The amount of deposit you will need for a property and the process of what you are trying to do, will be completely dictated by your own personal circumstances.
Here we explore how much deposit may be required for you and your situation.
In the past, it was quite common to come across 100% mortgages. Before they were nationalised, even Northern Rock was offering 125% loan-to-value mortgages.
What that means, is if you were buying a property valued at £100,000 they would lend you up to £125,000, and yet they were shocked when everything went wrong.
The reason that lenders require you to provide a deposit, is to reduce their lending risk. If they lend you 100% of the purchase price and you end up in any kind of debt, they would then have to take possession of the property. All it takes then is for house prices to change, for them to be at a loss, which of course they don’t like.
There is also a perception that if you haven’t invested some of your own or your family’s money into your home, then you might be more inclined to call it quits if things get tough and you can’t afford your monthly repayments.
It could also be argued that if you can’t save up for or with help, make up at least a 5% deposit for a property, then you likely aren’t ready for a jump into the property world.
Directly, no they are not able to do this. That being said, if you can find 5% of the deposit from your own funds, then there is still a chance you could qualify for the government’s Help to Buy Equity Loan Scheme.
With this scheme only applying only to new build properties, the concept is that you put in 5% and the Government loans you up to 20%, making up a 25% deposit.
After 5 years you need to start looking at paying the equity loan back possibly by way of a remortgage or from savings you have been able to make over the length of time that has elapsed since the start of your term.
Generally speaking, yes 5% is enough for the majority of mortgage types. It does vary between lender though and some will accept only a 5% deposit, limiting the paths you can take.
To combat this, you will normally need a reasonable credit score to qualify for a mortgage in Halifax. There are the odd lenders out there that may consider you for a 95% mortgage with an average credit score, but the rate of interest would also be higher than other mortgages.
Most specialist lenders will require at least 15% deposit if you have a less than favourable credit history. As touched upon earlier in this article, this is simply to reduce their risk in the event of a repossession.
It is a lot harder to obtain this type of mortgage than it was in the mid-2000s but in some cases may still be a possibility.
It has always been a requirement to put down a larger deposit for Buy-to-Let Mortgages in Halifax and most lenders at the moment are looking for around a minimum of 25%.
Technically this could be possible, but almost all lenders will not allow this, as essentially this would still be 100% lending, which no longer exists due to the aforementioned risk involved with this type of deal.
Yes, this happens all the time. Generally, it’s what the industry affectionately has titled the “Bank of Mum and Dad” (both birth and adopted parents, as well as carers & legal guardians) gifting the deposit, or other members of your family, such as Aunties & Uncles.
We have even seen cases where family friends are allowed to gift money too. These are all valid options, as long as they can evidence the funds, prove who they are and confirm they are not expecting you to pay them back at any point in the future.
If you are looking at buying as a sitting tenant and your landlord or family member has given you a discount from the open market value, or if you qualify for a discount under the Right to Buy Mortgage Scheme, then normally you won’t be required to put any of your own money in as deposit.
This is due to the equity being already “built-in” to the deal that is being made.
Please note that the above information and guidance is for reference purposes only and is not to be viewed as personal financial or mortgage advice.
The mortgage journey can come with its ups and downs, however, it can be fulfilling. Going through the process turn into one of the following positive outcomes:
Whatever route you go down, in the future, you will eventually come to the end of your mortgage term. You can either sell up and upsize/downsize into a new property.
Remortgage is a popular option for customers who are looking to sell their portfolio to the tenant or another buyer and look at other opportunities.
In the case where you use the proceeds from a new mortgage to pay off a pre-existing mortgage, this is a Remortgage. It can be beneficial when you are looking to find lower interest rates and better mortgage terms.
With the 20 years or so experience with Malcolm Davidson (Director / Mortgage Advisor), we felt it would be helpful to collate all the options you can choose from when it comes to taking out a Remortgage and create a guide.
Typically, your initial mortgage deal will usually last 2-5 years and include low fixed rate or possibly discounted rates. You might get placed on a tracker mortgage which means your mortgage will follow the Bank of England’s base rate.
It’s likely you will get moved along to the lenders Standard Variable Rate (SVR) as soon as your term ends. This type of mortgage has an interest rate that can fluctuate because it depends on what the lender wishes to charge.
Unlike a tracker mortgage, this doesn’t follow the Bank of England’s base rate. Many choose to look at Remortgaging for better rates to save money on their monthly payments due because SVR and tracker mortgages are a more expensive route to choose.
You might find that 2-5 years into occupying your home that something isn’t quite right. It could be you are wanting an extra room/larger living space for your kids/belongings, a new kitchen, a new office or loft conversion.
Instead of moving into a larger house, it might be best you look into advice in order to release equity so you can fund any renovation costs. Obtaining planning permission and funding can seem like a nerve-wracking concept, however, it can be a less stressful option compared to finding a new home.
Furthermore, it can reap rewards when going through the process of a development in your current home and can pay off in the future with a potential increase in the value of the property if you look to sell up or rent out in the future because of the expansion of space.
Another reason why some may look into Remortgage in Halifax is for a better mortgage term through reducing the length or switching to a more flexible product.
Even though reducing the size of your term can mean you aren’t tied down to your term for as long, it does mean your monthly repayments will be a lot higher. The longer your term, the lower the payments will be over time.
In some cases, you might look into getting a better mortgage term by looking into a more flexible mortgage term when they remortgage. This option can be appealing to many homeowners because of the benefits like having the option to overpay.
Furthermore, homeowners also have the ability to move the same mortgage and rates over to another property if they decide to move at any point in the future. As mentioned, you are able to overpay which means you can pay off your mortgage as quickly as you’d like.
Despite a flexible mortgage sounding a lot more appealing, they usually come in the form of a tracker mortgage. Again, this type of mortgage follows the Bank of England base rate which means your payments may change depending on interest, this can make them a little unreliable.
There is a level of equity in everyone’s properties. This is summed up by finding out the difference between the remaining total on the mortgage, and the current value of the property.
As mentioned previously, you do have the choice to use the equity to fund home improvements, however, there is a number of options out there for you.
Other options you could use the equity to cover long-term care costs, so cover their income, to pay off an interest-only mortgage, or to have free spending money.
Sometimes, Buy to Let landlords will use Equity Release so they can cover their deposit for buying another property in the future as an addition to their portfolio.
Using Equity Release in order to pay off any unsecured debts that you may have accumulated over time is a more popular options people go for.
Debt Consolidation is based on your credit rating as well as amount on how much you’re entitled to and the value of the property. Furthermore, this could result in the limitation of the amount you can have.
In order to pay off your previous mortgage and your debts, it’s required that you borrow more than your outstanding mortgage amount. Either way, your monthly repayments will most likely be higher.
As much as this isn’t the most perfect situation, it’s very helpful that the option is out there should an unfortunate situation arises.
There is options out there is you do have a significantly damaged credit rating, however, this situation will not be as simple. Therefore, it’s important that you seek Specialist Remortgage Advice in Halifax before progressing.
Even doing this doesn’t mean it’s guaranteed. Before consolidating and securing any debts again your home, you must seek Mortgage Advice in Halifax.
If you are coming to the end of your term and are wanting to look into the option available for Remortgaging, get in touch with an open and honest Mortgage Broker in Halifax.
Having an advisor by your side can allow you to discuss your situation and future in order to get the best plan of action when going forward on your mortgage journey. We always work hard to make this process quick and smooth.
First and foremost, one of the key factors that people look to when considering moving in or to Halifax in search of their dream home, is the location.
Often though it’s about more than just where, but also what is there and what you look to prioritise when deciding on what may be the perfect home.
To help you in your quest, we have put together a comprehensive list of the things many home buyers consider when looking to decide where to live.
It is important to figure out the type of setting you would like to live in, as this is somewhere you are going to live for at least a good few years, potentially even starting a family there.
If you’re the sort who likes thriving urban settings, the city life is definitely for you. If you prefer peace & quiet, being out of the way of others, you may be better suited for country life.
There are pros and cons to either of these options, so it is worth carefully thinking about before you get your heart set on a home in an area you perhaps won’t enjoy.
Transport links are a very important factor to many. Make sure whether it’s for hanging out with friends/family, your chosen profession, shopping and other general leisure activities, that your home has the appropriate transport.
Also make a note of how much these modes of transport are going to cost. If you are a driver, how long is it going to take you to travel to your different destinations? What will fuel costs be and do you have nearby stations to refill at.
For those of you who are parents, definitely check what schools are in the area. Research what the local catchment areas are for the homes you looking at, so you can see what the schools are like. School league tables are a good source of information for this.
For those of you who may not have any children now, whether you have a plan to have kids or not, it’s best to at least have a look to future proof yourself.
You may have a couple of different ideal nearby facilities in mind when planning for where to live. A helpful tip would be to make a note of which ones are necessary and which ones are just your preference.
For example, you may really want to have a gym nearby but also need a shop nearby for all your general needs. If you’re debating two areas and each only have one of those facilities, you’ll probably lean more towards the one with the shop.
For a lot of those looking to find their new home, having friends and family nearby can be an important factor. This is generally preferred as they can live comfortably knowing they have a support network close to them.
On the other hand, some prefer a solitary life, prioritising peace and quiet over regular social activity.
Finding that property that you feel is worth the money you’ll be paying for it can be dependent on the area that you are looking to buy in.
You ideally want to make the most out of your property purchase, so it may be worth your while finding somewhere cheaper as a starting property, though this might mean compromising features and facilities you may have wanted initially.
The local community can have an impact of your experience living in your home. You might prefer the quiet life, with a selection of residents who keep to themselves, or you may prefer a thriving busy community where everyone knows each other.
Speak to the estate agent and find out what it is like around that area. Community Facebook pages or locally run websites are common occurrences, so they’re worth looking up to get a general feel for what it may be like.
You may be moving home due to a new job or to kickstart a career. This is a huge factor we have heard from many customers in the past. It’s important to take a look at the distance between your new workplace and your new home.
If you’re going to be mostly working from home, is a longer commute for the few times you do go into the workplace something you’d be okay with, can you live further out? What about the space inside the property, will there be room for a home office?
For those who are looking at job hunting, do some research on the types of companies within the area and make a list of who all the top employers are.
In terms of the types of property available, home buyers will find a good selection on the open market to choose from. Some prefer end-terrace properties that have a nice garden, some prefer modern apartments within the city limits.
Check out all the options available to you, undertake some viewings and get a good feel for the type of property you are after.
Any potential investment that has been proposed within the local area can be handy information to get ahold of, especially if you’re looking to live there for a while and settle down.
Online research will serve you well here when looking to find any future investments in the local area. It’s important to consider if these will be beneficial to you and your lifestyle.
For example, those who would prefer to have a quiet life in the countryside might find their ideal living situation being impacted by a potential nearby housing development being planned.
By now you’ll hopefully have a good list of factors to look out for in the quest for finding your perfect home location. When the time comes for making offers and obtaining a mortgage, feel free to get in touch to book a free mortgage appointment.
Our dedicated mortgage advice team are here from morning until late evening, seven days a week, subject to availability. Whether you’re in need of help with a first time buyer mortgage in Halifax or are moving home in Halifax, we’d love to get the ball rolling on your mortgage process.
A gifted deposit is the name given if someone were to bequeath unto you either a portion of or the full amount of the deposit. This has to come with an agreement between the two parties that this is not to be paid back as a loan.
Gifted deposits are very beneficial for instances where perhaps you are financially capable enough to afford your monthly mortgage repayments but are struggling to find the means to afford the initial deposit, be that because of a lower salary or otherwise.
Depending on the amount you are gifted, you may open yourself up to potential better rates from the mortgage lenders, as the more that goes down initially, the less you’re having to pay back overall.
For the most part we find that it is an applicants’ parents who are able to gift you the deposit. This applies to both natural-born and adopted parents, being referred to across the mortgage world as the “Bank of Mum & Dad”.
Depending on the lender that you go with, you may also be able to receive a gifted deposit from another family member, maybe even from a friend. Finding the right lender who would accept this would require care and is where a mortgage advisor can help.
Sometimes, if the person helping you is aged 55 or over, they may have the potential option of gifting you a deposit by utilising Equity Release in Halifax.
It often becomes apparent that customers don’t always realise that their parents have the ability to help with their mortgage. In other cases they may not believe that their parents would be willing to help, so don’t ask them.
What we actually find, is that the majority of parents are always willing to provide their children with financial support if they can, wanting to help them find a means of owning their dream home that they one day might start their own family in.
Taking out a mortgage, to many people, is a much preferred option to living in a rental property. This is because you may potentially be able to pay less money to your mortgage than you would’ve with rent.
With this comes a point mentioned earlier, wherein the more you are gifted, the less you are borrowing and the less you have to pay back overall. If you’re paying less back over a longer term, your monthly payments will be greatly reduced.
The deposit that you are gifted can sometimes come from inheritance, although there have been instances where parents have gifted it to their children earlier on in life, especially if they have already saved enough or have released any equity.
Pretty much all lenders won’t accept a loan as a way for you to pay off your deposit. This is because they won’t have the confidence that you would be able to afford payments for both the loan and the mortgage at the same time.
You are not limited in the amount that someone will be able to gift you, though there are some lenders out there that insist on applicants having at least 5% from their own funds.
The types of applicants who benefit the most from having a gifted deposit are First Time Buyers in Halifax and Home Movers in Halifax.
Gifted deposits can also be incredibly helpful when used alongside the Help to Buy Scheme, as depending on the lender, the 5% required deposit for the scheme can be paid via gift.
As a rule, all lenders will require you to fill out a gifted deposit form. Some lenders will also want you to provide additional proof and ID (things like donor ID or bank statements).
Income Protection provides the opportunity for people who are out of work due to illness or accident through a monthly payment to provide financial security. When it comes to the amount of cover to take out, this can be determined with the help of an Advisor as well as the amount of time they are prepared to work before they are eligible to put a claim in.
Comparing it to life cover, Income Protection Insurance can be expensive. This is due to the fact that you are more likely to claim on your Income Protection Insurance than claiming on your Life Insurance policy, but the payment of monthly benefit will carry on until you return to work. This only applies to the cheaper version of the policy which only pays out over 24 months.
There are some differences between Income Protection Insurance and Critical Illness Cover. Income Protection Insurance pays out for anything that stops you from working whereas. Critical Illness cover prevents you from working have specified illnesses they apply to.
Applicants who are employed by companies that do not offer generous sick pay schemes or are self employed usually look at this type of policy.
Here at Halifaxmoneyman, we believe in equal opportunity in the situation of a customer taking out insurance. We wouldn’t be doing our jobs if we didn’t mention it!
Our mortgage advice team offers all our customers a free, no-obligation protection review. From this, we will then recommend which products like critical illness and income protection match your circumstances. If necessary, we will then work out the plan that fits well with your available monthly budget.
Providing Income Protection Insurance Advice in Halifax & Surrounding Areas
So you have passed all the exams you need and have reached your goal of becoming a newly qualified teacher. Your next step is finding your dream teaching job and start in the classroom. If you are located too far from the particular school you are looking to work at, you may find yourself looking at the option of moving house in Halifax.
You may find juggling a place to move and the struggle of homeownership alongside settling into your new job as a teacher to be stressful, however, this situation is common. As a Mortgage Broker in Halifax, we have helped numerous customers in this situation.
As a newly qualified teacher, it can be tough finding a lender that will offer you a mortgage. This is due to the fact that you will have no history of employment or being on a temporary contract. Despite this being a constraint, don’t worry, getting a mortgage as a newly qualified teacher can be achievable.
In some circumstances, lenders may offer good deals that benefit individuals in this particular sector. Finding the most suitable lender is important, but can be a struggle, however, this is where we can help. Our expert mortgage advice team in Halifax can find you the most suitable deals and rates by searching through 1000s deals.
Depending on cirNewly Qualified Teachers can be offered a range of types of mortgages such as:
Below is the following point lenders may factor in:
Through our countless years of experience working in the industry, our knowledgeable and dedicated Mortgage Advisors in Halifax have helped people with various mortgage situations. Having a trusted Mortgage Broker in Halifax by your side can be massively beneficial.
Contact us and our team can help look at your options and find out more about your situation to see if you will be eligible to get a mortgage that fits your circumstances.
Life insurance can act as a financial safety net to support your family in the event of your death. There are different types of Life Insurance to choose from and in this article, we will discuss what types are out there and explain why they are essential to take out.
Speaking with a Mortgage and Protection Specialist in Halifax might be very beneficial. Here at Halifaxmoneyman, we offer a free insurance consultation that we highly recommend you take prior to commiting to any insurance policies because you want to find the best one that matches your circumstances.
The reason we offer this is because life insurance can get complex, especially if you are not sure what you’re doing. As well as the different types of life insurance, you also need to choose what your policy covers and how long it will last.
Life insurance is a type of policy that financially supports your family in the event of death. This is through a lump sum of money that is passed down, usually to a family member or friend.
In the event of a claim, you can decide if the cover is paid out all at once or through regular payments.
As well as providing financial support for a family member, it also was introduced to replace lost income or payout outstanding debts owed in the person’s name e.g. a mortgage.
The amount that is paid out alters depending on the type of cover that was taken out. The advantage of life insurance is that you decide what your payout goes towards. For example, you could specify that you want your payout to be used only on debts like a mortgage or car loans.
There are several different types of life insurance policies. Below are the policies that we commonly see people take out as a mortgage broker in Halifax:
A Level Term Life policy provides you with a payout that will remain constant throughout your policy’s duration. This means whether a claim is made 5 years into the policy, or 20 years into the policy, the amount paid will be the same. The duration of the policy is usually between 5-25 years in 5 year increments.
A policy that is usually used to cover a mortgage is Term Life Insurance. It’s common for people to take out this policy that’s in line with their mortgage term. If you do pass away and still have your mortgage to pay off, the policy will pay out. Due to this, the mortgage payments will not have to be relied on by a family member or any other name attached to the mortgage.
Through our experience as a mortgage broker in Halifax, this type of life insurance seems to be the type that is the most popular.
It might be a surprise to some as you may be thinking, why would you want to take out a policy that decreases in value? This policy is targeted at homeowners with repayment mortgages – which is most people. When you do pass away, the policy works by paying off the outstanding mortgage balance.
The policy’s value mirrors the outstanding balance remaining on your mortgage. Therefore, as the amount owed on your mortgage decreases, so does the sum insured.
Decreasing life insurance is usually taken out alongside other insurance products depending on your circumstances. It’s best that you speak to a Mortgage & Protection Specialist in Halifax to give you guidance on what they recommend to be the most suitable insurance for your needs.
This type works in the opposite way to Decreasing Term Life Policy. Increasing Term Life Insurance will payout should you die within your fixed term.
Furthermore, the amount that you have covered increases as your term goes on. Through the duration of your policy term, the fixed amount increases. As you can see, this is different from Decreasing Term Life Insurance.
The reason why this policy was introduced was to protect the policy’s total value against inflation and is usually in line with the retail price index.
We find that Whole of Life Insurance is not the one at the top of the insurance market. Despite this, Whole of Life Insurance may still be helpful as well as being the perfect policy that suits your circumstances.
As stated in the name, Whole of Life Insurance is the type of cover that lasts your whole life. In the event of your death, the policy you took will payout. You will find that Whole of Life Insurance will be a higher cost compared to a Level Term Life Insurance. This is because you are covered for your whole life instead of a fixed term.
As long as you have kept up-to-date with your life insurance payments, your cover will apply for your whole life. This type of insurance is commonly used for family protection and is part of inheritance tax planning.
Joint Life Insurance is the type of policy that you may choose if you are in a relationship or married. This policy will payout in the event of one of you dying. Joint Life Insurance is often cheaper in comparison to both parties having two separate Life Insurance policies. It’s you and your partner’s decision if you want to take one out jointly or two separate ones.
The policy pays out then ends in the event of one of you passing away. This may seem like a drawback to the policy, however, if you intended to take out the policy to pay off your mortgage then you would still be able to do so because the money will be released following the death of one of the policyholders.
In some cases, your place of employment may offer you Death in Service cover as part of their employee benefits package. This is something that not all workplaces offer as they are not obligated to do so.
The cover works by paying out a lump sum of cash to the employee’s family or a person of their choice if they die. Usually, this sum is up to 5 times their annual salary. Unlike the other types of policies, there is a specific limitation on what can be done with the employee’s money.
The payout is not associated with if an employee dies in the workplace.
Life Insurance options is something you shouldn’t disregard just because you’re a single home owner.
It’s not unusual for people to forget life insurance when they have settled into a new place and are currently living on their own without children or a partner. Unfortunately, Life Insurance doesn’t always apply to single homeowners which is why people choose to ignore it.
Even if it might not apply to you now, your circumstances could change in the future, which is why you should think about it because Life Insurance could become a crucial thing to have.
To find out if it’s worth taking out Life Insurance as a single homeowner, get in touch with one of our Mortgage Protection and Insurance Specialist in Halifax.
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.
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 Halifax 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.
95% mortgages are usually accessible by both First Time Buyers in Halifax & those who are Moving Home in Halifax. 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.
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 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.
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.
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.
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.
Over time, the inflation of property prices has far outweighed the increase in wages. People nowadays are looking to build their own house rather than stay at rent somewhere and spend much money on paying rentals. The move from renter to homeowner needs proper planning and takes time. Therefore, many people, especially first time buyers in Halifax due to their low affordability levels, plan to buy a property with a friend or a partner. This is because the dual-income sources lead to a sufficient pool of income that convinces a lender to offer a higher mortgage amount.
When you jointly pool in your income, you decide mutually to divide the cost between the two, thereby making it more affordable. However, this is a Specialist Mortgage and comes with some risk. This article will answer some questions we often receive and shed some clarity on buying a property with a friend or partner in Halifax.
Owning a property involves a lot of regulations and technicalities. This is even more apparent in joint properties as one owner might want to sell the property, whereas the others do not. However, in Halifax, lenders allow up to four people to co-own a property at one time. If anyone owner stops contributing to the monthly mortgage payments, the other owners still have a right by law to stay in the property unless the court states otherwise. With this in mind, you need to be cautious with whom you choose to buy a property.
Any plans to increase the Mortgage down the line, require consent from all involved. With this in mind, it is also essential to discuss long term plans for owning your property if someone opts for a different route or situation change.
This concept is associated with couples who are married or are in a civil partnership. Such people are usually involved in joint tenancy. In case any one of the applicants pass away, the ownership will already be transferred to the other owner. This is where mortgage life insurance comes in handy, as at that point, the Mortgage would be repaid. However, you’ll require consent from other applicants if you want to sell or remortgage the property in the future.
Tenants in Common is usually chosen by the likes of relatives or friends buying a property together. This option allows you to own the property jointly, but it does not need equal shares. If one party is making more money than the other is, this works out well.
You can also act individually if you are a Tenant in Common, so you could realistically sell or give away your share, without the other person losing their stake in the property.
All parties involved in joint ownership or have relevant shares in the property are liable for the mortgage repayments. Generally, if one member fails to make the payments, the other covers the cost to prevent any debt from building up.
Any arrears made on a mortgage may stop you from getting one in the future. An ideal way to think of joint mortgages is that you don’t own 50% of a property, you own 100% of it conjointly.
Removing someone from Mortgage can be challenging as lenders need to do a vigilant check on your affordability level to confirm that you can pay the Mortgage all by yourself.
None who has applied for a mortgage together ever thought of separation in the longer run, but unfortunately, time does not always stay the same. Therefore, it is vital to remember how big a financial commitment to getting a mortgage is and how challenging it gets when all of a sudden, you decide to make changes. So it’s always recommended to assess your personal life thoroughly before agreeing to something big.
Handling over the evidence to a lender that you have been managing mortgage payments since your ex moved out, does not qualify the fact that you alone can make it a sole name mortgage.
Lenders would much rather there be a second income if one person is unable to afford their half. The process of removing someone involves a brand new affordability assessment, much like they would when you first applied for a mortgage.
If your lender declines your request to do so, you should get in touch with your mortgage advisor in Halifax to see if any other lenders would agree to let you transfer into your name.
It may also be worth your time to see if any family members can help you out with this. They can often gift a lump sum amount to reduce the amount owed or even replacing your ex-partner on your Mortgage.
Even if you and your partner are set apart, and you end up moving home in Halifax, you are still responsible for repayments. Even if you agree with your ex that they will pay the payments responsibly, there might be a time when your ex cannot pay thereby making you liable for costs.
If you promise to send them money every month, you need to be watchful of your credit report because if he defaults, it will negatively affect your credit score.
Being tied up to an older mortgage also limits your ability to borrow for any new homes you might be looking to buy, as the lender will take your current repayments into account, seeing them as existing credit commitments.
Lenders might not always agree to your demand, because rendering such a vast amount comes with a risk. So always plan carefully whom you need to get into agreement with. It is better to agree on a plan in advance, to avoid difficulty if things ever go wrong in the future.
When it comes to applying for a mortgage and your credit score, the fewer addresses you have on your record the better, however it seems that people are becoming savvier and aware of this.
We are now seeing more and more applicants who have moved out of their parents address into rented accommodation but think that it is a good idea to leave their bank statements, credit card and Electoral Roll information registered at their previous address.
There are good reasons why people do this, however, I’m afraid this is now a flawed strategy. Almost without fail, if you have moved to a new address, there will be some record of this on your credit report. This could be from a delivery address when you have ordered something online or a car/home insurance search and many more.
By far a better strategy for you if you are thinking about taking out a mortgage is to get all of your accounts (credit cards / current accounts) and electoral roll changed over to your new address. When updating your address on your credit file and electoral roll ensure you double check the date in and date out. If you do make a mistake with these dates it can appear that you are living in two places at the same time. This is a more open and honest way of trying to apply for a mortgage.
Speaking to a Specialist Mortgage Advisor in Halifax would benefit you in many ways. Firstly, a Mortgage Broker like Halifaxmoneyman will tell you exactly how to improve your chances in getting accepted for a mortgage and help you complete these simple steps if you need guidance. They will go above and beyond for you, trying to find you that perfect mortgage deal that best suits you and your personal and financial situation.
Here at Halifaxmoneyman, we also offer a free mortgage consultation and you can get in touch with us 7 days a week! We work for you, trying to provide the best mortgage experience we can; we hope that we hear from you soon!