Types of Mortgages

Whether you are a first time buyer, purchasing a rental property, upsizing, downsizing or releasing equity; we have the knowledge and expertise to ensure you are provided with exactly the right product for you.

Remortgaging

Your mortgage may have been the best deal for your circumstances at the time but is it still performing as well as it could?

Switch your mortgage and save money

Remortgaging can be a good way to reduce your monthly outgoings and more and more UK homeowners are moving their mortgages to save money. Even if you have just come out of a special deal and are obliged to pay a penalty if you change mortgage, do not be deterred, re-mortgaging often reduces your monthly mortgage payment enough to still save you money in the long term.

Remortgaging services

In recent years remortgaging has become a much simpler and more common process. More and more mortgage lenders are offering specialist remortgaging services – often with free legal and arrangement fees.

Reasons to remortgage

As well as reducing your monthly payments, you can also use remortgaging to release the equity that’s built-up in your property over time. If you have owned your property for several years, it could be worth more than your outstanding debt therefore taking out a larger mortgage could release some extra cash. This could be spent on home improvements, a new car or a luxury holiday.

When you re-mortgage, you are essentially replacing your existing mortgage loan with a new one, shifting your debt from one mortgage lender to another. There are thousands of remortgages available across the UK mortgage market and we will take into account what different mortgage lenders are offering at present and find the most suitable remortgage deal for you.

Buy to Let Mortgages

There are 3 main differences in buy to let mortgages:

Rent Potential

– the decision as to whether or not a mortgage will be offered is usually based on the rent you will earn as well as your income. In some cases your income is not ever considered.

Interest Rate

– buy to let mortgages have slightly higher interest rates.

Larger Deposit

– typically a minimum of 20% or 25% of the property’s value is required as a deposit.

When buying a second property to let, you will need to decide whether your primary objective is income or capital growth. In other words, are you looking to make a profit month on month or are you looking to make a profit through increased equity from the second property if it increases in value over time? The decision may affect the type of property you purchase, and the location.

When you are choosing a property to let, it is wise to take advice from local letting agents to determine; what types of properties are in need and which parts of the town are best or most wanted. They can tell you if there is a University in the town, and if students are looking for somewhere to live.

“The Financial Conduct Authority does not regulate some forms of buy to lets.”

First time buyer mortgages

Buying a house is one of the most important purchases you will make. Buying a home for the first time can be an even more daunting prospect.

With so many factors to consider it can be difficult to know where to begin when looking for your first mortgage.

So, rather than trawling the high street and agonising over your choice, you could save time and potentially a large amount of money, by contacting us to find the most suitable deal for you.

Shared ownership mortgages

Shared ownership mortgage schemes are a Government incentive backed up by developers and housing associations in order to provide highly quality affordable housing for first time buyers and other key workers.

How do shared ownership mortgages work?

The shared ownership mortgage scheme works by property buyers ‘sharing’ the ownership of the property. On the initial purchase you will typically buy 25/50/75% of the total property value. The remaining 75/50/25% of the property is owned jointly, usually with a housing association. They charge you a ‘rent’ for the section you do not own.

What are the benefits of a shared ownership mortgage?

The main benefit of getting a shared ownership mortgage is that you get a foothold on the housing ladder and benefit from the increase to the value of your ‘share’.

Also these schemes are unique in that you can ‘staircase’ up your ownership of the property; meaning you have the ability to buy additional sections of the property at a later date. Therefore you can start off by buying 50% of the property initially, then in 2 years buy another 25% and finally the last 25% so you own the entire property. This saves you the cost of having to ‘size up’ during your working life. As you increase your ownership of the property your rent decreases to reflect the increased ownership.

As shared-ownership is a niche mortgage sector not all mortgage lenders are willing to lend on these developments. As an impartial brokerage, we can find the a lender for you by sourcing the market place.

Bad credit mortgages

Non-conforming, sub-prime or bad credit mortgages are becoming more common in today’s mortgage environment and many of the mortgage lenders are now offering very competitive mortgage products to cater for this growing market.

At Talk mortgage solutions we will endeavour to help, whatever your financial circumstances. We have specialist knowledge on providing mortgage solutions for clients that don’t typically fit the traditional lender’s criteria.

Our advisers will support you through the bad credit mortgage process providing you with first-class, impartial mortgage advice on all the options available, whatever your situation; first-time buyer, home mover, remortgaging, buy-to-let or right to buy.

We will endeavour to help whatever the circumstances of your bad credit rating, including

– Mortgage, secured loan and rent arrears

– County Court Judgements (CCJs)

– Defaults

– Individual Voluntary Arrangements (IVA)

– Discharged bankrupt

– Repossession

– Self-employed with no accounts

Equity Release

Are you one of the thousands of homeowners in or approaching retirement with concerns about their current or future finances? After years of juggling work and family life, retirement should be a time to make the most out of life and do all those things we’ve always longed to. Unfortunately, it’s not always easy to find the money to pay for those dreams.

Over the years, rising house prices have allowed many people to build up substantial equity in their home, yet underperforming savings and pensions combined with rising living costs mean that some people struggle to maintain the lifestyle they would like.

More and more people are considering using their homes as part of their retirement finances, and equity release gives people the freedom to do this without having to downsize to a smaller property. A lifetime mortgage lets your client release tax-free money from their home to enjoy in their retirement years.

Everyone has their own reasons for releasing money and with an equity release plan it’s completely up to your client what they choose to spend their money on. Some of the most popular reasons include home and garden improvements, holidays, paying debts and clearing mortgages, treating family and friends and having enough spare cash to help with day to day bills. For many, equity release simply helps to make life that little bit easier.

A plan will reduce the overall value of their estate and it could affect their entitlement to some state benefits. You should check to see if their benefits are affected. Your clients should think carefully before securing other debts against their home.

This is a lifetime mortgage. To understand the feature and risks, ask for a personalised illustration.

“CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT. IF YOU ARE IN ANY DOUBT SEEK IMPARTIAL ADVICE”

(This service is offered by referral to a third party.)

Mortgage Choices

There are a number of different types of mortgages and we have outlined the key products below:

Standard variable rate
– This is the lenders variable rate, and they have the right to change it at their discretion. In practice rates tend to move in relation to funding costs, changes in the Bank of England Base Rate and competition in the market. As the rate rises and falls, so will your mortgage payments.

Discounted rate
– The rate remains variable, as above. However, as an incentive, you will be offered a discount off the standard variable rate for an agreed period, after which the rate charged usually, reverts to the lender’s standard variable rate, which could be higher than the rate chargeable at the outset.

Fixed rate
– The lender will fix the rate of interest on your mortgage for a set period of time. During this fixed period your payments will remain the same, helping you to budget. After the fixed period, the rate charged usually reverts to the Lender’s standard variable rate, which could be higher than the rate chargeable at the outset.

Capped rate
– The lender will cap the rate charged for a set period of time. Should the lender’s standard variable rate go above this capped figure, you will pay no more than the agreed capped rate. Should the rate fall below your capped rate then you will pay the reduced amount, until either the rate rises again or the set capped period ends. This provides you with the similar security of a fixed rate, in that you have a maximum interest you can pay, but also has the added advantage that you could pay less if rates fall. After the capped period, the rate charged usually reverts to the lenders standard variable rate, which could be higher than the rate chargeable at the outset.

Tracker rate
– This method of repayment is directly linked to changes in the Bank of England Base Rate. Tracker rates are set at a certain percentage above, or below Bank of England Base Rate and this percentage difference is fixed – e.g., if the Bank of England Base Rate rises or falls by 0.25%, your Tracker Mortgage rises or falls by 0.25% also. They can sometimes be arranged on a fixed, discounted or variable basis.

Flexible mortgage
There are various types of flexible mortgages available which all provide increased flexibility, when compared to the traditional types of mortgages. Typically, a flexible mortgage may include some or all of the following features:

– The ability to make over payments (without charges), subject to the lenders agreed limits.

– The ability to underpay your mortgage (subject to limits).

– The option to take payment holidays

– A facility to borrow more money (subject to limits), for lump sum expenditure, i.e. home improvements.

– Current account with cheque book and agreed overdraft facility

– Credit card with an agreed spending limit

– Debit card (subject to limits)

A flexible mortgage can be set up on a fixed, capped, discounted, variable or Bank of England base rate tracker basis.

Repayment Types

Repayment

– This means that each monthly payment that you make to the Lender will contain an element of capital in addition to the interest payable on the loan. The proportion of each will change throughout the period of the loan. The proportion of capital repaid increases with each monthly payment. As long as all repayments due to the lender are made in full and on time the mortgage will be repaid.

Interest only

– As the name suggests, you will only pay the interest each month. The actual amount borrowed does not reduce during the term of the mortgage and the full amount of the loan will remain outstanding to be repaid at the end of the term. It is vital that you ensure that you have the means to repay the loan at the end of the term. You are responsible for ensuring that any investment vehicle is maintained for the duration of the mortgage and should note the consequences of failing to maintain such investment vehicles.

Your home may be repossessed if you do not keep up repayments on your mortgage.