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Our property investment expert is Jeni Browne, Sales Director at
Mortgages for Business
www.mortgagesforbusiness.co.uk
Tel: 0345 345 6788
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Question
Can we still take advantage of the Help to Buy ISA?
My daughter is saving for a deposit on her first home and we are looking at the Government’s Help to Buy ISA scheme as a way to help her save. We have heard it is due to finish at the end of this year. Will we need to have invested all the money by this stage, or just opened the account? Are there any other ways she could save her deposit if we can’t use this scheme?
Answer
The good news is that as long as the ISA is opened by 30 November 2019, you can continue saving into it after the scheme closes. The caveat is you have to claim the bonus by 1 December 2030.
There hasn’t been an announcement yet for any type of replacement for the Help to Buy ISA (although we would obviously hope there is one). Assuming one is not forthcoming, I would suggest that using any tax efficient savings plan to build up a deposit fund would be the best option.
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Question
Can I take out a mortgage whilst in debt?
My wife has come into some money through an inheritance and we would like to buy our first home together. The problem is I have a personal loan which I am still paying back. I still have £7,500 left to repay but I am in a much better position now than I was when I took it out as I have a better job earning a good salary.
I have not missed any repayments on the loan either. I would like to know whether this might negatively impact our mortgage application – please can you offer me your advice?
Answer
When a lender is determining how much they are able to lend you, they will consider your affordability which includes factoring in committed monthly expenditure on things like loans.
So, the loan will not stop you from getting a mortgage, but the amount you will be able to borrow will be a little less than if it was not there. All lenders have different methods of determining affordability, so it would be worth you investing some time with a broker who will be able to advise you on the art of the possible.
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Question
Interest-only mortgages
I am a homeowner with about 35% equity in my home. I have recently undergone a change in my circumstances due to redundancy. Instead of earning £45,000 a year through a permanent employment contract I am now on a reduced and less reliable freelance income of approx. £34,000 a year.
I am due to remortgage shortly and am considering an interest only option until I can either find a new job or rebuild my freelance salary. Does this option sound viable and what will I need to provide a mortgage lender in order to be considered?
Answer
In terms of what can be done right now, it will largely hinge on how you freelance. Are you a contractor on a zero hours contract or entirely freelance (i.e. entirely self-employed)? Also, is the role you are now doing in the same line of work as before? Lenders view these arrangements differently, so they may or may not lend. If you do return to a fully employed role, there are lenders who will offer a mortgage once they can see sight of an employment contract.
In terms of the feasibility of taking an interest-only option, again lenders have differing requirements such as minimum income, equity value, repayment vehicle, etc.
So, I am afraid there are too many variables here for me to answer your question at this stage. I would suggest you get in touch with a broker, armed with this information, and see if they can help.
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Question
How do I remortgage?
Sorry to ask such a basic question! My mortgage is coming to an end in September. It was the two year introductory deal I took out when I bought my first house so I have never remortgaged before.
As I understand, switching to a new mortgage deal rather than rolling over to my lender’s standard rate will save me money. I would like to know, how I go about getting the remortgage? Should I contact my current lender to see what new deals they have? Or should I look further afield? I would also value some advice on how the lender will calculate how much my new loan will be worth in relation to the value of the house? Should I get an estate agent to value it first?
Answer
When your mortgage deal is coming to an end, there are two things you should do. Firstly, speak to your lender to see what they will offer to you and secondly, research the market to see what you can get elsewhere. You will then have the information you need to be able to ascertain which is going to be the best option for you. To save yourself time, I would suggest you speak to a whole-of-market broker who will be able to let you know the best rate very quickly, rather than trying to do the leg work yourself.
A lender will want to value your home – your existing lender will probably do this via an online valuation tool, whereas if you approach a new lender, they will usually send a surveyor out to the property. Either way, I would suggest getting an estate agent to give you a valuation so when you are looking at options, you are considering products in the right loan-to-value (LTV) bracket.
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