Whether you happen to be a First Time Buyer in Halifax hoping to find your footing on the property ladder, or you are currently Moving House in Halifax, it will become apparent soon enough that there are many different types of mortgages for customers to utilise.
There will be some options that are more popular than others, whilst some may be less common to come across. We have put together a comprehensive list of the different mortgage types we come across the most.
You can watch many more Helpful Mortgage Guides on moneymanTV here or go directly to our “Mortgages Explained” YouTube playlist here.
A fixed-rate mortgage allows for a customer to keep their mortgage payments consistent for a that your mortgage payments are going to remain consistent for a chosen period of time.
You have full control over the length of time in which you can fix your payments for, with people typically choosing 2, 3 or 5 year fixed rates, though possibly longer.
Regardless of any changes to the economy, inflation or interest rates, you can stay comfortable in your home knowing that your mortgage, arguably your biggest ever financial commitments, will stay the same for your fixed period.
A tracker mortgage is where the interest-rate of your mortgage will follow along with the Bank of England’s base rate.
To simplify this for you, the mortgage lender that you end up with will not be the one to choose your interest-rate, and you won’t be deciding that either.
Instead, the interest-rate on your mortgage will be set at a percentage above the Bank of England base rate. For example, if the base rate is 1% and your mortgage is tracking at 1% above base rate, you will be paying a rate of 2%.
A repayment mortgage is the standard type of mortgage you will come across, paying back both a combination of interest and capital each month.
So long as you continue paying your mortgage per month, for the duration of your mortgage term, you will be guaranteed to have paid off your mortgage balance in full by the end of your term, owning the property.
This is all considered to be the most risk-free way to pay back the capital on your mortgage balance. In the early stages of your mortgage term, you’ll mainly be paying back the interest, with your balance reducing slowly, especially with a 25-30 year term.
Your mortgage will alter slightly towards the last ten years or so, as you will be paying off much more capital from your balance than you will be with interest, meaning your balance will come down a lot quicker.
Though you will see a lot of modern buy-to-let mortgages being set up as interest-only mortgages, it is a lot more difficult to obtain a residential interest-only mortgage.
It is not entirely impossible, though it is a lot harder to find these, as mortgage lenders may not offer these to customers.
They do become helpful though in relevant situations, such as potentially downsizing when you are only, or if you have external investments you can use to pay back the capital on the mortgage.
There are much stricter rules with interest-only mortgage products these days, with the loan-to-values on these being much lower than they would be in the past.
By taking out an offset mortgage, your mortgage lender will be assigning a savings account to you, to run alongside your mortgage term.
The way that this works is that if you were to have a mortgage balance of £100,000 and £20,000 is deposited into your savings account, you would only be paying interest on the difference between that, which would be £80,000.
This is often considered to be a very efficient way of managing your money, especially if you are paying higher rates of tax.
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.
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!
So, you’ve saved up for your deposit (or got the green light from “Bank of Mum and Dad”) and made the decision to move home. What’s the next step? Put simply, and in the best boy scout traditions, it’s time to get prepared.
We’d recommend speaking to an experienced Mortgage Broker in Halifax as early on in the process as possible, so you know how much you can borrow for a mortgage and how much it will all cost. Obtaining an up to date credit report should also be at the top of your list, you don’t want a meaningless squabble with your mobile phone provider holding you back from buying a home. Taking the above two steps will give you a meaningful expectation of how possible this is going to be and what your budget is.
Your Mortgage Broker in Halifax will obtain a fully credit-checked Agreement in Principle on your behalf but you’ll have to prove who you are, where you live and how much you earn. There really is loads of paperwork for you to get together so it’s a good idea to open a file for yourself and start collecting everything in advance.
In terms of proving who you are you’ll need to produce some photo ID such as a Driving license or passport, if you’re a non-UK national working over here on a Visa you’ll need that too.
In addition to the above, you’ll need to prove where you live. You’ll need to produce a utility bill or original bank statement dated within the last 3 months.
The analysis of your spending habits has become one of the most important determining factors in whether you’ll qualify for a mortgage or not. Your bank statements should evidence your income and regular expenditures. Lenders will not be happy to see gambling transactions on your account. Nor will they like it if you go over an agreed overdraft limit or if your direct debits bounce regularly.
You will have to prove you have the funds in place for the deposit and also evidence this for anti-money laundering purposes. Try not to move monies around your various accounts too much as it will make evidencing the audit trail more difficult. Lenders like to see your savings building up so you’ll need to account for any large credits into your accounts.
Quite often money for deposits has been gifted by family members. These funds need to be evidenced also and the “donor” will need to sign a letter. This is to confirm it’s a non-refundable gift, not a loan.
In terms of affordability, the most important thing is to be able to prove your income. If you are employed this tends to be by way of your last 3 months’ payslips and most recent P60. Lenders can take into account regular overtime, commission, shift allowance and bonus.
If you are Self Employed then you’ll need your Accountant’s help. This will be to request your tax year overview.
It’s a good idea to do your homework. Write down an estimate of your anticipated 1outgoings after you move house. You can work out an idea of how much the council tax and utility bills will be. In addition to that, you can work out your regular expenditures, such as food and drink. This will demonstrate how much disposable income you have available to pay your mortgage from.
As you can see from the above, it’s a real paper trail when you are applying for a mortgage but if you want your application to run like clockwork you’ll need to put the time aside to get everything together.
My own view is that it’s better to get all this at the outset and collate everything that the lender could possibly ask for. As this saves time and frustration later down the line if you’re subsequently asked for paperwork you could have had ready at the outset.
More and more people these days pay much closer attention to their credit rating. Consumer awareness of credit scoring is higher now than ever before. I’d say at least half of the people who contact us for the first time, have already looked at their credit report online.
There are many different credit reference agencies out there. Most people will have heard of Experian or Equifax, but the free trial we recommend potential new clients take is with Check My File. This is because of this report “sweeps” several of those reference agencies and collates the information into an easily understandable colour-coded report.
Often, clients ask if we will be doing a credit search on them, because they are aware that too many searches can have an adverse effect on their credit score. Lenders always run credit checks but we always seek a client’s permission before doing so. There are 2 different types of credit searches that Banks can run on a customer: hard searches or soft ones.
A hard credit search is an in-depth look at your credit report. Any financial institution carrying out one of these should seek your permission to do so. The advantage of a “hard” search is the lender is looking into your situation quite closely. If you pass the credit score then it’s fairly likely that your application will ultimately be successful. The only thing that can really go wrong from then on, is if for some reason you cannot provide satisfactory documentation to back up the information you have disclosed. Either that, or it turns out you have provided false details.
The bad news about a hard search though is that it leaves a “footprint” on your credit file. This means anyone who looks at your report in the future can see you have had a search carried out. This isn’t necessarily a bad thing, but if you have several footprints registered in a short period of time then it could look like you applying for lots of credit at the same time.
The footprint does not state whether your application was successful or not. However, if you have several searches over a few weeks, then lenders’ systems could wrongly assume you are being declined on the basis of; “Why else would you go to lender number 2 unless lender number 1 had said no?”.
The odd hard footprint on your record from time to time is no big deal. There’s no need to worry too much about this, just be careful not to have too many.
A soft credit search is a “lighter touch” look at your financial situation. This is the kind of search that would routinely be carried out on price comparison websites. This would give you an indication of what products might be available to you. It can also be useful if someone wants to verify your identity.
Some mortgage lenders do soft searches in the first instance. More and more lenders seem to be changing to doing this type of search. Whilst the financial institution doing a soft search obtains less information about you than if they had done a hard search, an Agreement in Principle from one of these lenders is usually still an extremely strong signal that your full application will be accepted.
You will be able to see that someone has carried out a soft search on you if you check your credit file. The good news though, is that these searches are not visible to other Financial institutions like Banks. This means that you can apply for an Agreement in Principle for a mortgage, without it damaging your credit score. This is irrespective of whether it is successful or not.
For further Specialist Mortgage Advice in Halifax, get in touch with our team today.