Burgesses News >> Consider your repayments with mortgage protection

Interesting article here from Burgesses entitled “Consider your repayments with mortgage protection”.

Servicing your mortgage repayments each and every month is a must if you do not want to fall into arrears and risk losing your home to the lender through repossession. One way of protecting against a lost income due to accident, sickness or unemployment is by taking mortgage protection.  Read more

New holiday home website for holiday homes to rent

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/

Best Fixed Rate Mortgages

 

A fixed rate mortgage is one where the interest rate is stabilised at a certain percentage for a specified period of time or for the life of the loan.  It may be useful when it comes to budgeting as there will be one fixed figure to deal with at all times. 

Fixed rate mortgages may be granted on an interest only or repayment basis.  Applicants who are employed, self employed or self certifying their income, may also qualify for some of the best fixed rate mortgages.

The fixed rate that lenders use is guided by the Bank of England’s (BOE) base rate.  Lenders usually use the BOE base rate and add a percentage on top to arrive at their fixed rate.

Securing the best fixed rate mortgage may be done by comparing what different lenders have to offer and choosing the mortgage that is best suited to you.

Who Could Benefit
Choosing the best fixed rate mortgage may be of benefit in the following circumstances:

• Customers who want to stick to a strict budget
• Customers who think the Bank of England base rate will rise higher than the rate of their lender

Benefits Could Include
Some of the benefits of the best fixed rate mortgages are:

• You’ll know how much you have to pay for your mortgage payment for as long as the interest rate remains fixed.
• You will have peace of mind knowing that your payments will not increase.
• A fixed rate mortgage could allow you to budget better as you are likely to know your mortgage payment each month.
• If there are any rises in the Bank of England base rate above your mortgage fixed rate, it may not affect you.
• A homebuyer may find great security in knowing that as long as their income doesn’t fall, they’ll be able to repay the mortgage.

Drawbacks
Here are some of the drawbacks of choosing a fixed rate mortgage:

• If you do have a fixed rate mortgage you will not benefit if there is a drop in the interest rate. This will only apply if the Bank of England interest rate falls below the fixed interest rate you are paying.
• There is usually an arrangement or booking fee
• Some lenders have early repayment charges that apply if you want to repay your mortgage within the fixed rate period
• After the rate ends, unless you switch lenders, you may have to pay the lenders standard variable fee.
Summary
If you decide to choose the best fixed rate mortgage you could find, the following is worth remembering:

• The lenders interest is based on the Bank of England base rate
• Fixed rates can be done for a specific period or for the life of the mortgage
• Once you have a fixed rate, your mortgage payments should remain the same
• When the fixed rate is finished you may be forced to pay the lenders standard variable rate
• Fixed rate mortgages may be useful for planning and budgeting purposes.

Stamp duty abolished below £175,000

Residential property purchases of less than £175,000 will be exempt from stamp duty for the next 12 months.

A Treasury statement said: “The Chancellor of the Exchequer has today announced that stamp duty land tax will not apply to purchases of residential property of £175,000 or less.

“This will provide an exemption from stamp duty land tax for land transactions consisting entirely of residential property where the chargeable consideration is not more than £175,000.

“This relief will apply to transactions with an effective date on or after 3rd September and before 3rd September 2009.”

At present, buyers of properties that cost between £125,000 and £250,000 have to pay 1% of the purchase price in stamp duty to the Government .

Today’s announcement by the Treasury will take more homebuyers at the bottom end of the housing market out of the stamp duty bracket altogether, providing savings of upto £1,750.

Buyers of properties over £250,000 will still have to pay 3% in stamp duty, and homes above £500,000 4%.

What is a buy to let mortgage?

Buy to let mortgages are used when you need to buy a residential property to let. In the past the cost of buy to let mortgages would have been significantly more than a residential mortgage. Due to increasing competition and the quick growth of the buy to let mortgage market this gap has reduced.

With a standard mortgage the lender will want to be sure that you can afford the repayments so they will ask for proof of your earnings to check. With buy to let mortgages the lenders only want to see that the mortgage payments can comfortably be covered by the expected rent. The rental income will be checked by the Surveyor when the property is valued so it needs to be inline with comparable properties in the area.

Most buy to let mortgages are taken out on an interest only basis as this is the most tax efficient, it also keeps the monthly cost down. A buy to let mortgage lender will want the rental income to cover the interest only mortgage payment by around 125%. So if the mortgage payment is £500 per month the rent needs to be at least £625 per month. This calculation does differ between buy to let mortgage lenders and will govern the maximum mortgage you will be allowed.

Mortgage fees have increased across the board over the past few months. For a buy to let mortgage expect lender fees to be in the region of 1% to 2% of the loan amount.

Deposits for a buy to let mortgage are still around 15% with some lenders expecting you to pay more now.

Generally you get the same choice of interest rates with buy to let mortgages. Tracker, fixed or variable will be available for you to choose from. With all mortgage products remember to check how long you will be tied to the lender for as this may affect your future plans for the property. Some buy to let mortgage products have an extended tie in period. This means the redemption or early repayment charge period lasts longer than the actual special interest rate period.

Buy to let mortgages are generally very quick to set up. The lender will credit score you and then get the property valued. Provided all the financial aspects stack up they will then issue your mortgage offer. There is no need to prove your income with payslips or accounts as the lender assesses your income on a self certification basis.

However, it is important that you factor in interest rate rises and property voids into your cashflow so you can be certain the mortgage repayments remain affordable.

Buy to let mortgages are only suitable for properties that will be let on an Assured Shorthold Tenancy (AST) basis. If it is your intention to use the property as a holiday let then a holiday let mortgage will be required. Not all buy to let mortgage lenders like this type of business and so there are only a handful of lenders offering holiday let mortgages.

Accommodation Know How online price reduction

Leading mortgage broker Holiday Let Mortgages has this week lowered the price of an online subscription to Accommodation Know How.

Accommodation Know How online is also know as the Pink Booklet Online and is run by the UK’s Tourist Agency, Visit Britain.

If you run a hotel, guesthouse or let out self-catering accommodation such as a holiday let, you need to be aware of the legislation that applies to such businesses.  A subscription to Accommodation Know How online keeps you up to date with changes in legislation that may affect your business.

The normal price is £26.00 but Holiday Let Mortgages are offering a full 12 month online subscription for only £14.99. Please visit Holiday Let Mortgages for more information on this great offer.

http://www.holidayletmortgages.co.uk/accommodationknowhow.htm

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