24 September 2015
How to Climb the Property Ladder: Mortgage Tips & More
First Time Buyers - where to start
Congratulations! You’re starting your research into buying your first home, a major step onto the property ladder. With such a big purchase, the research and planning stage is key to getting the home you want and the mortgage that will help you achieve this.
You have probably got an idea of the location and type of property you would like, so once you’ve done some sums and budgeting, you’ll be ready to use our mortgage calculator tool to determine how much deposit you might need to save, how much you can borrow against the value of your ideal property, and what your monthly repayments might be.
Get to grips with mortgage jargon including loan to value (LTV), agreement in principle, insurance and contracts by using our First Time Buyers’ guides.
Mortgage Tips for Upsizing
Whether you need more space or would like a bigger garden for your growing family, moving to a larger home with room to grow often seems like the next logical step on the property ladder.
It’s important to consider budgets carefully when looking to upsize, as taking on a larger mortgage will be more financially demanding and require a lot of careful research and planning. Here are a few things to consider:
- Have you made a profit on your current home?
- How much can you afford to borrow on top of your existing mortgage repayments?
- Can you afford the selling fees (estate agents/legal fees) as well as the buying fees (legal fees/mortgage costs/survey and Stamp Duty)?
- Have you budgeted for the costs of moving e.g. van hire or removal services?
- Will there be additional costs around living in a larger home, e.g. higher council tax, energy/heating bills and maintenance costs?
- How quickly do similar properties in your area currently sell? Have you considered if you’d manage being in a ‘chain’ for a long time?
With all these factors considered, you’ll be ready to take on the next steps towards reaching your dream of a bigger home.
Mortgage Tips for Downsizing
Downsizing means changing your home to something smaller. There many benefits of downsizing including cheaper energy and fuel bills, and being easier to manage in overall maintenance.
You might want a smaller home to free up some income and equity for a variety of reasons – perhaps to start a business or maybe just a change in circumstances.
How much can you borrow on a Buy-to-let mortgage?
In many ways, a Buy to Let mortgage is similar to a regular mortgage: how much you can borrow will depend on your deposit, your monthly income and outgoings, and how long you want the mortgage for.
There are a few important things to research and consider with Buy to Let (BTL) mortgages:
- As BTL is classed as a business transaction, the borrowing criteria (e.g. the amount of deposit, loan to value (LTV), your income, and your projected rental income) will all influence how much you can borrow.
- There are tax implications for any income you might gain from the investment.
- Find out the differences between interest-only BTL mortgages and repayment BTL mortgages to see which will work best for you.
- If you are relying solely on the rental income to pay the mortgage, how will you pay it if the property does not have any tenants for a period of time?
If you’d like to speak to someone about Buy to Let mortgages, either call us on 0330 333 4000 or book an appointment in branch.