Mortgages and Loans

Mortgages/Remortgages

In recent years the number of different mortgage deals available has increased, creating a multitude of different mortgage options. These include a number of different repayment options, interest rate and incentive offers. This increased choice of mortgages has caused remortgaging to increase in popularity in recent years. With mortgage lenders offering introductory incentives and interest rate discounts borrowers are now starting to treat mortgage lenders much more like gas and electricity suppliers – Shopping around carefully in order to make massive long term savings.

A mortgage is no longer seen as something that is only taken out when buying a new house, they have become increasingly easy to switch, with many lenders covering the costs and legal fees of doing so, and as such there are real benefits to be had from switching mortgages. Mortgages are now available for people wishing to buy to let, people with no deposit wishing to buy a home, people with adverse credit history, people who already own a home and want to switch lenders and of course your average home movers and first time buyers. We cover every lender in the UK to find you the right mortgage, even if you fall into one of these categories:

  • Self employed
  • Poor credit history
  • Mortgage or rent arrears
  • Bankruptcy
  • IVA or Trust Deed
  • Defaults or County Court Judgements

To speak to an independent advisor, for free and without obligation, contact us via the enquiry form or call us on 0800 970 4242.

Buy–to–let

If you intend to buy a property for renting then you will need a buy to let mortgage. The buy to let mortgage will normally be secured against the property to be let but on very rare occasions a second charge will be secured on your main residence.

The amount you can borrow is normally dictated by a number of variables but is strongly linked to the amount of rental income you might expect to receive. Buy To Let mortgage lenders differ in approach. For example, one buy to let mortgage lender may require the projected rental income to be 30% higher than your mortgage payment. Another lender may require the projected income to be 10% higher than your mortgage payment. This is to allow surplus rent to cover other costs such as maintenance to the property and periods when there are no tenants living in the property.

Generally there has been a recent relaxation in rental requirements resulting with some buy to let lenders offering mortgages without a need for surplus rental income (rental income equal to the mortgage payment). It is also possible that buy to let mortgages will provide an option to make up any shortfall in rental income by showing surplus personal income (surplus personal income meaning disposable income). For example: a three times salary multiple and half the rental income or base the amount that they will lend on your salary and the existing loan commitments that you have, but then apply the deduction rule.

This means that they will lend up to 3.5 times your income (or whatever salary multiple applies), minus a representative figure for annual mortgage payments worked out at a pre–set level of interest.

Another variable used by Buy To Let mortgage lenders is the amount of deposit, deposit being the amount of money you personally have to put towards the property value. Typically, you’ll need to pay a deposit of around 15% of the value of the property. Some buy to let mortgages allow you to put in only 10%. No money down buy to let mortgages can be arranged but you will need to have high projected rental income to make the deal stack. The other point to note regarding the amount of deposit relates to the mortgage interest rate charged. The charge rate is likely to be lower with an increased deposit but don’t expect a deposit in excess of 25% to make a dramatic difference to the charge rate.

It is not just the deposit that will effect the maximum borrowing it is also the size of the mortgage. The maximum borrowing per a property ranges from £150,000 to £3 million. Also at the high end of the range the mortgage lender will probably restrict the ‘Loan To Value’, otherwise known as the LTV (LTV meaning the % you can borrow as a proportion of the property value). For example loans up to £1 million tend to be arranged with a Loan To Value of 85%. Loans over £1 million tend to be arranged with a LTV of 75% to 80%.

If you build a portfolio of buy to let properties with a particular mortgage lender then you need to be aware of the lenders overall exposure to any one client. For example a buy to let mortgage lender may only allow a client to borrow £5 million. Whilst £5 million may not be too restrictive a few lenders set their exposure limit as low as £500,000 (£500,000 may not even allow a landlord to purchase a property in central London).

To speak to an independent advisor, for free and without obligation, contact us via the enquiry form or call us on 0800 970 4242.

Secured Loans

As the name suggests, Secured Loans are only available to homeowners who can secure the loan against their property. Raising funds against the value of your home gives you access to far larger sums of money than are normally available with unsecured loans. Secured Loans are also referred to as Home Loans, Homeowner Loans and Mortgage Loans.

The amount available to borrow with secured loans can vary and could be anywhere between £3,000 and £500,000. Secured loan repayment terms can also vary from 3 to 30 years, with the most common being 10, 15 and 25 year terms.

The actual amount you can borrow with secured loans depends on how much equity you have in your home. For example, if your property is worth £250,000 and your outstanding mortgage is £180,000, you have £70,000 equity. If you have a considerable amount of equity in your property, you may be better off remortgaging as opposed to taking out a secured loan.

Some secured loan companies offer loans up to 125% of the value of your property, effectively allowing homeowners with negative equity to borrow money.

Some lenders specialise in bad credit secured loans. The rates on such loans can be higher than if you were a good credit risk. This is also normally the case for secured loans on houses with negative equity. As a general rule, however, a secured loan normally offers lower interest rates than an unsecured loan.

Loans secured on your home – think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. BrightSide Mortgages Limited is authorised and regulated by the Financial Services Authority for insurance mediation activities only.

To speak to an independent advisor, for free and without obligation, contact us via the enquiry form or call us on 0800 008 7366.

Equity Release

An equity release plan allows you to release a percentage of the value of your home. The interest accrued in this plan is in line with the appreciation (or in rare instances, depreciation) of the value of your home. For example, if you choose to release 20% of the value of your home, the lender will receive 20% of the value of the property at the time of the sale.

Your home will be valued by a surveyor working with the lender. You will not receive the full market value of your home as the lender is offering you a tax free lump sum and is allowing you to live in your home rent free.

With this plan, your age is a primary factor in determining the allowable surveyed value of your home. Other factors such as your health, gender and the estimated future value of your property will also be taken into consideration.

The loan must be paid off on the sale of your house, therefore this plan may be unsuitable for anyone wishing to leave a complete property (as opposed to the monetary value of the property) as an inheritance for their next of kin.

To speak to an independent advisor, for free and without obligation, contact us via the enquiry form or call us on 0800 970 4242.

Typical 7.5% APR variable

BrightSide Mortgages Limited is authorised and regulated by the Financial Services Authority (www.fsa.gov.uk). The overall cost for comparison is 7.5% APR. The actual rate will depend on your circumstances. Please ask for a pesonalised illustration. Not all forms of mortgage are regulated by the Financial Services Authority. A fee is chargeable only upon completion, typically £995.00.

BrightSide Mortgages Limited, Registered Number: 05529511. Registered at 21 St. Thomas Street, Bristol. BS1 6JS. Registered in England and Wales. BrightSide Mortgages Linited is a member of the FISA - www.fisa.co.uk

Not all the above products are regulated by the Financial Services Authority.