The subject of mortgages often comes up when chatting with buyers and sellers, and I often hear them discussing limitations when I’m pretty sure there’s a solution out there for them.
So, I sat down with Jon Stockdale, our lovely mortgage advisor from Jigsaw Mortgages, to answer some frequently asked questions and perhaps reveal some options that could benefit you.
1. I’ve found the perfect house but mine hasn’t sold yet. How can I secure the property before mine has sold?
Bridging loans can be a great idea to secure the property you want, but there are risks involved. For example, it may take longer than you think to sell your existing property, and you may not get the price you expect for it. Speak to an estate agent who can give you an honest valuation and projected timeline to sell, so your expectations are realistic.
A better option may be Let-to-Buy, where you remortgage your existing property (e.g. take out a 75% mortgage on it), and use the capital you’ve released to secure a mortgage on your next property. You can then rent out your previous property until it’s sold, or keep it as an investment. Keep in mind if you’re buying an additional property, you’re liable for an extra 3% stamp duty, refundable if you sell your existing property within 2 years.
Another option is a Refurbishment Buy-to-Let, where you secure a bridging loan to buy a property in need of renovation/refurbishment. This gives you 6 months to get the work done, without having to make mortgage repayments, at the end of the 6 months you let the property out and pay off the loan.
A good broker can talk you through the options, specific to your goals and financial position, to help you choose the best option.
CASE STUDY Jon Stockdale secured a mortgage for our Director, Natalie Carter, against the odds.
“I was working as a contractor and couldn’t find a high street bank or even a lender on the comparison sites who would consider me for a mortgage.
I’d all but given up hope when I decided to try a broker. Jon understood my situation and was positive right from the start.
He not only secured me a mortgage but got me a better rate than I’d hoped for. He worked with my accountant to ensure the right information was provided and hand-delivered documents to me to speed up the process.
Jon even called me on the day I got the keys to congratulate me, which is more than my estate agent did!
Since then he’s provided ongoing advice that continues to save me money.
Jon is a rare gem who genuinely works in the best interests of his clients. I can’t recommend him highly enough, and I’m delighted to recommend him to my clients.”
Natalie Carter
2. My mortgage conditions are pretty strict because I’m not a ‘regular’ customer.
There is no regular customer, everyone is different and every mortgage has a gift for the right borrower, waiting to be discovered.
Often, buyers will stick to their existing mortgage provider and/or high street bank, but no bank will create a special deal just for you, and it’s inevitable that market conditions and perhaps your circumstances have changed since you last mortgaged/remortgaged.
Each lender, including banks, has maybe 50 or 60 mortgage products, whereas I have access to the whole market of around 3000 mortgage products.
I can get 40-year mortgages to make it more affordable for you on a monthly basis, 5 times salary, and I can also get mortgages that run up to the age of 75, depending on occupation. It doesn’t cost anything to talk to a broker, so let us see what we can do for you.
3. Can I consolidate my mortgage and credit card debt by remortgaging?
Yes, but be mindful that it turns short term debt into long term debt. So, although moving a credit card debt charging 30% interest is cheaper if you add it to a mortgage at 2% interest, it’s more expensive in the long term. This is because it can take decades to pay off if you don’t address it, which can be done by, for example, overpaying your mortgage. This can knock years off the term of the mortgage and save you a significant amount of interest.
4. Is my mortgage provider’s survey adequate or should I get my own?
Mortgage surveys have changed in the last few years. A basic (Homebuyer) survey used to be fairly standard where a mortgage is involved. But in recent years, many lenders have switched to ‘online’ or ‘drive-by’ surveys to check the price being paid for a property looks about right, this especially applies where the loan to value ratio is 75% or less.
Broadly speaking there are two types of survey:
- Homebuyer survey*
This used to be a basic mortgage requirement, and covers:
- Standard type and construction of houses, bungalows and flats that are apparently in reasonable condition
- Identifies serious or urgent defects
- Surveyor’s opinion of market value and cost to rebuild (for insurance purposes)
- Building survey*
This is customisable according to the property you’re buying and is recommended if you are buying a property of unusual build, poor condition and/or are considering significant alterations.
Check with your broker if your mortgage provider will be conducting a physical survey. If not it is highly recommended you commission your own survey to identify any issues that may affect value and/or require additional investment.
A survey can take 2 to 3 weeks to complete so it’s worth looking at whether you want your own survey well in advance of your target exchange date.
* For more information visit https://www.kaicarterestates.com/which-survey/
5. How do I choose a mortgage broker?
A good place to start is to ask your friends for recommendations based on their own experiences.
Use an experienced broker – over time we get to know how and when certain lenders are better than others. This especially helps when dealing with ‘unusual’ mortgages such as Buy-to-Let, and mortgages for contractors.
An experienced broker will know the trick to getting the right product, based on the borrower’s individual needs. And we know where the devil in the detail is!
Jon Stockdale
Jon has over 40 years’ experience in financial services. He specialises in securing residential, Buy-to-Let and commercial mortgages and financing across all demographics. Jon is renowned for securing a mortgage deal where others may have struggled, while the care and attention he pays to his clients helps ease the stresses of the process.
If you’d like Jon’s advice, he can be reached via Kai Carter Estates or at jonstockdale@jigsawmortgagesltd.com