usually added to a portion of the borrowed amount or capital and repaid each month for the loan duration until you clear the loan.

Interest Only Repayments

Lenders can also allow you to choose between an interest-only or capital repayments plan for a £140,000 mortgage subject to lender criteria.

With capital repayment mortgages, you repay a percentage of the capital plus interest every month for the loan duration.

With interest-only repayments, you only repay the interest on the loan every month and nothing off the capital.

The amount borrowed or capital becomes due at the end of the loan term in one huge lump sum.

To qualify for an interest-only £140,000 mortgage, most lenders require you to show a viable repayment strategy.

It’s easy to pile up a huge debt that can be difficult to repay without a good plan.

A repayment strategy will assure the lender that you can cover the entire balance at the end of the mortgage term.

You may also need a larger deposit to qualify for an interest-only repayment plan for a £140,000 mortgage. Most lenders will only consider a 75% loan to value (LTV) ratio.

The good news is that you’ll have lower monthly repayments with an interest-only mortgage because you’ll not be paying anything off the capital amount.

Related guides:

The Term For A £140,000 Mortgage

The term or period of the mortgage will also significantly impact your monthly repayments and the total amount you’ll ultimately pay.

Typically, you can get a period between 5 to 30 years to repay a £140,000 mortgage among lenders in the UK. Some lenders will offer a longer term than this.

With a more extended period, you’ll have cheaper monthly repayments. However, you’ll repay a higher total amount for the loan than a shorter period.

Because the interest compounds each month, you can save thousands by repaying your loan over a shorter period.

The less the term or period of the loan, the less the total amount you’ll pay, but the monthly payments will be higher.

The loan term you get will depend on your circumstances and affordability, and it’s wise to choose a mortgage term based on the amount you can realistically afford to repay each month.

How Deposit Affects Monthly Repayments For A £140,000 Mortgage

The LTV ratio is expressed as a percentage, and it describes how much a lender is willing to offer you compared to the value of the property you’re buying.

For example, if you have a £14,000 deposit for a property worth £140,000, you’ll own 10% outright and need to borrow 90%. The LTV ratio, in this case, becomes 90%.

Lenders will see you as a higher-risk borrower if you have a low deposit, which will translate to unfavourable terms and higher interest rates.

While you can find lenders who offer mortgages of up to 95% of the property value in the UK, they don’t always include the best deals available.

With a higher deposit, you’ll have a lower loan amount and interest to repay monthly and in total.

Apply for a mortgage today

Related guides:

A £140,000 Mortgage With Bad Credit

Having bad credit isn’t necessarily a deal-breaker when you’re looking for a £140,000 mortgage.

The number of lenders available to you can be limited, but you can still find lenders specialising in offering mortgages to bad credit borrowers.

All lenders are not the same, and all borrowers are treated as individuals on a case-by-case basis.

Different lenders will treat you differently depending on your circumstances and how the lender assesses risk.

Each may offer different rates and require different deposit sizes for a bad credit £140,000 mortgage.

It’s recommended to consult a mortgage broker or adviser with access to the entire market to ensure you get the best deals and rates based on your circumstances.

A £140,000 Mortgage For Buy To Let

The criteria for a £140,000 mortgage for a buy-to-let property is different from a residential property.

Buy-to-let mortgage providers may require a 25% deposit, with others accepting a 15% deposit provided you meet their criteria.

Most buy-to-let mortgages are on an interest-only repayment basis which translates to lower monthly payments.

£140,000 Mortgage Final Thoughts

You can easily find various online mortgage calculators that give you a rough idea of how much a £140,000 mortgage can cost you.

However, many other variables are involved, and you may need to consult a mortgage adviser or broker for the best rates and more in-depth expert advice.

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

Further reading:

What are the Repayments on a 200k Mortgage?

by Dax McLeanPosted on 14th January 2022 | Updated 20th January 2023

A mortgage is a huge commitment, and mortgage repayments are likely to be your most considerable monthly expenditure.

For informed financial decisions, it’s wise to get an accurate measure of how much mortgage repayments will cost you.

This article will explore 200k mortgage repayments and how different factors like the term, interest rate, individual circumstances, income, and deposit can affect repayments.

What Are The Repayments For A 200k Mortgage?

Different factors can affect your monthly repayments for a 200k mortgage.

The repayments are not the same for everybody because every borrower is different and has individual circumstances and credit history.

All lenders are not created equal and may offer different terms and deals that may affect your mortgage repayments.

Generally, the main factors that will significantly impact how much repayments for a 200k mortgage cost you include the interest rate you get from the lender and the loan term.

Apply for a mortgage today

Need more help? Check our quick help guides:

How Interest Rate Affect 200k Mortgage Repayments

Like other loans, it’s crucial to consider the interest rate for a 200k mortgage loan as it can affect how much you repay every month. Mortgage lenders in the UK may offer interest rates ranging from 1% to 5%, mainly depending on your risk profile or credit history and the size of your deposit.

Here’s an estimate of the monthly repayments you would make for a 200k mortgage based on different interest rates in 30 years.

Interest Rate	1%	2%	3%	4%	5%
Monthly Repayment	£643	£739	£843	£954	£1074

Interest Only Repayments

Repayments for a 200k mortgage can also depend on whether the loan is a capital repayment or an interest-only mortgage. You repay a percentage of the interest plus capital every month with capital repayment mortgages.

Some lenders may also offer interest-only repayment plans where you only repay the interest on the loan every month and nothing off the capital or amount borrowed. At the end of the loan term, the capital becomes due in one huge lump sum.

It’s easy to accumulate a considerable debt with interest-only repayments, so lenders will require that you have a viable repayment strategy. It involves a written plan showing how you’ll pay the total balance on the mortgage at the end of the term.

How Loan Terms Affect 200k Mortgage Repayments

Generally, you can get a 5 to 30 years loan term to repay a 200k mortgage. The amount it will take you to pay off a 200k mortgage will depend on how much you can realistically afford to pay each month.

The length of the mortgage has a significant effect on repayments and how much you ultimately pay. Extended periods will have cheaper monthly repayments but a higher overall cost, while lesser periods will have higher monthly repayments but a lower total amount.

For example, a 200k mortgage over 30 years will cost you more than a mortgage for 25 years or less but will have cheaper monthly repayments that may be worth the extra cost.

It’s advisable to base your decision on how much you can realistically afford to repay each month without financial strain. The table below can give you an idea of how the term affects the total amount and repayments for a 200k mortgage based on an interest rate of 3%.

Term	Monthly Repayment	Interest	Total Repaid
30 years	£843	£103,495	£303,495
25 years	£948	£84,478	£284,478
20 years	£1106	£66,169	£266,169
15 years	£1381	£48,853	£248,853
10 years	£1931	£31,729	£231,729
5 years	£3594	£15,616	£215,616

What Income Do I Need To Get A 2ook Mortgage?

While qualifying for a 200k mortgage will come down to more than your income, lenders will generally cap the amount you can borrow based on your monthly salary. Some can advance you up to 4.5 times your salary, and others can go up to 5 times or even six times with the right circumstances.

Remember, lenders will look at other things to determine your affordability, including your monthly expenses, the deposit you have, and your credit history.

Related guides:

How The Deposit Can Affect 200k Mortgage Repayments

The more deposit you can put down, the better the rates and terms of the mortgage since lenders will see you as lower risk. Better rates translate to lower monthly repayments, so the higher the deposit, the better the deal.

The amount needed as a deposit will depend on the lender’s loan to value (LTV) ratio, your employment type, credit rating, and if you’re after a buy-to-let or residential mortgage.

The rate will generally get better with a bigger deposit size. The higher the amount you can put down, the lower the interest and mortgage loan amount you’ll have to repay.

What Are The Repayments For A 200k Buy-To-Let Mortgage?

Rules for buy-to-let mortgages are usually stricter and slightly different from residential mortgages. Lenders will have higher minimum income requirements and require more significant deposits.

Some may consider rental income forecasts and require that the projected rental payments cover 125% to 130% of the 200k mortgage monthly repayments.

You can make most buy-to-let mortgage repayments on an interest-only basis, and this will be more tax-efficient and flexible for you as a landlord. You’ll have the option to quickly sell the property when you wish to clear the loan balance.

Apply for a mortgage today

Related guides:

Other Factors That Can Affect 200k Mortgage Repayments

Your Credit Rating

Like other loans, your credit rating and history can affect the terms of the deal on a 200k mortgage. The better the rating, the better the rate. A bad rating may cause lenders to look at you as riskier, translating to less favourable rates and higher deposits.

However, every lender is different, and some may see you more positively than others, depending on your current circumstances.

Final Thoughts

Every borrower and lender is different, so expert, bespoke advice is the best way to determine what 200k mortgage repayments will cost you.

While mortgages calculators can be helpful, they can only give you a general idea. They will not consider other variables that come into play, including your income sources, credit history, monthly expenses or deposit amount

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

Further reading:

What Are the Monthly Repayments on a £200K Mortgage?

Kristian Derrick

by Dax McLeanPosted on 14th January 2022

A mortgage is a huge commitment, and mortgage repayments are likely to be your most considerable monthly expenditure.

For informed financial decisions, it’s wise to get an accurate measure of how much mortgage repayments will cost you.

This article will explore 200k mortgage repayments and how different factors like the term, interest rate, individual circumstances, income, and deposit can affect repayments.

What Are The Repayments For A £200k Mortgage?

Different factors can affect your monthly repayments for a 200k mortgage.

The repayments are not the same for everybody because every borrower is different and has individual circumstances and credit history.

All lenders are not created equal and may offer different terms and deals that may affect your mortgage repayments.

Generally, the main factors that will significantly impact how much repayments for a 200k mortgage cost you include the interest rate you get from the lender and the loan term.

Apply for a mortgage today

Need more help? Check our quick help guides:

How Interest Rate Affect £200K Mortgage Repayments

Here’s an estimate of the monthly repayments you would make for a 200k mortgage based on different interest rates in 30 years.

Interest Rate	1%	2%	3%	4%	5%
Monthly Repayment	£643	£739	£843	£954	£1074

Interest Only Repayments

Some lenders may also offer interest-only repayment plans where you only repay the interest on the loan every month and nothing of the capital or amount borrowed. At the end of the loan term, the capital becomes due in one huge lump sum.

It’s easy to accumulate considerable debt with interest-only repayments, so lenders will require that you have a viable repayment strategy. It involves a written plan showing how you’ll pay the total balance on the mortgage at the end of the term.

How Loan Terms Affect £200K Mortgage Repayments

Generally, you can get a 5 to 30-year loan term to repay a 200k mortgage. The amount it will take you to pay off a 200k mortgage will depend on how much you can realistically afford to pay each month.

For example, a 200k mortgage over 30 years will cost you more than a mortgage for 25 years or less but will have cheaper monthly repayments that may be worth the extra cost.

Term	Monthly Repayment	Interest	Total Repaid
30 years	£843	£103,495	£303,495
25 years	£948	£84,478	£284,478
20 years	£1106	£66,169	£266,169
15 years	£1381	£48,853	£248,853
10 years	£1931	£31,729	£231,729
5 years	£3594	£15,616	£215,616

What Income Do I Need To Get A 2ook Mortgage?

While qualifying for a 200k mortgage will come down to more than your income, lenders will generally cap the amount you can borrow based on your monthly salary.

Some can advance you up to 4.5 times your salary, and others can go up to 5 times or even six times with the right circumstances.

Remember, lenders will look at other things to determine your affordability, including your monthly expenses, the deposit you have, and your credit history.

Related guides:

How The Deposit Can Affect 200k Mortgage Repayments

The more deposits you can put down, the better the rates and terms of the mortgage since lenders will see you as a lower risk. Better rates translate to lower monthly repayments, so the higher the deposit, the better the deal.

The amount needed as a deposit will depend on the lender’s loan-to-value (LTV) ratio, your employment type, credit rating, and if you’re after a buy-to-let or residential mortgage.

The rate will generally get better with a bigger deposit size. The higher the amount you can put down, the lower the interest and mortgage loan amount you’ll have to repay.

What Are The Repayments For A 200k Buy-To-Let Mortgage?

Rules for buy-to-let mortgages are usually stricter and slightly different from residential mortgages. Lenders will have higher minimum income requirements and require more significant deposits.

Some may consider rental income forecasts and require that the projected rental payments cover 125% to 130% of the 200k mortgage monthly repayments.

Apply for a mortgage today

Related guides:

Other Factors That Can Affect 200k Mortgage Repayments

Your Credit Rating

However, every lender is different, and some may see you more positively than others, depending on your current circumstances.

Final Thoughts

Every borrower and lender is different, so expert, bespoke advice is the best way to determine what 200k mortgage repayments will cost you.

While mortgage calculators can be helpful, they can only give you a general idea. They will not consider other variables that come into play, including your income sources, credit history, monthly expenses or deposit amount

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

Further reading:

How much does a £150,000 mortgage cost a month? UK

by Dax McLeanPosted on 14th January 2022 | Updated 20th January 2023

If you’ve got your heart set out on a property that needs a £150,000 mortgage, the first thing to ask yourself is how much it would cost you a month.

It’s vital to know whether you can afford monthly repayments for a £150,000 mortgage now and in the future to make an informed decision.

In this guide, we’ll explore how much a £150,000 mortgage will cost you a month, how much deposit and income you’ll need, factors that affect the costs and how to get the best rates available.

Cost Of A £150,000 Mortgage A Month

Various things can impact how much a £150,000 mortgage costs you a month. These include:

The mortgage term or length
The lender’s interest rate
The loan to value (LTV) ratio
Your deposit amount
Whether it’s capital repayment or interest-only mortgage
Your credit history and profile

Remember, every lender is different, and they have different criteria to determine eligibility and the terms and rates they offer you.

Apply for a mortgage today

Need more help? Check our quick help guides:

How The Term Affects The Cost Of A £150,000 Mortgage

The mortgage term significantly affects how much a £150,000 mortgage costs a month and what you ultimately pay in total. Most lenders in the UK offer between 5 to 30 years to repay a £150,000 mortgage.

How long you’ll need to pay off the mortgage will depend on how much you can realistically afford to pay each month.

You’ll get cheaper monthly repayments with extended periods, but the overall cost will be higher at the end of the loan term.

You’ll have higher monthly repayments with a shorter mortgage term but a lower overall cost. A £150,000 mortgage with a term of 30 years will cost you thousands more than a mortgage for 20 years or less.

However, the cost of the more extended period may be worth it if you need cheaper monthly repayments you can easily afford.

It’s wise to choose a term based on how much you can afford each month without getting into financial hardship. Based on a 3% interest rate, the table below can give you a rough idea of how the term affects how much a £150,000 mortgage costs a month and in total.

Term	Monthly Repayment	Interest	Total Repaid
30 years	£632	£77,621	£227,621
25 years	£711	£63,358	£213,358
20 years	£832	£49,627	£199,627
15 years	£1,036	£36,437	£186,437
10 years	£1,448	£23,796	£173,796
5 years	£2,695	£11,712	£161,712

How Interest Affects The Cost Of A £150,000 Mortgage

The interest rate is crucial for any mortgage or loan because it will directly affect how much you pay each month. Mortgage lenders in the UK can offer interest rates from 1% to 5% for a £150,000 mortgage.

The rates lenders are willing to offer are usually based on your credit history or profile and the size of your deposit. The interest plus a portion of the capital or amount borrowed is paid back each month for the duration of the loan until the total amount is cleared.

For example, here’s an estimate of how much you would pay each month for a £150,000 mortgage with a 30-year term based on different interest rates.

Interest Rate	1%	2%	3%	4%	5%
Monthly Repayment	£482	£554	£632	£716	£805

Interest-Only Payments

How much a £150,000 mortgage costs you a month can also differ depending on whether you get a capital repayment or an interest-only mortgage.

Capital repayment plans require you to pay off a percentage of the borrowed amount plus interest every month for the entire loan period.

With interest-only mortgages, you’re only required to pay off the interest on the loan every month and nothing off the capital. The capital or amount borrowed becomes due at the end of the loan term in one lump sum.

You must have a viable repayment strategy to qualify for an interest-only £150,000 mortgage because it’s easy to accumulate a significant debt that can be difficult to repay without a good plan.

A viable strategy assures the lender that you can pay off the entire outstanding balance at the end of the loan period.

Related guides:

How The Deposit Affects How Much A £150,000 Mortgage Costs A Month

The deposit you can put down for a £150,000 mortgage directly affects the loan to value (LTV) ratio and the terms and interest rate of the mortgage.

The LTV ratio refers to the amount the lender is willing to offer you relative to the total value of the property. It reflects the proportion of the mortgaged property and the proportion you’ve paid off upfront with your deposit.

A higher deposit means a lower LTV, which translates to better mortgage rates and terms. Lenders will see you as a lower risk if you have a high deposit, and they can provide you with better deals with a lower monthly repayment.

A low deposit translates to a high LTV ratio, and lenders can insist on stricter terms translating to higher interest rates or fees. The best deals you can get for a £150,000 mortgage will require a higher deposit and a low LTV ratio. The higher the amount you can put down, the lower the interest rate, monthly repayments and overall loan amount you’ll have to repay.

Monthly Costs For A £150,000 Mortgage For A Buy-To-Let

You’ll find slightly different rules for a buy-to-let mortgage. You may have to provide a higher deposit and meet strict income requirements set by lenders to qualify.

Some lenders will only accept a 25% deposit and above, and others may consider rental income forecasts and require that the projected rent covers 125% to 130% of the monthly repayments.

Many buy-to-let mortgages are offered on an interest-only basis, translating to lower monthly repayments for a £150,000 mortgage.

It provides more flexibility and tax efficiency for landlords, and they can quickly sell the property at the end of the term and clear the loan balance.

Apply for a mortgage today

Related guides:

£150,000 Mortgage Costs Final Thoughts

Generally, the interest rate and the mortgage term will influence how much a £150,000 mortgage costs you a month.

How much you can put down as a deposit will influence the rate you get and the deal the lender is willing to offer. The higher the deposit, the better the rates and terms of the deal.

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

Further reading:

Should I buy a house with a restrictive covenant?

by Dax McLeanPosted on 6th January 2022 | Updated 20th January 2023

Restrictions imposed by a deed of covenant can negatively impact your mortgage application process. In addition, these limitations can affect the property’s value and make it challenging to resell.

This doesn’t mean mortgage lenders won’t consider properties with a deed of covenant, but they will require in-depth knowledge of what the covenant covers.

It is more challenging to obtain a mortgage on a property with a restrictive deed of covenant than a positive covenant.

A restrictive covenant prevents the buyer from certain forms of usage or improvement without permission. Often permission is not granted, thus limiting the homeowners living arrangements which can prove frustrating. No one enjoys being told what to do in their own castle!

This very reason puts potential buyers off when purchasing a home governed by a deed of covenant, therefore making the resale of these homes somewhat tricky.

Additionally, when banks look to mortgage a home, they want the surety of a quick resale should the mortgage fail, something a restrictive covenant is sure to impede.

What is a Deed of Covenant?

This is a legally binding document (deed) which details certain obligations or restrictions to which the homeowner must adhere. A covenant is there to ensure that homeowners abide by their property terms.

These stipulations are attached to the property and not to the property owner personally. Therefore they apply specifically to the property and not to the owner.

Apply for a mortgage today

Need more help? Check our quick help guides:

Types of Covenant

Covenants can be either positive or restrictive and can benefit or restrict your living arrangements.

Positive covenants

Usually, positive covenants benefit the property. As a result, these covenants don’t represent a risk to mortgage lenders, and mortgages are relatively easy to obtain.

Types of positive covenants include those that detail repair and maintenance, installing boundary fences, and financial outlay for property improvement.

Restrictive covenants

In contrast, restrictive covenants restrict land usage and make obtaining a mortgage challenging.

Types of restrictive covenants include but are not limited to alterations, satellite dishes, and building. They may also restrict the types of animals allowed on the property and prevent certain types of trade or vehicles from parking on the land.

Is it Possible to Get a Mortgage with a Restrictive Covenant?

Depending on the type of restrictions and lender you select, getting a mortgage on a property with a restrictive covenant is possible. That said, some lenders are more suited to this type of mortgage, so it’s best to do your research.

Often the legal obligations attached to the property are why lenders are more cautious with this type of covenant. This is because some restrictions can affect the property value and resale ability making them more high-risk.

Related guides:

Disadvantages of Restrictive Covenants

When purchasing a property with a restrictive covenant, it’s best to discuss the restrictions with an experienced conveyancer.

This will help you understand your legal obligations towards the property. Some disadvantages of a restrictive covenant are detailed below.

Restricted property renovations
Reduced resale-ability
Prevented from building on the land
Unable to extend the property
Mortgages may be challenging to obtain

Do Mortgage Lenders accept Restrictive Covenants?

Buyers looking to purchase a property with a restrictive covenant will have limited choice in terms of mortgage lenders. This is because lenders view these properties as higher risk due to the obligations you as the homeowner will have to adhere to.

In addition, restrictive covenants make properties harder to sell, thus further impacting the buyers’ ease of obtaining a mortgage. As a result, lenders often charge higher fees and interest rates to mitigate the risk, and a larger deposit may be required.

Specialist lenders design mortgages specifically for this type of purchase, and provided you meet the lender’s relevant criteria, a mortgage may be possible.

Can I Breach a Covenant?

Legally you are required to uphold the conditions of the covenant. Should you breach the covenant, the courts can grant injunctions forcing you to pay penalty fines.

Can I Purchase Insurance against a Covenant?

This is called indemnity insurance and is usually offered when purchasing the property by your conveyancer. However, this type of insurance doesn’t cover every property type and covenant. In addition, the cost of the insurance can be high and further impact your purchasing decision.

You may find that your mortgage lender requests you to purchase indemnity insurance, but this depends on the types of restrictions imposed on the property.

Is it Possible to Remove a Covenant from my Property?

This can be challenging and time-consuming and won’t provide a quick mortgage approval. Removing a covenant requires contacting the person with the benefit of the covenant to obtain ‘retrospective consent.’

As a last resort, you can contact the Upper Tribunal Lands Chamber to try and have the covenant removed or changed.

One disadvantage of removing the covenant prior to purchase is that it may increase the property’s value and thus cause your purchase price to increase.

Is it Difficult to Purchase Land with a Covenant?

While land mortgages differ significantly from property mortgages, they are also impacted by land that has an attached covenant. Often this means the mortgage options are limited due to the restrictions imposed on the land, which affects the resale-ability.

When purchasing land, lenders stipulate that you obtain building consent at the point of applying for the mortgage. This assures the lender that the property has value and will resell easily if required. Therefore, if the covenant prevents you from building on the land, this may create a challenge when looking for mortgage approval.

Obtaining planning permission prior to applying for a mortgage is common practice, and as long as the covenant restrictions allow, you can build with confidence in the future.

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Purchasing a Property with a Deed of Covenant Final word

Purchasing a property with a deed of covenant may present particular challenges when looking for mortgage approval.

For example, it may inflate the interest rate on the mortgage, increase the deposit required and impose restrictions that you will be legally obliged to follow.

However, not all covenants are restrictive. So, before you cross covenant restricted properties off your wish list, discuss your options with a specialist mortgage advisor. They can assess your situation and your exact obligations regarding the deed of covenant.

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

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Can you get a mortgage for a prefab house in the UK?

by Dax McLeanPosted on 6th January 2022 | Updated 20th January 2023

Prefab houses have been on the UK housing market since the end of the Second World War.

The post-war housing shortage meant that the demand for cheap, affordable homes sky-rocketed.

As a result, Prime Minister Winston Churchill used them as part of his plan to address this issue, and in 1944 they found their way into the Housing Act 1944 under the heading ‘Temporary Accommodation.’

The government at the time proposed to fill the gap in available housing by building 500 000 prefab homes which were only meant to last for 10 years!

Over the years, their popularity has remained static, and many have lasted long past their 10-year sell-by date!

However, this popularity has recently spiked due to the greater demand for sustainable and affordable housing.

What is a prefab house?

A prefab or prefabricated home is, as the name suggests, pre-made. Each piece of the house is factory manufactured and then transported to the building site where it is assembled.

This is the ultimate in flat-pack furniture. Prefab homes are the fastest, most affordable, and highly sustainable way of building a home.

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Different Types of Prefab Houses in the UK

There are three types of prefab homes to choose from when building your forever home.

Modular home

Each piece of the modular home is factory-made, transported to the building site, and constructed on permanent foundations.

Manufactured home

Also called mobile homes, these houses are built and transported in bulk sections to be fully assembled on site. These homes are not affixed to permanent foundations.

Kit homes

Construction is from factory manufactured pre cut pieces. These are then assembled by hired contractors or the homeowners themselves.

Is a Prefab House the Cheapest?

Prefab homes are between 10-25% cheaper to build than a standard brick and mortar home. Of course, this depends on the modern conveniences chosen.

However, even the modular home, considered the most expensive prefab home, is 10-20% cheaper than a traditional house.

The reason for this cheaper price tag is down to the use of mass-produced building materials and reduced need for carpenters, electricians, and plumbers on site. This reduces costs and keeps construction time to a minimum.

While a prefab may be cheaper in the long run, there are additional costs to consider aside from the actual price of the prefabricated pieces.

For example, you may need to purchase land, apply for permits, and request access to utilities and services such as electric, water, and sewerage. Additionally, you may need to factor in the cost of a driveway, garage, and possible landscaping.

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Can You Finance a Prefab Home?

While financing a prefab home is slightly more tricky than a standard build, some mortgage providers will offer homeowners the financing they need. This can be done in two ways: a construction loan or chattel mortgage.

Construction loan

A construction loan can provide the finance you need to cover the initial costs of building the prefab home. This can then transition into a mortgage once the construction is complete.

Chattel Mortgage

This is a loan specifically for unfixed property, for example, a manufactured home, houseboat, or plane. This type of mortgage uses the property (chattel) as collateral on the loan.

It is slightly different from a standard mortgage where a lien (right to keep possession of) secures the loan on the stationary property.

An additional incentive for buyers using this type of mortgage is that it can be used even if the prefab home is situated on leased land.

Besides all the benefits this type of mortgage offers, it is often more expensive than standard mortgages, and it can be challenging to find a mortgage provider that offers them.

Pros and Cons of a Prefab Home

Weighing up the pros and cons of a prefab home is a prudent thing to do. However, despite its cheaper price tag, it may not be the best option for you and your family.

Pros

Sustainability

Prefab homes may have better insulation than standard homes due to tighter seams and joints. This results in better energy efficiency and lower energy consumption.

Cost

A prefab house can be cost-effective and faster to build than a traditional house.

Safety

Prefab homes are often better built than standard homes and can easily withstand adverse weather.

Cons

Utilities

Rough terrain, closest water source, electric supply, and drainage issues can make setting up essential utilities and services difficult.

Regulations

Zoning laws and building codes must be adhered to when constructing a prefab home. Additionally, homeowners will require specific permits and permissions when building a prefab home which can be costly and time-consuming.

Upfront Cost

Unlike traditional houses, prefab houses are usually paid for upfront rather than over a period of time. This can make the initial upfront cost relatively high without finance.

Financing

Depending on your financial history, financing for a prefab home can be challenging to obtain.

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How to get preapproval on a Prefab Modular Home

Preapproval is the mortgage lenders’ process to determine the loan amount you can borrow. This is usually determined by your income, credit score, and assets combined. They also use this to decide the interest rate on your loan.

When applying for preapproval, your mortgage adviser will ask for the following information.

Identification & address verification
Employment status
Debt-to-income ratio (DTI)
Proof of income
Credit history
Other credit commitments

To ensure the preapproval process goes smoothly, you need the following documentation to support your application.

Proof of address
Bank statements
Passport / Driving license
Credit file
Deposit finances

Once preapproved, you can start the process of searching for your forever prefab home.

Mortgages for Prefab Homes Last word

Affordability and sustainability are two words synonymous with housing trends today. Everyone seems to want a cheaper, eco-friendly alternative to everything, including housing.

This is why prefab homes are gaining traction in popularity on the housing market today. However, this doesn’t mean a prefab home is suitable for you, so be sure to weigh up the pros and cons carefully!

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

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Consumer Buy To Let Mortgage – A Complete Guide UK

by Dax McLeanPosted on 6th January 2022 | Updated 20th January 2023

Gone are the days when purchasing a buy-to-let property was a cost-effective way of getting onto the property ladder. Recent changes have impacted the complexities of the process.

Stamp duty increases, tax reviews, and changes to the lending criteria exacted by mortgage providers have meant that purchasing a property for buy-to-let purposes is now much more challenging.

Another change to the market was the consumer buy-to-let mortgage, a form of borrowing aimed at people who have become accidental landlords.

This is the term given to people who inherit property or perhaps move in with a partner and rent out their property on a short-term basis.

What is a Consumer Buy-to-let Mortgage?

A consumer buy-to-let mortgage is specifically designed for people who have become accidental landlords. As mentioned previously, this can happen through property inheritance or when people rent out their property for a short period.

Other forms of consumer buy-to-let mortgages included purchasing a property with the intent to let it to a family member or if being a landlord is not your primary occupation.

In more specific terms and according to the Mortgage Credit Directive Order 2015, a consumer buy-to-let (CBTL) mortgage contract is defined as – “a buy-to-let mortgage contract which is not entered into by the borrower wholly or predominantly for the purpose of a business carried on, or intended to be carried on, by the borrower.”

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Consumer buy-to-let vs. Standard buy-to-let

The primary differences between these two mortgages are who they are designed for and how they are regulated.

Standard buy-to-let mortgages are aimed at landlords investing in property to let to prospective tenants.

These landlords purchase properties for the sole purpose of letting them to tenants as a form of income. They are regarded as professional landlords.

In contrast, consumer buy-to-let mortgages are geared towards the individual looking to rent property to family members or those who fall into the accidental landlord category. As a result, the income generated from the rental agreement is not their primary source of income.

The FCA regulates consumer buy-to-let mortgages (Financial Conduct Authority,) while standard buy-to-let’s are unregulated. This is because investors purchasing a property specifically for buy-to-let purposes do not require the same amount of protection.

This consumer protection protects buyers from the dangers of mis-selling and poor advice by giving them the security of FCA regulated contracts and cover provided by the FSCS (Financial Services Compensation Scheme)

Next Steps for Accidental Landlords

Knowing what to do when you become an accidental landlord can be confusing. However, it is your responsibility as a landlord, accidental or otherwise, to ensure you understand your legal obligations and avoid being in breach of your agreement.

Below is a list of steps you should take to ensure you are not breaching your mortgage terms.

Notify your current mortgage lender of your situation
Request permission to let out your property
Contact a consumer buy-to-let advisor

Note that you will breach your mortgage agreement if you let out a property with a residential mortgage agreement. Invariably this breach can allow the lender to demand full payment of the entire outstanding debt as a lump sum.

Unfortunately, most people don’t have access to this level of funds and may default on payment, affecting their credit rating and possibly losing their homes.

If you are unsure of the steps you need to take, contact a consumer buy-to-let advisor for expert advice. Always apply the golden mortgage rule; if in doubt, ask.

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What Are the Eligibility Criteria for a Consumer Buy-to-let mortgage?

The below criteria will help you determine whether you are eligible for a consumer buy-to-let mortgage.

Property rental is not your primary occupation.
You or a close relative previously lived in the property.
The property was not purchased to let it out.
You do not own any rental properties.

Regulations governing consumer buy-to-let mortgages prevent applications in the following circumstances.

Property rental is your primary occupation
You own other rental properties which are rented out
This is a new property that you plan to rent out once purchased

Lenders recognise that each buyer’s circumstances are unique; therefore, if you are unsure whether you qualify for a consumer buy-to-let mortgage, speak to an experienced mortgage adviser.

Which Lenders Offer Buy-to-let Mortgages?

BTL mortgages are pretty popular and are offered by many of the leading mortgage lenders in the industry. Big names such as Clydesdale Bank, Virgin Money, and Santander are some of the lenders that offer a BTL mortgage.

However, going directly to large lenders may mean you are only offered the products they provide, meaning you may miss the opportunity to compare the market. Comparing the market is crucial to ensure you get the best deal possible.

To do this, you would need to discuss your mortgage requirements with a mortgage broker specialising in consumer buy-to-let mortgages. This will allow you access to expert advice and the full quota of products you qualify for, resulting in an informed decision.

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Do I need Insurance as a Consumer Buy-to-let Landlord?

Unfortunately, your standard home insurance policy probably won’t cover the property if you’re letting it out to tenants. This means you will need a policy that suits the specific requirements of your property while providing you with the best deal.

We recommend comparing different insurers to obtain the right level of insurance at the best possible price.

Types of insurance policies a consumer buy-to-let landlord should consider are as follows:

Rental protection insurance
Public liability insurance
Landlords building /content insurance
Legal expense cover

These types of insurance mean you, as the landlord, are covered in most instances when things don’t go quite to plan.
Last word

A consumer buy-to-let mortgage is an excellent option for those looking to rent to close family or have inherited property unexpectedly.

Buyers are protected by the regulations of the FCA (Financial Conduct Authority) and covered by the FSCS (Financial Services Compensation Scheme).

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

Further reading:

Interest Only Mortgages (UK Criteria)

by Dax McLeanPosted on 9th December 2021 | Updated 20th January 2023

If you’re looking for an interest-only mortgage, you may have a hard time finding one. They used to be quite popular, but because of the higher risks involved compared to repayment mortgages.

Some providers still offer these mortgages, but you will have to meet specific criteria to get one.

Let’s investigate the criteria and eligibility rules surrounding this type of mortgage so you can decide if it’s the right mortgage option for you.

Interest-only mortgages explained

Firstly, let’s clarify what an interest-only mortgage is and how it works. Quite simply, the monthly repayments on the mortgage are, as the name suggests, made up of only the interest.

Therefore the lump sum capital initially borrowed is not repaid until the end of the mortgage term. Mortgage terms can vary and at the end of this term, the lender will expect full payment of the capital borrowed.

When you apply for the mortgage, the lender will require evidence of how you expect to repay the capital.

When discussing repayment, the term you may hear to describe this is a repayment vehicle.’ Common repayment vehicles include investments, the sale of property, pensions, savings.

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Interest-only mortgage criteria

As with any mortgage, there are specific criteria you will need to meet to get an interest-only mortgage.

For example, the lender will want to assess whether you can afford the load and if you can repay the capital sum borrowed.

In addition, there may be other eligibility rules the lender will expect borrowers to meet. For example:

Deposit

The lender will expect you to raise the required deposit and provide evidence of how you will repay the loan.

Earnings

Although you will only be paying the monthly interest initially, you will still be expected to prove your earnings. Usually, this is based on your annual earnings and may include a partner’s earnings if it is a joint application.

In addition, lenders will want to see you can afford the loan amount you wish to borrow.

Each lender will have criteria you will need to meet before providing a loan. However, the above are the most common requirements.

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Reaching the end of an interest-only mortgage. Now what?

When the end of the mortgage term comes around, you will need to repay the initial capital amount borrowed. There are several ways you can do this, depending on your circumstances.

Switch to a repayment mortgage

If you meet the lender’s criteria, you could remortgage and switch to a repayment mortgage agreement.

Cash payment

You could use savings, investments, or the tax-free portion of your pension to pay off the loan. Always seek professional advice when cashing in investments and pensions.

Equity release

If you are over 55 years old and own enough equity in your property, you could release it to repay the loan.

Remortgage

Apply for a remortgage with your existing lender. For example, suppose you have a good repayment history, enough equity in the property, and a deposit.

In that case, your current lender may consider a new application for an interest-only mortgage, thus extending the term.

Remortgage and Switch lenders

Consider switching lenders when trying to remortgage as some lenders offer longer mortgage terms and have different rules regarding the applicant’s age.

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What repayment vehicles do lenders accept?

Depending on the lender, the criteria for repayment of an interest-only mortgage may differ. Each one will have their preferred method of repayment, and so while one may accept remortgaging, others may not.

In general, lenders will want proof of one or more of the following repayment plans.

Property sale

Most lenders don’t accept this form of repayment. However, a few may accept it if you have as an example between £100,000 and £200,000 equity by the end of the term. You can also use the sale of a different property to repay the loan.

Investments

There are quite a few investment types you can use to repay your home loan. These include investment bonds, endowment policies, ISA savings, stocks & shares, and unit trusts.

In all instances, the lender will want to see evidence of their value and projected growth.

Pension lump sum

Some borrowers use the tax-free 25% portion of their pension to pay off their home loan.

This is usually drawable at 55 years. However, this may not be sufficient to cover the loan and could mean combining it with another source of funds.

In addition, drawing off your pension has tax implications and could affect your retirement finances. We suggest you discuss this with a pension advisor before making any pension withdrawals.

Minimum value required for repayment vehicles

While lenders will want to see that your repayment vehicle can repay the loan, you may not need the exact loan amount available when you take the mortgage. Generally, repayment vehicles grow over time; this is an accepted fact.

However, you will need evidence that it will grow and be able to pay the initial sum loaned. Some lenders require a minimum value for repayment vehicles, but if one lender rejects you, you can always approach another.

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Deposit required for an interest-only loan

Mortgages are based on the loan-to-value (LTV) ratio, determining how much you can borrow in relation to the property value.

For example, if you put down a £20,000 deposit on a house valued at £200,000, then 10% is owned by you, and your LTV is 90%.

Most interest-only mortgage lenders would expect an LTV of between 50-85%, which means your deposit could be as much as 15%.

Minimum income required for an interest-only mortgage

Many lenders don’t have a minimum income requirement and will use a mortgage calculator to ensure you can afford the loan.

However, some lenders require a high minimum income, while others are more lenient and accept income plus repayment plans. Each lender has different policies, and not all will expect a minimum income on an interest-only mortgage.

Types of income accepted by lenders include fixed monthly income, self-employed (based on net profit,) part-time (based on earnings), contract work, and pension income (based on pension payments.)

How much can I loan for an interest-only mortgage?

Usually, the amount you can borrow is 4 times your annual salary. However, this may not be enough to get an interest-only mortgage if your property value is high.

Depending on your circumstances, some lenders are more flexible and may consider loaning 5 or 6 times your annual salary.

It’s worth noting that an interest-only mortgage is capped at the value of the repayment vehicle if using property.

Therefore if the loan is based on the sale of a property in which you have £100,000 equity, the maximum mortgage amount would be for the same value.

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Interest-only mortgages final considerations

Lastly, all is not lost if you have a repayment shortfall and can’t borrow the amount needed on an interest-only mortgage.

Some lenders will allow you to take some of the loan as interest-only and the rest on a mortgage repayment plan, effectively splitting the loan. This can make qualifying for an interest-only mortgage a lot easier!

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

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Zero Hour Contract Mortgages

by Dax McLeanPosted on 9th December 2021 | Updated 20th January 2023

If you’re looking to secure a mortgage on a zero hour contract, it can be more difficult but isn’t impossible.

Over the past few years, the upward trend in zero-hour contracts has caused lenders to rethink the criteria required for buyers needing a mortgage.

Obtaining a mortgage on a zero-hour contract use to be more difficult because lenders tended to view this form of employment as unstable.

For example, no work equates to no pay, which means an unpaid mortgage putting the lender at risk.

However, recently, lenders have noticed the increase in this type of employment, meaning they have had to change their game plan to remain in the mortgage market.

Whilst most lenders prefer buyers to be in full-time employment, some lenders offer mortgages to those on zero-hour contracts, thus opening the proverbial home-buying door to those who may otherwise have found it firmly shut.

However, approaching the application with the correct information may lead to the approval of a mortgage and, subsequently, the purchase of your ‘forever home!

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Zero-hour contract mortgage explained

Firstly, a zero-hour contract can be broadly defined as an employment contract that allows the employer to hire staff without any guarantee of work.

Often the work is sporadic, offered at short notice, and your salary depends on the hours or shifts you work.

This causes uncertainty with lenders who provide standard mortgages as they require regular payments of set amounts which can easily be unpaid should your salary fluctuate each month.

However, a zero-hour contract mortgage is designed for those who have this type of employment contract.

Lenders who offer this type of mortgage understand that some employers don’t provide the stability of a full-time contract to their employees.

In addition, just because you are on a zero-hour contract does not mean you don’t earn the same or more than your full-time contract counterparts.

Can you get a mortgage on a zero-hour contract?

Yes, it’s possible, however, a zero-hour contract immediately labels you as higher risk, since lenders prefer more stable forms of income. However, the good news is that all lenders are different and some lenders will accept applications from higher risk applicants, including those on zero hour contracts.

Such lenders can be difficult to locate and its likely that your application will be rejected or you will be offered a mortgage with an extremely high interest rate, the key is to talk to a mortgage broker who will be able to do a full search of the market and find you the best possible lenders.

How do mortgage lenders view zero hour contracts?

The reality is that lenders will likely view an application from an individual on a zero hour contract less favourably than an individual on a full time contract.

Why? Your income is not guaranteed and so you will be considered higher risk and more likely to miss mortgage payments in the future.

This will typically mean lenders will reject your application, offer a higher interest rate or expect you to put down a larger deposit.

What criteria will lenders assess?

When considering a mortgage application from an individual on a zero hour contract, lenders will look at the following criteria:

Employment History

If you have been working for the same employer or in the same industry for twelve months, it demonstrates that your employment is secure. As a result, lenders often use this as their starting point.

In contrast, if your employment history has gaps or perhaps you have started a new job, it may cause lenders to feel that your employment isn’t quite as stable as they would like.

Earnings

Demonstrating that your income is sufficient to repay the mortgage will increase the confidence of lenders considering your mortgage application.

Zero-hour contracts don’t automatically mean you earn less than is required. Moreover, showing you have savings put away each month provides your application with additional ‘brownie points.’

Job role & industry

Your job role or occupation can show lenders the skills or qualifications you hold; this demonstrates the likelihood of you finding work easily to repay the mortgage.

It’s important to note that some lenders will never accept an application from an individual on a zero hours contract, however, some will as long as you can demonstrate a stable history of working in these types of roles.

If you have already been declined and you are on a zero hours contract, don’t give up quite yet, as our mortgage brokers will be more than happy to help you find a lender and offer assistance with completing the application.

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Deposit requirements for zero-hour contract mortgages

Figuring out the deposit you require can be quite tricky as it depends mainly on the lender and your circumstances.

In some cases this can be as little as a 5% deposit, but this is only usually possible via the help to buy scheme. In general, the standard amount needed is around 10%, but as much as 15% for individuals with a poor credit history.

It’s worth noting that the higher the deposit you can offer, the more favorable this looks on your application.

It stands to reason the higher the deposit, the less risk involved for the lender, which is what you want to show when working on a zero-hour contract.

To better understand the amount, you will require it’s best to speak to a mortgage advisor who can assess your circumstances and situation.

Related guides:

Zero hour contract mortgage lenders

Deciding which type of lender is best for you depends largely on the type of mortgage you require.

For example, a buy to let mortgage is very different from a regular mortgage, and those with credit issues may need to seek help and advice from an adverse credit lender.

Choosing the right lender for you is vital to avoid wasting your time, money and possibly missing out on purchasing your chosen home. Let’s take a look at lenders suited for zero-hour contract mortgages.

Specialist lenders for bad credit

Having a bad credit score doesn’t automatically cross you off the mortgage list. However, it will make the process more challenging. While specialist lenders may help, this will depend on the credit issues you are facing.

It’s also worth noting that a bad credit score coupled with a zero-hour contract may provide additional challenges. Often lenders will refuse mortgage applications based on the bad credit without considering the type of employment contract you hold.

Again, specialist lenders are there to help in this type of situation. However, the rates may not be as good compared to regular mortgages, and the fees may be higher.

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Buy to let mortgages for zero-hour contract workers

Can you get a buy to let mortgage on a zero hour contract? It may still be possible, but in general, it’s going to be more difficult.

Lenders commonly require to to provide proof of a minimum personal income through either employment or self-employment and assess this your accounts.

If this is your first buy to let property application, the criteria is much similar to a residential mortgage and you will usually need to provide 12 months of minimum income. However, there may be some specialist lenders that are willing to accept lending if you have less than 12 months income proof.

In addition, if you have previous history as a landlord, lenders will typically be more likely to approve your application, as the income criteria will be less important.

Mortgage advice for zero-hour contracts

Obtaining mortgage advice from a specialist advisor is a smart move for those on a zero-hour contract.

The truth is while some lenders recognise that the zero-hour contract is the future of today’s workforce, there are still very few that will consider your application.

Trying to figure out which lender will assist you can prove to be a daunting task.

However, a specialist advisor takes the guesswork out of your search. Furthermore, they can prepare your application and see you get the best mortgage rates possible.

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

Further reading: