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25 May, 2023
Bridge to let products are a type of financing that combine a short-term bridging loan with a pre-approved buy-to-let mortgage. They are designed to help property investors who want to purchase a property that requires some work to make it fit for letting, such as light refurbishment or renovation. Bridge to let products have become more popular in recent years, especially as the UK property market has faced various challenges and opportunities due to the Covid-19 pandemic, the changing taxation and regulation environment, and the shifting demand of renters. But what are the advantages and disadvantages of using bridge to let products in 2023? Here are some of the main points to consider. Pros of Bridge to Let Products One application process: With bridge to let products, property investors can apply for both the bridging loan and the buy-to-let mortgage at the same time, saving time, hassle and costs. They can also benefit from having one lender and one point of contact throughout the process. Pre-approved exit strategy: One of the main risks of using a bridging loan is not being able to repay it on time or find a suitable long-term finance option. With bridge to let products, property investors have a guaranteed exit strategy, as they can switch to the buy-to-let mortgage once the property is ready to be let out. Value uplift : Some bridge to let lenders can factor in the value increase resulting from the refurbishment work when agreeing the terms of the buy-to-let mortgage. This means that property investors can potentially borrow more or pay less interest on their long-term loan. Flexibility : Bridge to let products offer flexibility to property investors who want to take advantage of opportunities in the market, such as buying properties that are uninhabitable or unmortgageable, or that need some work to maximise their rental potential. Market demand : Bridge to let products can help property investors meet the changing demand of renters, who are looking for larger properties outside of major cities, or properties with more outdoor space or home office facilities. By updating the housing stock in these areas, property investors can attract more tenants and achieve higher rents. Cons of Bridge to Let Products Higher costs : Bridge to let products are generally more expensive than conventional buy-to-let mortgages, as they involve higher interest rates, fees and charges for the bridging loan component. Property investors also need to factor in the costs of refurbishment work and any potential delays or complications. Strict criteria : Bridge to let products are not suitable for every property or every investor. They usually require a minimum loan amount, a maximum loan-to-value ratio, and a clear plan for refurbishment work. They also depend on the property being habitable and mortgageable after the work is completed. Market uncertainty : Bridge to let products are subject to market fluctuations and risks, such as changes in property prices, rental demand, interest rates, taxation and regulation. Property investors need to be aware of these factors and how they may affect their profitability and cash flow. Limited availability : Bridge to let products are not widely available in the UK market, as they are offered by a relatively small number of specialist lenders. Property investors may need to use a broker or an intermediary to access these products and compare different options. Conclusion Bridge to let products are an innovative and flexible way of financing property investments that require some work before letting them out. They offer several benefits, such as one application process, pre-approved exit strategy, value uplift and market demand. However, they also have some drawbacks, such as higher costs, strict criteria, market uncertainty and limited availability. Property investors should weigh up these pros and cons carefully before deciding whether bridge to let products are suitable for their needs and goals in 2023. If you are interested in a bridge to let, contact us today on 0151 662 0188 or email [email protected].
By Liam Coker 24 May, 2023
When selling a home before buying the next one, there are many advantages that make it a more attractive choice. Firstly, the seller of the next property is likely to prefer a buyer who has ready cash in hand or a pre-approved mortgage rather than having to enter into a longer chain of sales. This means that buyers remain in control of the sale of their own property and can negotiate a better price for themselves as they are not pressured into selling cheaply. Secondly, when selling first, buyers have time on their side and can often get a better deal on the purchase of their next home. With ready cash in hand or access to funds, buyers know how much they can spend without having to wait for the sale of their current home. This is especially important in a market where prices are rising quickly; buyers can avoid overpaying by selling before buying. Finally, it pays to do your research and be organised when selling before buying. Decide what sort of property you want to buy, and how much you want to sell for, and compare local estate agents for the best deal. Develop relationships with a number of estate agents so that you are in the know about all good properties that come up for sale. This will help to eliminate delays and ensure your next purchase goes smoothly. In conclusion, selling before buying can be a valuable decision both financially and time-wise. Whether you are keen to move quickly or if you are uncertain of the future market, it pays to be prepared and organised when making the sale. By doing so, buyers can remain in control of their own sales and get a better deal on their next purchase. This is especially true if the economy is in flux – getting ready with cash in hand can help buyers avoid any price hikes and get the best deal possible. Ultimately, it’s important to stay informed on the local market and do your research before selling and buying. This will help you make an informed decision about whether selling first is the right choice for you. If you are interested in moving onto your next property and require a mortgage, we are here to help, contact us via email [email protected] or feel free to give us a call at 0151 662 0188.
By Liam Coker 24 May, 2023
Mortgages for those working on Zero Hour contracts can sometimes be a challenge to secure. Most lenders require proof of a stable stream of income in order to consider an application; however, the rise of zero hour contracts over the past few years has presented new opportunities for prospective mortgage holders. The Office for National Statistics (ONS) defines a zero hour contract as an employment arrangement with no obligation to guarantee any set amount of work. This means that people can be employed on such contracts without the security of a regular income, making it more difficult for lenders to accurately assess their ability to pay back money borrowed. In order to mitigate this risk, lenders may want borrowers on zero hour contracts to have held a permanent job with the same company for at least 12 months and in some cases, up to two years. The type of role you’ve been employed in may also play a part – if it requires specific skills or qualifications, then this could be beneficial when applying for a mortgage. Do I need a mortgage broker? It is possible for those on zero hour contracts to find lenders that are willing to accept their application. A mortgage broker can be invaluable as they will have a firm understanding of which lenders are most likely to consider an application and find the best deals for you. They will also help manage your mortgage application, submitting all relevant information in order to make it as strong as possible. However, some lenders may require those on zero hour contracts to provide larger deposits than other borrowers, such as a minimum of 10%, and offer higher interest rates. Therefore it is important to shop around for the best deals available and look for specialist lenders who offer tailored mortgages for those on zero hour contracts. It’s also important to demonstrate a history of responsible money management, so in the months leading up to applying for your mortgage, make sure to keep your spending in check and save as much as possible. This will show lenders that you are capable of managing your finances responsibly. With some careful planning and research, zero hour contract workers can successfully secure a mortgage. If you are on a zero hour contract and looking for a mortgage, contact us today at 0151 622 0188 or email [email protected].
By Liam Coker 24 May, 2023
A limited company mortgage is a type of mortgage that is taken out by a limited company to purchase a buy-to-let property. This means that the ownership of the property is held by the company rather than an individual. A limited company that is set up for the sole purpose of buying, letting and selling property is known as a special purpose vehicle (SPV). Many landlords choose to use a limited company mortgage for their buy-to-let properties because of the potential tax benefits and access to specialist finance that may not be available with personal purchases. However, there are also some drawbacks and challenges that need to be considered before deciding to go for this option. Benefits of a limited company mortgage One of the main benefits of a limited company mortgage is that it can reduce the tax liability for landlords. This is because the company pays corporation tax on its profits, which is currently 19% in the UK, instead of income tax, which can be up to 45% for higher earners. Additionally, the company can claim tax relief on the interest payments and other expenses related to the mortgage, such as maintenance costs, fees and insurance. This means that more of the rental income can be retained by the company or reinvested into new properties. Another benefit of a limited company mortgage is that it can offer more flexibility and protection for landlords. For example, the company can have multiple directors or shareholders who can share the ownership and management of the properties. This can make it easier to transfer or sell the properties in the future, as well as protect the personal assets of the landlords in case of any legal issues or claims. Furthermore, a limited company mortgage can open up more financing options for landlords who want to expand their portfolio. Some lenders offer specialist products and rates for limited companies that may not be available for individuals. These products may have higher loan-to-value ratios, lower fees or longer terms than standard buy-to-let mortgages. Disadvantages of a limited company mortgage One of the main disadvantages of a limited company mortgage is that it can be more costly and complicated to set up and maintain than a personal mortgage. For instance, landlords need to pay £12 to register their SPV with Companies House and file annual accounts and tax returns. They may also need to hire an accountant or solicitor to help them with the legal and financial aspects of running a company. Another disadvantage of a limited company mortgage is that it can limit the choice and availability of lenders and products. Not all lenders offer mortgages for limited companies, and those who do may have stricter criteria and higher rates than for individuals. Landlords may also face additional fees and charges from lenders, such as arrangement fees, valuation fees and legal fees. A third disadvantage of a limited company mortgage is that it can affect the personal income and credit rating of the landlords. This is because the rental income received by the company is not counted as personal income, which may reduce the borrowing capacity of the landlords for other purposes. Moreover, if the company defaults on its mortgage payments, this may damage the credit score of the directors or shareholders who have provided personal guarantees. Conclusion A limited company mortgage can be a viable option for landlords who want to reduce their tax liability and access specialist finance for their buy-to-let properties. However, it also comes with some challenges and risks that need to be weighed against the benefits. Landlords should seek professional advice from an independent financial adviser or broker before deciding whether a limited company mortgage is suitable for their circumstances. If you are interested in a limited company buy to let mortgage contact us today on 0151 662 0188 or email [email protected].
By Liam Coker 24 May, 2023
When it comes to applying for a mortgage, using child maintenance as income can be a complicated process. Lenders have different criteria when it comes to taking into consideration the income from child maintenance payments and some may not accept it at all. To better understand how to include these payments in your mortgage application, here is what you need to know. When applying for a mortgage using child maintenance as income, lenders will typically need to know how long the payments are likely to be received and whether you have a formal agreement in place. Some lenders may accept up to 100% of the child maintenance payment while others may only consider 50-60%. It’s important that you research different lenders and their criteria before applying for a mortgage. It’s also important to note that the age of your child or children may be taken into account when a lender is considering your application. Lenders want to make sure that the situation is sustainable and affordable, even after those payments cease. This is why it’s crucial to have a formal agreement in place and to provide proof of your income from other sources. Finding the best mortgage deal when using child maintenance can be tricky, so it’s always a good idea to speak with an experienced mortgage broker. They will break down how your income is made up into what you earn and any child maintenance payments. Brokers can also search the market for you and may have access to exclusive deals you won’t find on the High Street. Overall, child maintenance payments can be included in a mortgage application but make sure you do your research and speak to an expert before making any decisions. It’s important to understand how lenders view these payments and the best way to ensure your application is successful. With the right advice, you can find a great mortgage deal that works for both you and your family. Adding to this, it’s important to remember that there are other factors involved in securing a mortgage when using child maintenance as income, such as credit score and criteria set by the lender. Make sure you understand all of these requirements before applying for a mortgage to ensure you have the best chance of success. If you have any questions regarding your mortgage affordability contact us today at 0151 662 0188 or email [email protected].
By Liam Coker 24 May, 2023
Buying a house is a big decision and one that requires careful consideration. Before you make an offer on a property, it's important to complete a house survey. A house survey looks in detail at the condition of the property and can help inform you about any potential issues that could affect your buying decision. When buying a property, it is important to conduct a thorough property survey before exchanging contracts. Not only does this allow you to renegotiate the price if any issues are found, but it also gives you the opportunity to back out of the purchase if major concerns such as subsidence or dry rot are identified. It is important to leave enough time for the survey to be conducted, as it can take up to two weeks to receive the report. A house survey is usually a requirement when you take out a mortgage and is always advisable if you are buying a property. It's important to note that the cost of a house survey is not included in the price of the home and it's up to you as the buyer to pay for it. However, having an independent survey done can save you money in the long run, since it may alert you to any potential issues that could be costly to repair or rectify. What are the different surveys available? The RICS Condition Report is the most basic type of property survey and is suited to relatively new properties that are less than five years old. It provides information on the superficial condition of the property and highlights any potential legal issues. However, it does not give any advice on repair requirements or look at the structure of the property in detail. If you are buying a listed building, a RICS report is even more important. The RICS HomeBuyer Report is the most popular type of property survey and provides a more detailed look at the structure of the property. It identifies any issues such as damp and subsidence and makes suggestions for necessary repairs. While the surveyor will not check behind furniture or walls, you can combine this survey with the mortgage valuation report for a more comprehensive survey at an additional cost of around £250-650. A snagging survey is recommended for new builds or newly renovated properties. It is carried out once the work is complete and detects any ‘teething troubles’ with the property, from structural complications to minor glitches such as doors not closing properly. These issues can then be addressed with the builder or developer. Buying a property through auction Before making an offer on a property, you should request a legal pack from the seller’s solicitor. This includes all of the information about the property necessary for you to make an informed decision before buying. You should also request to see the results of any surveys that have been done on the property and offer an independent valuation before bidding ends. This will help you make an informed decision about whether or not you want to go ahead with the purchase. Overall, completing a house survey is essential for anyone looking to buy a property. It provides vital information about the condition of the property and can help you make an informed decision about whether or not it is worth what you are paying for it. With this in mind, it’s always advisable to arrange a house survey as soon as possible after making an offer on a property. By doing so, you will have plenty of time to review the survey results and make any necessary changes before the exchange of contracts. If you are looking for a mortgage, contact us today at 0151 662 0188 or email [email protected].
By Liam Coker 24 May, 2023
A green mortgage is a type of home loan that helps homeowners to save money and reduce their environmental impact by investing in an energy-efficient home. The incentives for securing this type of mortgage vary between lenders and may include cashback for buying an energy-efficient property, or a lower interest rate. It is important to compare lenders' offers before taking out a green mortgage to make sure you get the best deal. In order to be eligible for a green mortgage product, certain providers will only lend on the property if it meets their criteria. One of these criteria is often the Energy Performance Certificate (EPC) rating of the home, which assesses its energy efficiency and environmental impact. Therefore, to improve your chances of accessing a green mortgage, you may want to consider investing in improvements that can increase your EPC rating. Energy Performance Certificate An energy performance certificate (EPC) is a document which indicates how energy efficient a property is. To qualify for a green mortgage, usually you will need to provide evidence of a valid energy performance certificate (EPC) that rates the home in terms of its energy efficiency. This can be provided by an authorised assessor and the EPC rating will range from A-G (energy efficiency bands) depending on the property’s level of energy efficiency. In addition, some lenders may require other forms of proof to show that the home has been built with green-friendly materials and techniques, the house builder may be able to provide you with these documents if the property is a new build. This could include an eco-survey, which assesses the building’s environmental impact and carbon emissions, or a sustainability report from a specialist organisation. To access your energy performance certificate visit the Government website here How can I benefit from a green mortgage? The incentives for a green mortgage can vary between lenders. Some lenders may offer cashback for buying an energy-efficient property, while others may offer a lower interest rate, a better rate will incentivise homeowners to make their home more energy efficient when looking to borrow money from a lender for their mortgage. If you are looking to do a mortgage application for additional borrowing on your current property then this is possible as long as the property meets the green mortgage lending criteria. Before you remortgage always check to see if you have any early repayment charges on the mortgage before you commit. Some lenders may lend extra money on top of your standard mortgage if you’re planning to carry out ‘green’ home improvements. Therefore, green mortgages could be a useful solution for those trying to make their existing property more sustainable Improving your EPC If you want to improve your current EPC rating there are steps that you can take to do this. Some of these steps are easy and simple and others can be a bit more costly. There are several ways to make your property more energy efficient and save money on utility bills, such as: Energy saving light bulbs Loft insulation Cavity wall insulation Hot water cylinder insulation Solar Panels Double glazing Replacing old boilers In conclusion, green mortgages are becoming increasingly popular as they offer homeowners the opportunity to access more favourable financing options whilst making their home more energy efficient. It is important to shop around and compare lenders' offers before taking out a green mortgage, so you can make sure you're getting the best deal for your particular circumstances. Improving your EPC rating may also help you access better deals in the long run. If you think your property or the property you are purchasing may be eligible for a green mortgage then speak to one of our mortgage brokers today to see if the property meets the criteria. Call us on 0151 662 0188 or email at [email protected].
By Liam Coker 23 May, 2023
When looking to buy any property for commercial use, such as an office, shop or restaurant, a commercial mortgage is necessary to complete the transaction. Even if you're buying a mixed-use property with both residential and business spaces, such as a pub with an attached flat or house above it, the same applies. In addition, specialised buy-to-let mortgages are needed to purchase residential properties intended for renting out. What is a semi commercial property? A semi commercial property or also known as a mixed use property is one that supports both residential and commercial elements together. For example, a pub or a shop with a flat above is semi commercial as there is a business and a residential aspect to the same building, they can be mortgaged separately and together. Semi commercial mortgages Semi-commercial property mortgages would be suitable for the following properties: Commercial units with flats connected Pubs with self-contained accommodation Businesses operating in the home Buildings with self-contained offices and flats Guest homes that are mortgaged They can be mortgaged together or separately but this type of mortgage will require a specialist lender, a specialist independent mortgage broker will have access to the correct lenders to have your application approved. Specialist lenders that are providing semi commercial mortgages may require additional documents compared to a standard mortgage due to both elements of residential and business being within one building. There will be a certain loan to value that you will need to meet. Also, there is no maximum loan size, however, the lenders may have a minimum loan requirement from 50k. Commercial Mortgages The process of securing a commercial mortgage is more complicated than that of a residential loan, as it requires an in-depth assessment of the business's cash flow and long-term security. Businesses can vary greatly so lenders will have their own specific criteria that you must meet in order to be approved for a loan. In general, commercial mortgages typically require larger deposits than residential loans and have shorter terms - often one to 25 years. You may need to raise the capital to fund the deposit from your business's own resources, so it's important to seek advice from both a mortgage broker and an accountant to make sure you get the best possible deal. To ensure that your commercial mortgage remains the most suitable option for your business, it is important to keep in touch with your lender on a regular basis and review your loan every couple of years. Your financial circumstances or those of the business may have changed over time, which could mean that another lender may be able to offer you a better deal. It is also important to keep up with any payments, as failure to do so could lead to the loan being called in early or your business is subject to additional fees or penalties. Conclusion Overall, finding a suitable commercial mortgage and making sure it works for your business requires careful consideration of the terms and conditions of the loan, as well as your own financial situation. You should take a holistic view of your mortgage to make sure it remains the right choice for you in both the short and long term. By doing so, you'll be able to reap the benefits that a commercial mortgage can bring. The process of securing a commercial mortgage can be complicated and time consuming, but is made much easier with the help of an experienced mortgage broker. They will be able to assess your requirements and advise you on the best options available for your business. A good broker will also know which lenders are most likely to approve your loan application, as well as help you to negotiate a favourable deal. So, if you’re looking for a commercial mortgage, it is always worth enlisting the help of an expert. If you are interested in a semi commercial or commercial mortgage contact us today on 0151 662 0188 or email [email protected].
By Liam Coker 23 May, 2023
Reviewing your mortgage with an advisor is a great way to get access to extra funds and make the most out of your biggest financial asset - your home. In 2023, remortgaging can offer you a range of benefits that can help you unlock financial freedom. Staying with the existing lender or remortgage elsewhere Choosing to stay with your existing mortgage provider is a much simpler process since you won't have to move lenders, resulting in fewer documents and costs associated with remortgaging however ultimately this may not be the best rate available based on your current circumstances and may cost you more if there are better deals available with other lenders. Remortgaging with your current lender is also better known as a product transfer as this remortgage process entails switching from your existing deal but staying with the same lender. If you need to raise money for things like home improvements then you will need to complete a further advance if you choose to stay with your existing lender, this usually requires additional checks and can be different interest rates. If you decide switching lenders is best for you, it can be beneficial as you may be able to access better rates and features. By taking advantage of the current market and switching to a new deal, you may be able to reduce your monthly costs if you secure one of the most competitive remortgage deals available. What are the pros and cons of a debt consolidation remortgage? One of the pros of consolidating your debt using a mortgage is that you can reduce your overall interest rates, especially compared to credit card debt. The high-interest rates on credit cards can accumulate quickly, leading to a longer period of time needed to pay off the debts. Conversely, a lower interest rate on mortgages makes them a more desirable option for consolidating loans, giving you the potential to pay them off sooner. Another benefit of a debt consolidation remortgage is that they can lead to more disposable income thanks to the lowering of monthly outgoings. This can help you to save money, and ultimately put you in a better financial position. However, there are also some cons to consider. One of these is the term of the debt, as mortgages are typically taken out over a longer period than a loan. Evidently, this could lead to paying off higher amounts over a longer duration. Furthermore, some may find that there are fewer options available to them when trying to secure mortgage deals that consolidate their debt. This is due to certain factors, including missed payments and high-risk lifelines, which can impact their credit profile. Another key risk is that your home is used as collateral when taking out a debt consolidation mortgage. This means there's always a risk of losing your property if your finances spiral, and bankruptcy may be your only option, which would also lead to losing your home. Can I remortgage early? If you are looking to remortgage early before your fixed rate deal has ended, an early repayment charge /exit fees may be payable which will need to be taken into consideration when discussing your affordability for the new mortgage deal. We will always advise you to remortgage before your existing deal goes onto the lender's standard variable rate as this is a much higher rate of interest. By considering a remortgage in 2023, homeowners have the potential to benefit from reduced monthly mortgage repayments compared to what they may be paying on their current deal, access additional funds or switch to a repayment mortgage - all of which could help you unlock financial freedom. Finally, remortgaging in 2023 can also give you the opportunity to switch from an interest-only mortgage to a repayment mortgage. This means that you would pay off more of your debt each month and could help you become mortgage free sooner. We can provide tailored advice and find the best solution for your needs. Get in touch today to see how we can help you make the most of remortgaging in 2023, email us at [email protected] or call us at 0151 662 0188.
By Liam Coker 23 May, 2023
Buying a property through an auction can be a great way to get a good deal on a property, but it is important to understand the process before committing. The first step in any auction purchase is to register with the auction company and arrange viewings of the property you are interested in bidding on. Having a mortgage in principle already in place can make the process a lot smoother, especially if you are planning to buy with a loan. Online Auction You will have access to a link which will take you to the website to start your bidding journey, you are able to see other people's bids and you can bid as many times as you want to. The online auction process usually lasts 21 days and bidding can go on for the whole 3 weeks, on the last day of the auction, people can bid right up until the very last second. If you are unsure of how this works you can contact the auction company and ask them to explain the process to you so that you are fully aware of what's involved. If you choose to use an online only property auction which is a modern method used, then you will be best speaking to the auction company or the estate agent advertising the property, for additional information if needed. Auction House When attending an auction house in person, be aware of the rules and regulations that will apply on the day. Before bidding at any auction, it is essential to have already completed any due diligence such as surveys or searches and obtained your mortgage finance, as you may be unable to get out of the contract once you have made a successful bid. Be sure to stay within your budget and if your bid is successful, it will be essential to organise all the necessary paperwork quickly. Additional auction costs If you are successful in the bidding stage, you may need to pay 10% of the sale price on the day as a deposit. The remaining 90% must be paid within 28 days otherwise, you could lose both the property and your deposit. An administration fee to the auction house is usually between £200 and £300. If your bid is successful, you’ll usually have to pay: 10% of the sale price on the day, as a deposit 1% - 6% in auction fees The remaining 90% around 28 days later – if you don’t pay this you’ll lose the deposit and the property An administration fee to the auction house – usually between £200 and £300 Stamp Duty Land Tax Conveyancing solicitor fees Survey costs Buildings insurance Finally, at any type of auction, it is important to remember that the auctioneer has the right to accept or reject any bid. If your bid is unsuccessful, you may still be able to make a private offer afterwards, however there will be no guaranteed that this will be accepted by the seller. Therefore it is important to go into an auction with realistic expectations and understand the risks involved. If you are interested in a property at auction and looking to purchase it with a mortgage contact us today at 0151 662 0188 or email [email protected]
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