Mortgages – there are literally thousands of variations of Residential and Buy-to-Let mortgages. The bulk that our team deal with are Residential – people buying a home – mainly First-Time Buyers; people remortgaging – usually to get a better mortgage rate; Buy-to-Lets – for investment purposes. We also see a number of people using the various Govt Help-to-Buy (HTB) schemes.
Getting it right: The experienced team of independent mortgage advisors who provide the advice to all our clients, have years of experience between them and always aim to find the very best, and most suitable, deal for each client
First-Time Buyers (FTBs): - Over a good many years, our team have provided advice to a great many FTBs – they, generally, need more advice than more ‘seasoned’ buyers and the team explain everything in plain, non-technical, English.
Helping You Prepare - Planning Ahead: The Star Mortgages team start by advising what you need to do to prepare for a home-purchase:
Credit Report: This is something that the lender will look at to ensure that you have a good credit- history and don’t have any credit ‘blips’ (or more serious in some cases).
Electoral Register (are you registered to vote) – we’ll advise on getting on the Electoral Register (if you’re not on it) and discuss the importance of this, from a mortgage lender’s point of view.
The types of schemes that are generally the most popular are:
Fixed rate mortgages – The name says it all really: a fixed rate mortgage has an interest rate that is set for an initial term - 2, 3, 5 or even 10 years. A fixed-rate means that your monthly mortgage payment will remain the same over the period, giving you a level of certainty and allowing you to budget for the agreed period. When the fixed rate period ends, the mortgage will usually transfer to the lender's variable rate – it obviously makes sense to shop around at this point to secure the best deal.
Tracker/variable mortgages - the interest you pay can change; Tracker rates normally ‘track’ the Bank of England base rate (currently 0.5%). Example, a Tracker may be 1.5% above BoE base rate = 2%.
Discount Mortgages: Rate may be set below the lender’s variable rate for a set period of time. Example: A lender may have a variable rate of 3.5% but may offer a 1% discount for 2 to 5 years, meaning you’re on a rate of: 2.5%. Your rate will rise or fall with any changes to the lender’s variable rate.
Fees Free Mortgages: A number of lenders may offer Fee-Free mortgage deals, meaning they don’t charge an Arrangement Fee, pay for your survey/valuation and cover any legal costs (in the case of remortgaging) – whilst still, in many cases, offering excellent mortgage deals.
Offset mortgages: Every month, your mortgage lender calculates the interest you owe, based on the total amount that you have borrowed - but with an offset mortgage, this amount is reduced by any amount held in the linked accounts. Example: if you have borrowed £150,000 and have savings of £30,000, you will only be paying interest on £120,000.
Buy to Let (BTL) Mortgages: A mortgage linked to the level of rent your property is likely to produce. In most cases the rental income must equate to a sum that is between 25% and 30% higher than your monthly mortgage repayments. You tend to need a larger deposit (normally a minimum of 25%) for BTLs, they are, in effect, investment properties.
Help to Buy Mortgages: There are a number of Govt schemes that are aimed at helping people, who otherwise may have struggled to get on the property ladder, to do so. You normally come up with a small deposit (5% in many cases), the Govt lends, generally, 20% and you borrow the balance – repaying the Govt over time or when you sell. There are schemes in Scotland, England, Wales and members of HM Forces, for example, have a scheme of their own.
Self Build Mortgages: The biggest difference between Self-Build mortgages and traditional mortgages is that the loan is given to the borrower in stages – as the build begins to develop.