What are The Different Types of Mortgages Available in Sheffield?

The Different Types of Mortgage

You might be a First Time Buyer in Sheffield who are looking to take that initial step on the property ladder or looking to move into a different property through Moving Home in Sheffield, or your mortgage term is coming to an end so are looking to Remortgage in Sheffield. Either way, you’ll quickly find that there are a lot of options available for you when it comes to taking out your mortgage.

Below, we have put together an extensive list that highlights the most popular types of mortgages out there to customers on the mortgage market.

If you are interested in any of the mortgage options mentioned below and are looking for more information, then do get in touch as we will be able to connect you with a knowledgeable mortgage advisor for expert, fast & friendly mortgage advice in Sheffield & surrounding areas.

What is a Fixed-Rate Mortgage?

This type of mortgage means that your monthly mortgage payments will stay the same throughout the duration of your mortgage term.

You have the choice in the duration you want to fix your payments. It’s common for people to choose a fixed term of around 2,3 or 5 years or longer.

The benefit of this option is that your outgoings will probably be the biggest one in your finances, regardless of what happens with inflation, the interest rates, or the nationwide economy.

What is a Tracker Mortgage?

A tracker mortgage will mean you will have a mortgage interest rate that usually reflects the Bank of England’s base rate.

Because of this, the lender nor the mortgage lender will set the rate and it will fluctuate when the base rate does. For example, if the base rate goes up, your interest goes up. Therefore, if it goes down, yours will go down too which obviously would be beneficial to you.

It will require you to pay at a percentage that is higher than the Bank of England base rate. For example, if the base is 1% and you are tracking at 1% above the base rate, this will result in you paying back your interest at a rate of 2%.

What is a Repayment Mortgage?

A repayment mortgage will involve you paying back a combination of both the interest and capital each month. This is the mortgage people looking to buy a home usually go for.

If you have been able to keep your payments going for the mortgage term duration, you will be guaranteed to have paid it off in full and achieve the goal of owning your own home by the end of it.

This option can be seen across the industry and wider world as the most risk-free way to pay your capital back to the mortgage lender. When you begin your term, the amount you’ll be paying will be mostly the interest with your balance reducing at a slower rate. This is particularly the case if your term is 25,30 or 35 years.

Within the last ten years or so of your mortgage, the process speeds up. This means you will be paying back more capital than interest, with the balance reducing at a far quicker rate.

What is an Interest-Only Mortgage?

As a Mortgage Broker in Sheffield, we do find many buy to let mortgages being set up frequently on an interest-only basis ( this option does benefit many landlords), it is progressively more difficult these days to obtain a residential property on an interest-only mortgage.

This is due to the process because when you reach the end of your term, you are still required to pay the full mortgage amount to pay off all in one go, with no additional income to fund the amount you’re required to pay.

With this in mind, there a range of unique circumstances where this can be an appropriate route for a customer to go down such as downsizing when you are older or if you are in a situation in which you have other investments you are able to use to pay back the capital.

When it comes to offering these products, it’s common to find that lenders can be incredibly strict. Furthermore, the loan to values usually is much lower than they were in previous years.

What is an Offset Mortgage?

An offset mortgage is where your mortgage lender will create a savings account that will work simultaneously with your mortgage account.

To put this in an example, if you had a mortgage balance of £100,000 and you deposit £20,000 into your savings account, you will be required to only pay interest on the difference between those figures which in this case would result in £80,000.

This option can be a very efficient way of controlling your finances, especially if you won’t be paying higher rates of tax.

How much deposit do I need to put down?

First Time Buyer Mortgage Advice in Sheffield

First time buyers, home movers, landlords and the self employed will always ask the same question when it comes to applying for a mortgage – “how much can I borrow?”.

The answer varies depending on your individual situation. For example, how much you can borrow could change depending on your credit score, income, bank statements and your personal situation.

Let’s take a look into ‘how much you can borrow for a mortgage’ and how things have changed following the credit crunch.

Historic rules when borrowing for a mortgage

Long before the credit crunch, credit scoring was non-existent and mortgages were manually assessed by your local building society manager. Then, during the 1990s, lenders started performing income assessments to provide a consistent approach across applicants.

Maximum lending caps were also introduced. This meant that customers couldn’t borrow more than three to four times their annual income. Scary to think that before people could!

Despite these lending caps in place, in the early 2000s, lender’s income multipliers grew more generous. This meant that more and more people were borrowing more than they can afford to pay back. Furthermore, some lenders were even allowing some of their customers to ‘self-certify’ their income with minimal/no background checks such as payslips.

Of course, all of this went very wrong. Lenders were lending to applicants that couldn’t afford to pay them back, therefore the market crashed and all of sudden, it became extremely hard to get a mortgage from 2008-2010. Lenders tightened their margins and created a cautious (over-corrected) lending environment.

Nowadays approach to how much I can borrow

In 2014, the Mortgage Market Review (MMR) was introduced. This initiative helped the market get back up on its feet; it brought a new set of guidelines for lenders to adhere to. The old income multiplier method was scrapped and replaced with new, more sophisticated affordability calculators.

These new affordability calculators provided a closer look into an applicant’s spending habits and net disposable income. This meant that the lender could have an in-depth look at your bank statements to ensure unaffordable mortgages were not granted as they were before the Mortgage Market Review.

There is still a “lending cap” in place at about 4.75 times your annual income but your expenditures are also analysed. For example, lenders seem to penalise low-earners and even things like gambling showing up on your bank statements can sometimes affect your chances of being accepted. Some take pension contributions as a fixed outgoing so would often lend, say a public sector worker with a big pension deduction less than a private sector and so on.

Mortgage Broker in Sheffield

If you are currently trying to work out how much that you borrow, we would recommend trying our online free affordability calculator or speaking to us for a more accurate measure. A Mortgage Advisor in Sheffield will research the market on your behalf and try to find a lender that will lend you the amount you need.

Before you take out a mortgage you should sit down with a First Time Buyer Mortgage Advisor in Sheffield and work out your finances together to ensure that the repayments feel comfortable to you.

Tenants buying from landlords in Sheffield

Buy-to-Let Mortgage Advice in Sheffield

As a mortgage broker in Sheffield, we find that we get an ever-increasing amount of enquiries from tenants looking to buy from their landlords. This could be due to the fact that landlords are offering their tenants ‘first refusal’, which provides tenants a chance to buy the house before it goes onto the open market.

If you are wondering if your landlord may offer you the same chance to buy your rented home, it’s worth asking the question as they may be very willing to do so.

Why are so many Landlord selling their property to tenants?

Landlords selling their property to tenants has become increasingly popular over the years because the government cracked down on tax relief previously available on buy to let and some of those changes were introduced over a 4 year period. Property has always been viewed as a solid investment, so many decided to get through the tax changes as they have looked at their properties as a long-term investment.

Maintaining their investment over time is something landlords, old and new, find difficult. As a result, they look to sell up and leave the property market. In the circumstance where your landlord is looking to sell, then there is a possibility that they would sell to you as the current tenant because they will be aware of the number of advantages by doing this instead of the market. Some of these include:

• Avoiding estate agents fees – Because they are going directly to you and not the open housing market, they are cutting the costs by avoiding any estate agent fees. It makes the landlord’s job easier and cheaper through having no advertising costs and no costs for undertaking viewings.
  
• Loss of rent – A tenant going out their way to do property viewing is very unlikely, therefore, arranging this with a sitting tenant can become a problem for the landlord. Alternatively, some tenants decide to move out which creates a ‘rental void’ where there are no payments until someone else moves in. Therefore, selling to the tenant benefits the landlord as they keep a steady income all through until completion.
  
• No refurb costs –The landlord will have to make the house look presentable should the tenant decide to leave. Things like a fresh coat of paint, minor repairs, etc. can build up costs. Whereas selling the property to their tenant cuts this cost as they know the tenant is already happy with the house they live in and are willing to buy it.
  

The advantages for the tenant buying the property they rent

Tenants aren’t the only ones who benefit from this, tenants do too. Advantages include:

• Property Knowledge – You will have a broader understanding of the property because you have already lived in it. As well as this, you will know the condition of the house and if there need to be any improvements.
  
• Quicker Process – There is no need to sort out a moving date, pack up belongings, or anything like that because you already live there.
  
• No Chains – Because you already live there, there are no property chains to worry about. If you were in a property chain, you would have to wait for someone else to move before you can, but in this case, you are not waiting for anyone.
  
• Money Saved – Sometimes, landlords may offer you some discount off the asking price. This isn’t guaranteed but, you may find yourself saving money if this is the case. From a landlord’s point of view, selling to you benefits them by cutting additional costs in an open market.

If you are in need of some help with your mortgage after agreeing with your landlord to buy the property, please get in touch with your buy to let mortgage broker in Sheffield today.

Getting Prepared for a Mortgage in Sheffield

Mortgage Advice in Sheffield

So, you are now ready to take a further step up the property ladder and be one step closer to achieving your mortgage goals. Whether you are a first time buyer in Sheffield, new to the experience, or a home mover in Sheffield looking to sell your current home and live somewhere else, you will still need to start getting prepared for your mortgage.

As a open and honest mortgage broker in Sheffield, here are some expert tips:

Know Where You Stand Ahead of Your Mortgage

As an experienced and well trusted mortgage broker in Sheffield, we always recommend taking advantage of mortgage advice as early on in the mortgage process as you can. This will allow you to get an idea of how much you could possibly borrow and what your estimated monthly costs may be.

You need to prioritise getting an up-to-date credit report, as you will need to know what your current credit score is and what you could potentially do to improve it, if necessary. The better your credit score is, the higher chance you have of your mortgage application being accepted.

There are a lot of different ways that you could potentially improve your credit score in Sheffield and to the surprise of many, it isn’t always too difficult to do so. In some cases, it is even possible to obtain a mortgage deal despite having a low credit score, though this ultimately depends on your lender and the way they look at your circumstances.

By ensuring you have both a mortgage advisor in Sheffield by your side and an up-to-date credit report to hand, you could increase your chances of being accepted for a mortgage in the future. A trusted mortgage advisor in Sheffield will be able to work through everything on your behalf, guiding you throughout the process.

Getting Organised for a Mortgage

Here at Sheffieldmoneyman, we have the ability to obtain a fully credit-checked agreement in principle for you, something we can turn around within 24 hours of your initial appointment. A dedicated mortgage advisor in Sheffield will help you to get prepared for everything prior to submitting your mortgage application.

In doing this, your mortgage lender will want to see some proof of identification, so that you can prove you are who you say you are, along with where you are living and the amount that you earn from your job. In knowing this, you can now prepare for all the necessary documents you’ll need. These are as follows;

Proof of ID

In terms of proving who you are you’ll need to produce some photo ID. Acceptable types of ID include a driving license or valid passport.

Proof of address

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.

Last 3 months’ bank statements

Lenders will always have a keen interest in what your spending habits are, compared to anything else.

They need to be absolutely sure that you will have the ability to regularly maintain your monthly mortgage payments on top of everything else you have going out. They will analyse your bank statements very carefully and take everything into consideration.

Lenders aren’t too fond of seeing gambling on your bank statements. It’s something we often see catching people out, as they haven’t realised that it can harm your chances of obtaining a mortgage down the line. They also don’t like seeing customers go over their overdraft limit, as this basically means your spending money that isn’t there.

It’s reasons like this why we always advise that you be careful and make sure that your statements are going to appeal to a mortgage lender, rather than put them off from lending to you.

Proof of deposit

You will have to prove you have the funds in place for the deposit and also be able to evidence this for anti-money laundering purposes. Try not to move money around your various accounts too much as it will make evidencing the audit trail a more complex process than it needs to be.

Lenders take a preference to applicants who are able to evidence that they have been saving for their deposit. It shows that you have a good understanding of how to put money aside every month and not spend money you don’t have. You’ll also need to factor in any large credits into your accounts.

Quite often we find that the money for a deposit has been gifted by family members. These funds will also need to be evidenced, with the “donor” being required to sign a letter for the lender. This will be to confirm that the funds are strictly a gift and not something they will be needing back from the mortgage applicant.

Proof of income

In terms of affordability, the most important thing is to be able to prove your income. If you are employed this tends to be done by providing the lender with your last 3 months’ payslips and most recent P60. Lenders often take into account regular overtime, commission, shift allowance and bonus.

A list of your expected outgoings

Make sure that you do plenty of research ahead of time. Preparing for your mortgage and making a note of your anticipated outgoings after you move house puts you in a great position prior to starting the application process.

You can work out an estimate of how much the council tax and utility bills will be. In addition to that, you can also work out your regular expenditures, such as any food and drink you will be buying. This will demonstrate how much disposable income you have available to pay your mortgage from.

You need to accommodate lots of time to prepare for your mortgage application. It can sometimes be a lot quicker and much easier to approach a mortgage broker in Sheffield who can take the bulk of the process and do it on your behalf.

Mortgage Advisors in Sheffield

A mortgage advisor in Sheffield will be able to work out how much everything is potentially going to cost you and guide you through the entire mortgage process, doing their best to work hard and try to secure you a competitive mortgage deal.

Getting ahead and planning early will always impress your mortgage lender. Let an expert mortgage broker in Sheffield help you out. Get in touch to book your free mortgage appointment with a trusted mortgage advisor in Sheffield today.

Can I get a mortgage as a student?

Student mortgage advice in Sheffield

University is a place to enjoy some of the greatest things that come with adult life; for example, freedom and independence Although, University costs a lot of money, and sometimes it can be hard to see exactly what you’re putting your money into, especially when it comes to accommodation fees.

Student accommodation can be a hit or miss situation. You may get an amazing landlord in Sheffield that takes care of you and your housemates, regularly checking in and taking care of property repairs and damages. On the other hand, you could get a landlord who does the opposite and leaves you with something like a broken washing machine for 4 weeks!

When you’re raking out money for rent month on month and getting the minimal back, it can be hard to ignore the fact that you should be getting treat better. Why don’t you look at becoming your own landlord? This way, you will be in charge of things and manage your property your way.

This can be made possible through a student mortgage. Taking out a mortgage as a student may not only save you money in the short term, but also in the long run.

Why should I get a student mortgage?

Getting a student mortgage will allow you to save costs on your accommodation and will also give you an early opportunity to get yourself onto the property ladder. They are more popular amongst higher education students who plan to continue their education through to their masters/PhD.

If you’re not planning to live in the property in the future, you can always sell up when you’re ready to move on. You could even keep it as a buy to let in Sheffield to rent out to other students!

By the time that it comes to the end of your course, you should have built up a bit of equity within your home. You can withdraw this equity if you would like. Equity can be turned into cash, and you can spend it however you want, it’s your money after all. It could be anyway from a wedding to a new car. The more equity in your home, the more money you can withdraw.

There are lots of things you could do with your property in the future!

How can I get a student mortgage?

Student mortgages can sometimes be hard to obtain. The reason behind this is that you need to have funds in place to afford one, and as a student, that can be difficult.

As a mortgage broker in Sheffield, when we come across a student mortgage application, we have to ask the applicant a set of questions so that we can find out whether they qualify for one or not. Firstly, we will need to know if you have a deposit for the property. This can be something like a gifted deposit, a Lifetime ISA or even as simple as funds from a savings account.

Secondly, we need to know that you can actually afford a mortgage. Your mortgage advisor in Sheffield will measure your affordability right off the bat. You will need some sort of income to take out a student mortgage. Some lenders will accept a part-time job, whereas others will only accept a full-time job.

Showing reliability

Your lender needs to know that you’re a reliable applicant. You can show this in multiple different ways. Here are a few examples:

Increased deposit amount – Putting down a higher deposit would mean that the total amount that you borrow would decrease, hence also decreasing your mortgage payments.

Using government schemes – Using government-led schemes under the “Own Your Home” program, you may be able to access a larger deposit for your student mortgage. A few of the schemes included are the Help to Buy Equity Loan, Lifetime ISA and the Shared Ownership scheme; there are many more if you visit https://www.ownyourhome.gov.uk/all-schemes/.

Have an AIP ready – An agreement in principle can benefit your student mortgage application. It proves that a lender has already agreed to lend to you providing that you can supply documents to evidence your income, affordability, etc.

This is just naming a few. For further ways to appear more reliable during your student mortgage application, get in touch with our mortgage advisors in Sheffield today.

What type of property can I buy with a student mortgage?

Like most mortgage options, you have to meet certain requirements before getting the green light:

• The property that you’re taking the mortgage out on has to be within a 10-mile radius of your University.
• The property has to be 3-4 bedroom house.

With this in mind, you’ll also have to think about what you’re going to do with those spare rooms. To help you manage your money, the best idea could be to look into renting them out.

What happens if I can’t afford my payments?

Lenders will be aware of all of the risks that come with lending to a student. This is why they always take precautions.

When signing the papers for your student mortgage, you’ll have to declare a guarantor. This is someone who will cover your payments if you fail to pay them at any time. There are some limitations to who your guarantor can be:

• They cannot be over 65 at the point of your application.
• The guarantor must own a property in the UK.
• They must live inside this property in the UK.

Lenders have to have a backup just in case anything happens. This situation is in the worst possible scenario of course.

For help achieving your student mortgage dreams and first time buyer mortgage advice in Sheffield, get in touch today. We can help you see whether you match the criteria for a student mortgage or not.

First time buyer mortgage advice in Sheffield

How to Improve Your Credit Score in Sheffield

What credit score will I need for a mortgage in Sheffield?

The higher your credit score is, the more likely that a lender will accept your application for a mortgage. This is different from the likelihood of someone with a poor credit score finding the same success. A mortgage lender will study your application carefully to determine whether or not you can afford a mortgage.

However, there is still no guarantee to be accepted the first time. Even if your credit score is pretty high. Each mortgage lender will have their own specific criteria that you need to match to obtain their deal, and it is unlikely that you will meet the criteria for all lenders across the panel.

Each lender’s criteria are different from another and they have developed their own unique ways of figuring out whether you match what they’re looking for or not. In some cases, you might actually find yourself matching up with the majority of them and in some cases, maybe you only match up with a few of them.

Speak to a Mortgage Broker in Sheffield

Here at Sheffieldmoneyman, our mortgage advisors in Sheffield will work alongside you and find the most suitable lender who offers the best deal for your circumstances, with criteria that you can meet. It is the job of your dedicated mortgage broker in Sheffield like us, to search for thousands of deals and hold your hand throughout the entire process, and always have your best interests at heart.

You will be kept in the loop at all times with what’s going on, so you’re not left stressed and confused about the process. It’s one of our many aims during your mortgage journey to make sure everything goes as smoothly and stress-free as it possibly can.

Whether you are a First Time Buyer in Sheffield, planning on Moving Home in Sheffield, or Self Employed, we will do our best to provide you with helpful tips and tricks to help you improve your credit score and eventually, secure an amazing mortgage that you’ll be thrilled to be walking away with.

Credit Score Mortgage Advisor in Sheffield

There are a variety of different credit reference agencies in Sheffield you could go with, though the most popular ones are Experian and Equifax. Before you rush into anything, make sure that you do some research into each agency as some of them may be holding incorrect data and it could help you identify any discrepancies.

We personally would suggest using a platform called Check My File, as this collates data from all the major ones like the aforementioned two, giving you a wider overview of how your credit file is looking. In signing up, you will receive a free 30-day trial, followed by a monthly fee of £14.99. Your account can be cancelled at any time prior to the end of the trial should you see fit.

There are lots of different things you can do to improve your credit score. Here we have some for you to have a look at:

Avoid Unnecessary Credit Searches

You will find that having multiple credit searches taken out against you could actually end up having a negative effect on your credit score in the long run. Even the use of price comparison websites is a factor that could harm your credit score.

If you are planning to apply for a mortgage, we strongly suggest that you avoid applying for any other credit in the meantime. Paying your credit back is a good thing for your score in the long run, providing that you can show lenders that you are able to maintain your monthly repayments.

That being said, borrowing during a mortgage application is something that could make the lender think that you cannot afford the deposit and are relying on the credit to give you a financial boost.

Check You Are On The Voters’ Roll

A great yet very simple way for you to get a boost to your credit score, is to register yourself for the electoral roll. It can demonstrate stability and this is something that the lenders like to see. You must make sure that your name is spelled correctly, and you must include your current registered address, not your previous one.

If you are not registered on the voters’ roll, you should definitely sign up for it. It is very easy to do online and it is something that could contribute well to improving your credit score.

Don’t Run Close to Your Maximum Limit

Maxing out your card each month is something else that can actually reduce your credit score. The lender will prefer to see that you are using a credit card and paying off the balance in full each month, as this will show that you are good with your money management.

If a lender sees that you are exceeding credit card limits or overdrafts,it might give them the impression that you don’t take your finances seriously. This once again could drastically harm your chances of getting accepted for a mortgage.

Check Your Address History is Keyed Correctly

Sometimes, if you have forgotten to tell a previous credit provider that you’ve moved into a new property, it can come across like you are actually living in multiple properties at the same time. Lenders don’t like to see this so you must make sure that you are on top of your address history so that it displays correctly on your credit report.

Remove Financial Links To Others

If you have a family member or ex-partner financially linked to you, this could be affecting your score without you even being aware of it. If the account is still live, then you won’t be able to get the financial association removed. If you want to remove any of these links, you should absolutely get in touch with the credit reference agencies and make a request.

Applicants see credit scoring as an unfair way to assess a mortgage application. Your mortgage lender would disagree with that, as at the end of the day, they are in the business of making money and they need to be sure you will be able to keep up your payments. It’s also much cheaper for them to operate through a computer-generated credit scoring system, as this keeps the process consistent and efficient.

Send an up-to-date copy of your credit report to your dedicated mortgage advisor in Sheffield ahead of time to increase your chances of being accepted the first time. The more your in-the-know your advisor is regarding your finances, the better it will be.

Also, there are still some lenders that prefer to operate the way companies used to and will manually assess your application. They will still have rules that they stick by regarding the number of defaults and CCJs that they will allow customers to have.

Buying a Property with Cash – Better than a Mortgage?

When buying a home, you can choose one of two options: to buy it upfront or take out a mortgage on the property and pay it off over a fixed term.

Both ways are costly, however, buying a house with cash is the obvious most expensive option. Paying upfront requires you to pay the price that’s on the tag, whereas, taking out a mortgage allows you to pay off the property over a long period of time.

Why should I buy with cash if I can?

If you have the funds in place to do so, buying a property with cash could be a great investment. Whether it’s to live in yourself or to use as a buy to let in Sheffield, it can put you ahead of people on the property ladder who have taken out a mortgage.

Reliability

9 times out of ten, when making an offer on a property, if you’re a cash buyer you’ll have an advantage over other applicants who are taking out a mortgage. One of the reasons is due to your reliability.

A property seller who is looking for a quick purchase will love a cash buyer. Having a cash offer eliminates the probability of getting caught up in the property chain. This is where a property is being sold to a buyer, however, they can’t move in yet as they’re still trying to sell their current home and sort out their mortgage. This can go on and on, ending in repeated homeowners struggling to move out as they’re waiting on their buyer to move out.

This shows your reliability. You don’t have to wait around for your buyer, they can proceed straight away. Also, you won’t have to pass any affordability checks as you already have the funds in place and you won’t need a valuation to be carried out on the property.

Easy and fast process

Everyone wants a quick and simple process when moving home in Sheffield. It’s more than likely that if you were to make a cash offer, you’ll see the process through within no time at all as opposed to having you taken out a mortgage.

You won’t have to take out a mortgage if you choose the cash route. However, as a mortgage broker in Sheffield, we can say that sometimes it’s just as quick to take the mortgage route. It’s our job to provide a fast and friendly service in Sheffield.

You don’t owe anthing

Taking out a mortgage is the same as taking out a loan. You’re committing to around 25+ years of potential mortgage payments. If you buy a property with cash, you won’t be making this commitment.

You also won’t receive any interest. Your mortgage payments may increase each month due to interest, whereas if you’re buying with cash this can never happen as you’ve already paid it all off.

Why should I get a mortgage and save my cash?

If you don’t have the funds in place to make a cash payment, you’ll have to take out a mortgage on the property you’re looking to buy.

Cheaper in the short term

Rather than using all of your life savings to purchase a property upfront, you could save money short term by taking out a mortgage instead. Usually, depending on your credit score, getting a mortgage will only require a minimum of a 5% deposit (5% of the property’s value).

A mortgage allows you to pay off your home in monthly payments. Monthly payments allow you to pay little back each month not the whole of it in one go.

Something wrong with house

If you’re looking at a property and the listing says “cash buyers only”, it’s likely that the property needs lots of repairs doing on it. If this is the case, you are unlikely to be able to get a mortgage on this property. You may be dodging a bullet if you are choosing a mortgage over cash here.

Even though it’s not required, we’d always recommend getting a property survey carried out just in case. This applies to both cash buyers and mortgage applicants.

A mortgage advisor in Sheffield by your side

Going into a cash purchase blind may put you at a slight disadvantage to someone who has a mortgage advisor in Sheffield by their side. Things are as simple as possible when you have your own mortgage advisor in Sheffield.

As a mortgage broker in Sheffield, it’s our job to deliver a fast and friendly mortgage advice service. Get in touch today and we can help you through the moving home process. We can help you make an offer on a property, arrange an AIP within 24-hours and perform a free affordability assessment on you.

Get in touch today for a free consultation.

Fixed-Rate Mortgages | Mortgage Advice in Sheffield

Fixed-rate Mortgage Advice in Sheffield

What is a fixed-rate mortgage?

Generally, you’ll find that the longer that you fix your mortgage for, the higher your interest rate is going to be. This is why you should look for a shorter fixed term, so that you can access lower rates.

Even though short term fixes could eventually save you money, your mortgage will need to be regularly reviewed and renewed more frequently. When it comes to your remortgage in Sheffield, it can depend on how the economy is performing and what sort of deals of available to what sort of rate you’ll pay on your new product.

Sometimes, you may end up paying more than your previous months’ mortgage payments, and then sometimes you may end up paying less.

Medium & long term fixed mortgages

If you would prefer to fix your rate for a longer period, you can take out a medium to long term fixed mortgage if you want to.

The most popular fixed rates are 5-year terms. These deals are sort of in the middle, not too short nor too long. They also add the security of constant monthly payments for the foreseeable future.

The only negative to fixing into a 5-year term is that your overall payments may be more than if you were to had fixed a 2-year product and then a 3-year product, but not by much.

If you wanted to go even further and try and secure a 7 to 10-year fixed-rate product, you may need to try and access specialist lenders as there are a limited number of these products on the market. They aren’t the most popular of choices amongst home buyers and owners, due to the length of the term. You won’t get much flexibility with a mortgage in the long term; they may also come with expensive setup fees and rates.

Fees to consider

In addition to interest rates and monthly mortgage payments, you’ll also have to consider booking and arrangement fees. A booking fee will be charged upfront and an arrangement fee will be charged at completion. Sometimes these fees can be incorporated into your mortgage payments, however, this can increase the total amount paid in the end.

If you’ve got the funds in place to do so, you may want to pay off a chunk of your mortgage early. Usually, people do this after they’ve received a large lump sum of money for something.

If you do this, you may be charged with an ERC or otherwise known as an early repayment charge. You are tied into a deal for a set period of time, so jumping out of the deal early will cost you. You can continue with repaying early if you are okay with paying the ERC.

An ERC is calculated as a percentage of the amount that is still owed on the whole mortgage, not your term. For example, if you have £200,000 left on your mortgage, you may get an ERC of 2% which is £4,000. If a current deal is available on the market that you want to access, it may benefit you more to take the ERC and remortgage early.

Remortgage Advice in Sheffield

As a mortgage broker in Sheffield, we would recommend not chasing after ‘headline’ deals. You need to remember that the deals with the lowest rates come with the highest arrangement/setup fees.

For remortgage advice in Sheffield, please contact us today. We have helped 1000s of customers fix excellent mortgage rates in the past, and you could be next!

Get in touch for a free mortgage review today.

What is a property survey and which one should I choose?

Property Survey Mortgage Advice in Sheffield

Once you’ve had your offer accepted on a property, you are going to move onto the next stage of the mortgage process… getting the property surveyed.

A property survey is carried out to determine whether the true value of a home correlates to the amount that a buyer has offered for it. The survey will also show the overall condition of a property, highlighting defects and damages (if there is any).

Types of property survey

There are lots of different types of property surveys, however, three stand out as the most popular amongst the crowd:

• Mortgage Valuation
• Homebuyer’s Report
• Full Structural Survey
  
  

A property survey may be carried out free of charge depending on the lender that you use. If you are offered a free survey, you may be limited to what you can see on the report, or sometimes the lender may not give you a copy.

Each survey differs, some will provide great detail and tell you everything that you need to know about your property, whereas others will not. Usually, the more that you pay for a survey, the more in-depth the report will be.

If your survey shows something about the property that you weren’t told about, by law you are allowed to approach the seller and work out a price reduction is necessary.

Mortgage Valuation

A Mortgage Valuation is the simplest property survey and usually the cheapest. They are carried out to find out the true value of a property.

Before committing to lending to you, your lender will need to find out whether the property’s value matches how much you are set to borrow from them. If you put in an offer above the property’s value and it gets accepted by your seller, it’s good for them but not for your lender, therefore it’s unlikely that your lender will accept your application. This is because they will have to lend more than the property is actually worth; this is called a down valuation. If you can make up the difference between what you said you’d pay and the mortgage amount, you’ll be able to go ahead with your lender, although, if you can’t then the lender will pull out of the deal.

Unfortunately, a Mortgage Valuation survey will not point out minor damages or repairs, it will just show clear structural defects that will require attention as soon as possible. If you want a report that goes further in-depth, you will have to pay more to upgrade to a different survey.

Homebuyers Report

A Homebuyers Report focuses on the safety of the property and how safe it is to live inside of it. The report will include problems such as mould, dampness or something that does not pass the current building laws.

This survey will be carried out by an expert. They will thoroughly examine the property from top to bottom so that they know exactly how safe it is to live in.

Full Structural Survey

As a Mortgage Broker in Sheffield, we usually recommend a Full Structural Survey, especially to those who are purchasing an older building. You sometimes need to be aware of everything.

This survey is the most expensive of the three and usually them all. This is because your surveyor will look at the whole property, often spending a whole day to determine its worth and to find out what’s wrong with it.

If the purchase goes through and you now know everything about the property, you may have saved yourself a lot of money in the long run as if you didn’t know about the damages, you couldn’t act on them meaning that they could worsen overtime.

Do I need to get a survey on a new build?

New builds usually requires a different type of survey called a snagging survey. This will highlight both minor and major issues. It could be from a missing door hinge to cracks in the ceiling.

If the new build has already been built, it would be wise to have a property survey carried out on it before you move into it. Just because the property is a new build doesn’t mean that there is nothing wrong with it. As a Mortgage Broker in Sheffield, we would always advise that you have some sort of survey carried out on a property.

Mortgage Advice in Sheffield

Whether you are a first time buyer in Sheffield or moving home in Sheffield, if you are struggling to choose the right property survey or just need general mortgage advice, feel free to get in touch with our team. Sometimes, it can be difficult to get the ball rolling when it comes to moving home, so make sure to get in touch if you need any help!

You can obtain the services of a surveyor to carry out a Homebuyers report or building survey through the Royal Institution of Chartered Surveyors.

What is a Mortgage Agreement in Principle, and how can it help?

What is an Agreement in Principle? 

An Agreement in Principle (AIP) is a statement or certificate from a lender to say that, in principle, they would lend you a certain amount and proves a First-Time Buyer in Sheffield like yourself that you are credit-worthy.  

If you are looking to get one, you need to get in touch and provide us with information about your mortgage needs and situation. Then, once we have processed your details, we can suggest how much you may be able to borrow. 

As a devoted mortgage broker in Sheffield, we can usually turn around an agreement in principle for you within 24 hours of your enquiry. Your Agreement in Principle can last anywhere between 30 and 90 days, depending on the lender. If your Agreement in Principle expires before you use it, it can be easily refreshed by speaking to your mortgage advisor in Sheffield. 

Does an Agreement in Principle affect my credit score? 

When applying for an Agreement in Principle, the lender will run a credit check to evaluate your eligibility. You will need to ask what level of credit survey they do. If the lender runs a hard credit search, it will leave a ‘footprint’ on your credit file visible to other lenders.  

A search footprint is a record left by a credit reference agency every time your credit report gets searched, either by yourself or by others. If there are a high number of hard searches in a short period, it can harm your credit score as it could signal that you’re struggling to get accepted by other lenders. 

However, if the lender has chosen to run a soft search, it won’t leave a footprint, and it won’t impact your credit score. 

Is an Agreement in Principle guaranteed? 

An AIP cannot guarantee that you will get a mortgage offer – you will still need to go through the entire mortgage application process when you find a property you want to buy, but this will help strengthen your chances.  

An AIP usually is valid for up to 30 – 90 days, and our mortgage adviser in Sheffield will be able to use the information as part of your mortgage application process. However, they will want to make sure the details are still correct.  

Some factors may affect the lender’s decision when making a complete application, such as their lending criteria or personal circumstances that have changed.  

Mortgage Broker in Sheffield – Our Service 

You may be a First Time Buyer in Sheffield, or you might be thinking of moving to the area and are looking for excellent mortgage advice. If this is your situation, we believe that you will benefit from our dedicated mortgage advice service in Sheffield. 

We offer a free initial mortgage consultation with one of our expert mortgage advisors in Sheffield, so please get in touch today and let us get the ball rolling on your mortgage application so that we can secure you an agreement in principle.