Category: Mortgages

According to Statista, mortgage loans in the UK are projected to experience an increase in monthly costs by the 4th quarter of 2024.

This statistic alone may have new homeowners looking at their mortgage deal and wondering if they should try to pay it early or switch to a better deal.

If your financial situation changes, and you want to repay your mortgage early, or if a new property catches your eye, and you want to get rid of your current property, so you can get it, chances are that settling your current mortgage early is on the forefront of your mind.

If you don’t want to continue with your existing mortgage, you can pay it off early or remortgage, but you should know a few things first.

One of the biggest disadvantages of paying your mortgage early or remortgaging is the ERC (early repayment charge) that your current lender will impose on you.

If you’re exiting your mortgage early to save money, you should first take the time to ensure that the ERC won’t negate any expected savings.

To fully understand how it works, you only need to learn more about ERCs and how they work. Then, you can find ways to avoid or minimise it.

Below, we cover everything you need to know before deciding whether repaying your mortgage early is worth it.

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What is an ERC?

It isn’t easy to provide a precise figure for an ERC, as each is calculated as a percentage of the remaining mortgage balance.

Usually, ERCs are between 1% and 5% of the mortgage balance.

Sometimes, lenders are more lenient on the percentage, especially if the mortgage deal is already nearing its end.

For instance, if you’re trying to exit your current mortgage deal in the first year, you may have the highest percentage applied of 5%, but if you’re in the fourth year of your mortgage, you may find you’ll have a 1% charge.

Of course, this cannot be guaranteed, as each mortgage lender has its own terms.

What Do Early Repayment Charges Cost on the Average UK Mortgage?

It’s difficult to provide a precise figure for an ERC as each is calculated as a percentage of the remaining mortgage balance.

Usually, ERCs are between 1% and 5% of the mortgage balance.

In some instances, lenders are more lenient on the percentage, especially if the mortgage deal is already nearing its end.

For instance, if you’re trying to exit your current mortgage deal in the first year, you may have the highest percentage applied of 5% but if you’re in the fourth year of your mortgage, you may find you’ll have a 1% charge.

Of course, this cannot be guaranteed, as each mortgage lender has its own terms.

Related mortgage guides: 

• What to do if your mortgage expires.
• Disadvantages of paying your mortgage off.
• Best mortgage brokers in the UK.
• Should you pay off your mortgage early?
• 50-year mortgages UK.

When Do ERCs Apply?

Every mortgage has a tie-in period. This is the period of your fixed-rate deal.

ERCs apply during the tie-in period.

Sometimes, depending on your contract, it may extend beyond the tie-in period.

For example, someone on a 2-year fixed rate deal may still face an ERC when switching to another deal within the first 3 years of their mortgage.

It may be disadvantageous to switch to a new deal within your tie-in period, but once that time passes, you may find that switching saves you money.

Another thing to be aware of is that an ERC may also apply to other types of mortgages, including variable-rate mortgages.

You may also have to pay an early repayment charge in the following scenarios:

• You have a lump sum to pay off the mortgage before the mortgage term ends.
• Your mortgage is still in a special-rate period, and you switch to a new mortgage deal.
• You find a better mortgage deal and switch to it before the end of your contract.
• You overpay each month in hopes of paying down your mortgage quicker.
• You can’t move your mortgage to a new property, but you’re moving home.
• Your new property is worth less than your current home, and you wish to transfer your mortgage to the new property.

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How Lenders Approach ERCs

Every UK mortgage lender is different, with their own terms and conditions in place.

Some lenders have a flat penalty fee for early repayment, whereas others may apply a certain percentage of the outstanding mortgage amount.

By looking at your mortgage contract, you can determine the specific terms and conditions if you repay your mortgage early.

All the details should be listed in your mortgage contract.

When getting into a mortgage deal, it’s best to inquire directly about the possible fees and penalties if you settle your mortgage early.

Is It Possible to Get a Mortgage with No Early Repayment Charge?

You will find that not all mortgages have an ERC worked into the deal.

For instance, standard variable rate mortgages and tracker mortgages rarely include an ERC.

You may think it’s a great idea to get one of these mortgages but keep in mind that they’re also more expensive than other mortgage types as they come with higher interest rates.

That said, if you think you’ll be repaying your mortgage early or want to have the option of changing to a different mortgage deal during the loan term, these mortgage types may be the most viable option for you.

If you’d prefer to start with a low-interest mortgage with lower monthly instalments, you may want to avoid standard variable rate mortgages and tracker mortgages.

If you’re unsure what type of mortgage is best suited to your financial situation and future plans, discussing the various options with a professional mortgage advisor is in your best interests.

Related reading: 

• Reasons for remortgaging.
• Remortgaging to release equity.
• Remortgaging to buy another property.
• Remortgaging with bad credit.
• Remortgaging for home improvements.
• I own my house outright can I remortgage? 
• Capital raising mortgages.

Tips for Avoiding Early Repayment Charges on Your UK Mortgage

Everyone hoping to switch mortgage deals or pay off their mortgage early wants to know how to avoid those pesky early repayment charges.

If you check your mortgage contract, you may find that there’s a specific date mentioned when early repayment charges will no longer apply.

If you adhere to this date, there should be no penalty when switching deals or repaying early.

This is just one way of avoiding early repayment charges on your mortgage. Some other ways include:

• Avoid overpaying the agreed mortgage instalment amounts.
• Instead of switching to a new mortgage deal when you move, port your mortgage. First, check with the mortgage lender if they charge fees for porting a mortgage.
• Opt for a mortgage deal that doesn’t impose ERCs. This could be a standard variable rate mortgage or a tracker mortgage.
• Opt to have the ERC added to your new mortgage deal. This is a short-term cash flow fix but isn’t the most financially sound option, as interest will be added to the additional amount.

Is the ERC Worth It?

You may wonder if it’s worth simply going ahead with your plans to exit the mortgage early and pay the early repayment charge.

If the early repayment charge won’t put you in a difficult financial position, it may be worth it.

Also, and quite obviously, if you can save a decent amount of money by changing to a different mortgage deal, it’s certainly worth it.

If you won’t be saving any money and the exit will exhaust your finances, you may want to stick with your current mortgage or wait until the date when the ERC will no longer apply.

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Mortgage Early Repayment Conclusion

It can certainly help to discuss the various options with your real estate agent or dedicated mortgage advisor.

Understanding the pros and cons of exiting your existing mortgage early and how ERCs actually work can save you headaches and financial burdens in the future.

Call us today on 03330 90 60 30 or contact us to speak to one of our friendly advisors.

If you’ve found the home of your dreams, but the mortgage you’d require to cover the cost is £180,000, you may wonder if you can even afford it.

The average UK mortgage granted is around 200,000. Before applying for a mortgage, it’s a good idea to calculate the monthly instalments.

That way, you’ll avoid overindebting yourself or plunging your budget into distress.

The amount you’ll pay on a £180,000 mortgage will depend on several factors, but a general example can be provided.

Say you acquire a standard repayment mortgage with an interest rate of around 6%, which is typical for current times. The term you received is 25 years.

Your expected monthly instalments would be around £1,160 per month.

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What Salary Do I Need for a £180,000 Mortgage?

While several factors come into play when applying for a £180,000 mortgage, the general earnings required are around £40,000 to £45,000 per annum.

This is because most lenders will only loan you an amount that is 4 to 4.5 times your annual salary.

That said, your amount is only one factor of an affordability assessment.

For example, some borrowers have acquired up to 7 times their annual salary based on certain factors.

How Much Deposit Do I Need on a £180,000 Mortgage?

The deposit is an important focus point for most borrowers, as it’s the most difficult part to organise.

On a mortgage of £180,000 in the UK, lenders typically expect a minimum of 15% deposit.

If you put down a 15% deposit, which comes to £31,800, you’d realistically be able to purchase a property for £212,000 while acquiring a mortgage for £180,200.

With this in mind, remember that many mortgage deals and schemes are on the market, meaning there’s no hard and fast rule about putting down a 15% deposit.

Sometimes, borrowers only put down a 5% deposit (£9,500), enabling them to purchase property valued up to £190,000.

Sometimes, lenders can offer a zero deposit option, but this is very rare.

Factors that Influence Mortgage Repayments UK

Of course, several factors can influence mortgage repayments as follows:

Mortgage Type

The amount of interest added to your loan will influence how much you pay towards your monthly instalments.

For instance, tracker mortgages have interest rates in line with the Bank of England base rate.

As the base rate fluctuates, so does your mortgage instalment.

If you’d prefer no surprises and want to know with certainty how much you’ll pay each month, a fixed-rate mortgage is a good option.

The rates on a fixed-rate mortgage may appear higher at first, but they’re consistent and won’t spike when the interest rate does.

Another type of mortgage is an interest-only mortgage.

This type of mortgage has greatly reduced rates. During the term of your mortgage, you would only pay the interest on the loan.

At the end of your loan term, you will have a lump sum of £180,000 to pay.

These types of mortgages are a little trickier, as lenders will want you to show evidence of settling the remaining amount when the interest is paid off.

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Interest Rate

Interest rates you are offered can be the difference between an affordable mortgage and one you cannot afford.

As of July 2023, mortgage rates in the UK are between 5.5% and 6.5%.

You may think 1% less isn’t a big amount, but it certainly is on a mortgage of £180,000.

Your creditworthiness will influence how lenders see you and ultimately determine what sort of interest rate you can get.

If you meet the criteria in place by the lender, you’ve got a better chance of achieving a mortgage rate on the lower end of the scale.

Of course, the best deals are often negotiated with the help of a mortgage broker.

Mortgage Term

The length of time you have to repay your mortgage (the term) can influence how much you repay. Many mortgages run over 25 years, but several runs for 30 years.

It’s important to note that choosing a longer repayment term may seem like you’re paying less, as your monthly instalments would be lower.

However, a longer term means you pay more in interest over the loan term.

Related mortgage guides: 

• What to do if your mortgage expires.
• Disadvantages of paying your mortgage off.
• Best mortgage brokers in the UK.
• Should you pay off your mortgage early?
• 50-year mortgages UK.

Additional UK Mortgage Costs to Consider

When applying for a mortgage, the amount you pay back is not the amount you’ll genuinely pay back.

You must have some additional funds set aside to cover additional mortgage costs.

These include:

Establishment fee

This can range from £1000 to £2500, which is paid to the lender as a lump sum or split between monthly payments.

If you can’t afford to pay this off as a lump sum in advance and opt for the amount to be added to your instalments, you’ll pay interest on it.

Broker Fees

Brokers may charge the buyer and the lender a commission, but some don’t charge the buyer.

These fees can vary from one broker to the next.

Deposit

You’ll need to put down a deposit between 5% and 25% depending on the housing scheme or mortgage type you happen to get.

Stamp Duties

Stamp duties are fees paid to the government. If you’re purchasing a £180,000 property, the stamp duty will likely be around 2%.

Valuation Fees

In most instances, valuation fees are around £300. The lender will charge this to evaluate the premises to confirm its value.

Survey Costs

A survey is a more thorough inspection of the property to determine if there are underlying issues that may need attention and be costly to tend to.

The survey usually costs between £400 and £1,500.

Conveyancing Costs

A solicitor must be hired to manage the official and legal paperwork during the purchase.

Conveyancing fees in the UK typically cost between £800 and £1,500.

Sometimes, lenders will cover this cost, but it’s not always the case.

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£180,000 Mortgage UK Conclusion

If you’re interested in purchasing a property that’s in the £180,000 price range, you’ll need to ensure you have a good credit record, earn around £40,000-£45,000 per month, and meet the lenders’ eligibility criteria.

Speaking with a professional mortgage advisor could help you find the right deal for you.

Call us today on 03330 90 60 30 or contact us to speak to one of our friendly advisors.

Mortgage brokers are professional individuals who know everything there is to know about mortgages.

When acquiring the services of a mortgage broker in the UK, you can rest assured that you’ll learn about all the most viable mortgage options available.

Selecting the ideal mortgage deal for you can be a daunting experience, especially if all the lenders and their packages seem similar.

With a mortgage broker, you can cut through the noise of mortgage comparisons and get advice on which options suit your financial situation.

Below, we feature the ins and outs of using a mortgage broker and mention some of the leading names in the UK.

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Do I Really Need a Mortgage Broker?

No law says you must hire a mortgage broker, but it’s recommended.

Mortgage brokers are qualified advisors tasked with getting their clients the best mortgage deal possible.

Mortgage brokers are also qualified individuals.

They must have qualifications to practice, and they’re regulated by the Financial Conduct Authority (FCA).

While brokers can advise on all types of lenders and mortgages, it’s good to note that some lenders only deal directly with clients, so they may not have access to every deal out there.

Before knowing if you really need one when you’re buying a property, you’ll need to consider several things.

First and foremost, if your situation is unique, you may want to consider hiring a specialist mortgage broker.

People with irregular income or a desire to buy a unique property often benefit from the advice and guidance of a professional mortgage broker.

If your situation is considered normal or standard, you can still benefit greatly from using a mortgage broker because they spend their time hunting for the best deals available, ensuring that you’re never paying more than you absolutely have to.

A mortgage broker will also handle all of the paperwork, ensure you know about housing and government schemes you can sign up for, and keep tabs on the process to ensure everything progresses swiftly.

Related mortgage guides: 

• What to do if your mortgage expires.
• Disadvantages of paying your mortgage off.
• Best mortgage brokers in the UK.
• Should you pay off your mortgage early?
• 50-year mortgages UK.

Benefits of Using a UK Mortgage Broker

There are several perks to using a mortgage broker in the UK. With the right mortgage broker on your side, you can save yourself hassle, stress, and time.

Of course, the main aim is also to cut back on the costs of buying a new home.

Competent mortgage brokers won’t just parrot mortgage company information. Their knowledge goes far deeper than that.

They will have an expert understanding of the industry and be able to recommend lenders most likely to approve your application based on a quick overview of your financial situation.

Fees are normal when using a mortgage broker.

Usually, buyers will pay a fee to the mortgage broker for their services and collect a commission from the lender.

Some estate agencies or mortgage companies offer mortgage broker services free to the buyer and only collect a commission from the lender.

Your mortgage broker isn’t guaranteed to be a miracle worker, though.

Some lenders make it a rule to only deal with a direct buyer, which means you won’t be able to use a broker to access such deals.

That said, and it’s often the case, some mortgage advisors have access to mortgage deals that are not open to direct customers.

Overview of advantages of using a mortgage broker:

• Professional brokers are focused on finding the best deal for you.
• Tied brokers may be able to organise lower interest rates and certain incentives for you.
• Your broker may recommend a solicitor to hire when purchasing a property.
• Brokers act as an intermediary between the buyer and lender, which means that you won’t find yourself accepting terms or agreeing to deals that you don’t entirely understand. Your broker will explain everything to you.
• Mortgage brokers do all the legwork during the mortgage setup. This includes making calls, doing progress checks, gathering documents, and ensuring that the mortgage application goes through timeously.

Finding the Best UK Mortgage Brokers

If you’re looking for a mortgage broker in the UK, you will find that there are thousands registered.

Here are a few ways you can find the best mortgage brokers available to you:

Local Estate Agency

If your local estate agency buys and sells homes, they may have their own in-house mortgage brokers.

Using a local mortgage broker through the agency you wish to buy a property can save time and money and give you peace of mind that the broker has a vested interest in ensuring your deal goes through.

Using Comparison Sites

Several online platforms will allow you to input your requirements, and the system provides you with a list of options to consider.

In most instances, mortgage brokers on comparison sites are legitimate.

Check Review Sites

Finding excellent reviews for mortgage brokers online is a great way to get insight into the type of service they offer and what to expect.

You will also know which mortgage advisors to avoid.

Personal Recommendations

Word of mouth is a powerful way to find the right mortgage advisor.

Perhaps a family member or friend had a great experience with a particular mortgage broker.

They can help you connect with them and get the ball rolling.

Related reading: 

• Reasons for remortgaging.
• Remortgaging to release equity.
• Remortgaging to buy another property.
• Remortgaging with bad credit.
• Remortgaging for home improvements.
• I own my house outright can I remortgage? 
• Capital raising mortgages.

What Qualifications Should a Mortgage Broker in the UK Have?

You may want to ensure that your mortgage broker is a reliable, transparent and experienced individual.

Simply trusting that someone is a qualified and approved mortgage broker would be risky.

If you wish to check the qualifications of your mortgage advisor, they should have a level 3 qualification.

Some mortgage brokers have a Certificate in Mortgage Advice and Practice diploma, also referred to as a CeMAP diploma.

This is a higher level qualification and indicates more experience in the industry.

Apply for a remortgage today

Best Mortgage Brokers in the UK Conclusion

Finding the best mortgage brokers in the UK takes a bit of time and forethought.

Opt for mortgage advisors who are qualified, experienced, and come with good reviews and reputations in the industry.

Call us today on 03330 90 60 30 or contact us to speak to one of our friendly advisors.

According to the Office for National Statistics, in 2019, 33% of the total UK workforce (around 10.6 million people) worked in key worker positions.

That’s a large portion of the population that may want or need to buy housing.

Key workers are notoriously paid less than their worth, and if you’re a key worker, you may experience this too.

If you work in the UK as a paramedic, doctor, nurse, care worker, social worker, educator, public serviceman, police, or crime agency staff member, you’re considered a key worker.

While your responsibilities are sure to be tough, there are several perks to being a key worker in the UK, with various housing schemes being one of them.

You may think that a key worker housing scheme makes homeownership easier, and it does.

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But you still have your work cut out to ensure that you find the right key worker housing scheme option for you and figure out which mortgage lenders will likely approve your application in conjunction with the housing scheme.

Below, we look at the various ins and outs of key working housing schemes and what you can expect.

Understanding how these schemes work and how you can get a mortgage through one of these schemes will help you invest in a property with confidence.

Are You Eligible for the UK Key Worker Housing Scheme?

One of the first things you need to consider is if you’re eligible for the key worker housing schemes that are available.

Not everyone is eligible for the key worker housing scheme just because they’re key workers.

You’ll need to meet certain eligibility criteria to qualify.

The requirements to qualify include:

• Your annual income must be £60,000 or less.
• You must be permanently employed and have proof thereof.
• Your retirement cannot be less than 5 years in the future.
• At least 5% deposit is required, and you’ll need to prove that you have this amount or how you will raise the amount.
• Proof showing that an affordable home cannot be bought at an affordable rate without financial aid within a reasonable travelling distance to work must be given.
• Citizens of the UK, applicants with indefinite leave to remain, or EU/EEA citizenship is preferred. That said, applicants without indefinite leave to remain can qualify in certain situations.
• Certain housing schemes only support first-time buyers, but this is not always the case.
• To apply, you will need a valid form of ID.

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What UK Key Worker Housing Schemes are Available in 2023?

Several housing schemes are available to key workers in the UK; some are open to other individuals, too, not only key workers.

The best way forward is to have a good understanding of the mortgages and schemes available, as certain ones may not specifically be advertised for key workers, but are ideal for such individuals.

1. Right to Buy

If you live in a council house or have social housing in the UK, you may be able to purchase the property at a large discount if you’ve lived in it for 3 or more years.

The longer you’ve lived in the home, the bigger your discount will be.

This scheme aims to build a new low-cost home for every home bought.

Not all homes have this option, but it’s worth investigating.

2. Shared Ownership

You can consider shared ownership if you can’t afford a mortgage on 100% of the property.

With a shared ownership scheme, you can buy a portion of the home between 25% and 75%.

You’ll then pay rent towards the balance of the property value.

Through stair casing, you could buy a higher home value later on.

It’s common for these properties to come with a 99-year lease, but this is not always the case.

Related mortgages guides: 

• What to do if your mortgage expires.
• Disadvantages of paying your mortgage off.
• Best mortgage brokers in the UK.
• Should you pay off your mortgage early?
• 50-year mortgages UK.

3. Help to Buy Equity Loans

To qualify for Help to Buy equity loans, you’ll need to be a first-time buyer and have a 5% deposit available.

This scheme is ideal if you want a mortgage but don’t have a lump sum to use as a deposit.

The government loan provided covers the rest of the deposit amount.

For 5 years, you won’t pay interest on the government portion of the loan.

You won’t have to make your first payment on that portion of your finance for the first 5 years of your mortgage.

4. 95% Mortgages

This government-backed guarantee mortgage allows buyers to purchase a home with only a 5% deposit.

5. First Homes Scheme for Key Workers

The First Homes scheme for key workers was introduced in 2021.

Most key workers in this scheme can buy a home at 30% less than its market value.

The next buyer of the home will also get the same discount.

This scheme is in place to help the community benefit from buying homes below market value.

Related reading: 

• Reasons for remortgaging.
• Remortgaging to release equity.
• Remortgaging to buy another property.
• Remortgaging with bad credit.
• Remortgaging for home improvements.
• I own my house outright can I remortgage? 
• Capital raising mortgages.

Can Key Workers with Bad Credit Qualify for Housing Schemes in the UK?

While it’s not impossible to get a mortgage or qualify for a key worker housing scheme, having a poor credit history may make it difficult to qualify for a scheme.

Before applying for a housing scheme or mortgage deal, take the time to check your credit score.

If your credit score is poor, you can do a few things to increase it, such as paying down debt, paying accounts on time, and ensuring that your information with the various credit bureaus is correct.

How to Get Onto a UK Key Worker Housing Scheme

If you want to get onto a housing scheme, you’ll need to search your local council for relevant schemes.

You can also consult with a property expert or mortgage broker, who can advise you of the relevant schemes you qualify for in your area.

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Key Worker Housing Scheme Conclusion

If you’re a key worker in the UK and want to cut back on the costs of buying property or need a bit of financial relief so that you can buy a home comfortably, take the time to investigate the various housing schemes in your area.

Consult with a mortgage expert on the options available, too.

Call us today on 03330 90 60 30 or contact us to speak to one of our friendly advisors.

According to the Financial Conduct Authority in the UK, the total value of new approved mortgages in the first quarter of 2023 was 16.1% lower than in the previous quarter, and a whopping 40.7% lower than the previous year.

Since 2020, the value of UK mortgages is the lowest it’s ever been, in 2023.

This indicates that fewer people are applying for, and getting approved for mortgages, potentially due to inaffordability.

One must wonder what the market would look like if more options were available for blue light and key workers, who generally struggle to get full financing for a property.

Blue light workers in the UK are typically NHS, social care, armed forces, rescue services, and emergency services staff members and as such a worker, you may qualify for various blue light benefits.

The Blue Light Card Scheme is one program and while there’s no such thing as blue light card mortgages, your card can get you various discounts on estate agency and letting management fees with certain companies.

If you’re in possession of a Blue Light Worker card, you’re already a key worker and can take advantage of several housing schemes and mortgages that may suit your needs and situation (not specifically aimed at blue light workers).

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Mortgages Ideal for Blue Light Workers in the UK

While not all of these mortgages and housing schemes are designed specifically for blue light workers, they can provide various benefits for people working in blue light jobs.

As an NHS or blue light worker, you can effectively apply for the following mortgage types:

• Buy to let mortgages
• Residential mortgages
• Joint mortgages
• Mortgage schemes (Help to Buy and Shared Ownership, for example)

Do Blue Light Workers Get Mortgage Discounts?

While discounted mortgage deals for blue light workers aren’t widely advertised, they exist.

Some lenders – not all – provide discounted mortgages, lower fees, and reduced deposits for individuals working in the care field.

Working with a mortgage advisor is recommended to ensure that you know what discounts are available and can take advantage of them.

Blue light workers who may consider applying for discounted mortgages or special offers include the likes of surgeons, dentists, ambulance workers, police, mental healthcare workers, blood transfusion services, and various other trusts and NHS workers.

How to Qualify for Blue Light Mortgages

You’ll have to meet the same requirements as other applicants applying for discounted mortgage types or mortgages with additional perks.

To qualify, lenders may ask to look at your:

• Blue light career contracted hours
• Credit score
• Annual income (payslips and bank statements)
• The expected length of your contract (for contractors)
• What your blue light worker role is

Some lenders work differently from others and focus on assisting blue light workers.

It’s a good idea to find out which lenders are more likely to help a blue light worker, as each lender has a different scoring system for qualifying applicants.

Again, a mortgage advisor may be best suited to check which lenders you will most likely get a positive outcome from.

How Much Can I Borrow as a Blue Light Worker?

There’s no hard and fast rule about how much a blue light worker can borrow, as each person’s financial situation is unique.

That said, the general rule of thumb is that lenders provide between 3 and 5 times an applicant’s annual income.

You’ll need to undergo a standard affordability assessment to confirm that you can afford the expected monthly instalments without plunging your budget into distress.

Of course, it’s not just your pay band that determines how much you can borrow.

Your credit score and history will play a role too.

Related reading: 

• Reasons for remortgaging.
• Remortgaging to release equity.
• Remortgaging to buy another property.
• Remortgaging with bad credit.
• Remortgaging for home improvements.
• I own my house outright can I remortgage? 
• Capital raising mortgages.

How Long Must I Be a Blue Light Worker to Apply for a Mortgage?

You don’t have to have worked in the care industry for years to qualify for a mortgage.

In fact, you can possibly get a mortgage even if you’ve just started working in care.

The mortgage lender you apply with will examine your contract, proof of employment, or payslips/income.

The terms of your employment in an official appointment letter can be a suitable basis for applying for your mortgage.

Apply for a mortgage today

What is the NHS Key Worker Mortgage Scheme?

Many blue light workers remember a previously available housing scheme and assume they can still apply.

The NHS key worker scheme was a government initiative set in place to help NHS, and other care staff get a mortgage.

This scheme is no longer available, but you can consider several alternative mortgage options that offer low-interest rates and reduced deposits.

The NHS key worker scheme was disbanded in 2019.

Alternative Schemes for Blue Light Workers Interested in a Mortgage

Below are some alternatives to the NHS key worker mortgage scheme:

Help to Buy Mortgages

The Help to Buy scheme perfectly suits individuals who need help to raise a large deposit to buy a home.

If you qualify for this scheme, you can get a mortgage with just a 5% deposit.

The government will top up your deposit by adding 20%, bringing it up to 25%.

Shared Ownership Mortgages

Shared ownership mortgages are a good option for blue light workers who can’t afford a mortgage for the full value of the home they wish to buy.

With a shared ownership mortgage, you can buy a portion of the property and then pay rent at a reduced rate on the balance outstanding.

When buying a portion of the property, you can expect to be able to buy between 25% and 75% of the property.

You can later buy a larger share of the property if you wish to.

The perks of a shared ownership mortgage are that the deposit and monthly instalments are typically lower than on a mortgage for the property’s full value.

Related mortgages guides: 

• What to do if your mortgage expires.
• Disadvantages of paying your mortgage off.
• Best mortgage brokers in the UK.
• Should you pay off your mortgage early?
• 50-year mortgages UK.

Right to Buy

If you’re a blue light worker who rents a council house or a housing association residence, you may find that the Right to Buy scheme can help you purchase the property you’re already in.

You’ll be able to buy the property at a discounted rate, ensuring that you’re not out of pocket.

Apply for a mortgage today

Blue Light Worker Mortgages Conclusion

Consulting with a mortgage advisor is the best way to ensure that you’re aware of the various blue light worker mortgages or options that are suited to individuals in your situation.

With the help of an expert, you can find out which schemes and mortgage types you’re likely to qualify for, and can get help with the process of setting everything in place.

Call us today on 03330 906 030 or contact us to speak to one of our friendly advisors.

According to Statista, the distribution of mortgages in the UK in 2022 show that only 4.1% of properties bought with a mortgage are owned by people 65 years of age and older.

The same statistics show the following:

•  61.7% of homeowners 65+ bought the property outright
• In the age group of 25 to 34, only 1.5% bought the property outright while 22.5% bought property with a mortgage

This certainly shows that in the younger age brackets, the ability to afford to pay off an entire mortgage immediately is less likely.

It might seem like a brilliant idea to pay your UK mortgage early.

After all, you won’t be forking out cash every month.

But the question begs to be answered; is it a good idea to pay your mortgage early?

Below is everything you need to know to make a more informed decision.

Advantages of Paying Off Your UK Mortgage Early

Let’s first get to the good stuff.

If you can pay off your mortgage early, you might have come into an inheritance, earned a decent wage that’s allowed you to save, or made a lump sum through investment.

Regardless of the ‘how,’ you can now settle the outstanding amount on your home loan.

Apply for a mortgage today

What are the advantages? We’ll tell you:

1. Get Out of Excess Interest

Along with the amount you borrow to pay for your UK home, you’ll have interest to pay. And in most instances, the interest amount is sizeable.

Regardless of the type of mortgage you opt for, the longer the repayment terms are, the more interest you’ll pay.

Paying your mortgage off earlier than anticipated will reduce your interest costs by thousands of pounds.

However, remember that some mortgage companies in the UK penalize homeowners for paying off their mortgage early due to the interest (income) they will lose.

2. Living Without Debt

Most people’s UK home loan or mortgage is their biggest debt.

It’s likely your biggest monthly instalments and comes with the heaviest consequences if you miss payments throughout the year.

Clearing your mortgage could mean you have more cash to spend on other expenses.

The money you save on your mortgage could buy you that holiday you’ve always dreamt of, or help you refurnish your home.

3. You’ll Have a Genuine Place to Call Home

Once your mortgage is settled, the property is officially yours to do with whatever you want.

The terms restricting whether you can rent, sell, or give the property away all fall away, and you’ll have a place to call home – genuinely.

Disadvantages of Paying Off Your UK Home Loan Early

Paying your UK mortgage off early comes with definite benefits, but what are the downsides?

How to handle all financial situations comes down to an individual’s circumstances.

Financial decisions have advantages and disadvantages, so it requires a bit of forethought before deciding what to do.

With that in mind, here are the common drawbacks of paying off your mortgage early.

Related mortgages guides: 

• What to do if your mortgage expires.
• Disadvantages of paying your mortgage off.
• Best mortgage brokers in the UK.
• Should you pay off your mortgage early?
• 50-year mortgages UK.

1. Sneaky Early Settlement Penalties

Not everyone will have the opportunity to settle their UK mortgage early, so the idea of early settlement fees probably doesn’t come up.

These fees may be called ERC (early repayment charges) or “exit fees” on your mortgage contract.

When granting your mortgage, the lender carefully calculates their portion of income on the deal through the many months of interest charges that span the length of your loan contract.

When you cut the deal early and settle, they’ll lose out on all those months of income.

Naturally, everyone has bills to pay and wants their piece of the pie, so they mitigate the loss by imposing penalties on those who try to pay off their UK home mortgage early.

Apply for a mortgage today

2. Losing Out on Tax and Interest Benefits

If your savings are currently earning interest, you should check if your interest is more than the amount you’re paying towards your home loan each month.

It may be beneficial to leave your savings in the account, accruing interest to make a profit (the difference between the interest you’re earning and what you’re paying towards your mortgage).

You could use the interest on your savings to pay your monthly mortgage instalments. Then there’s your pension to think about.

Depending on your age and pension pot, you may benefit more from contributing funds in your savings to your retirement instead of paying down your mortgage.

While it’s not always the case, there are scenarios where the tax advantage of doing so would be more beneficial.

3. Overlooking the Benefits of Prioritising Your Higher Interest Borrowing

Many people will be in multiple forms of debt, not just with their home loan.

If you compare your debt accounts carefully, you may find that you have other forms of debt with higher interest charges attached.

Car finance and credit cards typically come with higher interest rates attached.

You may find it more beneficial to pay your smaller debts off that have more significant interest rates than paying off your mortgage early.

You’ll then have extra monthly cash to pay down your mortgage.

I Want to Pay Off My UK Mortgage Early, How Can I Do That?

If you want to pay your mortgage off early, here are a few ways you can do that:

Full Lump Sum Payment of Your Mortgage

If you happen to have a sudden influx of cash and have the full mortgage amount available, remember to check with the lender what their penalties and early settlement fees are, as this will increase the amount you’ll have to pay over.

A full lump sum is often the easiest way to pay your mortgage early.

Remortgaging

This option is slightly different, as you won’t be free from your mortgage.

That said, when you remortgage your existing loan, you can negotiate better terms that could contribute to paying off your outstanding mortgage amount quicker.

Remortgaging can help you do one of two things as follows:

• Overpay your mortgage

If you choose to overpay your mortgage by 10% of the loan amount each year, in addition to your current instalments, you won’t incur fees or charges (this is only available with some mortgage providers).

This will help you settle your home loan sooner than anticipated.

• Offset your savings

Offset mortgages let homeowners host their savings accounts with their mortgage provider.

In such instances, you can offset your savings balance against the interest charged on your mortgage.

When your interest is paid faster with your savings, you’ll pay more into your loan balance each month.

Remember that remortgaging comes with fees, so you’ll need to calculate if this is the right option.

Apply for a mortgage today

Disadvantages And Advantages Of Paying Your Mortgage Off Conclusion

Whether you should pay your mortgage early in the UK will come down to your unique financial situation.

Take the time to consider your finances and do the calculations before making any big financial decisions.

It’s always recommended to consult with a mortgage broker, so you’re assured of making a decision will all the costs and terms/conditions in mind.

Call us today on 03330 906 030 or contact us to speak to one of our friendly advisors.

According to Statista, the distribution of mortgages in the UK in 2022 show that only 4.1% of properties bought with a mortgage are owned by people 65 years of age and older.

The same statistics show the following:

•  61.7% of homeowners 65+ bought the property outright
• In the age group of 25 to 34, only 1.5% bought the property outright while 22.5% bought property with a mortgage

This certainly shows that in the younger age brackets, the ability to afford to pay off an entire mortgage immediately is less likely.

It might seem like a brilliant idea to pay your UK mortgage early.

After all, you won’t be forking out cash every month.

But the question begs to be answered; is it a good idea to pay your mortgage early?

Below is everything you need to know to make a more informed decision.

Advantages of Paying Off Your UK Mortgage Early

Let’s first get to the good stuff.

If you can pay off your mortgage early, you might have come into an inheritance, earned a decent wage that’s allowed you to save, or made a lump sum through investment.

Regardless of the ‘how,’ you can now settle the outstanding amount on your home loan.

Apply for a mortgage today

What are the advantages? We’ll tell you:

1. Get Out of Excess Interest

Along with the amount you borrow to pay for your UK home, you’ll have interest to pay. And in most instances, the interest amount is sizeable.

Regardless of the type of mortgage you opt for, the longer the repayment terms are, the more interest you’ll pay.

Paying your mortgage off earlier than anticipated will reduce your interest costs by thousands of pounds.

However, remember that some mortgage companies in the UK penalize homeowners for paying off their mortgage early due to the interest (income) they will lose.

2. Living Without Debt

Most people’s UK home loan or mortgage is their biggest debt.

It’s likely your biggest monthly instalments and comes with the heaviest consequences if you miss payments throughout the year.

Clearing your mortgage could mean you have more cash to spend on other expenses.

The money you save on your mortgage could buy you that holiday you’ve always dreamt of, or help you refurnish your home.

3. You’ll Have a Genuine Place to Call Home

Once your mortgage is settled, the property is officially yours to do with whatever you want.

The terms restricting whether you can rent, sell, or give the property away all fall away, and you’ll have a place to call home – genuinely.

Disadvantages of Paying Off Your UK Home Loan Early

Paying your UK mortgage off early comes with definite benefits, but what are the downsides?

How to handle all financial situations comes down to an individual’s circumstances.

Financial decisions have advantages and disadvantages, so it requires a bit of forethought before deciding what to do.

With that in mind, here are the common drawbacks of paying off your mortgage early.

Related mortgages guides: 

• What to do if your mortgage expires.
• Disadvantages of paying your mortgage off.
• Best mortgage brokers in the UK.
• Should you pay off your mortgage early?
• 50-year mortgages UK.

1. Sneaky Early Settlement Penalties

Not everyone will have the opportunity to settle their UK mortgage early, so the idea of early settlement fees probably doesn’t come up.

These fees may be called ERC (early repayment charges) or “exit fees” on your mortgage contract.

When granting your mortgage, the lender carefully calculates their portion of income on the deal through the many months of interest charges that span the length of your loan contract.

When you cut the deal early and settle, they’ll lose out on all those months of income.

Naturally, everyone has bills to pay and wants their piece of the pie, so they mitigate the loss by imposing penalties on those who try to pay off their UK home mortgage early.

Apply for a mortgage today

2. Losing Out on Tax and Interest Benefits

If your savings are currently earning interest, you should check if your interest is more than the amount you’re paying towards your home loan each month.

It may be beneficial to leave your savings in the account, accruing interest to make a profit (the difference between the interest you’re earning and what you’re paying towards your mortgage).

You could use the interest on your savings to pay your monthly mortgage instalments. Then there’s your pension to think about.

Depending on your age and pension pot, you may benefit more from contributing funds in your savings to your retirement instead of paying down your mortgage.

While it’s not always the case, there are scenarios where the tax advantage of doing so would be more beneficial.

3. Overlooking the Benefits of Prioritising Your Higher Interest Borrowing

Many people will be in multiple forms of debt, not just with their home loan.

If you compare your debt accounts carefully, you may find that you have other forms of debt with higher interest charges attached.

Car finance and credit cards typically come with higher interest rates attached.

You may find it more beneficial to pay your smaller debts off that have more significant interest rates than paying off your mortgage early.

You’ll then have extra monthly cash to pay down your mortgage.

I Want to Pay Off My UK Mortgage Early, How Can I Do That?

If you want to pay your mortgage off early, here are a few ways you can do that:

Full Lump Sum Payment of Your Mortgage

If you happen to have a sudden influx of cash and have the full mortgage amount available, remember to check with the lender what their penalties and early settlement fees are, as this will increase the amount you’ll have to pay over.

A full lump sum is often the easiest way to pay your mortgage early.

Remortgaging

This option is slightly different, as you won’t be free from your mortgage.

That said, when you remortgage your existing loan, you can negotiate better terms that could contribute to paying off your outstanding mortgage amount quicker.

Remortgaging can help you do one of two things as follows:

• Overpay your mortgage

If you choose to overpay your mortgage by 10% of the loan amount each year, in addition to your current instalments, you won’t incur fees or charges (this is only available with some mortgage providers).

This will help you settle your home loan sooner than anticipated.

• Offset your savings

Offset mortgages let homeowners host their savings accounts with their mortgage provider.

In such instances, you can offset your savings balance against the interest charged on your mortgage.

When your interest is paid faster with your savings, you’ll pay more into your loan balance each month.

Remember that remortgaging comes with fees, so you’ll need to calculate if this is the right option.

Apply for a mortgage today

Disadvantages And Advantages Of Paying Your Mortgage Off Conclusion

Whether you should pay your mortgage early in the UK will come down to your unique financial situation.

Take the time to consider your finances and do the calculations before making any big financial decisions.

It’s always recommended to consult with a mortgage broker, so you’re assured of making a decision will all the costs and terms/conditions in mind.

Call us today on 03330 906 030 or contact us to speak to one of our friendly advisors.

You love the property you’re renting, and you’ve really settled into life there, and it just seems like the natural next step to buy the property.

Can you ask your landlord if you can buy it?

Of course, you can! Keep in mind, though, that the landlord is not obligated to sell the property to you.

But, if you’re in a good financial position and can afford the property, you may find that you save on purchasing costs exponentially by approaching the landlord and striking up a deal.

Also, you won’t have to pay for removals – you’re already there!

And if you feel this way, you’re not alone! According to the Property Reporter, more than half of UK tenants want to buy the property from their landlord.

This means that your situation isn’t unique, and hundreds, if not thousands, of renters before you have successfully bought their rental properties.

Apply for a mortgage today

Benefits of Buying the Property You’re Already Renting in the UK

Buying a property you’re already renting has some fairly specific benefits.

For starters, you won’t be competing with other potential buyers for consideration from the property owner.

There’s no need to hire an agent to process the sale, meaning you and the landlord cut costs.

If you’ve been a long-term tenant and have a relationship with the owner, you can better negotiate the selling price.

You’ll also have the pleasure of not moving to a new property.

You’re already where you need to be. Ultimately, you’re heading into a financial change, not a physical one.

Steps to Buying Your UK Rental Property

If you want to buy your rental property, there are a few things you should consider and processes to follow to get it right.

Follow these steps if you’re genuinely interested in purchasing your rental property in the UK:

Step 1: Make Enquiries with Your Landlord

The first step is to contact your landlord to determine if they have an interest in selling the property.

In some instances, landlords may initially say they’re not interested because they haven’t thought about it, but in other cases, it may be food for thought.

This could inspire a desire in them to sell the property.

If you have your heart set on the property, it’s worth asking your landlord before starting the house-hunting process for similar properties.

Related mortgages guides: 

• What to do if your mortgage expires.
• Disadvantages of paying your mortgage off.
• Best mortgage brokers in the UK.
• Should you pay off your mortgage early?
• 50-year mortgages UK.

Step 2: Determine the Realistic Value of the House

Before you make an offer or try to negotiate a price, it’s a good idea to have an understanding of the property’s value.

Online services like Rightmove or Zoopla make it a bit easier as they may have historical sale prices of the property.

Then, compare the properties in your area with similar specs. Another way to get to the realistic value of the property is to hire a professional to do an independent valuation.

If you decide to do this through an estate agent, ask more than one to appraise the property, so you have a good basis to go on.

Apply for a mortgage today

Consult with a Mortgage Broker

If you’re paying for the property outright, you must find an affordable UK mortgage provider.

A mortgage broker can provide helpful information on finding the best possible financing.

Trying to decide on a finance deal for first-time buyers can be mind-boggling.

You’ll also need some know-how regarding reading and understanding the terms of your mortgage contract.

Brokers are the link between the many deals out there and you.

They help you find the best deal for your finances based on what they have calculated as your reasonable affordability.

As such, you must be upfront with your mortgage broker about your finances.

Lenders will do checks to verify the information provided, which can sway the result of your mortgage application.

That’s not all a mortgage broker does.

A mortgage broker can assist you with comparing lenders and ensuring that you’re applying for the right type of mortgage based on your financial situation.

Your chosen mortgage broker can also help you avoid negative marks on your credit file by applying for finance through too many lenders.

Related quick help remortgage guides: 

• Remortaging on maternity leave 
• How soon can I remortgage?
• Shared ownership remortgages
• How long does it take to remortgage?
• How to remortgage for an extension?

Make Your Landlord an Offer

If your landlord has indicated a potential interest, you can prepare an official written offer to purchase the property.

You’ll want to include your findings in terms of property value or make mention of your expected price. Offer them a fair market price, or you may reject your offer.

Make sure that everything is done in writing so that there’s a paper trail to follow in case of future queries.

It’s also a good way to ensure the deal goes through professionally and without a hitch.

If the landlord decides to proceed with the deal, ensure they have a clear copy of the terms and conditions of the sale/purchase agreement.

Have a Backup Plan

What happens if your landlord isn’t keen or the deal falls through?

In that case, you should have a plan B. If the property is too expensive for you or your landlord deciding they don’t want to sell the property, you might want alternatives to consider.

Look around at other properties to see if anything else on the market interests you within your price range.

You may find a better buy at a lower price in the same area or something that suits your needs better.

Apply for a mortgage today

Can I Buy My Property From the Landlord? Conclusion

If you’ve fallen in love with the property you’re renting, there’s a chance that the landlord might want to sell it.

It’s not guaranteed, but it’s worth asking about.

Then, if you’re serious about buying it, follow due process and ensure your paperwork is in order.

Your much-loved rental could soon be your dream home!

Of course, consulting with a mortgage broker about your options and the process involved is always highly recommended.

Call us today on 03330 906 030 or contact us to speak to one of our friendly advisors.

Many first-time buyers in the UK don’t know this, but their mortgage offer could expire before they finalise their purchase, which could result in complications with their finance.

When you receive your mortgage offer, you may be so over the moon that you don’t even realise there’s an expiration date attached.

If you don’t finalise your purchase by that date, your mortgage offer may be invalid, which could mean starting the finance application process from the beginning again.

How Long Do Most Mortgage Offers in the UK Last?

Generally speaking, mortgage offers in the UK are only valid for between 3 and 6 months.

That doesn’t mean that every lender has the same terms.

In fact, every lender is different, so it’s a good idea to check the validity of the offer you receive.

It may seem you can process a property purchase swiftly once you have your mortgage offer, but that’s not always true.

There are various hoops to jump through, which can delay the entire application process.

Common Reasons Purchases Experience Delays Resulting in Expired Mortgage Offers

Reasons for a mortgage offer expiring include spelling errors on the mortgage application, the weather, and hiccups in the conveyancing process.

If you’re unable to push these processes along, you may miss that looming expiration date.

Here’s a closer look at the various reasons for mortgage offers expiring before finalising the purchase:

1. Reserving a New Build Property Early

According to Savills, approximately 255, 300 new build properties received full planning consent for 2023’s first quarter.

That’s just the first quarter! This means an astounding number of new builds will be ready for mortgaging.

Securing a new build property as early as possible comes with its perks.

For starters, you’ll have the pick of the batch and get the unit that you like best, instead of having to settle for what’s left.

That said, you may reserve a new build early and then find that the construction company doesn’t follow through on their projected plans and timelines, leaving you with a mortgage offer ticking down and not much you can do about it.

Sometimes the construction company isn’t entirely at fault and is at the mercy of their supply chain, waiting for materials or having to deal with being under-staffed.

In most instances, a new build can be completed within 6 months.

If the new build isn’t finalised within the time window, you’ll need to find a way of extending your mortgage offer.

Lenders, of course, are aware that this can sometimes happen, so some offer specific finance offers aimed at new builds that can extend the mortgage offer by up to 9 months.

Enquiring about this possibility with potential mortgage providers before choosing which one you will go with is a good idea.

Apply for a mortgage today

2. Errors on Your Mortgage Application

Your mortgage application will require extra care to be as thorough and accurate as possible.

If you include the wrong address or spell something incorrectly, it can start the back and forth of paperwork, leading to unfortunate delays.

Double-check every detail on your application before submitting it.

If an error is detected, every participant in the contract will need to be notified and then sign the contract again – this includes the seller, solicitor, and you.

Keep in mind that solicitors can be quite busy, which could mean they don’t get around to paperwork corrections as promptly as you’d like them to.

Most first-time and even seasoned property buyers in the UK use a mortgage broker to ensure their application is flawless.

They’re trained to be meticulous with processing applications, and so you may find it saves you a lot of time and trouble to consult with one.

3. At the Mercy of the Weather

The prompt finalisation of new property builds is undoubtedly the weather.

If it’s going through an unpredictable period where it’s wet or snowing, the completion date of the property is pushed back past the expiry date of the mortgage offer.

4. Conveyancing Delays

The conveyancing process can be quite unpredictable.

If the seller’s conveyancer is away or busy, it may delay the entire process.

Before using a specific solicitor, make enquiries about their schedules to ensure they won’t take any breaks or be unavailable during the process.

It’s the responsibility of your chosen conveyancer to ensure all building regulation approvals and planning permissions are in place and that your lender is furnished with the relevant details.

If they’re unavailable to do this, your mortgage provider won’t approve the loan request.

Related mortgages guides: 

• What to do if your mortgage expires.
• Disadvantages of paying your mortgage off.
• Best mortgage brokers in the UK.
• Should you pay off your mortgage early?
• 50-year mortgages UK.

5. The Valuation is Delayed

During the mortgage application process, the lender must arrange a mortgage valuation.

The entire process should take less than half an hour, but if the mortgage provider doesn’t make the relevant arrangements, it could delay the entire purchase.

Some lenders are disorganised or busy, and then you’ll find yourself waiting for the valuation to take place.

You can follow up with the lender to find out when the valuation will happen – sometimes, this does help speed the process along.

Apply for a mortgage today

Getting an Extension on Your Mortgage Offer

You’re likely to feel panicked if the expiry date of your mortgage offer is swiftly approaching and your purchase hasn’t been finalised.

The good news is that most mortgage providers are reasonable in their approach to delays.

That said, you shouldn’t leave it to the last minute to advise them.

Rather, let them know as soon as possible so that they can extend the mortgage in good time.

In most instances, the mortgage company will extend the loan offer by around 30 days, but in certain scenarios, you may be able to negotiate up to 3 months or more from the lender.

You’ll need to back up your reasoning for the extension, though.

Related quick help remortgage guides: 

• Remortaging on maternity leave 
• How soon can I remortgage?
• Shared ownership remortgages
• How long does it take to remortgage?
• How to remortgage for an extension?

Possible Reasons for Mortgage Extensions Being Denied

Mortgage providers in the UK are not obligated to extend mortgage offers just because you request it.

In some instances, the application for an extension can be rejected.

Of course, the process isn’t as simple as asking for an extension, and it is granted.

You’ll need to prove your earnings have stayed the same by providing your bank statements or payslips for the past 6 months.

This allows the lender to check that you’re still financially stable and haven’t experienced a change in your financial situation.

It’s best to advise the lender if your situation has changed.

For instance, if you’ve acquired additional debt, your income has reduced, or you’ve started working for a new employer, you’ll need to be upfront about this.

Minimising the Risk of Your Mortgage Offer Expiring

One of the first things you should focus on is not needing a mortgage offer extension in the first place.

Here’s what you can do to ensure that:

• Know your mortgage offer expiration date

When you start negotiating a mortgage deal, you should know your mortgage offer expiry date.

This will ensure you know how much time you have to motivate all parties to process your purchase timeously.

• Acquire the Assistance of a Mortgage Broker

Mortgage brokers are trained in all things mortgage related.

They’ll ensure that you know how much you can realistically apply for, which lenders to approach, and how to ensure that your application goes ahead smoothly.

They take the reins and ensure that they do all the chasing up and get the application process – you’ll be able to rest easy knowing that your application is in the hands of a professional.

• Track the Progress of Your Application & Advise Your Lender as Early as Possible

If you’re investing in a new build, keep in touch with the construction managers about the progress of the build.

If you expect there to be delays, you can let the lender know as soon as possible.

If you suspect that you’ll need an extension, simply let the lender know as soon as possible so that your lender has time to do the relevant checks in time.

What to Expect When Mortgage Offer Extensions Are Denied

In certain circumstances, mortgage providers will reject the application for an extension.

In such instances, the only way around it is to re-apply for a brand-new mortgage.

The downside of this is that you will likely forfeit the fees you’ve already paid.

This means you’ll be faced with fresh valuation, solicitors, and application fees to pay.

If the process is restarted and the lender valuation determines that the property is now worth more than before, you’ll have to raise a higher deposit amount as your mortgage amount will need to be higher, too.

Of course, there’s the option that, in some instances, the property value may have fallen, in which case you’ll pay a lower deposit and require a lower mortgage amount.

It’s not all doom and gloom when a mortgage offer falls through.

Despite the forfeited fees, you may actually find a better mortgage deal which could save you money in the long run.

What About Your Credit Report?

One of the biggest disadvantages of a rejected mortgage offer extension is that the initial failed mortgage will appear on your credit profile, and some lenders may see this as a risk factor.

While some lenders may be sticklers for the details and be wary of why the mortgage didn’t go through, others will understand the delays that can happen, especially if a professional mortgage broker is assisting you.

A mortgage broker can also help you find a lender most likely to assist you despite your failed mortgage.

Apply for a mortgage today

Mortgage Offer Expires Before Completion UK Conclusion

Ensuring that your mortgage is processed swiftly could be as simple as working with a professional mortgage broker and keeping a close eye on the progress of your purchase.

Letting the lender know as early on as possible about delays could be the difference between an approved and denied mortgage offer extension.

Call us today on 03330 906 030 or contact us to speak to one of our friendly advisors.

If you’ve already got one mortgage in the UK but have your eye on another property, you may wonder if it’s even possible to have more than one mortgage.

While having more than one mortgage is possible, it’s important to note that not everyone qualifies for a second mortgage.

For most, the thought of a second mortgage and the high-interest rates that will come with it can be off-putting.

But according to Reuters, the Bank of England says that Britons are coping with higher interest rates, which the bank pushed from 0.1% to 5% at the end of 2021.

Depending on your financial situation, you may be able to manage a second mortgage, but how do you go about getting one?

The best course of action is to know the qualifying criteria for a mortgage and what you can do to boost your chances of getting one or more.

Apply for a remortgage today

Second, Third, and Fourth Mortgages – What’s the Deal?

For many, applying for a second mortgage follows the same process as the first application, but you’ll be required to nominate which home will be your primary residence.

It makes more sense to have multiple buy-to-let mortgages for investment purposes than it does to have several standalone mortgages.

If you’re simply buying a second home without stipulating that it’s for investment purposes, the financial institution you’re working with may have a lot of questions regarding the reasons behind your purchase.

What’s great about buy-to-let mortgages is that you won’t be limited to how many you can have. However, the issue you may face is how much a lender is willing to give you.

Most lenders have limits per individual, as granting multiple mortgages could be a financially risky path for them.

Limited Companies and Portfolio Mortgages

If you’re specifically buying property to use for income purposes, you may want to consider running a limited company for property investment, or to use a portfolio mortgage which puts all the properties in your portfolio under one umbrella mortgage.

With this type of mortgage, it’s easier to state your case for borrowing more against your existing property portfolio.

Each portfolio mortgage lender’s criteria vary, but you’ll need to invest in three or more buy-to-let properties to qualify as a portfolio landlord.

You can expect to go through an affordability assessment to ensure you can afford the mortgage instalments.

Apply for a remortgage today

Are Commercial Mortgages an Option?

If you’re interested in investing in property for income, commercial mortgages may be your best option.

There’s no set limit to the number of commercial mortgages a person can have, and it’s sometimes easier to get approved for more than one commercial mortgage than for multiple personal mortgages.

Lenders have their own sets of criteria for commercial mortgages, but here’s what’s generally required:

• Minimum deposit of 25% with additional mortgages sometimes requiring up to 35% or more.
• Primary applicant must be between 18 and 75.
• Trading history of the company required for 2–3 years.

Types of commercial entities that generally make use of commercial mortgages are partnerships, limited companies, offshore companies, LLPs, and sole traders.

You can invest in more than just a residential home for renting out.

Commercial mortgages can purchase shops, retail units, hotels, guest houses, cafés, restaurants, offices, factories, warehouses, and even business parks.

Income Influences How Many Mortgages You’re Allowed

It’s important to stipulate what you’re buying the second property for.

For instance, if you’re buying a second home for residential reasons, you can expect the amount you’re earning to play a role in whether the mortgage is granted or not.

On the contrary, buy-to-let property mortgages won’t consider your personal earnings.

The property’s potential income is considered when determining if the property is a worthy investment to fund.

As a general rule of thumb, most landlords aim to charge rentals that cover 125-145% of the total mortgage amount each month.

Stamp Duties

Stamp duties may apply when you get a second mortgage in England or Northern Ireland.

This stamp duty is an additional amount added to the normal rate.

Stamp duties to be expected:

• Property up to £250,000: 3%
• Property of £250,001 to £925,000: 8%
• Property of £925,001 to £1.5 million: 13%
• Property of over £1.5 million: 15%

Before You Apply for Another Mortgage, Keep the Following in Mind

If you’re not financially stable, even one mortgage can be risky.

Having a second mortgage increases the risk for you and the lender.

You should consider several factors before applying for a second mortgage of any type.

These include:

1. Affordability

Take the time to draw up a complete budget and decide if a second mortgage is affordable.

2. Current Debt

Consider how long it will take you to clear all your debt if you add a new mortgage to the pile.

Are you making a sound financial decision, or should you hold off until you’ve paid down more of your current debt?

3. Credit History

If you have a good credit score, missed mortgage payments can tarnish it.

In fact, you could find your property being repossessed if you’re unable to keep up with payments, which will only damage your future creditworthiness.

4. Justifications for Multiple Mortgages

If the new mortgage is just an impulse buy or ego purchase, you may want to hold off.

Make sure you know what your motivation for getting a second mortgage is.

Is it a personal purchase or is it for investment and income purposes?

Related quick help remortgage guides: 

• Remortaging on maternity leave 
• How soon can I remortgage?
• Shared ownership remortgages
• How long does it take to remortgage?
• How to remortgage for an extension?

5. Funds and Available Time

Purchasing a second, third, or fourth property will require maintenance and drum up costs.

Have you calculated the extra financial cost of owning another property?

And will you have the time (or hire someone) to maintain the property?

Apply for a remortgage today

Can I Have More Than One Mortgage? Conclusion

Having more than one mortgage is entirely possible in the UK, but it’s a decision that should be made carefully with affordability in mind.

If you’re applying for a second mortgage, consider if a portfolio mortgage or commercial mortgage might be better suited to your needs and requirements.

Call us today on 03330 90 60 30 or contact us to speak to one of our friendly advisors.