Remortgaging
We always stress the importance of involving your accountant as early as possible in the house buying process. This has not changed – if anything it has become even more essential for the self-employed.
Now, when you apply for a mortgage, there are even more back office checks being done. For example, the Mortgage Verification Scheme (MVS) kicked in fully this month. Under the MVS, mortgage lenders send details of borrowers to HM Revenue and Customs who crosscheck it against their tax returns.
It is a good thing that a variety of fraud systems, such as the MVS, are in place. Our only worry is that a mortgage lender might be fixated on a self-employed person’s net profit, without understanding their income situation properly.
For example, a client might have a contract go wrong and end up losing £50,000 of her net profit, but this could clearly be a position that will not repeat itself the next year.
As a general rule if you are self-employed it helps to request an SA302 in advance of your mortgage appointment. This is your tax calculation from HMRC.
Individual circumstances are the reason to involve an accountant early on. An accountant may be able to shed some light on your ongoing financial situation where the black and white of a computer system fails.
For more information contact Limetree Financial Services.
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We have had an increase recently in enquiries regarding military mortgages. If you work for the armed forces, the good news is that lenders are finally beginning to understand your situation when it comes to property.
Because of the amount of time spent on service overseas, lenders can be dismissive of the needs of the military. One Army member expressed the problem this way:
I recently wanted to remortgage my family home but was frustrated to find that, because I am presently letting it due to service overseas, that most mortgage lenders would only offer buy-to-let products, which incur far inferior terms (rate and LTV).
I argued that it was my main family home and as only my military service compelled me to let it for a short period, I should qualify for residential terms.
Lenders are beginning to get it, however. We have found a number of lenders that allow armed forces personnel who are posted overseas on operational duties to rent out their property, or remortgage it, without change or having to switch to a buy-to-let mortgage.
It is also apparent that these very same lenders also accept deposits via the Long Service Advance of Pay scheme – a long-established MoD scheme under which the government provides a loan for the deposit on a property.
If you are in a similar situation and would like to know which lenders can help you, give Limetree a call.
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Where will standard variable rates move next? Up? Down? It is impossible to tell.
It was good news for customers on Norwich and Peterborough’s standard variable rate recently. The rate dropped 0.5% to 4.95%, the same standard variable rate as Norwich and Peterborough’s new owner Yorkshire Building Society.
On the other hand, it was bad news for Bank of Scotland and the The Mortgage Business customers. These lenders, both part of the Lloyds banking group, increased their standard variable rates by 0.11% to 4.95%.
Standard variable rates (SVR) differ considerably from lender to lender. They are usually set by the board of directors and can be varied at any time. We find that many of our clients have remained on the standard variable rate as there are usually no redemption penalties, leaving them flexible to have options.
But is it time to change?
Many fixed rate and standard rates are now below standard variable rates. Some lenders are offering no redemption penalties, as well as free valuation and legal services. If the difference between the rates is enough, it might not take long to save money, even taking the arrangement fee into account.
Contact us to see if it is worth changing. And from all of us at Limetree – hope you’re having a happy Christmas!
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Let’s keep this short and sweet.
We have just heard that Natwest have reduced the cost of a 2-year fixed rate mortgage deal (at 50% loan-to-value) to below 2.5%. This is an excellent rate. Better still, it comes with free valuation and free legal fees. If that isn’t enough, the arrangement fee has been cut to only £499.
It’s a great deal for anyone looking to remortgage. But you have to act quickly – the offer will not be around for long.
Call the office on 01223 266140 for more information.
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Ever wondered why you need a mortgage broker?
Can’t you just walk into a high street bank for a loan, or phone the number you saw on the TV?
Of course you can, but your choice will be severely limited. There are thousands of mortgages out there, for people in all sorts of different situations. Fixed rate, variable rate, tracker mortgages, capped and collared…
With interest-only mortgages, you only pay back interest on the loan. With repayment mortgages, you pay back both the interest and the capital that you borrowed over the term of the loan.
Ah yes, the repayment term – how long should that be? And do you want a short term discounted deal or something that you don’t have to look at again in a few years?
What about up-front fees and the all-important deposit question – how much loan-to-value do you need to borrow?
There are other considerations too. Some lenders offer cashback. You might want flexibility in your payment schedule. If you have a decent amount of savings then now might be a good time to offset your mortgage.
The possibilities are vast. You might know what you need and are just trying to find it, or you might not know what – if anything – suits your situation the best.
We know. And that’s the point of mortgage brokers. We understand how all these different mortgages work. We know the different lenders – the ones that are hidden from sight as well as the ones on the high street.
In fact, there are thousands of mortgage products that are only known to mortgage brokers. In the last half a year alone, 3,900 new products have become available to us – products that you can’t get directly as a borrower.
Brokers find the best deal from all of the mortgages available.
So if you want real choice, talk to a broker. We can find the best mortgage for your unique situation, and get it set up as smoothly as possible. We are impartial, and the advice is free. Let us know what you need and we will do our best to help.
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