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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
Moving house: Can I take my mortgage with me?
We remortgaged early last year to an excellent rate with flexible terms and we thrilled with the deal. But we are now, due to relocation of work, having to move house and we are in the process of looking for a new home. Is there any way we can take our mortgage with us, so to speak?
Our current house is in the South East and worth £450k but we are planning to move to home of similar price in the South West of England.
Answer
Many mortgages are ‘portable’, which means that they can be taken to a new property without breaking your current deal and thus incurring early repayment charges. You can check whether your mortgage is portable on your original mortgage offer document.
It’s worth mentioning that lenders will treat this request as if it were a new mortgage application, even if you’re borrowing the same or less, and will complete financial checks etc. This means a mortgage is not guaranteed.
I would recommend calling your existing lender directly and chatting it through with them.
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Question
What is criteria? Feeling totally overwhelmed!
I recently approached a local mortgage broker to find my first ever mortgage but he said I might not pass the criteria for some of the 90% mortgages I need and suggested I save up for more money for a deposit.
I am really not sure what he meant by this and was a bit nervous about asking in case he thought I was too inexperienced. Can you help please?
I have saved up around £30,000 and am looking for a flat in the £290k region. I earn £35,000 per year and don’t have any debt. I currently pay £1200 in rent per month and other than bills etc I don’t have any outgoings. I am a bit confused what this ‘criteria’ is that I am not passing. Help!
Answer
Lenders tend to calculate affordability based on a multiple of your income, usually about 4.5 and 5x.
This means your £35,000 salary would allow you to borrow up to £175,000. I think what your other broker meant was that you need to save a larger deposit in order to purchase a property of the value you were initially looking at.
Could you consider buying a property at a lower price? Or you could consider shared ownership schemes as a way to still get on the property ladder.
Please don’t feel embarrassed about asking questions! Brokers are there to guide you through the whole process, and you shouldn’t feel uncomfortable if you don’t understand what we’re saying! It’s important that you make informed decisions, so ask away!
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Question
What mortgage will I need for a shared ownership home?
I have decided to purchase a shared ownership property near my parents to help me onto the property ladder and I have seen an amazing home come up!
I will need a small mortgage – probably of around £60k – to get this property as I already have some money in equity from a house I owned with my ex several years ago.
Do I need to get a specialist mortgage for shared ownership properties or can I take out a normal deal? I have seen rates are really low at the moment so am keen to go down the mainstream route but wondered if I am tied to a particular provider or product.
Answer
Shared ownership mortgages are a specific scheme but are available from mainstream lenders. For example, NatWest might have a specific set of products available for shared ownership deals. The good news is these can be very competitively priced!
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Question
Can I remortgage if I have lost my job?
Apologies – I expect you are getting lots of Covid/Furlough/Redundancy queries. I lost my job last year having been made redundant, like many others, due to Covid.
I used to work in the entertainment industry but with venues closed and entertainment on hold, my company has been forced to lay me off. I have managed to find several jobs to pay the mortgage but they are all casual – I am doing some cleaning work, delivering leaflets – anything! – and am running dance classes on Zoom for children and adults.
I am looking for as much extra work as possible but although this is bringing my income back up to a similar level to when I was in full-time employment, I am concerned I will be a risky prospect for lenders when I come to remortgage in June.
Do I stand any chance of being accepted for a new deal or should I cut my losses and default to the lenders’ rate?
Answer
Firstly, I’m so sorry to hear that you’ve had such a difficult time over the past year, it must have caused a lot of stress and worry for you.
Unfortunately, it will probably be challenging to remortgage in your current situation. However, you may find that your current lender will offer a new rate to stay with them (called a product transfer).
Products transfers don’t require further underwriting, so they won’t ask questions about your employment. As long as you are confident you can still afford your monthly repayments, this can be very quick and easy to organise!
Also, lapsing onto a variable rate (as most fixed mortgages do) can increase your monthly repayments and not give you peace of mind of a fixed monthly cost.
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