“What’s the right mortgage for me?” is a question I quite often get asked.
Without being too vague, the honest answer is, “it’s not as straight-forward as that!”
Everyone is a person in their own right with their own unique traits and personalities. Every mortgage has at least one applicant and each application has its own specifications and individual requirements.
A mortgage term, for example, will largely be dependent on the oldest applicant’s age. Generally, a residential mortgage term would end before the oldest applicant retires and their earned income stops.
If there are more than 2 applicants on a mortgage then this may restrict the lenders available to offer you a loan.
If you want to buy a shared ownership property, not all lenders will allow this.
If you have a 10% deposit and are looking to buy a new build flat, many lenders restrict the loan to value on this type of mortgage so a 90% loan to value mortgage (as this would be) may not be an option.
If you’re looking to raise funds with a re-mortgage to pay off debt, some lenders limit the maximum loan to value of the mortgage you take out so you need to be careful here.
If you have historical credit issues such as late or missed payments then depending on the severity of the issues and when they happened then different lenders take their own view and may or may not be agreeable.
Other, specialist lenders may be fine with credit issues however you are likely to attract a higher interest rate so your future plans may be worth considering to establish whether it would be cheaper in the long run to wait until credit blips are further in the past.
If you’re looking for a buy to let mortgage not all lenders will allow you to have a mortgage if you are not an owner occupier at the time of completion. For example, if you wanted to move out of your property to live with parents or a partner in their home, not all lenders would allow you to re-mortgage your own property on a buy to let basis.
Other lenders may not allow you to have a buy to let mortgage if you don’t have a residential mortgage.
If you are going to fix your interest rates for a certain period, what are your future plans? If you intend to start up your own business in the near future it would be advisable to think hard about whether a 2 year fixed rate is a good idea.
A 5 year fixed rate may be advisable if you have young children and their child-care costs will be significantly reduce by the end of 5 years. For example, they may be at school by then and disposable income will have increased.
Likewise, if you are unsure of your plans over the next couple of years it may be more beneficial for you to stick with a variable rate of interest if you may need to sell the property during the first 2 years and then be subject to early repayment charges.
Some lenders don’t lend on certain property types such as properties close to commercial buildings. Or flats converted from offices. Or properties with flat rooves. Or leasehold properties with a short lease remaining.
There are many circumstances which may be relevant to you and your application and all of these need to be taken into consideration when you look for the mortgage which is ideal for you.
This is why it would be advisable to talk to a professional advisor.
Asking Google or Siri may offer you some answers but not necessarily the right answers for you.
And if you don’t know to ask a specific question then you won’t get the answer in any case!
A whole of market mortgage advisor will take a holistic view of your requirements and establish a list of lenders who can accommodate your requirements. Once they have done that, they can look at more specific details such as how much your monthly budget is, how much the mortgage costs, identify lender fees and present their findings to you in order that you can make an informed decision.
Just as importantly, they will contact you to review your options before the end of any fixed term in order to ensure your current mortgage is still the right one for you. If necessary they can help you arrange a re-mortgage to a different lender if a new mortgage would be more appropriate for you at that time..
If you would like any help sourcing the ideal mortgage for your own circumstances then please don’t hesitate to get in touch!
Think carefully before securing other debts against your home. Your home may be repossessed if you fail to keep up the repayments on your mortgage.
Heide Swift
Telephone: 01525 309300
Mobile: 07903 302895
Email: heide@swift-mortgages.com
#SwiftMortgages
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