Equity release mortgages revisited

Monday, 17th February, 2020
equity release

The equity release mortgage is becoming increasingly popular. It’s also playing a significant role in helping older people pay off debts and mortgages, with figures suggesting that equity release is seeing £10m ‘withdrawn’ from homes each day.

Those reading this who are new to the world of equity release may be asking themselves ‘what is equity release?’ and ‘how does equity release work?’ Well, if that is you, then read on as this quick guide to equity release mortgages will fill in any gaps you might have.

1. What is equity release?

Equity release is a way in which older people, typically those aged from 55-60 and upwards, can unlock the value of their home – or ‘cash in’ – without needing to actually move home.

2. How does equity release work?

There are two main routes into equity release: lifetime mortgages and home reversion plans.

The lifetime mortgage is typically the most popular route, and involves borrowing a portion of your property’s value at a fixed or capped interest rate. You don’t make repayments. Instead, you make a lump sum payment – which includes compounded interest – when the house is sold. There is an opportunity to get a lifetime mortgage with a drawdown option built in, whereby you can pay back the interest and sometimes even the capital, too.

Home reversion plans are generally geared towards those aged 65+ and will see a lender pay you a tax-free lump sum whilst allowing you to remain in the property – rent-free – until you die. When this happens, proceeds from the sale are split based on the percentage split agreed when the home reversion plan was taken out. If the property rises in value, so too does the amount the lender gets when the property is sold. Please note that Complete Mortgages does not give advice on home reversion plans.

3. How much can I borrow?

This will depend on your age and the value of your property. Your health is also likely to be taken into consideration. A good mortgage broker will be able to help you establish this once they have a clearer picture of you and fully understand your circumstances. As a Guildford mortgage broker that manages a high volume of equity release mortgages on a daily basis, we’ll be able to assist you at every step of the equity release mortgage application process.

4. What next?

Equity release mortgages are very individual-specific, so our advice to anyone thinking of going down this route would be to arrange a meeting with a specialist mortgage broker, who will be able to source a selection of competitive equity release mortgages for you.

Just make sure that you’re fully aware of any mortgage broker charges along the way. Complete Mortgages, for example, only charges a one-off flat fee of £699 and for that we’ll handle the entire mortgage application from the beginning until you receive the money.

Whether you’re looking for an equity release mortgage or any other form of complex mortgage, Complete Mortgages will be able to help. Contact the team on 01483 238280 or email info@complete-mortgages.co.uk.

Getting a mortgage if you’re divorced

Thursday, 6th February, 2020
Getting a mortgage if you’re divorced

Interestingly, there appears to a ‘content gap’ when it comes to advice on applying for a mortgage if you’re divorced.

Strange, considering how research from the Office for National Statistics revealed how there were 90,871 divorces in 2018.

Reassuringly, this was down 10.6% when compared with 2017. However, 90,000 is still a large number. And, if you multiply this by two, on the basis that for every divorce there are potentially two people needing a mortgage, then that’s potentially 180,000 newly separated individuals enter the market wondering ‘can I get a mortgage now that I’m divorced?’.

Given the number of mortgage applications for divorcees we’ve prepared over the years, the Complete Mortgages team has become, for want of a better phrase, divorce mortgage specialists. And, considering that January is a notoriously busy time for separation, we thought we’d share a few tips for getting a mortgage if you are divorced.

Will child maintenance payments reduce the amount I can borrow?

Lenders treat child maintenance payments as outgoings, just as they would loan repayments and utilities payments, so it will affect your borrowing capability. Conversely, if you’re receiving child maintenance payments, then some lenders will not consider this income, and therefore you will not be able to use this form of income to borrow more. Thankfully, there are some exceptions to the rule, which a good mortgage broker will be able to source for you.

I’m buying a property to live in, but I still own the marital home. How will this affect my chances of getting a mortgage?

If you plan to continue being named on the mortgage then a second property will be treated as such. This means that from a lender’s perspective, you will need to be able to demonstrate that you can meet payments on both properties – this is something that a reputable mortgage broker will be able to help you with. Similarly, as a second property purchaser, you would be required to pay the additional 3% Stamp Duty as specified by HMRC. You can apply for exemption; however, you would need to provide legal evidence to prove that you are formally separated – your solicitor will be able to provide guidance on this.

I’m currently going through a divorce and have moved out of the marital property. Do I still need to continue paying for the mortgage?

Regardless of your situation, you will need to keep paying for the mortgage if you’re named on it. By not paying on time, you may damage your credit history and therefore your chances of arranging a mortgage after your divorce. If one person refuses to pay, this could spark a long-lasting chain of events. Banks can be sympathetic to divorce, so the sooner you contact them and make them aware of your situation, the easier it will be. In some cases, lenders provide mortgage payment holidays to help remove pressure in the short term.

I’ve just gone through a divorce and am ready to purchase my next property. What do you recommend?

Get good mortgage advice. As a Guildford mortgage adviser that has arranged mortgages for countless people after they’ve gone through divorce, we understand the ins and outs of post-divorce mortgage applications, and the subtleties and difficulties associated with the process. So, if you’re ready to take the next step then contact the Complete Mortgages team.

Whether you’re recently divorced and looking to get a mortgage or ready to move up the property ladder, our team of Guildford mortgage brokers can help. Contact the team on 01483 238280 or email info@complete-mortgages.co.uk.

Reasons to use a mortgage broker

Friday, 17th January, 2020
REASONS TO USE A MORTGAGE BROKER

Is technology about to make the mortgage broker redundant? Will robots and AI replace the traditional role of your local mortgage adviser?

The answer is ‘yes’, according to news reports from the start of the year, which claim how mortgage applications may be as simple as car insurance in the next 10 years due to advancements in finance-led technological processes.

Does Complete Mortgages agree? No, and here’s why.

1. Power to the people

There are some professions that simply need people; those in the fire service, police and surgeons all spring to mind.  But even it when it comes to the services industry, people generally tend to want to deal with people. Not screens. Or robots. The nuances that dealing with a real person allows (body language, asking questions that would be hard to articulate or communicate when not face to face) play a huge role. And when it comes to getting a mortgage, there is never any shortage of questions. So, from my perspective, applying for a mortgage isn’t an area that’s going to be entirely automated any time soon.

2. Experience is everything

As a Guildford mortgage broker, we’ve arranged mortgages for the widest spectrum of customers, from first time buyers through to equity release mortgage applicants, for many years. As a result, we’ve encountered scenarios and overcome obstructions and situations which, when added together, have a built up a high level of experience, knowledge and understanding of the mortgage sector that technology would find hard to match. Unlike the binary, black or white nature of machines, real mortgage brokers can deal with the shades of grey in-between.

3. Mortgage brokers not machines have relationships with lenders

Similar to point 1, people-based relationships enable a good mortgage broker to pick up the phone and chase the lender (who they may have known for years through working together) about Mr Smith’s mortgage application. This level of personal service, which doesn’t rely on flow diagrams and computer code, is what ultimately speeds up the mortgage application process and gets mortgages approved.

4. The perfect match

Mortgage brokers match specific lenders and specific mortgage deals with specific people. This follows a consultative approach that enables a mortgage broker to fully understand the intricacies of individual applicants’ lives, their financial limitations and personal circumstances. Without fully understanding and appraising someone prior to their mortgage application (a process that can take time), the person trying to get a mortgage may never be presented with the most suitable option.

If you’re looking to arrange a mortgage (with a real person), then contact our team of Guildford mortgage advisers on 01483 238280 or email info@complete-mortgages.co.uk.

How to get a cheap mortgage

Wednesday, 7th August, 2019

This isn’t a cheat. Nor does it involve any sneakiness or withholding of information on your part when it comes to applying for a mortgage. And yes, it’s legal!

In fact, it’s so above board that you may even kick yourself and wonder why you haven’t done anything about it before.

Note: if you’re an existing Complete Mortgages customer then this doesn’t apply to you as, for reasons you’ll understand if you read on, we wouldn’t have let this happen to you in the first place.

According to Yorkshire Building Society, more than £26bn worth of mortgage deals are due to mature in October. Simply put, this means that £26bn worth of mortgages are about to slip on to the more expensive standard variable rate (SVR).

It’s a bit like energy providers or telecoms firms; when you’re coming up to the end of your contract you can either renew on a more cost-efficient deal – or start paying more.

The building society’s analysis further reveals that by avoiding the ‘default mortgage setting’ of the SVR through remortgaging, homeowners could be saving themselves up to £200 a month. That’s £2,400 a year!

If you’re not currently a Complete Mortgages customer but are one of the many UK homeowners whose mortgage is about to become more expensive, then our advice is that you start looking into remortgaging as soon as possible. Of course, as an award-winning Guildford mortgage adviser, then we recommend you call us on 01483 238230 to kick start the remortgage process.

Either way, failing to change mortgage deal – or even mortgage lender – if you’re about to fall onto the SVR could end up costing you a pretty penny.

As to why it doesn’t apply to our customers, we contact each and every single one of them months before their mortgage deal is due to end – regardless of whether that’s in October or not.

We have a team of people whose role it is to make sure that not a single client falls onto the SVR. The reason we do this is because being a good mortgage broker isn’t just about making sure the customer gets the best mortgage available to them, but also that they save as much money as possible along the way.

Yes, remortgaging takes a bit of time and legwork (although a mortgage broker worth its salt should gladly handle this for you), but it isn’t particularly difficult. And as the price of not doing it can be as much as £2,400 a year, then why wouldn’t you explore your options.

If you’re not currently a Complete Mortgages customer and think that you might need to remortgage in the not too distant future, then contact the team on 01483 238280 or email info@complete-mortgages.co.uk.

If you are already a customer, then you needn’t do anything at all. If your remortgaging needs are already catered for then remember that we also specialise in first time buyer mortgages, buy to let mortgages, adverse credit mortgages and equity release mortgages.

By Mark Finnegan, Director at Complete Mortgages

A guide to commercial mortgages

Tuesday, 8th January, 2019

There’s never a shortage of debate around residential mortgages and buy to let mortgages. Even equity release mortgages are currently basking in the sunlight after the amount of equity released from the properties of UK homeowners hit over £1bn. However, one type of mortgage that often gets overlooked is the commercial mortgage.

According to the Federation of Small Businesses, there were 5.7 million private sector businesses at the start of 2017 – up 197,000 from 2017 and 2.2 million more than in 2000.

It stands to reason, then, that whilst the process of applying for a commercial mortgage doesn’t get as much airtime as residential mortgages (there are less UK businesses than UK properties, after all), commercial mortgage applications are on the up.

As a mortgage broker in Guildford, an area where there is a high concentration of business owners, we have seen an increase in the number of people interested in getting a commercial mortgage over the years. Yet when comparing applicants’ knowledge of commercial mortgages with residential mortgages, there are huge gaps.

So, here’s our brief guide to the commercial mortgage in the hope that it provides you with enough information to get you started.

1. What is a commercial mortgage?

Commercial mortgages are used to buy land or property for a business. Equally, a commercial mortgage can be used to expand an existing business or for property development. It’s generally a long-term loan spanning 10 to 20 years and lenders are generally willing to lend up to 70% of the total value of the property, although they can consider lending more where they are happy with the overall circumstances. The remaining funds are expected to come from the business.

2. What are the benefits of taking out a commercial mortgage?

If you run a business and want to protect yourself against escalating rental costs, then owning a business premises is a great way of controlling this particular overhead. Also, just like residential properties, commercial property values can increase, the equity of which can give you an added buffer in fallow periods or when cash flow is poor.

3. Are commercial mortgages easy to get?

There are many lenders offering commercial mortgages. The trick is finding the one that works for you and your business. As a commercial mortgage specialist, Complete Mortgages can help you identify a lender from a wide pool of commercial mortgage lenders that we work with and that can support your short and long term objectives.

4. What about commercial mortgage rates?

They are typically higher than residential mortgage rates and tend to vary. A good mortgage broker will help you identify a commercial mortgage that best suits your needs.

5. Is my credit rating still important in order to get a business mortgage?

Yes, it is important. However, rather than just looking at your personal credit rating, a lender will also be able to get a good indication of whether or not you’re a ‘safe bet’ by looking at your business as a whole, which is a good thing.

6. Is there anything I need to be aware of?

The commercial mortgage journey is arguably less predictable than that of a residential mortgage. Residential mortgages are quite linear; you need somewhere to live and once you’re on the property ladder, the chances are you won’t get off. Businesses are different. Many grow, many fail and sometimes businesses owners simply decide to go and do something entirely different. As a result, you need to be aware of the financial commitments of a commercial mortgage and have a good idea of what you’re looking to achieve before taking out a commercial mortgage.

This is only a brief guide to commercial mortgages. If you’re interested in finding out more information then contact the Complete Mortgages team on 01483 238280 or email info@complete-mortgages.co.uk to find out more.

Beware the SVR mortgage trap

Tuesday, 2nd October, 2018

This definitely sounds more sinister than it really is, however the standard variable rate (SVR) mortgage trap surprisingly affects a high number of people every year.

It’s a bit like household energy deals or ISAs: you are drawn in by the competitive rates, be they cheap – and fixed – energy or a high rate of interest for the first 12 months, only to find yourself paying twice as much for home heating or receiving half as much interest as soon as that period is over.

It’s arguably more difficult to overlook increases in your monthly mortgage payments than it is the rate of interest on your ISA, generally because the stakes are higher and the increases more noticeable, however people do tend to find themselves on the SVR and subject to higher monthly payments – and there’s really no need for it to happen at all.

When it comes to finding yourself on your lender’s SVR rate, there are two scenarios:

a) You’ve sorted the mortgage and you’ve lost track of when your preferred mortgage rate ends and the SVR begins – and your lender either hasn’t reminded you, or they have, but you’ve put off sorting it for another day

b) You use a mortgage broker and they’ve failed to remind you to consider your options as you approach the end of what seemed like the best mortgage deal when you took it out 18 to 24 months ago.

As a Guildford mortgage broker the advice we have covers both points, and that’s don’t just use a mortgage broker – but a good mortgage broker.

Firstly, using a mortgage broker doesn’t mean handing over money to someone who you feel does just as good a job as you. In return for getting a mortgage broker to apply for a mortgage on your behalf, you will be working with someone who’s qualified, bound by stringent regulation and who often has access to the best mortgage deals on the market at any given time.

More importantly, in the context of the SVR trap at least, it takes the responsibility of keeping on top of your mortgage off of you and places it firmly at your mortgage broker’s door.

Secondly, good mortgage brokers should know your mortgage as well – if not better – than you. As a result, they should not only be aware of key dates, such as the date your mortgage is due to switch to the SVR, but also proactively contacting you with a list of options when it comes to doing something about it.

That’s what we do, at least, and it’s an approach that prevents the majority of Complete Mortgages’ clients from having to experience the SVR.

Don’t get caught in the SVR mortgage trap. Contact a member of the team at Complete Mortgages on 01483 238280 who can manage your mortgage on your behalf and make sure that you’re aware of all the best mortgage rates available to you in advance. Alternatively, email info@complete-mortgages.co.uk.

Three reasons to use a buy to let mortgage broker

Monday, 6th November, 2017
buy-to-let mortgages

The buy-to-let mortgage market is booming – but not necessarily in the way you might think.

In fact, it’s taken quite a pounding over recent years. The first attack came when George Osborne, in his role as Chancellor, announced the phasing out of tax relief for landlords. The second, also a ‘blow’ by Osborne, came in the form of stamp duty surcharge on additional properties.

The result? The jury’s still out, however the repercussions seem to be a combination of landlords with high LTV mortgages releasing some of their properties back on to the market and existing landlords raising their rent.

Yet recently released figures suggest that buy to let mortgages are far from over.

According to Moneyfacts*, there has been a seven per cent rise in the number of buy to let mortgage products to enter the market, taking the total to 1,735 – the highest number of mortgages for landlords since the heady, pre-crash days of 2007.

It also makes choosing the right buy-to-let mortgage increasingly difficult.

So, as increasing taxes don’t seem to be putting off would-be landlords from entering the market – and following our recent ‘five reasons to use a mortgage broker’ article – we thought we’d outline three key reasons to consider using a buy to let mortgage broker.

1. Time is money

As a mortgage broker in Surrey, a county with a large share of buy to let landlords, we are in a continuous cycle of appraising new buy to let mortgage products in the context of our clients’ needs. Of course this is hugely time consuming – however it’s our job. You, on the other hand, may not have the time required to separate the wheat from the chaff and sift through this growing glut of deals.

By getting a buy to let mortgage broker to do the legwork and find a deal based on your personal requirements – all of which would have been established during an initial consultation – you are able to save yourself huge amounts of time by only having to deal with a shortlist containing the best-of-the-best deals.

2. Mortgage brokers are mortgage experts

If you’re looking to sell your property, you’ll no doubt commission an estate agent to sell it. If you have a problem with your roof you’ll consult a roof specialist. Similarly, if your car’s not working, you will probably visit a mechanic. We can’t all be experts in everything – there simply isn’t enough time. We don’t claim to be property experts, nor can any member of my team (myself included) fix a car, but we are experts in arranging a mortgage for our clients. If you want to save time and benefit from expert advice, then use a mortgage broker with a good reputation.

3. Not just any mortgage

Those of you that already have experience of getting a mortgage – either independently or though a mortgage adviser – will know that there is a lot of ‘crossing the Is and dotting the Ts’. With buy to let mortgages, there is even more.

Not only that, but a good mortgage broker can help advise you with regards to making sure the numbers stack up (i.e. the mortgage you secure works in tandem with the rent you plan to charge). The difference between 1% on your mortgage rate here, or a potential/hidden charge there, can make a serious impact on your profit. An experienced buy to let mortgage broker will be able to review this in relation to your own requirements very quickly and make sure that you get the right deal for your circumstances.

Cut through the buy-to-let mortgage ‘noise’ and contact Complete Mortgages on 01483 238280 or email info@complete-mortgages.co.uk. Remember, we also offer specialist mortgages including commercial mortgages, self-employed mortgages and adverse credit mortgages.

By Mark Finnegan, Director at Complete Mortgages

*https://www.ftadviser.com/mortgages/2017/09/12/number-of-buy-to-let-deals-at-10-year-high/

Five reasons to use a mortgage broker

Tuesday, 22nd August, 2017
mortgage broker

Regular readers will know that we tackle pretty much every topic related to applying for a mortgage; from the actual mortgage products themselves (buy to let mortgages, commercial mortgages, residential mortgages etc.) to the legislation and changes in rules that either hinders or facilitates access to them.

However, on this occasion, I’ve decided to place the spotlight not just on the team of mortgage brokers at Complete Mortgages, but mortgage brokers as a whole.

Not because mortgage brokers have come under fire, or that that there is any particular reason to defend the work of a mortgage broker. It’s just that there are now a number of elements such as regulation, new rules, and restrictions that affects those wishing to apply for a mortgage.

This, on one hand, makes the work of a broker more complex and challenging, however on the other it’s allowing brokers throughout the UK to showcase how they can add value to their clients.

As a result, I would simply like to take this opportunity to remind homeowners and investors why using a mortgage broker can help expedite the mortgage application process and save a lot of heartache in the process.

From the recent changes affecting mortgage affordability to the latest set of rules from the Prudential Regulation Authority, which come into play in September and require landlords to provide details of their assets and liabilities, declare future investment property intentions and reveal the property schedule already requested for buy to let mortgage applications, there are now more obstacles to navigate than ever before.

And, as the number of obstacles grow, so too does the number of reasons to outsource your mortgage application requirements to a mortgage professional. Here are five.

1. Knowledge is power

This sub-heading is probably slightly over-egging the pudding, however it’s true that the more you know the more you can control. A good mortgage broker thoroughly knows the industry and, as a result, knows how to present your case in a way that reduces administration time and gets the desired result quicker. This knowledge, which non-mortgage brokers typically wouldn’t know, also enables brokers to sidestep the pitfalls and capitalise on any potential opportunities, thus ensuring you receive the best possible mortgage advice for your particular circumstances.

2. Qualifications count

It goes without saying, but those with formal training and qualifications in anything – from medicine and teaching to hairdressing and car maintenance – are more likely to approach what they do in a more efficient, balanced and professional manner.

3. Duty of care

Professional mortgage brokers are not only morally obliged to act in your best interests, but also the Financial Conduct Authority also heavily regulates them. If your mortgage broker is not acting in your best interest, then you’re covered. Complete Mortgages positively embrace the FCA’s Treating Customers Fairly initiative meaning that you will be treated fairly with the utmost duty of care at all times.

4. Bigger picture

Mortgage brokers assess and evaluate every aspect of your financial situation. Not only does this ensure that you end up with the right mortgage for you, but it also means that they can develop a holistic package covering other aspects of your financial planning such as life insurance, critical illness cover and income protection in one go.

5. No time to lose

If, like most people, you’re incredibly busy, then juggling mortgage applications with your job and family commitments is probably something you could do without. By using a mortgage broker you can offload the burden of finding the right mortgage – and the associated admin – freeing you up to either a) focus on doing what you do best or b) spend time on anything but applying for a mortgage!

As the mortgage lending landscape continues to change and lenders become more careful about whom they lend to, why spend time doing something that mortgage brokers can handle for you

Whether you’re looking to secure a mortgage or simply want to remortgage, then contact the team at Complete Mortgages on 01483 238280 or email info@complete-mortgages.co.uk to find out how we can help you.

By Mark Finnegan, Director at Complete Mortgages