Mortgages

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

– For new clients, we charge an initial engagement fee of £250

– For existing clients, we charge no engagement fee, i.e. £0

– We also charge a small loan fee of £499 , on application, if the value of the mortgage loan/(s) are less than or equal to £300,000. However, if we are doing more than one mortgage for a client, i.e. a Let-to-Buy scenario, and the cumulative value of the mortgages is greater than £300k, then we do not charge the small loan fee.

Before meeting with a prospective mortgage client we will qualify all mortgages over the phone.

For this small engagement fee, we can take the hasstle out of applying for a mortgage/remortgage. This includes providing you with options, advice and implementation, saving your precious time and money: so why would you go directly to your bank?!

Whether you are a first time buyer, potentially moving back to the UK to purchase your first home, or are looking to buy a bigger home, a mortgage will normally be required. Typically, a lender will provide a secured loan to purchase the property which you then pay off in monthly instalments. The contract typically lasts for 25 years (although this period can be longer or shorter depending on your needs).

Similarly, if you are looking at consolidating your debts, raising money for home improvements, or looking for a better monthly payment than you currently have, you could look at remortgaging your property – this involves moving your current mortgage to a new arrangement, either with your existing lender, or a new one.

If you want to help someone else obtain their own home by using your financial stability, such as children who are looking to get on the property ladder, it is possible for you to act as a guarantor for their mortgage, to enable them to get a larger loan than they would otherwise be able to afford. In this case, the lender will normally require you to offer your property as security against the guaranteed part of the mortgage.

Whatever your mortgage requirement, now is a good time to take advantage of the all-time low mortgage interest rates (linked to the base rate of 0.5%). The cost of monthly repayments can vary, depending on the type of mortgage chosen:-

• Tracker mortgages follow the UK base rate i.e. the initial interest rate may be the base rate + 1.5%.
• Another type of mortgage is a fixed rate mortgage – this typically has a fixed initial interest rate for a period of approximately 2 to 10 years before the rate is re-evaluated. The main benefit of a fixed mortgage is the ability to budget for the mortgage without the risk of change to the payments, however, they tend to have a higher initial rate than tracker mortgages.
• Repayment mortgages mean your monthly repayments cover both capital and interest on the loan. As the term continues, the amount outstanding on the loan reduces so the full amount of the loan will have been repaid at the end of the loan.
• With an interest only mortgage, your payments to the lender cover only the interest on the loan (ie. you do not repay any of the capital). This will reduce your monthly payment, however, your debt does not reduce over time the full amount of the loan still has to be repaid to the lender at the end of the term, so you will need to ensure you have the money or an investment vehicle to cover this.

A mortgage is secured against the property you are purchasing; this means that if you are unable to keep up with the monthly repayments the lender will repossess your home.

The home loan market is complex and there are many different mortgages to choose from. Our role is to save you time and effort by recommending the most appropriate solution, and stop you missing out on the most cost effective way of arranging your loan. We can also clarify the terminology, benefits, risks and associated costs, such as stamp duty, of borrowing to buy or remortgage your home.

The benefit of seeking whole of market mortgage advice is that you will get access to all the non-directly brokered mortgages available across the market place, i.e. not limited to a select few lenders, so you are more likely to get a better rate. Also, taking advice from a financial adviser as opposed to a mortgage broker is advantageous because the adviser will look at the mortgage in a holistic context, so the mortgage is going to fit into your financial plan and work for you both in terms of growth and risk hedging.

We specialise in high value loans, and brokering mortgages for Limited company directors, as well as releasing equity from an existing home, converting that to a Buy-to-Let and using funds towards a deposit for the purchase a larger residential home.

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Borrowing to invest in a rental property

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

– For new clients, we charge an initial engagement fee of £250

– For existing clients, we charge no engagement fee, i.e. £0

– We also charge a small loan fee of £499 , on application, if the value of the mortgage loan/(s) are less than or equal to £300,000. However, if we are doing more than one mortgage for a client, i.e. a Let-to-Buy scenario, and the cumulative value of the mortgages is greater than £300k, then we do not charge the small loan fee.

Before meeting with a prospective mortgage client we will qualify all mortgages over the phone.

For this small engagement fee, we can take the hasstle out of applying for a mortgage/remortgage. This includes providing you with options, advice and implementation, saving your precious time and money: so why would you go directly to your bank?!

Whether you are looking at buying-to-let, where you are borrowing to invest in a rental property, or letting-to-Buy, if you want to turn your current home into a house that generates income, the Buy-to-let mortgage market is a specialised one.

Lenders generally view buy-to-let mortgages as higher risk than residential mortgages because they know that many landlords rely on rental income to make the mortgage repayments and if the property is vacant for a period, there is no income. Because of this perceived risk, interest rates tend to be higher than residential mortgages, and the lender will usually demand a higher deposit. Stamp duty charges are also 3% higher than residential mortgages.

Typically in the current market, you will struggle to borrow more than 75% of the property value, and any lender will look for rental income that covers around 125% – 145% of the mortgage repayments.

However, despite the risks and costs associated with buying-to-let, the main benefit is for its investment potential – both capital growth on the value of the property and the income it generates in rent. The buy-to-let market that exists today has a huge part to play as first time buyers are getting older and younger people are renting.

When borrowing to invest in a rental property it is important to ensure you have a clear understanding of the process, benefits, risks and associated costs. By seeking whole of market mortgage advice, you will get access to all the non-directly brokered mortgages available across the market place, i.e. not limited to a select few lenders, so you are more likely to get a better rate. Also, taking advice from a financial adviser as opposed to a mortgage broker is advantageous because the adviser will look at the mortgage in a holistic context, so the mortgage is going to fit into your financial plan and work for you both in terms of grown and risk hedging.

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Mortgages for the self-employed

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

– For new clients, we charge an initial engagement fee of £250

– For existing clients, we charge no engagement fee, i.e. £0

– We also charge a small loan fee of £499 , on application, if the value of the mortgage loan/(s) are less than or equal to £300,000. However, if we are doing more than one mortgage for a client, i.e. a Let-to-Buy scenario, and the cumulative value of the mortgages is greater than £300k, then we do not charge the small loan fee.

Before meeting with a prospective mortgage client we will qualify all mortgages over the phone.

For this small engagement fee, we can take the hasstle out of applying for a mortgage/remortgage. This includes providing you with options, advice and implementation, saving your precious time and money: so why would you go directly to your bank?!

Can contractors get a mortgage?

The short answer is YES, but, contractor mortgages are complicated, and your eligibility is dependent on your personal situation.

For the self-employed – freelancers, sole traders, individuals, limited companies and contractors – it can be harder yet, as proving your affordability becomes the biggest factor. However, if your income as a contractor is strong enough, you should still be able to gain access to the same range of mortgage products as those in permanent roles.

How to get a mortgage when you’re a contractor

From mortgages to credit cards, lenders make their lending decisions based largely on risk. Mortgage lenders are less bothered by what you do for a living – and how often you do it – as whether you are likely to make your monthly repayments in full and on time, and on a regular basis.

As contractors will have a fixed end date with no guarantees of renewal, lenders may have a question mark over whether that income is likely to be ongoing. So being able to show evidence of regular, sufficient and sustainable income is crucial, to give the lender confidence that you can take on the mortgage.

How contractors can prove their income to mortgage lenders

Self-certification mortgages – where you simply assured the lender how much you earned- are no longer an option in today’s market and showing hard evidence of what your income looks like is key.

Lenders vary in their approach. Some specialist lenders multiply your contract day rate by the number of days worked each week over 12 months, minus allowing for a four-week holiday, while some take a close look at your tax returns. You would probably need to show:

For Limited companies – Two or three years’ worth of SA302 tax year calculations and accounting – including the salary you take and any dividends you pay yourself.

For Sole traders – Two or three years’ worth of self-assessment tax returns and accounting. While usually your accountant tries to keep the net profits as low as possible, so you pay less tax, ironically for a mortgage application the higher the income, the better it is.

They are also likely to want to see bank statements to show evidence of your income and your outgoings, much like regular mortgage applicants, to demonstrate your ability to afford monthly repayments, as well as proof of future earnings to show that your prospects are good.

Showing that you have a good credit rating is important too, so managing credit accounts well, paying bills on time and staying within your credit limits is especially good practice.

To find a great mortgage deal and have a seamless experience, speak to a Chartered Financial Planner and mortgage expert in Maidenhead or Windsor today.

Not sure what to ask? Call today on 01628 308138

Financial Planning for People & Businesses Across the Thames Valley

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Ask a question or make a no obligation enquiry by email

Finance FAQs

A list of clear answers to questions frequently asked by my clients

Finance Jargon

A simple guide to help clarify the confusing terms and financial jargon

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There are two types of Equity Release (ER); Lifetime Mortgages (LTM) and Home Reversion (HR). The first involves borrowing money against the value of your home. The second involves selling some or part of your home. What these arrangements have in common is to allow you to remain in your own home of the rest of your life or until you sell your home or permanently go into a care or nursing home. This will of course reduce the value of your estate, and the amount your heirs will inherit.

Equity release will reduce the value of your estate and can affect your eligibility for means tested benefits.

Equity Release and Lifetime Mortgages have up until recently had a stigma associated with it.

The good news is that times are changing for the better. Advice and product transparency, quality and availability is now much improved across the industry. So, this product area can definitely have a legitimate place in asset rich / cash poor people’s (> 55 yoa) financial planning strategy.

The main reasons that people look to release equity from their homes:

• Incredible growth in house pricing over the last few decades and as a result many +60 yoa people have built up large amounts of equity in their homes.
• Often people who have large amounts of equity in their homes, don’t necessarily have much cash or income.
• People are living longer, and as a result many retired people have insufficient income from their pensions to sustain a satisfactory lifestyle.
• Many people have become attached to their homes and do not want to leave their property.

Understanding whether it is actually suitable for someone to release equity from their home is perhaps the most important part of the process.

Releasing equity from our homes can be a valid and very useful financial tool and one that should not to be shunned simply because of historical negative press.

If you are thinking about releasing equity from your home and would like to deal with one familiar person who genuinely cares about doing the right thing for you, then get in touch with Alex and find out whether releasing equity from your home is the right thing for you or not.

We are a member of the Equity Release Council , click to find out why this matters ( Equity Release Council ).

Lifetime Mortgage

• More common than home reversion
• Take out a mortgage on part of your property at a higher rate of intrest than normal. This gives you a lump sum
• You don’t have to make monthly payments against this but some plans will allow it
• The intrest rolls up until death, sale or you go into long term care
• The remaining payment is taken from your estate
• “No negative equity guarantee” means once your proprerty is sold and the fees for agents etc have been taken out, if the value doesn’t cover the whole of the debt your estate is not liable to pay (Equity Release Council Standard)

Home Reversion Plan

• Less common and may require you to be older
• You sell a portion or all of your house at below market value, and stay there rent free with an agreement to maintain the property
• Can recieve the money in a lump sum or regular payments
• On death or moving into long term care the property is sold and proceeds are split based on the share
• “No negative equity guarantee” means once your property is sold and fees have been paid, if the value doesn’t cover the value of the outstanding loan your estate is not liable to pay (Equity Release Council Standard)

Find us (Old Bray Financial Ltd) on the Equity Release Council register

Not sure what to ask? Call today on 01628 308138

Financial Planning for People & Businesses Across the Thames Valley

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Ask a question or make a no obligation enquiry by email

Finance FAQs

A list of clear answers to questions frequently asked by my clients

Finance Jargon

A simple guide to help clarify the confusing terms and financial jargon

• Home
• About Me
• About You Getting Off to a Good Start
• Increasing Responsibilities
• Growing Your Wealth
• Planning a Safe & Secure Retirement
• Enjoying Your Retirement

• Savings and Investments
• Mortgages
• Insurance
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• Pensions and Retirement Planning
• Estate Planning

A bridge loan is a short term loan, 6-12 month term, used in the most by property speculators but also by people who are renovating for example. It is a means to fund a project, where the end goal may be to sell the property or buy another.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

For advice and services in relation to bridging loans we refer customers to a specialist broker.

What is a bridging loan?

A bridge loan is a short term, 6 to 12 months, secured loan. Amounts lent will vary according to personal circumstance and will normally be secured against property.

When are bridging loans used?

Short Term Bridging Finance is used when short term funding is required, quickly. In this case a bridging loan is often the most cost effective solution.

What are bridging loans used for?

• To purchase a bargain. For example, an opportunity to buy a subpar priced property may be the driver for a needing bridge loan. In this instance where a mortgage is not required, using a bridge loan might be the difference between securing the property and not securing the property.
• To purchase a non-mainstream property which cannot be used as collateral with mainstream mortgage lenders.
• To fulfill a large order. Upon receiving a large order your business may need short term funding, fast.
• Cash Flow. To provide a cash injection to your business in order to pay bills whilst waiting for invoices to be paid or until an alternative finance facility is put in place.

• As an established referrer with strong lender relationships, we are confident that we will be able to find the most competitive bridge loans to suit your circumstances.

Get in touch to discuss your bridge loan requirements.

Not sure what to ask? Call today on 01628 308138

Financial Planning for People & Businesses Across the Thames Valley

Contact Us

Ask a question or make a no obligation enquiry by email

Finance FAQs

A list of clear answers to questions frequently asked by my clients

Finance Jargon

A simple guide to help clarify the confusing terms and financial jargon