Services

The Right to Buy is a Government scheme that enables eligible tenants to purchase their council property, sometimes with a discount, and sometimes even without a deposit.

Eligible tenants have matched the requirements of spending at least 3 years (not always continuous) renting from a local authority and are secure tenants of a council or housing association owned property.

Being able to fund the purchase and having a good credit score, the scheme is available to all council tenants as long as they meet the full criteria for a Right to Buy mortgage.

When you are looking to purchase your property via a Right to Buy, the property will be valued at the full market price, with the government discount applied before the purchase is made.

First-time buyer – Individual/s buying a house or a flat and have not previously owned a property.

First-time buyer’s deposit – Deposit is the amount you have saved in order to purchase you first home, this will help determine how much you require to borrow as a mortgage. 

First-time buyer’s mortgage – What happens when you apply for a mortgage?, the mortgage lender will assess your affordability by looking at your annual salary and any other income you receive, as well as all of your outgoings, including credit card and loan debts, household bills, childcare, travel and general living costs.

When do I apply for a mortgage? – Before you start viewing properties, it is a good idea before you start viewing properties that you obtain a mortgage in principle from a few lenders. This is return will give you an idea of how much you are able to borrow. Furthermore, this will also prove to estate agents you are serious about buying

You may be able to buy a home with other people if your deposit and mortgage amount isn’t enough to get you onto the property ladder, either a friend, partner, spouse or a family member. Including their income and your income and deposit, you may be able get a larger mortgage and get onto the property ladder.

It is important to understand that a joint mortgage could mean that you and the other tenants own equal parts of the property, which is known as  joint tenants – or you might own a share of the home, which means tenants in common, This might not be the same amount as the others.

It is an excellent idea to seek independent legal advice before deciding to take out a joint mortgage.

A guarantor mortgage can also facilitate you in taking out a mortgage for your first home, as a guarantor. This is most likely to be in the form of a parent or close family member, who promises to cover any missed mortgage repayments if you can’t afford them. The guarantor’s name will not go on to the mortgage either. 

It is an excellent idea to seek independent legal advice before deciding to take out a guarantor mortgage.

If you’re a first-time buyer and you earn less than £80,000 (£90,000 in London) a year per household, you might be able to take out a shared ownership mortgage.

A shared ownership mortgage would mean that you will take out a mortgage for a certain percentage of a property, and a landlord or the government will own the rest. You will then pay a reduced amount of rent on the value of the property that’s not in your name. You are able to buy a larger percentage of the property once you have enough funds to be able to afford this.

A re-mortgage happens when you change the mortgage you currently have on your property. This is done by either switching it to a new mortgage lender, or by moving to a new deal with your existing lender.

How much can I borrow with a re-mortgage? – The mortgage amount you will be able to borrow when you re-mortgage your property will depend on your own financial situation. Mortgage Lenders will look at your income and expenditures and conduct a credit search before deciding to lend.

What is the cost or re-mortgaging? – The cost of your re-mortgage will be decided by the interest rate your mortgage lender sets. Lenders will usually decide this by considering the following:

• Your loan to value
• Your credit history

What Fees are involved in re-mortgaging? – The following fees that can occur are:

• Arrangement fees: a number of mortgages have arrangement fees which can cost anything up to £2,000.
• Legal fees: you may also have to pay for a solicitor to take care of any conveyancing if you are to re-mortgage with a new mortgage lender.
• Administration fees: the mortgage lender may include charges for the cost of setting up your re-mortgage.
• Valuation: A valuation will also need to take place to make sure the property value meets the needs of the new lender.

A buy to let mortgage is evaluated on the rental income that the property is likely to generate. Mortgage Lenders will typically need the rental income to be at least 125% of the monthly mortgage payments if this is going to feasible.

How much deposit will I need? – As a general rule the more deposit you are able to put down, in return this will result in you getting a better mortgage deal. A lower mortgage Interest rate means lower monthly payments and a greater margin between your rental income and your mortgage costs.

25% of deposit is required. Some lenders are happy with a deposit as low as 15%, considering the rental income is enough.

Repayment Mortgage – On a monthly basis you will repay money that has been borrowed along with interest on the capital remaining. At the end of the mortgage term, as long as all payments have been made, you will have repaid the entire loan. A repayment mortgage is also known as a capital and interest mortgage because you are paying the capital and interest of the mortgage loan.

Interest-Only Mortgage – Over the term of your loan, you do not pay any capital off the mortgage, just the interest on it. Your monthly repayments will also be lower. At the end of the mortgage term, you have to pay the total amount in full (Capital Remaining). People with an interest only mortgage will invest their mortgage, meaning in return they will then use this investment to pay the mortgage off at the end of the mortgage term.

Fixed Rate Mortgage – The mortgage lender guarantees your interest rate will stay the same for a set amount of time (the ‘initial period’ of your loan), which is typically anything between 1–10 years. When this initial period ends, you’ll be switched to the lender’s default rate (or standard variable rate).

Standard Variable Rate (SVR) mortgage – SVR is a mortgage lender’s default. Each mortgage lender is free to set their own SVR, and adjust it how and when they like. After the fixed mortgage deal expires, a lot of people find themselves on an SVR mortgage by default. This may not be the best rate as this rate will be higher meaning monthly payment will also increase.

Discounted Rate Mortgage – Over a set period of time, you get a discount on the lender’s Standard Variable Rate. This is a type of variable rate, so the amount you pay each month can change if the lender changes their SVR, which they are able to do as an when they like.

Tracker Mortgage – a type of variable rate, which means you could pay a different amount to your lender each month. Tracker rates work by following a particular interest rate to determine what you pay each month (for example, the Bank of England base rate), then adding a fixed amount on top. If the base rate goes up or down, so does your interest rate.

Capped Rate Mortgage – These are variable mortgages, but with a cap on how high the interest rate can rise.

Cashback Mortgage – the mortgage lender pays you a lump sum of cash. This can be around £500–£1,000. You might find that these mortgages don’t come with other incentives, like free valuations or free legal’s, however, why don’t you get a member of our team to check.

Flexible Mortgage -a flexible mortgage will allow you to over pay and underpay on your mortgage, and also allow you to take payment holidays if this is required. It is worth noting a flexible mortgage may result in the interest rate being higher. A type of flexible mortgage is shown below (an Offset mortgage)

Offset Mortgage – this mortgage type allows you to use savings (account must be held with the same provider as the mortgage) to reduce the amount of interest you need to pay on your mortgage. For example, You have £10,000 in your savings account, and £100,000 left to pay on your mortgage. With an offset mortgage you only need to pay interest on (£100,000 – £10,000 =) £90,000 of your mortgage

What Fees are involved in re-mortgaging? – The following fees that can occur are:

• Arrangement fees: a number of mortgages have arrangement fees which can cost anything up to £2,000.
• Legal fees: you may also have to pay for a solicitor to take care of any conveyancing if you are to re-mortgage with a new mortgage lender.
• Administration fees: the mortgage lender may include charges for the cost of setting up your re-mortgage.
• Valuation: A valuation will also need to take place to make sure the property value meets the needs of the new lender.