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COVID Update – Can you remortgage or product transfer during the lockdown?

Covid-19 has had a massive impact on the mortgage marketplace, with some lenders withdrawing altogether and thousands of products being withdrawn, but the outlook is not as gloomy as you may imagine if you need to think about a remortgage.

If your current deal is about to end, ends later this year or if you want to

consider remortgaging to consolidate commitments and re-organise your finances what options are there and what should you do?

If your mortgage deal is ending soon

Firstly, if your current deal ends imminently, whilst there has been a reduction in the number of lenders and products, many of those withdrawn are for house purchase or higher risk lending.

Most lenders continue to offer product-transfer deals for existing customers, many still offer Remortgage deals for new customers and we can arrange these for you without any advice fees, so we can typically advise you on options from the whole of market and your current lender at the same time.

If your income has been impacted by the crisis this might affect your ability to change lender, but should not prevent you from transferring to a new deal with the current lender.

If your mortgage deal is ending within the next 6 months

For anyone whose existing deal comes to an end by late Autumn now is an ideal time to think about remortgaging.

Several lenders offer remortgage deals which are valid for 6 months so you can apply well in advance, taking advantage of the extremely low current rates and set everything up ready to switch over as soon as the current mortgage deal expires.

There are several reasons why doing this now could be wise. Firstly, although lenders have not passed on the full rate reductions made by the Bank of England into new fixed-rate-mortgage deals, there is a good chance that this never happens.

With losses being so great in every industry, it is difficult to imagine lenders being keen to cut into vital profit margins when rates are already at all-time lows.

Conversely, we could see a reduction in house prices or even lenders pulling out of the market entirely creating a situation where you were better off applying today than in several months.

No one has a crystal ball to be able to say for sure how the market will progress over the year but the likelihood of rates getting significantly better than today’s seems dim.

Consolidating credit commitments into your mortgage

This is the area where the remortgage market has already shrunk significantly. So if you want to trim down your outgoings and reduce your typical monthly commitments then it may be wise to act now rather than waiting. 

Bear in mind though, that in many cases consolidating credit commitments into a mortgage does not represent the best value for money and may be more expensive than alternative options like balance-transfer deals or converting credit card debts into a personal loan for example.

It’s also important to note that you convert typically unsecured credit commitments into one secured against your home, meaning you stand to lose your most precious asset if you default, where previously there may have been no risk of this at all.

We can help you get a picture of whether a debt-consolidation remortgage is the correct solution in your circumstances. 

Changing your mortgage term

You don’t necessarily have to wait to remortgage to alter your mortgage term, and therefore your monthly payments (for anyone on a repayment loan).

If this is something you want to look at you can speak to your lender about this and may be able to do this midway through an existing deal even if you have early repayment penalties.

Again though, this is something that can also be done as part of a remortgage or product transfer and if you want to reduce your outgoings in this way get in touch and we can discuss your options.

If you are in financial difficulty

If you are experiencing difficulty making payments, your first port of call should be your existing lender to discuss what options they have to prevent you from getting into arrears, including the government’s payment-holiday scheme.

If there is a serious risk of you defaulting on obligations like credit cards, loans or hire purchase and other non-secured credit commitments, then consolidating these into your mortgage is a potential solution but it increases the risk of losing your home, by converting unsecured commitments into a secured debt.

We can help you get an understanding of whether consolidating commitments is a solution that could be viable for you, but you should consider speaking to & the Citizens Advice Bureau about the implications of getting into arrears on either type of commitment and other options that may be available such as an IVA.

Corona Virus or COVID Update – Managing your mortgage, payment holidays and BOE Base rate changes

The Corona Virus has clearly caught governments, business and consumers off guard, so the situation is continuously changing but there is good news for most people.

Firstly, for those who are wanting to remortgage during the current lockdown, who want to consolidate commitments or whose current deal is due to come to an end soon mortgage lenders are still lending, and our advice service goes on as normal. We can work with you entirely over the phone and online.

We will follow this article shortly with a discussion of the Bank of England Base Rate reduction and how this affects borrowers looking at a new mortgage. But for those with existing mortgage offers there is further information below.

Due to the lockdown most lenders have ceased physical valuations temporarily, so lending will likely be based on an electronic valuation (i.e an estimate based on previous sale prices and local market trends, like estimates on sites like Zoopla).

This may mean you have difficulty if you have spent significant sums renovating a property and now want to consolidate commitments back into your mortgage.

Reports of lenders ceasing funding is based on a handful of very small specialist lenders who were new to the marketplace anyway ceasing new lending. Some larger lenders have limited their purchase lending loan to values etc but purchasing currently seems unlikely.

Managing mortgage payments, and difficulties in paying your mortgage

The most important thing for you as a consumer is that if you believe you will have difficulty in paying your mortgage, contact your lender as soon as possible to discuss with them the options they have for helping you manage payments.

On residential loans, i.e. properties occupied mainly by you or your family the lender is legally obliged to try and prevent you from going into arrears.

This means they must consider offering solutions such as a temporary switch to interest only if suitable or consider alternatives like increasing the term of the loan or offering a payment holiday.

You should engage with them early as going into arrears will incur costs that may be non-refundable, avoidable and any arrears recorded on credit reports are unlikely to be removed in future. And arrears will make very significant differences to costs and the options available when you remortgage.

Bear in mind that any solution proposed is likely to cost you more in the long term and so it is not a gift or freebie and so it may not make sense to use it if you have plenty of savings for the long term to carry a short term drop in income.

The situation is less clear for those with buy to let mortgages especially as many will be interest only and therefore payment holidays are really the only temporary solution available. It isn’t yet clear if the governments statement about payment holidays will apply to commercial lending.

You should still contact your lender early though and discuss what assistance they may be able to offer if you are facing difficulties or non-paying tenants. Lenders are unlikely to want to take punitive action against otherwise good borrowers for a problem that will be affecting them across their whole lending book and so are likely to be magnanimous.

Registers of Scotland Shutdown

We have been made aware of clients whose sales are pending within a few weeks who are experiencing difficulty due to the Government closing the Registers of Scotland (the Scottish Land Registry).

Discussions between the Law Society and the Scottish Government are ongoing, and an interim arrangement will likely be agreed in the next few days. Until this point Scottish sales will not be able to complete. But it seems likely that some solution to the current problem must be arranged.

Bank of England Base Rate Changes

If you are considering a new mortgage will be writing shortly to expand on how the changes to the Bank of England Base Rate affect choices on new mortgage products.

For those people who are about to complete on their mortgage soon they do a present a dilemma though.

Fixed rate mortgages are not directly linked to the BOE base rate, and so the reduction in BOE rate has not yet passed through to most fixed rate mortgages although one or two small reductions have popped up.

As lenders will be extremely hard hit by the lockdown, they might seek to increase their margin on lending and so these rate reductions might never be passed onto fixed rates fully.

This means for most borrowers either wait to see fixed rates come down (when they could even go up) or switch to some form of variable product such as tracker rates which have reduced significantly as they follow the BOE rate.

However, no one currently offers tracker or variable rate mortgages with any kind of cap or upper limit that I know of, and given that this is a time of unprecedented global turmoil and upheaval wild changes to interest rates are not outside of the realms of realistic possibility.

Can a foreign national get a mortgage on a visa?

A simple and (nearly) definitive guide to whether foreign nationals from outside the EU can get a mortgage.

One of our main areas of business is foreign nationals on visa’s, and it’s interesting to see how many people are asking on forums on other websites whether it’s possible for them to get a mortgage and how much misinformation is spread around.

So let’s dispel some myths first. Getting a mortgage on a visa isn’t difficult per se. The vast majority of lenders however will not lend at all on these cases.

So it’s very difficult for a member of the general public to try and find the right lenders and at the same time make sure that all other requirements are met too.

That’s why you see so many people on forums trying a lender recommended by someone else but then being told they cannot apply.

The benefit of an advisor like ourselves is knowing which lenders we can ignore altogether (and dealing with these applications frequently enough to know if they have recently changed their rules).

And at the same time knowing enough about all of the other eligibility rules to quickly and easily determine whether you will be able to get a loan.

It’s not something where the lender makes a case by case decision (in general), for most applicants if they meet the guidelines below then they will be accepted subject to credit scoring and all other rules.

We normally offer a fee free service, so there’s very little to gain in trying to DIY an application (whether you’re on a visa or not).

So the point of this post is to give you a simple answer as to whether we have lenders who can consider your application and visa status.

It’s also very difficult to be definite because this post basically compresses the true bulk of the different lenders eligibility rules to try and make things simple.

So if you don’t meet the rules below feel free to ask us about your situation and we will be happy to go into more detail.

So then, can we get you a mortgage?


Applicants who have lived in the UK for more than 2 years

If you have resided in the UK permanently for 2 years or more, and have a 10% deposit we have lenders available.

This is regardless of the type of visa (except refugees; see below).

It obviously still depends on how well you credit score, and other factors like having suitable income etc.

It’s possible to get a mortgage up to 95% if you have been employed/self-employed continuously for 3 years or more.

In this instance continuously employed could mean working part time whilst studying for example, as long as you have been working for someone without a break of more than a few weeks between any 2 roles.

Or if you have more than 30 months remaining on your visa then again it’s possible to go up to 95% and this is also generally straightforward.

If you have a tier 2 visa then a letter from your employer confirming their intention to renew your work permit is also suitable with less than 30 months remaining.

For joint applications only the applicant who has a sponsored work permit would need the employers letter.

Bear in mind though that the visa is only one element of the application. Meeting the criteria for an applicant on a visa doesn’t mean you meet the rest.

That’s why one of our roles as your advisor is to make sure that you meet all the criteria required before application.


Applicants who have lived in the UK for less than 2 years

If you have resided here for less than 6 months, it’s very unlikely that you will have sufficient credit score to get a mortgage (but there can be exceptions, especially if you have UK bank or credit accounts with longer term history).

So in most cases you will need to have been residing here for 12 months, it is technically possible in the first 12 months but will be very case by case dependent.

With less than 2 years UK residency, mortgages are still readily available up to 95% of the purchase price if you have more than 30 months on your visa.

For those on a tier 2 visa with less than 30 months remaining if your employer can confirm that they will look to extend your visa then again 95% is still possible.

Applicants on a tier one visa can apply up to 90% once they have resided in the UK and been employed for more than 6 months regardless of the remaining term on the visa.

If you have 25% or more deposit, then mortgages are available regardless of how long remains on your visa or how long you have actually resided here.

But for anyone with less than 12 month’s residency credit scoring will be a major factor so the shorter the UK residency history the less likely it is possible.

If you don’t have 25% deposit, have been here less than 2 years, and have less than 30 months remaining on your visa, and a visa such as an ancestry or spousal visa then it could be possible to buy a new build property under the help to buy shared equity scheme.


Very large deposits

If you have more than 30% deposit available, then describing a conclusive answer would be too complicated as there are far more potential lenders.

So if this applies to you but you don’t meet the criteria above give us a call to discuss it.


Self employed

We don’t see a lot of self-employed applicants on visa’s however this does not exclude you from application.

But being self-employed has its own criteria with each lender which is probably far more complicated so really you would need to get in touch with us to discuss this in more detail!



Refugees are the main exception to the rules above. Most lenders won’t accept applications from refugees until permanent right to reside is granted.

If you have a deposit of 25% or more there may be options available though, once you have 12 month’s residency in the UK.


EU Nationals

EU Nationals still currently have full legal right to reside in the UK and so most lenders can accept your application.

However the length of residency is the main factor so if you have been in the UK for less than 3 years you may well still benefit from our assistance.


In summary

So then as you can see here, there are plenty of options available to meet most circumstances.

These are all standard products from high street banks. You won’t get a higher rate because of your nationality.

Every case is different which is why we cannot give you a completely definitive answer (it’s also ludicrously complex to detail in a blog post).

So always seek advice from a professional like ourselves.

We also don’t treat foreign nationals as high complexity cases. We won’t charge an advice fee purely because of being on a visa.

Most of our clients receive a fee free service including foreign nationals.

Those who we do charge fees are usually borrowing smaller amounts, or have other more complex issues (like multiple forms of self-employment).

For more information or to discuss your circumstances call 08454594490 or fill in our enquiry form here.

Is a 10 year fixed rate mortgage a good idea and should you get one?

10 Year fixed rate mortgages have been reducing significantly in cost, and for the first time in the UK it’s now possible to get a pretty competitive rate fixed for 10 years but the big question is; should you get one?

Question 1- Is a fixed rate even appropriate for you?

Forget 10 years. Should you even have a fixed rate mortgage?

Lots of people are caught out by significant early repayment penalties due to not properly considering the question of their long term plans before buying.

Will you be moving home, repaying large balances early, hoping to raise significant additional finance from the property or could you be eligible for better deals in the short term if your own circumstances improve?

Before even considering a fixed rate mortgage you should take a look at our guide to fixed rate products and see how they work versus other types of rates, and pay real consideration to whether the points above could leave you paying redemption penalties of many thousands of pounds.

You should definitely speak to an independent mortgage broker like us as well.

Question 2 – Will fixing for 10 years be competitive long term?

If you had a crystal ball you could answer this question, but no one can see into the future.

When a lender prices a product it’s either based on the cost of loaning that money from another bank or investor and turning it into mortgages or on the expected rate of interest they will pay to their own depositors over that time.

So the simple fact is that a fixed rate mortgage will be priced based on the expectations of what will happen to interest rates over the term and the Bank will be expecting to profit.

That means the current glut of competitive long term fixed deals indicate that the banks expect a prolonged period of relatively low interest rates in the UK well into the future.

So like odds given by bookies, most banks won’t be expecting average interest rates over the fixed period to be higher than the rate they are offering you. So you are in effect betting against the bank, but they have to be known to be quite spectacularly wrong in the past.

The smaller your mortgage though, and the shorter the remaining term (for someone on a repayment or capital and interest mortgage) the less differences in rate will impact long term cost.

Because of this for each loan there will come a point as remaining term decreases when small differences in rates are outweighed by the repeated fees and charges involved in refinancing a mortgage, and changing product regularly becomes poor value for money.

This is very case specific, but once your mortgage reaches that point the potential downsides of long term fixes may become insignificant.

Question 3 – So who should take a 10 year fixed rate mortgage?

If you are very worried about increases in costs, have no circumstances that would indicate other rates like variables could be preferable, and very sure that the early repayment penalties won’t be likely to cause an issue then you just need to decide whether you feel it’s worthwhile gambling long term and risking paying more than you might need to or whether to take a short term product in the hope that you can secure another competitive rate again in a few years.

This decision is mainly going to come down to the margin between short term fixed rates and long term ones and the probability that changes to your own circumstances make better deals available to you in the short term (such as better income making more competitive lenders available, or works to a property decreasing your loan to value), and whether you feel the additional cost is good value for the extra security.

A mortgage advisor such as ourselves will discuss your circumstances with you and give guidance on whether a fixed product is really more appropriate for you. If a fixed rate is the best option for you, but it comes down purely to a decision between long and short term deals then this is very much a decision best made by the customer, but at least we can present to you the best options available over the different periods so you can make a more informed decision between them.

If you’d like to know what the best deals available to you both in the short and long term could be then complete out enquiry form and an advisor will contact you, to discuss your options and provide you with advice.

If you have an interest only mortgage now could be the time to consider switching product before the window closes.

In the last two weeks both Natwest and Coventry Building Society ceased offering interest only mortgages for residential property following on from Nationwide’s decision to do the same some time ago.

Add to this the vast number of lenders who have restricted interest only borrowing to less than 75%, 66% or even 50% of the property value and the market for these mortgages is now stricter than ever.

Borrowers on interest only mortgages currently sitting on their lenders variable rate should consider changing their mortgage to a new product now before the market contracts further.

With the FSA’s announcement that interest only lending would become part of their mortgage market review following the credit crunch many lenders have reacted in a kneejerk fashion eliminating the option for customers with a suitable repayment strategy to refinance their loan regardless of the plausibility of their circumstances.

This is already creating a large number of mortgage “refugees” unable simply due to lenders criteria to arrange a new mortgage and who then become trapped on a variable rate without the option to move.

Whilst this may not be the end of the world whilst the Bank of England Base Rate is low it could result in thousands more repossessions in the event of the collapse of the Euro.

This scenario would almost certainly see wholesale increases in lenders standard variable rates which many borrowers might find too large to handle.

For those in the last years of an interest only mortgage or perhaps even half way through with a borrowing of more than 50% of their properties value waiting too long to consider a move to a new product could see them shut out of the market in the long term.

Of course for those borrowers without a suitable strategy for repaying an interest only loan then this should be the right time to think about switching either to a full repayment mortgage or if investment’s such as endowments are not performing and predicted to fall short of requirements whether a part repayment and part interest only loan could be suitable.

For more information contact one of our whole of market advisors on 0845 4594490

85% loan to value Buy to Let mortgage products released by Kensington

It’s been a long time since I have had anything significant to write about in terms of new products, but this morning Kensington Mortgages have announced what must be one of the most significant signs to date that mortgage lending is returning to some sense of normality.

Their new buy to let product range is available up to 85% loan to value even for first time landlords, and although arrangement fee’s on the 85% product are 2.5% it is still a major step forward for buy to let landlords particularly as it is available on up to 3 properties with an interest rate of 5.99% fixed for two years and with a portfolio maximum of £1 Million or 3 properties on the product.

Rental coverage requirements are also lower than the competition with a rental yield requirement of 120% coverage at the pay rate required and this should help to ensure that the products are viable . The range also now allows first time landlords into the market at 80% and at this loan to value there is a flat fee product option as well as a 2.5% fee which will work well for those borrowers with higher property values.

The products are also available for both purchase and remortgage however they are only available for properties in England and Wales, have a minimum income requirement of £25,000 or £30,000 above 75% loan to value.

For more information on any of these products please call one of our mortgage advisors on 0845 4594490.

Does a fixed rate mortgage make sense in the current market?

This is probably the biggest mortgage related question on everyone’s lips at the moment and it is certainly very difficult to tell what is going to happen with interest rates. I can remember a conversation with a client almost 18 months ago where media coverage suggested interest rates were going to shoot up and they were worried the tracker product I had recommended might end up being very expensive.

In my opinion the question of whether to fix your interest rate comes in two parts. Firstly your attitude to risk should be taken into account and the severity of the risk assessed too. If you have ample income to afford higher interest rates then it comes down to your preference as to whether to gamble on variable type products, but if you simply couldn’t afford for your mortgage payments to go above current figures then not only should you be considering a fixed rate but also trying to reduce your borrowing levels asap.

The second part of the answer comes down to the difference between fixed rates and variable products, if the difference between a suitable variable product and a fixed is relatively low then even if you are a little risk averse it may be worth opting for a fixed rate. However when the difference is greater it becomes harder to say.

Let’s compare for example a 5 year deal currently on offer with one lender of 6.49% with a 25% deposit, compared to their 2 year fixed and 18month tracker product this is 3-4% higher and this means the chances of it being good value for money long term are much lower as it would require average interest rates over the next five years to be over 5% or so which is a big increase from current rates, hence I would only really recommend this scenario to someone who was really on the borderline of what they can afford and needed absolute long term security.

Many lenders are touting products with an option to switch to a fixed deal at a later date without early repayment charges, but for those who would be at serious risk of being unable to afford their mortgage if rates went up this is probably a poor option, as the reality is that fixed deals available at the time are likely to be higher than now as well.

It remains quite likely that while interest rates must increase at some point, that overall market competition will do too and to some extent increases in bank base rate are likely to be met with at least some reduction in lenders margins. Current two year fixed deals come with an average margin of about 3% over the bank base rate which would have been unthinkable three years ago, so at some point slowly but surely these differences must be eroded by competition as the market improves too.

Mortgages and concrete constructions properties

There are literally thousands of different concrete construction types which have been used in the UK and some of these are very difficult if not impossible to arrange a mortgage on.

In general it is properties from the post war era of a pre-fabricated construction type which can be difficult however even establishing which type of construction has been used can be a challenge. Most properties built after 1984 are likely to be ok as the introduction of Building Regulations established a suitable guideline for ensuring properties were not defective.

Some concrete construction types particularly those which contain structural iron or steel elements built between the early 1900’s and 1970’s have been found to suffer from concrete corrosion and either require significant work to prevent failure of the concrete or are indeed not suitable to mortgage at all, these are classed as defective types. In these construction types contaminants in the concrete react with the Iron in the steel rotting the concrete and steel beams from the inside out.

There are some very common concrete construction types such as Taylor Wimpey No Fines which should not be a problem though too so if you are looking at buying a property which is a concrete construction type you should inform your mortgage advisor at the outset and they should be able to check with local surveyors to see what construction method has been used and who if anyone might be able to lend on them.

New Mortgage lenders start to fill the adverse & sub-prime mortgage market again.

Over the past few weeks new mortgage lenders have been popping up at quite a pace, with Platform Igroup and Kensington all returning to the market after considerable time away there is at last some possibility for clients with less than perfect credit history to obtain new mortgages although loan to value limits are still strict.

These lenders maintain adamantly in the press that they are lending to prime borrowers only however the truth is that they are lending to customers who would have been considered near prime or very light adverse in the days preceding the credit crunch.

To boot this week also saw the announcement that Aldermore mortgages had opened its doors to the main intermediary marketplace for both residential and buy to let loans, as well as Precise Mortgages adding further new options in the Buy to Let mortgage marketplace.

Kensington and Igroup in particular have filled the much needed whole between highly competitive high street residential mortgage rates and ultra high adverse rates offered by the likes of Platform and Cheshire Mortgage Corp. They have rates ranging between the 4-6% mark which are much more palatable than 8% plus offerings from the other two.

For further information on any of the products from these new lenders speak to one of our independent mortgage brokers on 0845 4594490

80% Loan to value buy to let mortgages return from the mortgage works.

Mortgage Interest rates continue to creep slowly downwards towards the current bank base rate of 0.5% and it’s clear to mortgage brokers that while the range of products on offer in the market currently is still a major factor preventing true growth in the property sector particularly in buy to let, It is still very encouraging to see the mortgage works increase their maximum loan to value for buy to let mortgages to 80%.

The new products are quite competitively priced and so this reduction of minimum deposit size is one of the few examples of lenders returning to a competitive spirit since HSBC announced their 2% tracker rates more than a year ago.

Fixed rates are available from 4.69% with a 2.5% arrangement fee, 5.69% with a 1.5% fee and 5.79% with a £1795 arrangement fee and a 5% early repayment charge during the initial term of the product. Standard legal and valuation charges would apply.

A lending limit of £350,000 at this LTV will reduce the popularity of the product in the south east but should help to ensure that TMW are not saturated with new business, and it is likely that this too will be increased in the not too distant future.

For further information about these products please speak to one of our mortgage advisors on 0845454490.


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