Enhanced Wealth News

Media frenzy -  ‘There’s no money left.’

One of the most alarming suggestions by the media is encouraging people to believe that there is no longer any money left to lend. This is absurd, as the real situation is very different. Banks may not be lending ninety five percent of the properties value or more, but if you have a good job and a deposit that should mean with the right buy to let mortgage advice that you get a better rate of interest. The banks are tightening up their lending criteria but will be very interested in offering financial products to people they deem to be a safe place to use their money.

Media frenzy -  ‘There is no one to help me.’

If you are facing some problems then don’t hesitate to speak to a buy to let mortgage broker or an independent financial adviser to see if they can offer ways to get around your financial difficulties. Even if you are not in great difficulty but are choosing to simply remortgage your property it’s highly recommended that you get the best buy to let mortgage advice possible. That means asking more questions and looking at your options and not just taking the so called deal of the moment. In some cases it may it may mean paying a higher rate of interest for a short time until you can be sure you are not trapped into an unhelpful financial situation for an even longer period of time.

Media frenzy: ‘Buy to let can’t work’

Some doom and gloom merchants are claiming that buy to let mortgages are no longer cost effective or a useful way to finance your property. This couldn’t be further from the truth. There are extra considerations to be made like the possible increase in arrangement fees and higher interest rates, but there are also some excellent properties coming onto the market for the first time so it’s worth considering the advantages of buying a property now.

The key principles to ensuring a buy to let mortgage works with your property and not against it are simple.

•    When there are a larger number of properties it makes sense to shop around for the right property. Now more than ever before estate agents and auction houses are reporting large amounts of properties coming onto the market at affordable prices in the best locations so view more properties.

•    Potential buyers have far more room to manoeuvre when it comes to the price they offer.  They also have increased levels of information about the property through the introduction of the Home Information Pack and Energy Performance Certificates.

•    When buying at auction or considering buying a property which you deem to be a bargain it is essential that you and your buy to let mortgage broker have as much information about the property before a final decision is made about any purchase.

Quite simply, a bridging loan is a short term loan that is used to bridge the gap between purchasing one property, whilst waiting for the proceeds of the sale of another. Typically a bridging loan will be offered at a fixed term, and at a slightly higher rate than a standard mortgage loan.

A bridging loan can be fairly expensive, and you would need to consider the costs very carefully before applying for a bridging loan. In certain situations it may not be possible to avoid needing a bridging loan, if you simply must pay for your new property or lose it. When the property market is slack, it sometimes becomes a necessity to take up a bridging loan to ensure that you do not lose out on your ideal property.

What Types of Bridging Loans Are Available?

There are two basic types of bridging loans offered to borrowers, the first is known as a “closed” bridge, and is offered to people who have already actually exchanged on their existing property sale, lenders see this as fairly low risk, as it is not often that a property deal falls through after the exchange has taken place. The second kind of bridging loans are named “open” bridge, this type of bridging loans are taken up by people who have not yet sold their existing property, indeed they may not yet have placed their property on the market, but are keen to purchase their new property as soon as possible. Lenders will almost always insist that there is plenty of equity in the existing property and will need to be given good reason as to the reason for the loan before making a decision.

When applying for an open bridge, the lender will usually ask to see the details of the mortgage offer on the property you are looking to purchase, along with full details about the property you propose to buy. They may also insist on proof that your current property has been put on the market, and ask you to provide details of how you intend to make repayments, and what you will do if you have not sold your property within the term of the bridging loan. If you fail to sell your property within the term of the loan, most lenders will allow you to renegotiate, as long as the property market is still healthy and you have been making repayments.

Bridging loans are typically offered at a rate somewhat above other forms of mortgage finance, and will often include an arrangement fee. You may be offered choice of lower interest rate and higher arrangement fee or lower arrangement fee and higher interest rate, which one you should choose will depend upon how long you believe you are going to need the bridge to last.

You should definitely take professional advice from a commercial mortgage broker when considering bridging loans and other forms of finance may well be available to solve your immediate problem.

Second home mortgages can be a very complicated issue, especially in the current financial climate.   People need a second home mortgage for a number of different reasons.  The most common reason for second home mortgages is to finance properties which have been bought with the view of letting it out to a tenant, this type of mortgage can also be called a buy to let mortgage or holiday let mortgage.  Renting out a property can lead to long term financial gains in the form of receiving monthly rent from the tenant and a large profit if the decision is made to sell the property in the future to a rise in the property’s price.  This is a great way for people to invest and secure their financial future.

Second home mortgages are also popularly used for the purchase of a holiday home.  Holiday home’s are very popular in the UK, especially with people who live busy lifestyles in hectic cities, a holiday home in the country is their perfect getaway to the countryside in order to relax on the weekends or on their time off from work.  These holiday homes can also be rented out when not needed to raise income from rental, they can also be sold in the future for a possible profit. Other reasons for a second home mortgage would be to purchase a house for a member of the family such as children.

When applying for a second home mortgage, the decision of the lender to grant a mortgage will be dependant on numerous factors.  For their best interests, they must be sure that the borrower will be able to afford the repayments on the second home mortgage, which can be decided by considering any current liabilities they have in their name.  These liabilities could include other mortgages, loans and even their credit rating will be taken into consideration.

If you are purchasing a property with the intention of letting it out to a tenant, it is advisable to carry out research in order to find out if it is likely that the property will increase in value, factors such as the area and local development should be assessed.  Also you should consider the likelihood of finding tenant, it is unadvisable to purchase if the likelihood is low.  Purchasing a second home however can be a great investment, whether it be as a holiday home, buy to let or for general investments such as purchasing for your children, high profits are possible as long as extensive research and consideration has been carried out.

Holiday Let Mortgages specialise in providing mortgage finance for UK holiday home owners.

We have now enhanced our service to clients by developing a new website which showcases their holiday homes to rent. The new website, www.holidayletproperty.co.uk, includes property details and photos with a link to the holiday home website or the holiday letting agents website to help promote the property as a holiday destination.

In addition, we will soon be launching a new marketing guide for holiday homes with tips and advice on how to raise the profile of your holiday home and increase bookings. We already have a special offer in place with www.holidaylettings.co.uk and more information can be found here http://www.holidayletproperty.co.uk/holiday-home-owners/

Very soon we will be launching a new holiday home insurance policy in conjunction with Towergate Connect.

Standard home insurance policies are not appropriate for holiday homes, second homes or holiday lets which is why it is important to arrange the correct type of cover for your holiday home.

Our new holiday home insurance plan will cover:

• UK holiday home insurance
• Overseas holiday home insurance
• UK holiday chalet and lodges insurance
• Overseas holiday chalet and lodges insurance

We will update the Holiday Let Mortgages insurance page (http://www.holidayletmortgages.co.uk/holidayhomeinsurance.htm) when this product is finalised.

You have bought your dream home and have been granted a mortgage to finance the purchase; things are going well in work so the repayments won’t be too much of a problem, besides you got a great deal thanks to a mortgage broker.  Have you ever wondered what it would be like if things suddenly took a turn for the worst?  It is impossible to predict the future, no-one is invincible and no-one is 100% guarded against redundancy.  If you suffer an accident or fall ill which leaves you unable to work, income support is very unlikely to be as much as your wage.  If you are made redundant, unless you find a new job which does not happen overnight, you will only be earning job seekers allowance.  How will you pay your mortgage repayments is any of the unfortunate incidents above happen?

There is a way you can protect yourself against mortgage payments if you are unable to work due to injury, illness or redundancy.  The mortgage payment insurance will pay the monthly instalments on your behalf for a specific period of time.  Taking out a mortgage payment insurance policy will help with preventing serious debt, bad credit rating and general stress or worry.  You can take out mortgage payment insurance either with your mortgage company, or separately from one of the numerous financial companies who offer the service.  It is highly advisable to shop around for the best deal and a mortgage payment insurance policy which will fit your needs perfectly.  Most people think that it’s always the case that mortgage payment insurance policies are expensive, whilst this is true in some cases, there are some great deals to be had, and it’s all about finding them.

Mortgage payment insurance can also be known as mortgage payment protection insurance or MPPI.  They can be complicated to apply for and seem unnecessary, but there is no harm in asking for help with understanding all the aspects of MPPI’s.  For people who don’t bother with mortgage payment insurance, they are at high risk of getting into bad debt if they lose their job for some reason and cannot afford the mortgage repayments.  Even if they only lose their job for a short period of time, it can seriously affect one’s finances.  Mortgage payment insurance policies are available from high street banks, specialist finance firms and online financial companies.

Enhanced Wealth offer an award winning mortgage payment insurance policy from British Insurance. Full details are avaialable here http://www.enhancedwealth.co.uk/asu/mppi/index.htm