A lifetime mortgage is a form of later life loan that is secured on your home. It allows eligible homeowners to achieve equity release in Cambridge. Your loan will not need to be repaid until you have either died or moved into long-term care, where the property would be sold to do so.
By taking out a lifetime mortgage, you are making use of the equity that has currently been sitting within your home over your time as a homeowner in Cambridge. Many use this for things like home improvements, inheritance, to pay off debts, to fund their own lavish retirement, care costs, and more.
Firstly, you must be eligible for a lifetime mortgage. This means that you must be at least 55 years old and own a property that is worth at a minimum, £70,000. You are not required to be a mortgage holder to do this, only a property owner and with this being your main residence.
In order for you to make a start on the lifetime mortgage process, you will need to book in and chat with a qualified and trusted later life mortgage advisor. They will take a look at your situation to see if equity release in Cambridge or an alternative, is appropriate for you.
Lifetime mortgages are generally found in two main varieties. The first type you will come across is a lump sum lifetime mortgage, with the second one being a drawdown lifetime mortgage.
A lump sum lifetime mortgage works in the same way that the name would suggest, as an all-in-one release of equity in a lump sum payment. This allows you to access the amount you need, as soon as you need it, but will leave you with a much larger loan.
A drawdown allows you to access your equity and draw from it whenever is necessary. This means you aren’t releasing all your equity at once and are only using it when you need to. You will also only be paying interest on what you release, which means you will owe less.
With all types of lifetime mortgage, you have the option of letting your interest to roll-up, though this will likely also impact the amount of inheritance that will be left behind once the sale of your home has been completed and the loan has been repaid.
Thankfully, not only can one of our later life mortgage advisors help you to ring-fence an amount of equity ahead of time, for covering any inheritance you’d like to leave, but due to our membership in the Equity Release Council, you will also reap the benefits of the “no negative equity guarantee”.
This guarantee is a lifeline for many, as it means that your estate will never owe more than what the property is worth. You can rest easy in the knowledge that your family won’t be struggling financially either after you have died or have moved into long-term care.
As is typically the case with any mortgage type, there are both positives and negatives to taking out a lifetime mortgage. The importance of these vary depending on who it is that is taking out a lifetime mortgage in Cambridge, as well as their plans for the future.
Of course one of the bigger plus sides to look at, is how flexible you can be with releasing equity from your home, in using both the drawdown and lump sum varieties of lifetime mortgage. You are also able to be flexible in your monthly payments.
You have the option of letting your interest simply roll-up, which gives you more cash to play with as you won’t be making any payments monthly. The cons of this, is that letting interest roll-up will leave you with less funds for inheritance or care when you either die or move into long-term care.
The area of inheritance can be a big deal for many as well, as a vast majority of homeowners look to take out equity release in Cambridge to achieve this. Thankfully, you are able to ring-fence some of your equity to do so, as your later life mortgage advisor will help you plan in advance.
The good news is that, if you are able to maintain these payments, you will have a higher amount to leave behind for your family when you have passed on. Additionally, as discussed, your family will benefit from a no negative equity guarantee, meaning they will never owe more than the home is worth.
Furthermore, there are new safeguards that have been put in place for homeowners in more recent memory, thanks to the standards set by the Equity Release Council.
Ultimately, this will always depend on what it is you are hoping to achieve, as well as your own personal situation. There are a variety of different mortgage types available to homeowners in later life, with lifetime mortgages and equity release in Cambridge only being one of those.
It is the role of a dedicated and trusted later life mortgage advisor in Cambridge to take a look at your case and figure out whether equity release in Cambridge, or something else, is better for you to take out.
In a lot of cases, an alternative will likely be much better for you. Your later life mortgage advisor will be able to check this with you, prior to making a start on the process of equity release in Cambridge and a lifetime mortgage.
Oftentimes, more suitable routes can include taking out a personal loan, a conventional mortgages or a remortgage, retirement interest only, term interest only or something else. If a lifetime mortgage is right for you, your later life mortgage advisor will ensure that all of your needs are met.
This will include laying out a plan for what it is that you hope to achieve in the future, how you predict your circumstances might change, and any inheritance you are looking to leave behind. To learn more about how we can help with a lifetime mortgage, speak to our later life mortgage advice team today.
To understand the features and risks of equity release in Cambridge, ask for a personalised illustration.
A lifetime mortgage in Cambridge may impact the value of your estate and it could affect your entitlement to current and future means-tested benefits. The loan plus accrued interest will be repayable upon death or moving into long-term care.
Perhaps you have decided the time is right for a change of location, choosing to look at your options for moving home in Cambridge. In order to ensure you are happy with your new home, take a look at our list of the top ten factors to take into account when deciding where you would like to live next.
It’s important to understand your preferences when deciding on a set location to settle down and start a life in. Do you thrive in the busy atmosphere of the “big city”? Maybe you would much rather live the quiet life, looking out over the landscape? There are positives and negatives to both of these options, it’s all down to what you’d personally prefer.
Whether you regularly make a commute for work or enjoy spending your weekends exploring new areas, transport links can make or break a potential new location for many people. Make sure that you take a look into the transport links available and how much they’re all going to cost for you to use.
If you have any children or are planning to have some later down the line, then being within the catchment zone of either a specific high school or a variety of schools is something you may see as a high priority.
Local authority websites and school league tables are great places to find information on which schools are the best for the area in question.
Prioritising the facilities and local amenities that you would like nearby is something that could be helpful. Determine which ones must-haves, those that would be nice to have, and finally, those that aren’t too important if you can’t get them.
Some people prefer having a park nearby for the kids. Others maybe prefer to have a gym on their route home from work or a bank within the vicinity of their home.
How close would you rather be to friends and family and family? Would you rather be close enough to help them when they’re in need, or will you require any kind of help from them? Do you prefer peace and quiet or are you going to be spending time with people regularly?
Depending on the location you’re looking in, what is deemed as “good value for money” will be different. If you’re looking to get the most out of your money, then you might benefit from looking at somewhere that is a little cheaper. In doing this though, you might need to sacrifice some of those factors you were hoping for.
The way the local community is can have a huge impact on your experience of living in a house. If you would much rather have a small, tightly-knit neighborhood, then research the area and have a word with the estate agents.
You might find some areas even have a dedicated local website or community Facebook group. If a community is not so important to you, but you would still rather live somewhere that is more quiet, then maybe take some time to research the crime rates.
If you are moving because of your job or career, then it is important to think about how far that job is from where you are buying. That being said, if you’re going to be job hunting after your home move, do some minor research in advance as to what sort of businesses are in the local area and who the main employers may be.
There are lots of different types available on the market for home buyers nowadays. Whether you’re looking at an end terrace with a beautiful garden, or are looking for an inner-city, super modern apartment, make sure to look at different options available to you and see what property type best fits your needs.
If you’re looking for a property to settle down in for a very long time, then it’s worth taking a look online to see if there is any proposed investment for the local area. Make sure this is going to benefit you and the lifestyle you are after. If you’re after the quiet life and there’s a new housing development planned nearby, will this ruin your ideal housing scenario?
Whether you are looking at your options as an inexperienced first-time buyer in Cambridge searching the market for your first home or are looking to move home, it’s likely you will have discovered that some of the larger estate agents and builders would prefer it if you used their in-house mortgage advisor and conveyancing services.
As a standalone mortgage broker in Cambridge, we have spent many years working hard to help out our customers. We’ll hear from a large amount of customers who have felt themselves being pressured by an estate agent to opt into that companies personal financial services. Here are just some of the instances we’ve heard from people who get in touch;
A lot of estate agents across the industry have a reputation for refusing to put an offer forward if you pass up on their in-house mortgage advisor and go with an external mortgage broker instead.
As if this act wasn’t bad enough, some have even gone as far as to refuse putting an offer through because another client who actually said yes to their in-house service has also made an offer on the same property.
Something else we hear all too often is the ridiculous quotations they have been known to give for their services. Unfortunately there have been customers we’ve spoken to who weren’t aware these were overpriced and went forward with them. One notable customer was charged £1,500 for a simple purchase with a particular estate agent.
A member of our dedicated mortgage advice team got right onto this and we were able to get this cost down. Off of this incident, we recommended that the customer use another conveyancer in the area near the property and we were able to drop the cost of the service to a significantly less £750; the estate agent was charging double this amount!
Once you’ve made an offer on a property, the common train of thought would be that pretty soon you’ll get a phone call detailing whether or not your offer has been accepted. What often happens with estate agents instead, is they will call up and demand to know the conveyancer you have chosen.
Their questionable methods don’t end there, as following this they have a habit of refusing to take the property off the open market until you agree to use their in-house mortgage services.
As touched upon earlier, though these will be far overpriced, many crumble under the pressure and simply agree to please the agent and avoid losing their home (even though that shouldn’t happen). This is common with first-time buyers in Cambridge who want their first mortgage experience to go smoothly.
As you’ve seen here, estate agents are notorious for making the process difficult and bordering on near harassment. A dedicated mortgage broker in Cambridge can help you with these situations and in some cases, bring the costs of other services down to a level that is fair. Now to answer a question you may be thinking at this point…
Absolutely not. These are highly illegal ways to conduct business. As a customer, you have the right to use whichever companies you would like during your home buying process. You have full freedom to use any mortgage broker or conveyancing solicitor that you wish to, it’s your personal process and personal choice.
Unless you explicitly sign a contract in the beginning to say you will only use their services (which you won’t be offered anyway), you have zero obligation to use their services for anything other than the sale process between yourself and the seller of the property.
Please always remember, when negotiating on the purchase price of a property; Should the people selling the property you’re looking to buy really know your personal financial circumstances, as well as the amount a lender is willing to let you borrow? This is a fact they will use to their advantage when pushing their in-house services.
Be wary and if you definitely don’t want to use their service, put your foot down and do not succumb to the pressure. Your future family home and financial situation all depends on how well your mortgage process goes.
We will always have your best interests at heart, keeping you informed throughout and jumping through those hoops on your behalf, so you can stay relaxed and happy. The information provided here is based on a genuine history of tactics used, that we wouldn’t wish others to go through if they can avoid it.
For all your mortgage needs, please do get in touch and we’ll do our very best to help you out, hopefully securing a great deal and your future family home in the process.
A 95% mortgage is as simple as the name would suggest; you are borrowing against 95% of the price of a property, and then you are covering the remaining 5% with your deposit. An example of this is if you looked at buying a property that was worth £150,000 with a 95% mortgage, you would be putting down £7,500 as your deposit and borrow the remaining £142,500 from the lender.
Off the back of the March 2021 Budget, Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, making 95% mortgages more readily available from the bigger high street banks.
This is fantastic news for First-Time Buyers and Home Movers alike, as this scheme will continue running until December 2022. Certain terms and conditions will apply though, which is something your Mortgage Advisor in Cambridge will be able to look at, to see if you qualify.
All our customers who opt to Get in Touch will receive a free, no-obligation mortgage consultation where one of our dedicated mortgage advisors will be able to make a recommendation on the best possible route for you to take.
95% mortgages are usually accessible by both First-Time Buyers in Cambridge & those who are Moving Home in Cambridge. Whilst saving for a 5% deposit sounds like a pretty straightforward concept, you’ll still need to have an acceptable credit score and prove that you are able to afford your monthly mortgage repayments, in order to access a 95% mortgage.
A good credit score is essential in the process of obtaining any mortgage, especially a 95% mortgage. Things like paying any current credit commitments on time, ensuring your addresses are updated and checking that you’re on the voters roll, can all help with your credit score.
Affordability is another one that is important to take note of. By giving the lender details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments, your lender will be able to get a general overview of whether or not you are able to afford this type of mortgage.
Nowadays we see lots of family members helping each other get onto the property ladder, especially parents looking to further their children’s lives. The way this usually happens is by gifting the person looking to find their home, the deposit required. Known through the industry as the “Bank of Mum & Dad, Gifted Deposits are only intended to be a gift, and not as a loan. The lender will need proof that this has been agreed, before it can be used towards your mortgage.
When looking for a 95% mortgage, you want to make sure you have the right type of mortgage. Each mortgage type works differently, with that choice allowing you to find one that is most appropriate for your personal and financial situation.
Some homeowners and home buyers prefer Fixed Rate or Tracker Mortgages, mortgage types which mean you either keep interest rates at a set amount for the term given or have your interest rates tracking the Bank of England base rates.
Alternatively, you might find that Interest-Only or a Repayment Mortgages are more your style. Interest-Only allows cheaper payments until you need to pay a lump sum at the end (mostly now used for Buy-to-Lets), whereas a Repayment mortgage (a normal mortgage if you’d like) means you’ll be paying interest and capital combined per month.
Seeing as a mortgage is such a large financial outgoing, you need to be prepared and need to be aware. You might find things like higher interest rates, remortgaging difficulties due to less equity and then negative equity all cropping up if you’re not.
There is no need to worry though, as all these can be avoided if you’re savvy enough with your process to begin with. The more deposit you put down for a property, the less risk the lender will see you as.
A larger deposit, of say 10-15%, would not only reduce the rates of interest by a noticeable amount, but would also give the property more equity and reduce the risk of negative equity, thanks in part to you borrowing less against the property.
So, whilst the risks may seem intimidating, planning ahead and saving for a bigger deposit to access something like a 90% or even an 85% mortgage will be a massive help in your mortgage journey and something you’ll be able to reap the rewards from in the future.
Rishi Sunak’s second Budget as Chancellor brought two pieces of welcome news for the property sector as the Government attempts to transform “Generation Rent” into “Generation Buy” to help stimulate the UK economy, namely the new 95% Mortgage Guarantee and an extension of the Stamp Duty Holiday.
The name of this scheme is misleading as not everyone that applies is guaranteed to be offered a mortgage, it is still subject to affordability and credit score. The “guarantee” itself is that the Government will ensure Lenders don’t stand a loss if they grant a 95% mortgage to a customer who then subsequently falls into arrears and is repossessed leaving behind negative equity.
This scheme should in theory give Lenders more confidence to lend even though the applicant only has a smaller deposit to put down. Of course, Lenders never want to repossess someone’s home unless it is the last resort, but if that happens then the new scheme would cover any shortfall.
Lenders have been worried about the prospect of home values decreasing so this measure should alleviate that concern although of course, the chances of negative equity occurring will naturally reduce should property prices increase as a result of these announcements!
The scheme is available to both 1st Time Buyers and Home Movers, it’s available on any property (not just new build) and will run until December 2022. Some major High Street Banks have already signed up to the scheme and it’s likely more will follow later on. It’s still a big challenge for Lenders to cope with the demand they are getting for mortgages due to the difficulties training and supervising staff working from home but they will want to offer as many of these mortgages as they can.
When the Stamp Duty Holiday was launched last year we all hoped life would be very much back to normal by the cut-off date of 31st March 2021 but things didn’t pan out that way as we know. Solicitors are struggling to keep up with the workload and if lots of chains had collapsed then it would have partly defeated the object of the exercise.
Therefore it was good to hear the scheme has been extended to 30th June for purchases up to £500,000 and 30th September for purchases up to £250,000.
The Government certainly sees the property sector as an area that can play a big part in our economic recovery and if you are looking to buy a home or remortgage this year please reach out and we will be happy to advise you.
Owning a home that is filled with happiness, love and warmth is the dream of every first time buyer in Cambridge at the start of their process. Having your own home feels special, no matter where you go or whatever you do, you will always feel most comfortable in your own house.
There is no doubt that buying a home is one of the biggest financial decisions you will ever make, so it’s understandable you’d want to get things right the first time around. If you’re finding it difficult to obtain a mortgage, a mortgage broker in Cambridge may be able to help.
Once you have your home, you will be able to take pride in being a homeowner and having the freedom to make any changes (so long as planning permission approves, if necessary) that you want to. That’s why getting the right mortgage advice in Cambridge is a must have.
Of course with taking on a new financial venture, you’ll want to know how much it will all cost. Whilst specifics vary, we have put together a guide about the costs of buying a home in Cambridge, what is included, what to look out for and how to best prepare as a first time buyer in Cambridge.
Estate agency fees can at times be negotiable and will have a starting fee that varies from agent to agent or company to company. More importantly, the most affordable agents are the field experts who you will find working online.
The main reason for their lower prices, is that they aren’t covering the costs of maintaining a physical location such as an office. That being said, you should still be conscious about what you do online and make sure you prepare ahead of time for the right deal.
Before you take out a mortgage for such a large amount of money, the mortgage lender you are looking to borrow from needs to make sure that the property in question is actually worth the amount that you will be paying for it.
In order to achieve this, the mortgage lender needs to conduct a professional survey, which may cost you some extra charges in the form of a survey fee. On the other hand, some mortgage lenders may provide this free of charge, although they may not provide you with the report.
For the surveys you do pay for, you could be looking at a few hundred pounds. Of course, if you want an in-depth home buyer’s report for documentation, the service fee almost doubles.
Your mortgage advisor in Cambridge will explain the differences between each survey to help you make a more informed decision. For first time buyers in Cambridge, it may be recommended to go with the premium survey if the property is old or in somewhat worse condition.
Though you may consider an in-depth survey an expensive option, it may save you from repairs and maintenance costs throughout the coming years.
As a typical rule of thumb, the mortgages that have the lowest interest rates tend to have higher service charges. Set up fees for the mortgage can be as low as nothing at all, to as much as a few thousand pounds, it really does vary.
An open & honest mortgage advisor in Cambridge will help you to make arrangements for all of your finances, especially when it comes to your mortgage arrangement fees. In some cases, the lender arrangement fees can also be added to your mortgage.
The inclusion of a solicitor is a crucial part of your mortgage, as it is them who will be handling the legal side of the purchase and mortgage process.
For instance, they may validate the property ownership, find out any future plans for adjoining properties, as well as the most important step, which is the processing and handling of funds, to complete the sale of the property.
When you view your solicitor’s fee, check if their quote includes VAT and local searches. Though a typical solicitor’s fee is a few thousand pounds, the legal verification is worth the price. Getting first time buyer mortgage advice in Cambridge can help you find out which is the best solicitor for you.
Some properties or purchases may be subject to stamp duty – a paid land tax to the government. You can check the official government website to get the latest updates and more information regarding stamp duty.
The rules concerning this tax change every now and again, so it’s worth checking to make sure you’re up to date. If stamp duty is something you need to pay, your mortgage advisor in Cambridge will advise on this.
Before you get in touch with a trusted and dedicated mortgage broker in Cambridge, it is important to make sure that you do your research first, so that you are going with the best mortgage broker for you.
An expert mortgage broker in Cambridge will sometimes charge a small fee, which will entirely depend upon the amount of your mortgage and complexity of your case. Most mortgage brokers, like us, will only charge a fee, upon completion of your mortgage, not upfront.
When moving home with a mortgage, many people will hire a van to move all of their belongings into their new home.
We would always recommend hiring local removal companies to make the most of their services. The costs of these can vary, though it could be said that hiring and driving your own van could cost less.
If you are a First-Time Buyer in Cambridge or are looking at Moving Home, you will know that several forms of mortgages are available. Some of them are more common than others, and some may even be difficult to find. We have assembled a list of some of the most common forms of mortgages. You will also find one of our MoneymanTV episodes useful for learning more about these.
A fixed-rate mortgage means that for a specified time, the mortgage rates will remain the same. You should decide your period, usually 2, 3, or 5 years or more, for your payments. You know your mortgage balance will typically be the largest outstanding one, regardless of inflation, interest rates, or the economy.
Your interest-rate shall track the base rate of the Bank of England by using a tracker mortgage. In other words, the lender does not fix the rate itself. You pay a sum above the base rate of the Bank of England. An example of this is where the basic rate is 1%, and you are tracking at 1% more than the basic rate, you pay 2%.
If you carry out a repayment mortgage, you pay capital and interest together every month. So long as you carry the full term of the interest loan, you will pay the mortgage debt at the end, and the property shall be yours. This is the risk-free way of paying the lender back the money.
The interest you are paying in the early years, and particularly with a period of 25, 30, or 35 years, your balance would decrease very slowly. In the last 10 years or so, this scenario changes, where your payments pay more capital than interest and your balance falls even faster.
While some transactions allow mortgages on an interest-only basis, residential property is even more difficult to obtain on an interest-only basis. Lenders are also less likely to sell a product that is interest-only. However, it may be an alternative under some conditions.
This involves reducing the amount of money you pay out as you’re older or have other savings. When it comes to offering these items, lenders are very strict now, and the valuation loan is much smaller than before.
You can build a savings account alongside your mortgage account for an offset mortgage. How this works, is you pay interest on the difference, for example, you pay £80,000 for the balance of £100,000, and £20,000 is deposited in your bank account. This can be a very successful way to manage your capital.
Debt Management Plans are wonderful things. It is an agreement between the creditor to pay off any owed payments weekly or monthly, depending on what is agreed.
The advantages of using one of these include making regular set amount payments, you can have peace of mind and in some cases, creditors can freeze the interest so it’s more affordable for you or even stop actions like taking you to court (though this depends on the company).
In this Case Study, we look at a client who needed one of these to further her chances of obtaining a mortgage in Cambridge.
When Katie called us after being declined for a mortgage elsewhere we could tell she was in a very stressful situation. She had come through a messy divorce and having to look after her children on her own with little financial assistance from her ex had clearly taken its toll.
By her own admission, she had made some bad financial decisions including trying to help out other family members with money and her debts got on top of her.
Katie decided to take control of her situation and reached out to Step Change for advice and they recommended she entered a debt management plan.
Having turned over a new leaf, Katie’s finances improved, and she was comfortably able to keep up the payments on the plan and her confidence rose to the point where she was able to start thinking about Moving Home in Cambridge.
As part of her divorce, Katie had ended up with the family home in her sole name and there was a decent amount of equity in the property to put down a deposit for her onward purchase.
Due to her previous financial mistakes it was going to be impossible to find a High Street lender prepared to grant her a new mortgage even though all the payments on her current mortgage were up to date.
When she called us, I advised Katie that there are lenders who will consider applicants with previous missed payments, defaults and CCJs and indeed there are options for people who are currently in a DMP, as long as all the payments have been up to date for at least 12 months.
The only thing is when it comes to the non-High Street lenders is that they tend to charge higher rates of interest because they are lending in situations where others would not. Katie and I ran through a detailed budget planner and we were both confident the proposed mortgage payments were affordable, and the mortgage went through fine.
As a footnote, if you need to take out a mortgage in Cambridge with a specialist lender it does not necessarily mean you will be paying that higher rate of interest forever.
As your credit rating improves and the issues you had move further and further into the past, the more chance you have of being accepted for a High St mortgage down the line. We keep all our customers mortgages under review and often the specialist mortgage deal is a “stepping stone” towards obtaining a cheaper mortgage in the future.