Found your forever home? Looking to grow a family? Or simply thinking of downsizing? Whether country-life or city living, we can help.
Finding a property is hard enough these days, but when you find that dream home you can see yourself living in long-term, passions really start to burn. As far as your mortgage is concerned, purchasing your “forever home” has enough stress and strain, so a smooth transaction is what you need. If you are expectant parents or with a young family then the last thing you have time for is to be running around after mortgage lenders and valuers.
If it is a high demand area, especially within the catchment area of a desirable school, then speed can often be of the essence.
We will help you with the usual questions, such as the type of loan you should go for — fixed or tracker, for example — but in the current market, lenders are far stricter with their lending criteria. Because of this, the knowledge and contacts a professional mortgage broker like us have can be the difference between a costly mortgage and a competitive one.
We can provide the service you need, adept at knowing which lenders can not only get you the best rate, but also those who are able to move quickly so you don’t miss out.
We know which lenders take things like school fees and pension payments into account, which ones will include child benefits and how to maximise your borrowing capacity in the most sensible and comfortable way.
We are a hand to hold throughout the whole process, the fulcrum of your transaction to take the heat away from you by dealing with the estate agents, valuers, lenders, solicitors and anyone else you need us to talk to and ensure the deadlines are met.
What about my current mortgage and property?
When you move home you often have the choice to either take your existing mortgage with you, (known as porting) and securing it on the new property. This may be considered when you have Early Repayment Charges on your existing mortgage, for example, if you are 3 years into a 5-year fixed rate.
Although the mortgage is technically “portable”, this is not an automatic right and you will still have to apply again to your current provider and go through a full application and credit score process. If your circumstances have not changed this should not be a problem. If your existing mortgage is not quite enough you can always apply for a top-up mortgage from your existing lender. This will be at a different rate to your existing mortgage, so you need to watch out that the new loan matches the penalty period of your existing loan, so you can refinance the whole thing together without additional expense.
You should get professional advice to see if it is worth taking a whole new mortgage with a new lender or sticking with your existing provider. Don’t worry, we can do all those calculations for you, taking into account all the costs to make sure you choose the best option for you.
Should I keep my existing property?
This is one of the most frequent questions we get asked and the answer really depends on your overall financial situation. Many clients find they have to sell in order to fund the deposit on their new home and we can work to make sure that the timing of your sale and purchase works perfectly, however big the chain.
If you are lucky enough to be able to keep your existing property to rent out, you can obtain a buy-to-let mortgage on your existing property and capital raise funds to help towards the deposit on the new one.
There are some things to watch out for though, not least the fact that there are loads of rules you need to know about when becoming a landlord, for example, the property must have an Energy Efficiency Rating of at least an E before you can rent it out.
The amount you can borrow will depend upon the rental income you obtain as well as your personal tax rate. As a rough rule of thumb, a lender will want to see that the rental income received at least equals the monthly mortgage interest payments at an assumed rate of 5.5% and then stressed at 145%. There are some variations in this calculation and we can find out which one applies to you.
We also insist you take independent tax advice as the tax treatment of rental income has changed recently, which could push you into a higher tax bracket and mean you are no longer liable for certain government benefits.
You also need to bear in mind that if you keep your existing property you will have to pay an additional 3% Stamp Duty over and above what is already due on your new property. If you sell your existing property within 36 months you can claim this back.
What costs do I need to consider?
When you sell and buy a property it does seem that all you ever do is pay another fee and it is true it can be an expensive business. Depending on your circumstances we will sit down and make sure you know exactly who charges what and when they will be paid, so you don’t get any unpleasant surprises.
As a guide we have detailed the main fees you need to know about below:
Buying A Property
Stamp Duty – a government tax paid on homes costing £125,001 or more. Remember there is also an additional 3% charge on top of the current rates if at the end of the transaction you have 2 properties or more.
Survey / Valuation – the mortgage lender will want to do their own valuation and may charge you for this, though some now offer a free valuation. Either way, we recommend you get your own survey done for your own piece of mind. We can help recommend a reputable company who is able to produce either a Homebuyers Report or a Full Structural Report for you.
Solicitors/Conveyancers – You will need a solicitor to handle the purchase, provide a report on title and arrange for exchange and completion. We can help recommend a reputable firm to help you if you do not already have your own contacts.
Mortgage Lenders Fees – Yes, we all know lenders love a fee and sometimes they will charge a Mortgage Arrangement Fee, (from £195 to £1,999 which can be added to the loan), a booking fee, (usually around £99 to £199) as well as a Telegraphic Transfer Fee to send the mortgage monies to your solicitor of around £35.
Mortgage Brokers Professional Fee – Many of the best brokers will charge a professional fee for their services. This is often around £495 but can be up to 1% of the loan amount. We know we may be biased but we think this is the best value fee out of them all, helping to make sure you get the best rate to fit your personal circumstances and make sure you get the property of your dreams. To find out what and why we charge, click here.
Selling A Property
Estate Agent Fees – Estate Agents charge their fees to the sellers of the property and typically this will be between 1% or 2% of the agreed sale price. As with anything you may be able to do this cheaper yourself, but enlisting the help of a good estate agent may be more than worth the money as they will usually be able to obtain a higher price for you and take out the stress associated with organising viewings and keeping the chain intact.
Solicitors/ Conveyancers – As with a purchase you need a solicitor to handle the sale, making sure the other party buying your property does things right and ensuring the money gets to you. If you are buying at the same time it makes sense to use the same solicitor to avoid higher costs.
EPC – You will need to obtain a valid Energy Certificate for your property at a cost of around £80.
Removal Costs – Unless you travel light or plan to buy everything new you will probably need to book removal vans to help move those pesky boxes, which unfortunately are not going to move themselves!
Whilst this may not be exhaustive it shows you the sort of fees you need to budget for when selling and moving.
Hopefully, you feel a bit better now knowing everything involved in the buying and selling process, but if you still have questions then don’t worry; that is why we are here. Trust us to provide you with the mortgage cuddle you need for a smooth, calming process.