23 March 2017

Be ready for some fairly detailed questions when submitting an application!

The remortgage market is awash with lenders actively looking to attract new customers. Whether you want to fix your monthly payments for a period of time, or you fancy a low rate tracker mortgage, or maybe both - a tracker rate with the option to fix later on, there are plenty of great products currently available.  Many lenders are offering superb remortgage opportunities with minimal costs to change, including free standard valuations (lender survey on your property) and legal costs (solicitors or conveyancer to register the charge in the new lenders name).  Rates are competitively low and mortgage product choice is at its highest for some time. So pull out that paperwork and have a no obligation conversation with your local, independent and whole of market mortgage advisers!

Alternatively, if you are looking for additional funds, but are already on an attractive rate with your lender, there are other options rather than a full remortgage. Depending on the amount already lent as a mortgage, compared to the value of the property, most lenders will allow a ‘secured loan’ to be added as additional borrowing, right up to 95% of the property value.   A secured loan is a 2nd, or subsequent charge which allows the equity in a property to be used as security.  The secured loan is usually repaid over a shorter term than a mortgage, circa 3-7 years, but the term can be longer, although this will increase the amount of interest repaid.   Second charge lenders are also in the midst of a price war.  Many have reduced rates, one or two new lenders have entered the market and rates can now be below 4%.  Rates vary depending on the customer’s circumstances and current level of borrowings.  Make sure you review all options available to you and always seek advice.

In either of the above the lenders are looking more carefully at affordability, not just for now but also any potential changes that may affect your income in the next five years. Be ready for some fairly detailed questions when submitting an application!

09 March 2017

A Place for Landlords - Horsham!

My column has to be submitted by Tuesday so, by the time you read this, the budget will have taken place and we will all be digesting the Chancellors latest updates.   However, we already know that people with Buy to Let properties will see their tax bill increase as the mortgage interest and other financial costs relief begins it's phase out from April onwards.   Expect this to be under the spotlight, although I don't think there will be a back track.  I'll cover any other property finance surprises in future columns.

Whilst on this subject, we're bringing back our popular ‘A PLACE FOR LANDLORDS  INVESTOR PROPERTY’ show in April!  This year it will take place at the Drill Hall, Denne Road, Horsham where you can learn about the new tax relief changes, the new PRA rules surrounding Buy to Lets and legal entities as well as meeting many local specialist companies.  These include AToM, Kreston Reeves Accountants, Coffin Mew Solicitors, Courtney Green Lettings, Leaders Lettings, Lady Decorators, The National Landlords Association, Durrants Removals and more!   It is likely to be a packed event and we expect the free Seminars to be oversubscribed, so BOOK EARLY!  To find out more, email landlordshow@atomltd.co.uk or call 01403 27 26 25.  A Place For Landlords - 1st April - 9am to 2pm- Drill Hall, Denne Road, Horsham RH12 1JF.

And finally, staying with Buy to Lets, the minimum deposit can be as little as just 15% although, at this level there are fewer product options.  With a 20% deposit, the number of products increases substantially, as do those with a 25% deposit, and so on.  Rates in this sector are now so low that there's actually not a huge gap between Buy to Let rates and normal Residential rates, as there used to be. 

As the new taxation changes are implemented, we are seeing a lot more people purchase properties in a Limited Company name.  This sounds complicated, but any good property accountant will be able to advise you at the early stages if this is more beneficial to you, rather than buying in a personal name (see the free seminar at A Place for Landlords!).  The most important thing is to ensure any property investment outlay gives you the best return possible and professional advice should always be sought.

02 March 2017

Right to Buy or Shared ownership?

Over the last few weeks, we’ve seen a marked increase in enquiries for Right to Buy properties and those looking to purchase on a Shared Ownership basis.

Right to Buys are usually via the local council selling their properties to the existing tenant at a discounted price.  This discount can be up to £77,900 (£103,900 in London) and applicants must have been a public sector tenant for at least three years.  Some lenders will allow borrowing of up to 100% of the purchase price.  If you resell your home within five years you will usually have to repay some or all of the discount you received, however remortgaging is usually allowed in this time period.  There are other schemes available to housing associations and the Government has plans to extend Right to Buy to more housing association tenants.  So if you think you are eligible, register on the Government's website.

Shared Ownership Schemes are normally provided through housing associations.  You buy a share of your home, between 25% and 75% of the property value, and pay rent on the remaining share to the housing association.  You usually have the opportunity to purchase a bigger share of the property later on (normally called ‘staircasing’).  Local housing associations must confirm your eligibility in order to join these types of schemes.

Both schemes are proving popular in the local area and a wide number of lenders are looking to lend in both scenarios and to a number of different customer types, even those who may have had financial credit blips in the past.  So always seek advice.

Finally, first time buyers generally are in the spotlight again with many great rates and low fee products available.  One in particular, launched over the last few weeks, will allow customers to achieve, subject to an affordability assessment and minimum income levels, a loan equivalent to six times their income.  Yes SIX!  With a 15% deposit required and a competitive rate of interest, this product is an exclusive from the Tipton & Coseley Building Society.  Obviously terms and conditions apply.  There still needs to be a lot more innovation in helping the First Time Buyer sector overall, but huge credit to those trying to assist in the current climates.