Mortgage Broker in England

A first-time buyer mortgage is a type of mortgage that has been formulated specifically for those who are trying to make their first step into the property market, whether by buying a new house or making your first ever property investment. A range of deals is available for first-time buyers and incentives such as cash-back schemes. Some companies may even offer you 95% mortgages under which you are only required to pay a 5% deposit, and in rare cases, there is no deposit at all. It is essential to remember that with such incentives, there is always a strict affordability criterion you must qualify.

The scheme is designed to help first time home buyers who cannot afford other loan-to-value mortgages due to having an insufficient deposit.

The amount an applicant can borrow is directly linked to the expected rental income. Lenders tend to stress the rental income being at least 25-30% more than the mortgage payments. The LTV (loan to value) determines how much can be borrowed, which is the percentage of the price of the property that your lender is willing to give you. The LTV can be up to 95% of the property value on a standard mortgage. However, BTL properties tend to have a lower LTV, which can be up to 75%. This further means that the applicant will need at least a 25% deposit, alongside funds that may be needed for other payments such as fees and money to get the property ready for the tenants.

A remortgage is when you decide to modify your existing mortgage contract for another one, either by switching it to a different lender or moving to different rates with your existing lender. When your current mortgage deal is near to ending the initial interest rates are also expired so you will be regressed to the lender’s standard variable rate (SVR) which is likely to be higher. In this case, remortgaging can be a good choice to move to lower interest.

Before you can use the right-to-buy scheme, there is a specific eligibility criterion you have to meet, which includes the following

• It is essential that you are residing in the property as your primary and only home. 
• The property must be only for you and your family; no spaces should be shared with any outsider. 
• There must be a secure contract existing between you and the landlord.
• It would help if you had a public sector or council landlord for at least three years (it doesn’t need to be three years in a row).
• You should be clear of any lawful issues or debts. 

Commercial and residential mortgages work more or less the same way; however, there are a few differences: 

• Any estate that is used for security can only be used for commercial use or a mix of both commercial and residential purposes. 
• You can not get a commercial mortgage on a fixed rate 
• Commercial businesses usually come with a higher interest rate and higher risk than residential mortgages. 
• In a commercial mortgage, the DIP (decision in principle) is always a verbal commitment. 
• The time frame of a commercial mortgage is between 5-12 weeks which is much more than a residential mortgage.