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.

A Guide to Remortgages in Harrogate: Top Reasons to Consider

Beginning your mortgage journey can come with its up and downs, however, the overall process is a rewarding one.

You have achieved a life goal of owning your own home and can set you up for any future goals for yourself like having children or starting a family. In particular, as a First Time Buyer in Harrogate, getting the keys to your first home can be a huge financial achievement.

Your reason for owning may be that you are wanting a sense of security and somewhere to call yours. From this, you have found that a mortgage is cheaper than renting.

Regardless of the hurdles and challenges, you may have along the way, you will inevitably end up further onto the property ladder or in a position to make an investment purchase to provide some further income.

What is a Remortgage, and how does it work?

A remortgage is when you apply to take out a new mortgage product on a property that you already own to either your current mortgage or borrow additional money against your property.

If you are wanting to take out a new mortgage product with your current lender, you can negotiate this which is known as a product transfer.

Regardless of whether you are looking to remortgage or take out a product transfer you will find that a lot of products out there all have their own collection of different deals and rates available.

Like with many products, there are always the ones most people go for and this is the case with remortgage products that are accessible to many homeowners, further down the page we have highlighted the most popular ones.

You may be wondering when is the time for a remortgage. It might be as simple as your circumstances changing or it could be that you are looking at securing a better deal, funding home improvements, consolidating debt or releasing equity.

Remortgage Advice in Cardiff Reasons to Consider

Remortgage for a Better Rate

Usually, a fixed mortgage term lasts between 2 and 5 years. At the time, you will be paying off some interest and capital and when it comes to your remortgage, 2-5 years down the line, you may be able to qualify for a lower loan to value bracket. By doing this, you are open to better rates.

Alternately, you may find yourself not wanting to remortgage, but this can mean you are risking yourself going onto a lender’s standard variable rate of interest (SVR).

This is something you progress onto if you have decided not to remortgage and can be a risk because you could be paying much higher than what you currently are. If you remortgage before this happens and you fit into a better loan to value bracket this could open opportunities for a better rate saving you money each month.

In the case you have been placed on a tracker mortgage, you will find that your monthly payments and interest corresponds with the Bank of England’s base rate. This can fluctuate depending on the economy’s performance.

For instance, if the economy has dipped, base rates may lower, and vice versa. It can be common for Lenders to have an additional percentage onto this base rate that you are normally tracking a rate between 2-4%.

Remortgage for Home Improvements

If you have been on the property journey and are settled into your new home, you might look at giving your property some home improvements like a new extension, conversion or redecorating. Remortgage can be an option for you to get this work done through the funding of the remortgage.

Before carrying out any of these home improvements, you will need to have estimated costs and have some idea of how much it will cost you. From this, you can include these costs into your mortgage when taking out a new product. Depending on what your home goals are, your monthly payments may increase.

Whether if you are looking to start having children/starting a family, want to add value to your home or add some home improvements, we would recommend remortgaging instead of going through the process of having to sell and buy a property simultaneously. It can be easier to improve your current home.

Remortgage for Changes to Your Term

You could be looking to Remortgage to extend or shorten your term and switch to a more flexible product which will lead to paying off your mortgage quicker. The negative to this is that you will have higher repayments but extending your term does mean that you will reduce your payments and be paying off your mortgage a lot louder.

You do have the option to extend your term during this process. If you shorten your term, it will lead to overpaying which results in your mortgage being paid off quicker.

A flexible mortgage may sound like a good choice, however, it usually correspond n the form of a tracker mortgage. As mentioned, a tracker mortgage works with the Bank of England’s base interest rate, which fluctuates depending on the economy’s performance.

Remortgage to Release Equity

Equity is a way of releasing money from your home with the amount being the sum still owed on the mortgage and the property’s current value. Equity will likely build up the longer you have owned the property. As time goes on, you will be able to remortgage release some of this equity to turn into a lump sum of cash.

What you do with the cash is up to you, some uses include people putting down another deposit on another home to help a family member.

Through our experience as a Mortgage Broker in Harrogate, we usually see that Buy to Let landlords release equity to put down a deposit onto another property to expand their portfolio.

For homeowners who are over the age of 55 and have a property valued at a minimum of £70,000, it may be worth your time looking at your options for Equity Release in Harrogate. Get in touch with a trusted later life mortgage advisor to learn more about lifetime mortgages.

To understand the features and risks, ask for a personalised illustration.

A lifetime mortgage may impact the value of your estate and it could affect your entitlement to current and future means-tested benefits. The loan plus accrued interest will be repayable upon death or moving into long-term care.

Debt Consolidation

In some cases where you have built up some unsecured debt, you can incorporate this into your mortgage. Debt consolidation can be seen as a complex topic so, speaking to a Mortgage Advisor in Harrogate can be beneficial for you to understand this subject.

Debt consolidation is based on the amount you owe, your property value and your credit rating. Remember, that you need to consider the large sums that will be included into your mortgage which will result in your total mortgage amount increasing.

Please don’t hesitate to contact us if you have bad credit and are seeking help from a mortgage expert. Here at Harrogatemoneyman, our team can help you with your needs and circumstances.

Expert Remortgage Advisors in Harrogate?

If you are at the remortgage stage in your property journey and are coming to the end of your fixed mortgage term, our team can help get prepared for this and aim to take the stress away by doing it for you.

It’s best to start looking into deals 6 months before your deal ends.

Book yourself in for a free remortgage appointment online with one of our knowledgeable advisors in providing Remortgage Advice in Harrogate. Our team can help you through your process by finding you the most appropriate deal that fits well within your personal and financial circumstances.

How to Improve your Credit Score in Harrogate

Mortgage Advice in Harrogate

What is a credit score?

A credit score is a tool that lenders use to measure whether or not an applicant can afford a mortgage or not. The higher your credit score, the more likely it is that you’ll get accepted for a mortgage. Which means that if you have a low credit score, your chances of getting a mortgage are lowered.

Having a high credit score may sound great, however, it doesn’t guarantee you a mortgage in any way. Each lender has their own unique lending criteria and it’s more than likely that you won’t meet all of them. Sometimes it’s down to your circumstances and not just your score.

Matching lender’s criteria

It is more than likely that each lender will have completely different lending criteria. Lenders have almost carved out their own niche market. You could end up matching with lots of lenders or it may only be a couple, but all that matters is that you match with one and get an amazing mortgage deal from it!

Whether you receive help from a Mortgage Broker in Harrogate or go solo and use your bank, it’s their job to help you compare deals and match you with a lender.

As a Mortgage Broker in Harrogate, we would always recommend taking up our free mortgage consultation offer. This way, we can evaluate your situation and compare deals for you straight away. If you go to a bank, you could just be added to a waiting list.

If you are struggling to match a lender’s criteria, it could be down to multiple things or maybe just one. The most common reason why people don’t match their lender’s criteria is that they have a low credit score. If this is your situation, then you need to find some ways to improve your credit score.

Improving your credit score

Avoid unnecessary credit searches

Having unnecessary credit searches on your file could negatively impact your credit score. Lenders don’t particularly like seeing repeated credit checks; they may think that there is a reason behind it and they may even start asking you questions about it. Even using price comparison websites could damage your score.

On another note, if you are applying for a mortgage, it is unwise to apply for any form of extra credit in the meantime of your application.

If you manage to pay back owed money before your application, it will look good on your file, however, if you are borrowing/paying back money during your application, it will have a reverse effect. If you borrow credit, some lenders’ could think that you cannot afford the deposit and are relying on the credit to help you.

Are you registered on the Voter’s Roll?

A great way to improve your credit score is to register onto the Voter’s Roll. Lenders love seeing applicants that are registered on it as it indicates stability. It’s really easy to get yourself registered and the fact that it can boost your credit score surely means that you have to sign up if you haven’t before!

Even if you are already registered, it’s always a good idea to double-check that you have entered all of your information correctly. If you have an old address on their system, lenders will easily spot this mistake and it could go against your score.

Don’t run too close to your maximum limit

Maxing out your card each month will have a detrimental effect on your credit score. If you are using a credit card, a lender would much rather that you pay off the full balance each month rather than cutting it short. Showing you can meet set payments each month shows reliability and can help your chances of being accepted for a mortgage.

On the other hand, if you are doing the opposite and exceeding your credit limits or overdrafts, your lender will think that you don’t take your finances seriously. This could massively impact your credit score, especially if you get declined by a lender due to this reason.

Check that your address is up to date

Your address should always be up-to-date. People usually get caught out when they move out from their parent’s house and forget to update all of their address’.

If you forget to change your address on things such as credit accounts, it will appear that you are living in two separate places. This can hurt your credit score once lenders see this so make sure that you are keeping on top of what address’ are linked with each of your accounts.

Close down your unused credit accounts

If you have any store/credit cards that are no longer in use, you should contact the provider and get them to fully close down your old account(s). These types of accounts are probably doing more damage than you think.

However, if you manage to close your account(s) it could still have a negative effect on your credit score as the credit reference can’t really tell if it’s you closing the account or the provider.

Don’t worry about this, if they ask, you will have to explain and it could work in your favour as you are proving that you want to improve your chances of being accepted.

Remember that it’s always good to check up on these types of things just in case. For example, you could’ve lost a card and you didn’t realise, then you fall victim for fraud. This could end up having a worse effect on your score.

Remove your financial link to others

People often don’t know that they are still financially tied to a family member or ex-partner. If this is the case, it can have a negative effect on your credit score without you even realising.

If the account that you are still tied to is still active, you must know that you will not be able to remove your link just yet. If you want to remove any of these links, then you should get in touch with the credit reference agencies and make a request.

Summary

As a Mortgage Broker in Harrogate, we know that some applicants see credit scoring as an unfair way of determining whether or not you’ll get accepted for a mortgage. For example, you may have a low credit score due to personal circumstances that couldn’t be prevented.

As a Mortgage Broker in Harrogate, we mostly see that it’s people that are Moving Home or Self Employed struggle with their credit score. However, if this isn’t your mortgage situation and you still need help with improving your credit score, you know to get in touch with.

Sending an up-to-date credit report to your expert Mortgage Broker in Harrogate could prove extremely beneficial to your mortgage journey. A great tool that we always recommend to our customers is checkymyfile.com.

The more your advisor knows about your finances the better. There are still some lenders out there that prefer to do things the old-fashioned way and will manually assess your application. They will still have rules that they stick by about the number of defaults and CCJ’s that they will allow.

A Mortgage Broker in Harrogate, like us, likes to do things the new way and will always aim to deliver you the same fast and friendly mortgage advice service that you are all used to. We hope to hear from you soon.

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.

The Different Types of Mortgages Explained in Harrogate

When you start out looking for a mortgage/remortgage in Harrogate, you will soon realise that there are lots of different options available and each has advantages and disadvantages depending on your individual situation. 

What is a Fixed-rate Mortgage? 

A fixed-rate mortgage means that your mortgage payments are going to stay the same for a set period of time. You can set the length of which you want to fix your payments for, typically this being 2, 3 or 5 years or longer. And no matter what happens to inflation, interest rates or the economy you know that your mortgage payment, usually your biggest outgoing, will not change.

What is a Tracker Mortgage?

A tracker mortgage means that your interest rate will track the Bank of England’s base rate. So in other words, the lender that you are with does not actually set the rate themselves, you will be paying a percentage above the Bank of England base rate. In an example, if the base rate is 1% and you are tracking at 1% above base rate, that means you will be paying a rate of 2%.

Back in the mid-2000s, these deals were very popular, as the rate you where tracking was a fraction above that of the base rate. These deals aren’t as attractive anymore, however always remember that it is a variable rate so if the Bank of England base rate goes up, your mortgage payments will also increase.

What is a Repayment Mortgage? 

When you take out a repayment mortgage this means that each month you are paying capital and interest combined.

So as long as you keep your payments going for the full length of the mortgage term, the mortgage balance is guaranteed to be paid off at the end and the property becomes yours.

This is the most risk-free way to pay your capital back to the lender, in the early years it is mainly the interest that you are paying and your balance will reduce very slowly especially if you have taken out a 25, 30 or 35-year term.

This situation switches in the last ten years or so of your mortgage where your payments are paying off more capital than interest and the balance will come down much faster.

What is an Interest-only Mortgage?

Whilst many Buy to Let mortgages are set up on an interest-only basis, it is much more difficult to get a residential property on an interest-only basis. Back in the ’80s and 90’s how a mortgage would work is that you would take out an interest-only mortgage, a mortgage were you just pay the interest.

The idea was that you would take out a separate investment vehicle, such as an endowment policy or pension to pay the balance back at the end of the mortgage term.

Whether there is going to be enough money to pay the capital balance will depend on the performance of your investment vehicle.

During the 2000s some of these investments didn’t perform as well as expected and some borrowers were left with a shortfall.

It is much less likely for lenders to offer an interest only product now, however, there are certain circumstances where this can be an option if you are going to downsize when you are older or have other investments what you will use to pay the capital back.

Lenders are very strict when it comes to offering these products now and the loan to values are a lot lower than back in the day.

What is an Offset Mortgage?

With an offset mortgage, the lender will set you up a savings account to go alongside your mortgage account. How this works is that let’s say you have a mortgage balance of £100,000 and £20,000 is deposited into your savings account, you only pay interest on the difference, so in this case £80,000.

This can be a very efficient way of managing your money, especially if you are a higher rate taxpayer. This also is a way of reducing the mortgage term because as that money is sitting in that savings account your mortgage term shrinks.

This mortgage option was popular in the late ’90s and early 2000s, it originated in Australia and became popular in the UK when introduced by lenders such as The Yorkshire Bank. Currently, this is not a very popular mortgage option, The reason for this is that people don’t save as much as they used to anymore, however in the right circumstances an offset can be the perfect solution.