Remortgaging in Harrogate When House Value Has Increased
Owning a property, whether it’s your family home or a buy to let in Harrogate, is seen as a valuable asset. It goes beyond providing shelter; it’s a substantial investment that can be sold or passed down to future generations.
The property market is dynamic, with prices fluctuating over time. During periods of price increases, it can be beneficial to explore remortgage options, as you may have the opportunity to access more favourable loan-to-value ratios and better interest rates.
What is loan-to-value (LTV), and why do people consider remortgaging in Harrogate to improve it?
Loan-to-value (LTV) is the ratio of the mortgage amount to the property’s market value, expressed as a percentage. For example, if you buy a property for £100,000 with a £10,000 deposit, you’ll need a 90% LTV mortgage.
Different mortgage lenders offer varying LTV brackets, typically ranging from 60% to 95%. Lower LTV ratios allow access to mortgage deals with more competitive interest rates.
Let’s say your property value has increased to £110,000, and your outstanding mortgage balance is now £80,000. This results in a new LTV of 73%. By remortgaging in Harrogate, you could potentially secure a 75% LTV mortgage with a more competitive interest rate.
Market conditions also influence the interest rate available at the time of remortgaging in Harrogate. Lower LTV mortgages tend to have better interest rates because they present less risk to the mortgage lender.
How can I determine the value of my property?
To access better rates or terms, you need to establish whether your property’s value has increased since you purchased it. To do this, a valuation of your home will be necessary.
When you remortgage in Harrogate, you’ll be switching to a new mortgage lender, unlike a product transfer where you remain with the same mortgage lender.
As a new mortgage lender, they will require a valuation to determine the property’s value against which they are lending. Two types of property valuations will typically be found.
The first is an Automated Valuation Model (AVM), also known as a desktop valuation. It involves cross-referencing similar properties in the area to estimate the value without a physical inspection.
The alternative is a physical valuation, where an expert visits your property to assess its interior and exterior, providing a more accurate value. This method is particularly useful if you have made home improvements or extensions that an AVM might overlook.
You can discuss your preference with your mortgage advisor in Harrogate during your appointment.
Remortgaging in Harrogate to Release Equity When Home Value Has Increased
Sometimes, homeowners choose to remortgage in Harrogate to release equity. This means taking out a new mortgage with a higher loan-to-value ratio. It’s important to be cautious when considering this option. With a higher LTV, your monthly mortgage payments may increase.
The goal is to invest in home improvements, which would hopefully see an increase in the property’s value. This strategy aims to lower the loan-to-value ratio when you remortgage in Harrogate in the future.
It’s essential to devise a well-thought-out plan, especially when dealing with a significant financial investment like your home. A mortgage advisor in Harrogate can guide you in determining the best approach for your situation.
Can I remortgage in Harrogate early if my home’s value has increased?
In some cases, homeowners may think about remortgaging in Harrogate before their fixed-term ends, even as early as a year in advance. It is important to remember that breaking the agreed terms of your mortgage contract usually means paying an early repayment charge (ERC).
Predicting house prices is challenging, and the market’s conditions can be uncertain. While remortgaging in Harrogate early may seem attractive, it might not be financially viable for everyone. People typically consider early exit from their mortgage when there’s a good reason to do so.
In such cases, it’s highly recommended to involve a mortgage broker in Harrogate.
For instance, during the COVID-19 pandemic, when the Bank of England base rate reached record lows, homeowners at the end of their fixed-rate mortgage period had the opportunity to benefit from lower interest rates through remortgaging in Harrogate.
If you were a year away from that point, however, you could only take advantage of this by remortgaging in Harrogate early and fixing the mortgage for a longer period. This is a unique example from an unusual time, as mortgage lenders also limited product availability, reducing options for many borrowers.
Nevertheless, it demonstrates a scenario where early remortgaging could provide financial benefits. If your home’s value has risen, it could be an opportune time to remortgage in Harrogate, as the savings from accessing a lower loan-to-value ratio may outweigh the associated costs.
Please do keep in mind the potential early repayment charge, as well as arrangement, valuation, and solicitor fees for the new mortgage. To fully understand your options, it’s recommended that you speak with a mortgage broker in Harrogate.
10 Factors to Help You Decide Where to Live in Harrogate
Before you make a start on the process of moving home in Harrogate, you first need to come up with a plan of what you want. Many will want to move to a new location and have a fresh start, whilst others may want the same location but a bigger property, to name a few reasons.
You need to give some thought to the area you are in, what your current situation is and whether you expect that to change. In an ideal world, when you move home in Harrogate, you need to consider how things might change in the next 5 or 10 years, maybe more?
To give you a nudge in the right direction and give you plenty to consider ahead of the next step in your home owning journey, we have put together a list of 10 factors that could help you to decide where to move house in Harrogate.
1. Busy town centre or relaxing countryside?
First of all, we would suggest that you take a look at the area that you are looking to buy a house in. Do you want to live in the busy town centre of Harrogate or would you prefer something a little quieter, perhaps in the countryside?
Typically speaking, we find that first time buyers in Harrogate prefer to live closer to towns and cities, whereas people with families, who have perhaps been homeowners for a few years, may move out of the busier areas to settle down for a much quieter life.
There are no doubt pros and cons to both of these options, though at the end of the day, it’s all down to personal preference!
2. Transport Links
Transport links are quite a large factor to think about when you are considering where to live, which is even more so the case when you are working out where it is you want to live.
If you typically go to work via driving and have a job that is situated outside of where you are living, you should consider seeing how easy it is to get onto the motorway or busier roads.
If you are unable to drive and you happen to heavily rely on public transport to commute to and from your place of work, it may be worth your while looking at an area that is closer to where it is you work, to provide you with easier access to public transport.
You should also bear in mind the amount that it will cost to travel if you do, as those costs could run high. Additionally, it could be worth moving as close to your work as you can, maybe considering things like walking or biking as a way to reduce your carbon footprint.
3. Schools & Education
Families will need to take a look at all the nearby schools and education opportunities too, whilst they are property hunting. If your kids are still in school, you might find this a little challenging, as you will have to decide whether or not to keep them where they are or move them to another school.
It will mostly be dependant on how far it is you are planning to move away. If your children are younger, this might be a little easier for you.
If you currently don’t have a family of your own but are thinking about starting one, it will be worth your time looking at this ahead of time. When you eventually do have children and they are ready to start school, it will be much easier to already be aware of your options.
4. Nearby Facilities – What You Need vs What You Want
When moving to a new area, there will be many different things that you want nearby. Although, there is a difference between what you want nearby and what you need nearby.
We would advise separating nearby facilities with ‘what you want vs what you need’. For example, you want to have a gym nearby, however, having shops nearby is more important and something that you need.
Having a gym nearby is what we call ‘an added bonus’ and is not one of the main reasons why someone should live in an area.
5. Friends & Family
If you tend to see your family and friends more often, it may be challenging for you to even consider moving further away. We often find that conversely to this, people actually will often move closer to family and friends, as one of their primary reasons is to see them more.
This is a scenario that tends to be much more popular with young families in Harrogate who move closer to family and friends, as a way of getting help with raising their children. This a perk you lose if you move away, unfortunately!
6. Is the property good value for money?
When you look to buy a property, you first need to make sure that the properties you are looking at are actually worth what it is the seller is asking for it.
We would suggest that you take a look at recently sold house prices for that area on websites like Rightmove or Zoopla, as a way to double-check you aren’t paying over the odds for a property. If you are overpaying, a mortgage lender might down-value the property when they do their valuation.
If you are a first time buyer in Harrogate, you simply be looking to find something cheap and cheerful as your first home, so that you are at least on the property ladder. This still doesn’t mean you shouldn’t check house prices in the area, however, as you still need to make sure it is worth the costs.
7. What is the community like?
The way the local community of an area is like can have an impact on how your living experience will be as well. Some people love to live in busy, vibrant communities with regular events and celebrations. Others will prefer to be quiet and do very little.
As a mortgage broker in Harrogate, we would suggest that when someone looks at moving home in Harrogate, that they should look online to find out what the local area is like. Checking forum threads, Facebook groups and local news can help you to get a good idea of this.
8. Career Changes
A lot of home buyers will be moving home because they have actually decided to take a new job or even take on a new career altogether. This is a very common reason we hear for people moving home!
You will also have to bear in mind the various transport links when moving to a new area and how this could affect your job. Is it viable for you to move closer to work and yet also be within reach of friends and family?
There may very well be places that are easy enough for you to travel to your new place of work and aren’t too far from your new home.
Many home buyers will not be affected by this anymore, as the new modern approach to work is to actually just work from home. This could be a factor too, as you may require space for a home office, whilst factoring in still getting to your workplace, if they ever require you in person.
9. Type of Property
There are a wide variety of different property types that are available to property purchasers on the open market. Depending on the size of the property you are looking for, you may find that you don’t have as many choices for where you want to live.
For example, terraced and semi-detached houses are usually found in and around cities or towns, whilst you can find a larger property usually outside of those areas. If you have a particular property type in mind already, say a detached house, there may not be any near where you were hoping to buy.
It will also be quite dependant on your personal factors, such as how big your family is, how you might expect it to grow, what your future plans are and your financial circumstances. It is worth looking at other properties on the internet to gauge the average housing prices for a set area and property type.
10. Local Developments
If there has been a proposal for a local development, it is handy for you to be aware of this prior to committing to a property purchase, especially if you have high hopes and are looking to build your life around this new home.
An example of a local investment could be something like an entire housing estate that is either proposed or is set to be finished soon. Something like this could change the environment, altering what seems quiet to you at first, making for a much more active community.
Free Mortgage Appointment for Home Movers
When you have gone through all of the factors listed and have made plans for where you wish to live next, the next step for you to take is to get in touch with a mortgage advisor in Harrogate and get the ball rolling on your mortgage process!
We are an experienced and reputable mortgage broker in Harrogate, helping many home buyers in Harrogate over the years. We offer all of our customers a free home movers review or first time buyer mortgage appointment, with a qualified mortgage advisor in Harrogate.
Book online today and we will see how we can help you out with your home buying journey!
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Cashback Mortgage Advice in Harrogate
We regularly receive enquiries from customers regarding a variety of mortgage types. One we come across every now and again is a cashback mortgage.
In this article, it is our goal to answer all the main questions we hear from customers regarding the topic of cashback mortgages. These include whether or not the mortgage type will benefit you in the long or short term, as well as how it may compare to other mortgage options.
What is a Cashback Mortgage?
Cashback mortgages are a rather self-explanatory type of mortgage available to applicants. After you have finally paid off your mortgage or once your mortgage term has come to an end, you will receive some cash back in your pocket.
The amount that you can get back is usually a percentage of what you have borrowed, say around 1 or 2%. Some lenders will prefer to have a fixed price written in the contract, meaning even with a longer term, your amount won’t change.
Will a Cashback Mortgage benefit me?
Cashback mortgages tend to have both advantages and disadvantages. For example, Cashback Mortgages may also bring along with them a free property valuation or some fringe benefits.
Cashback Mortgages are generally quite attractive mortgage types to customers that are borrowing much smaller mortgages. You will make back some money plus be granted some additional benefits on the side.
If your mortgage lender offers you a reasonable percentage on your Cashback Mortgage, it is worth considering, as this could be a benefit to you in the long term.
One of the main disadvantages to a cashback mortgage is that they have also been known to have rather high interest-rates with them as well.
Different Types of Mortgages in Harrogate
Compared to the other types of mortgages that are available, Cashback Mortgages are often not the most popular mortgages to go with, though they are absolutely worth considering.
We still see come across customers at Harrogatemoneyman every so often who are looking for Cashback Mortgages, and they are a great backup option if you perhaps don’t quite meet the criteria for other mortgage types.
If you would like to receive a much more in-depth viewpoint, be sure to book your free mortgage appointment online. Here you will be able to benefit from Specialist Mortgage Advice in Harrogate.
A member of our brilliant team of mortgage advisors in Harrogate will be able to take a look at your case and determine whether or not this is the right option for you, comparing everything else that may be available to you.
Can I Have Two Mortgages in Harrogate?
Can I have two mortgages at once?
Though homeowners may not be aware, yes it is possible for you to have two mortgages!
Of course this depends on your eligibility. Providing you have enough income, have a strong credit score and a consistent job status, this may become an option for you.
Why would you take out a second mortgage?
To Purchase a Second Home
There are many reasons why someone might want to purchase a second home. For starters, you may be wanting to rent out the home you already have and purchase a new one. This is called a Let to Buy.
You may be wanting to help out your kids by releasing some equity, purchasing a second property and mortgaging it, so that they have somewhere to live.
It’s a lot more common for parents to release equity as a means of gifting a deposit, though this still crops up from time to time, especially when you factor in property price rises!
Further Advance for Home Improvements
Some may want a second mortgage with their existing lender, on the same home. This is called a further advance and allows you to borrow an additional amount in order to cover various home improvements.
This is a specialist area and would require you to speak with a mortgage advisor in Harrogate.
Second Mortgage for your Buy to Let Portfolio
If you are a landlord, you may require additional mortgages for further portfolio purchases. We find that buy to let mortgages are most commonly on interest only, as this means your monthly payments will be lower, as you’re only paying interest.
You will need to pay back the capital in full at the end of your term though, so that’s something to bear in mind. It’s beneficial to look at speaking with a mortgage advisor in Harrogate ahead of a buy to let mortgage in Harrogate.
We are experts in buy to let mortgage criteria and will work hard to take the weight of your mortgage off your shoulders.
Named on an existing mortgage and want to buy a new home?
Thanks to situations like divorce and separation, this is unfortunately quite a common occurrence for us. We would recommend looking to get your name removed from the mortgage with your ex, as otherwise you will remain liable for the payments, whether you’ve come to a personal agreement or not.
This in turn, will make it difficult to obtain a second mortgage, as they need confidence in your ability to maintain both payments. You also have to think about your ex’s credit history. If they start to miss payments, this can affect your score too.
Speak with a mortgage advisor as soon as possible and get your name removed if you can, as that is definitely your safest bet. If this isn’t an option, then there still be hope for you to get a second mortgage. Book your free mortgage appointment and we’ll be happy to go over this with you.
What is a 95% Mortgage?
A 95% mortgage is as simple as the name would suggest; you are borrowing against 95% of the price of a property, and then you are covering the remaining 5% with your deposit. An example of this is if you looked at buying a property that was worth £150,000 with a 95% mortgage, you would be putting down £7,500 as your deposit and borrow the remaining £142,500 from the lender.
95% Mortgage Advice in Harrogate
Off the back of the March 2021 Budget, Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, making 95% mortgages more readily available from the bigger high street banks.
This is fantastic news for First-Time Buyers and Home Movers alike, as this scheme will continue running until December 2022. Certain terms and conditions will apply though, which is something your Mortgage Advisor in Harrogate will be able to look at, to see if you qualify.
All our customers who opt to Get in Touch will receive a free, no-obligation mortgage consultation where one of our dedicated mortgage advisors will be able to make a recommendation on the best possible route for you to take.
Can I get a 95% mortgage?
95% mortgages are usually accessible by both First-Time Buyers in Harrogate & those who are Moving Home in Harrogate. Whilst saving for a 5% deposit sounds like a pretty straightforward concept, you’ll still need to have an acceptable credit score and prove that you are able to afford your monthly mortgage repayments, in order to access a 95% mortgage.
Improving your credit score
A good credit score is essential in the process of obtaining any mortgage, especially a 95% mortgage. Things like paying any current credit commitments on time, ensuring your addresses are updated and checking that you’re on the voters roll, can all help with your credit score.
Affordability
Affordability is another one that is important to take note of. By giving the lender details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments, your lender will be able to get a general overview of whether or not you are able to afford this type of mortgage.
Can my family help me get a 95% mortgage?
Nowadays we see lots of family members helping each other get onto the property ladder, especially parents looking to further their children’s lives. The way this usually happens is by gifting the person looking to find their home, the deposit required. Known through the industry as the “Bank of Mum & Dad, Gifted Deposits are only intended to be a gift, and not as a loan. The lender will need proof that this has been agreed, before it can be used towards your mortgage.
How do I choose the right 95% mortgage?
When looking for a 95% mortgage, you want to make sure you have the right type of mortgage. Each mortgage type works differently, with that choice allowing you to find one that is most appropriate for your personal and financial situation.
Some homeowners and home buyers prefer Fixed Rate or Tracker Mortgages, mortgage types which mean you either keep interest rates at a set amount for the term given or have your interest rates tracking the Bank of England base rates.
Alternatively, you might find that Interest-Only or a Repayment Mortgages are more your style. Interest-Only allows cheaper payments until you need to pay a lump sum at the end (mostly now used for Buy-to-Lets), whereas a Repayment mortgage (a normal mortgage if you’d like) means you’ll be paying interest and capital combined per month.
How can a bigger deposit help with my mortgage?
Seeing as a mortgage is such a large financial outgoing, you need to be prepared and need to be aware. You might find things like higher interest rates, remortgaging difficulties due to less equity and then negative equity all cropping up if you’re not.
There is no need to worry though, as all these can be avoided if you’re savvy enough with your process to begin with. The more deposit you put down for a property, the less risk the lender will see you as.
A larger deposit, of say 10-15%, would not only reduce the rates of interest by a noticeable amount, but would also give the property more equity and reduce the risk of negative equity, thanks in part to you borrowing less against the property.
So, whilst the risks may seem intimidating, planning ahead and saving for a bigger deposit to access something like a 90% or even an 85% mortgage will be a massive help in your mortgage journey and something you’ll be able to reap the rewards from in the future.
Harrogatemoneyman Spring Budget 2021 Update
Rishi Sunak’s second Budget as Chancellor brought two pieces of welcome news for the property sector as the Government attempts to transform “Generation Rent” into “Generation Buy” to help stimulate the UK economy, namely the new 95% Mortgage Guarantee and an extension of the Stamp Duty Holiday.
95% Mortgage Guarantee
The name of this scheme is misleading as not everyone that applies is guaranteed to be offered a mortgage, it is still subject to affordability and credit score. The “guarantee” itself is that the Government will ensure Lenders don’t stand a loss if they grant a 95% mortgage to a customer who then subsequently falls into arrears and is repossessed leaving behind negative equity.
This scheme should in theory give Lenders more confidence to lend even though the applicant only has a smaller deposit to put down. Of course, Lenders never want to repossess someone’s home unless it is the last resort, but if that happens then the new scheme would cover any shortfall.
Lenders have been worried about the prospect of home values decreasing so this measure should alleviate that concern although of course, the chances of negative equity occurring will naturally reduce should property prices increase as a result of these announcements!
The scheme is available to both 1st Time Buyers and Home Movers, it’s available on any property (not just new build) and will run until December 2022. Some major High Street Banks have already signed up to the scheme and it’s likely more will follow later on. It’s still a big challenge for Lenders to cope with the demand they are getting for mortgages due to the difficulties training and supervising staff working from home but they will want to offer as many of these mortgages as they can.
Stamp Duty Holiday Extension
When the Stamp Duty Holiday was launched last year we all hoped life would be very much back to normal by the cut-off date of 31st March 2021 but things didn’t pan out that way as we know. Solicitors are struggling to keep up with the workload and if lots of chains had collapsed then it would have partly defeated the object of the exercise.
Therefore it was good to hear the scheme has been extended to 30th June for purchases up to £500,000 and 30th September for purchases up to £250,000.
The Government certainly sees the property sector as an area that can play a big part in our economic recovery and if you are looking to buy a home or remortgage this year please reach out and we will be happy to advise you.
In need of a Mortgage Agreement in Principle in Harrogate?
The purpose of an Agreement in Principle (AIP) is to determine whether or not you pass a Lender credit score to qualify for a potential mortgage. Sometimes this is also referred to as a Decision in Principle.
By obtaining yourself an Agreement in Principle, you are ready to support any potential offers you make as a First-Time Buyer in Harrogate. Having one of these may also put you in a place to negotiate a lower price as it shows the seller you are serious and have the means to proceed with the purchase.
Will obtaining an Agreement in Principle impact my Credit Score?
Common practice these days seems to lean more towards soft searches, though even these could still affect your credit score. Usually this would be more likely with a hard search, with soft searches generally leaving your credit score unaffected.
The difference between the two, is that a soft search won’t dig as deeply as a hard search. You can always rest assured though that the lender has chosen either with the best of intentions.
Should I stay away from hard credit checks?
Now and again a hard search or two should be fine. It becomes slightly more problematic if you start having multiple hard searches over a short amount of time. Soft searches won’t show up on your credit report, but a hard search will. This looks bad, especially if you don’t pass the different criteria.
Don’t let this put you off however, as if you know you know you have a good credit score and taking a hard search with that lender is the best deal, you’ll most likely be fine.
Does my Agreement in Principle a guarantee that I will get the Mortgage?
We really wish it were the case, but sadly no, there are no guarantees that having an Agreement in Principle will get you a mortgage. You still need to present the lender with your documents and it’s only then, that the underwriter will make the final decision on your case.
A regular occurrence here at Harrogatemoneyman, is customers getting in touch after being declined at application stage. This is often down to missing some of the small print mentioned in their Agreement in Principle. You will need to provide identification for proof of who you are, payslips for proof of income, and bank statements for proof of handle your finances the right way. Without these, your case won’t go to offer.
Can I make an offer without having an Agreement in Principle?
If we were to get technical, the answer is yes you can. However, it is highly unrecommended and any credible estate agent will not proceed without proof that you can proceed.
How long does is the process of getting an Agreement in Principle?
Within 24 hours of speaking with a mortgage advisor in Harrogate it is possible to obtain an Agreement in Principle.
How long will an Agreement in Principle last?
Generally speaking, an Agreement in Principle will expire around the 30-90 days mark. The good thing is though, that this doesn’t mean you should just apply for the first house you find. If your Agreement in Principle expires, it is relatively straightforward to have it refreshed when you are ready to make an offer on a property.
Finding a mortgage only to be declined a mortgage can be a major disappointment, we get that. We recommend getting an Agreement in Principle as early as you can to avoid that disappointment.
