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Purchasing a property is a significant milestone, and buying with a friend or partner can make the process more manageable and financially feasible.
However, entering a joint mortgage agreement requires careful consideration and understanding of the legal and financial implications.
This guide will explore the key aspects of buying a property with a friend or partner in Cambridge, ensuring you’re well-informed before making this important decision.
In the UK, up to four people can jointly own a property. This arrangement allows friends, partners, or family members to combine their financial resources, making it easier to secure a mortgage and afford a home.
Joint ownership can also provide more borrowing power and increase the likelihood of mortgage approval. However, it’s crucial to understand the responsibilities and legalities involved, as each co-owner will have a shared interest in the property.
When buying a property with someone else, you must decide between joint tenancy and tenancy in common. Joint tenancy means that all owners have equal shares and rights to the entire property. In the event of one owner’s death, their share automatically passes to the surviving co-owners.
Tenancy in common, on the other hand, allows co-owners to have different shares in the property. This option is often preferred by friends or business partners as it offers more flexibility. Each owner’s share can be sold, mortgaged, or bequeathed independently.
For a first time buyer in Cambridge, choosing the right ownership structure is essential, so it’s advisable to seek legal advice to understand which arrangement suits your situation best.
If one party stops making mortgage payments, it can create financial strain and potentially lead to serious consequences for all owners.
The mortgage lender will hold all parties jointly responsible for the debt. This means that if one person fails to pay, the others must cover the shortfall to avoid default.
It’s essential to have a clear agreement in place outlining each party’s financial responsibilities and to communicate openly to manage any financial difficulties that arise.
Removing an ex-partner from a mortgage can be complex and typically requires refinancing the loan.
The remaining owners must demonstrate to the lender that they can afford the mortgage payments on their own. The process involves:
It is wise to seek mortgage advice in Cambridge during this process to ensure all legal requirements are met.
If you wish to remove your name from a joint mortgage, similar steps are required:
Professional guidance from mortgage advisors in Cambridge and solicitors can provide clarity and support during this transition.
Buying a property with a friend or partner in Cambridge can be an exciting venture, offering both financial benefits and a shared investment.
For a first time buyer in Cambridge, understanding the different ownership structures, financial responsibilities, and steps to take if circumstances change is crucial.
By being well-informed and seeking professional mortgage advice in Cambridge, you can navigate the complexities of joint property ownership and make a decision that suits your long-term goals.
Once you’ve saved enough for a mortgage deposit, the next step is preparation. Before you are ready to start your process, make sure your mortgage application is in the best position.
If you are a first time buyer in Cambridge, you will find this guide very beneficial to aid you with your mortgage application.
Also, this article will feature helpful tips to speed up your mortgage application for those looking to remortgage or move home in Cambridge.
The first thing you should do is obtain an up-to-date credit report. Having an up-to-date credit report is essential for you to provide during mortgage application; ideally, you should try and get yours arranged prior to speaking with a mortgage broker in Cambridge. Your report will be reviewed by one of our mortgage advisor in Cambridge before forwarding you to a suitable lender.
Another thing that you should do before making an offer on a property is to obtain an agreement in principle. The good news is getting in touch with an expert mortgage broker in Cambridge like ourselves, we can often turn around an agreement in Principle within 24 hours of your initial appointment.
Make sure to produce a photo ID, the required documents will have to be photo identification such as a Driving License or Passport – though if you’re using one for proof of ID then it can’t be used as proof of address. If you are a non-UK national working in England on a Visa then this will also need to be presented.
You will also be required to prove where you live. This is usually in the form of a utility bill or bank statement within the last 3 months.
Your bank statements should reflect your income and regular expenditures. It will be a displeasure to Lenders if they see gambling transactions on your account and they will also not be happy if you are seen to have surpassed an agreed overdraft limit or your direct debits have bounced regularly. The key factor is to get ahead of the game and get prepared as best as you can.
Not all lenders will ask to see your Bank Statements but it is an option that is available to them if they choose to utilize it – regardless of whether they do ask for your bank statements, they want to be confident that you take your finances seriously. The bank statements which you produce should consist if your salary going in and your bills going out.
A vital step in the mortgage application is evidencing your deposit for Anti-Money Laundering purposes. To help the process it is best not to move finances around your accounts too much as this will make it a lot more difficult and may delay the process.
Lenders like to see that you are saving your money responsibly, but that doesn’t exempt you from having to account for any large recent deposits into your accounts.
If you have been gifted a deposit, then there will need to be written confirmation stating it’s a non-refundable gift.
The most pivotal point of the application is proving your income. If you’re in employment then sufficient evidence would be your last 3 months’ payslips, though some lenders will also ask for your most recent P60. Lenders will take into account regular overtime, commission, shift allowance and bonuses. Additionally, extra earnings may also be considered with some lenders such as part-time jobs or self-employment.
Many applicants are self employed in Cambridge nowadays – if you are a self-employed applicant then you may mean you will need to acquire your Accounts’ help to request your last two or three years’ proof of earnings from the Revenue. If you submit your own accounts then feel free to get in touch and we will be happy to advise you on how to go about downloading from the Government Gateway.
By working out an estimate of your expected outgoings after you move house means you can gain an idea of how much disposable income will be available to you to pay your mortgage after such things as regular expenditures, council tax, and utility bills have been paid out from your account. To help you with this, we are happy to send you our version of a Budget Planner to get you started.
As seen, there are many steps you must take to prepare fully for your mortgage application deeming it not an easy feat but it doesn’t mean you should worry.
If you approach the mortgage application with plenty of time and use a mortgage broker in Cambridge, your process will be a breeze!
Whether you are living with your parents/carers, or in rented accommodation you will wonder what is the next step up the property ladder. Do you continue renting or do you invest in a property and become a first time buyer in Cambridge?
In this article we discuss the positives and negatives to both renting and buying a property in Cambridge. Watch an in-depth discussion of the topic below in a MoneymanTV YouTube video.
If your plans involve staying somewhere temporarily, opting for renting is the logical choice. On the other hand, if you want to commit to a specific location, it’s advisable to save for a deposit and consider purchasing.
Having parents who themselves obtained a mortgage may also inspire you to become a first time buyer in Cambridge. Once you’ve accumulated sufficient savings for a deposit or have been fortunate enough to receive a gifted deposit, you may be encouraged to start your mortgage process!
Mortgage repayments tend to be cheaper compared to rent payments. However, interest rates are subject to variation, which consequently influences the variability of your mortgage payments.
If you manage to secure a fixed-rate mortgage, you won’t face this problem. Opting for a fixed-rate mortgage guarantees consistent payments over a predetermined duration. When it comes to rent, you will typically see that the costs can stay the same or increase. It’s unlikely that they will decrease.
Homeownership in Cambridge offers a profound sense of stability for individuals and their families. As long as you manage your payments, nobody can force you out of your home.
Being a tenant does offer certain safeguards, such as specific notice periods, but your options remain constrained if the landlord decides to reclaim the property. However, this arrangement becomes less appealing when considering family dynamics, work commitments, or proximity to schools.
In certain cases, landlords extend the option to purchase the property to their tenants before seeking external buyers. This approach not only benefits tenants but also saves landlords on estate agent fees.
Opting for renting in Cambridge can offer increased flexibility compared to property ownership. Giving notice to your landlord when you plan to relocate for a job opportunity in another region is relatively straightforward.
However, the situation shifts for homeowners. They face the dilemma of determining whether to rent out their property or sell it if they plan to move. The intricacies of selling a home and acquiring a new one involve both significant expenses and time commitments.
You should always be absolutely certain when buying a property in Cambridge. Don’t buy a property and immediately regret the purchase as the complications of buying a home and moving home in Cambridge straight away can be expensive.
Landlords carry the responsibility to fix any repairs that are required on the property. However, the quality of this support can vary among landlords, and there might be instances where you end up conducting some repairs yourself.
Conversely, if you’re a homeowner, property maintenance rests on your shoulders. If anything needs repairing, you must arrange the repairs yourself.
Contrary to popular assumptions, property ownership doesn’t suit everyone’s circumstances. For instance, if you’re moving in with a friend or a partner, is taking out a mortgage together the right option. We like the question, “Have you tried living with each other?”. If not, renting could be a fitting choice for your circumstances before taking out a mortgage in joint names.
If you choose to take out a mortgage and things don’t go to plan, meaning that you have to remove someone’s name from a property, this process can prove challenging and there are lots of costs and fees involved. If this happens, it is important that you get specialist mortgage advice in Cambridge and speak with an expert in the field.
If you are thinking of purchasing a property in Cambridge, you should consider getting mortgage advice in Cambridge. It can be a stressful process, especially when it is your first time taking on the mortgage journey.
As a mortgage broker in Cambridge, our job is to take all of this stress away and find a perfect mortgage deal for your personal and financial situation. You should take your time when it comes to purchasing a property in Cambridge, they are a huge investment and you must be positive that it is the best decision for you.
The credit scoring system frequently stirs concerns among both first time buyers in Cambridge and home movers in Cambridge. These individuals might perceive it as an inequitable method employed by mortgage lenders to assess loan applications.
It’s imperative to grasp that mortgage lenders possess a distinct perspective. Credit scoring empowers them to mitigate risks and achieve more consistent outcomes at a reduced operational cost.
If you find yourself feeling apprehensive about the potential impact of the credit scoring system on your mortgage application, there’s no need for undue alarm. It’s important to bear in mind that the landscape comprises a plethora of mortgage lenders, each employing their unique scoring systems and criteria.
To navigate this process adeptly, procuring a current copy of your credit report is highly recommended as you embark on your mortgage application journey.
Supplying your mortgage advisor in Cambridge with an up-to-date credit report from the outset significantly bolsters your chances of securing approval on your first application attempt.
This proactive approach equips your mortgage advisor in Cambridge with a comprehensive understanding of your financial history, thereby enabling them to provide tailored recommendations.
Keep in mind that credit reports are dynamic, shaped by an array of factors. As such, taking the initiative to review and rectify potential issues or disparities on your credit report beforehand can substantially enhance your overall mortgage application experience.
Rest assured that your mortgage advisor in Cambridge possesses the expertise to navigate the intricacies of credit scoring systems. They can guide you toward suitable lenders whose criteria align seamlessly with your financial situation.
By harnessing their knowledge and leveraging access to multiple lenders, you maximise the likelihood of securing a mortgage that perfectly suits your requirements while adeptly addressing any potential impediments presented by credit scoring.
Several credit reference agencies are available for your use, including well-known names such as Experian and Equifax. We recommend considering CheckMyFile for its comprehensive approach, which combines information from multiple agencies.
CheckMyFile offers a user-friendly platform for obtaining your credit report, providing a comprehensive view of your credit history and financial position. With a 30-day trial period, you have the flexibility to cancel at your convenience.
By using the provided link below, you can access a special offer that allows for an instant, complimentary PDF download of your credit report. This enables you to quickly review your credit information and address any potential discrepancies or issues.
This resource serves as a valuable tool, empowering you with the information needed to make informed decisions when applying for a mortgage or engaging in financial transactions.
Try it FREE for 30 days, then £14.99 a month – cancel online anytime.
When setting out to improve your credit score, exercising caution with price comparison websites becomes crucial. These platforms can inadvertently trigger credit searches that have the potential to negatively impact your score.
Being mindful when using such websites is wise. If you’re planning to apply for a mortgage in the near future, it’s prudent to avoid seeking additional credit during this time.
While maintaining some credit and responsibly repaying it can certainly have a positive impact, mortgage lenders generally prefer not to see a recent surge in borrowing activities.
Enhancing your credit score can also be influenced by your presence on the electoral register. Ensuring the accuracy and up-to-date status of your name and address is important, as this information contributes to shaping your creditworthiness.
Thoroughly verifying the accuracy of all your listed addresses helps avoid any confusion that might inaccurately suggest you reside in multiple locations concurrently.
Maintaining a healthy credit score involves refraining from maxing out your credit card every month. Opting to use your card judiciously and settling the balance completely each month showcases responsible credit utilisation and can exert a positive influence on your score.
While closing dormant store or credit card accounts might result in a brief, initial dip in your score, this strategic move can yield long-term benefits by reducing vulnerability to fraud.
If you share financial obligations with a family member, friend, or former partner, such as joint accounts or shared fiscal responsibilities, their adverse credit history has the potential to impact your score.
For active accounts, severing these financial connections may not be feasible. You can request credit reference agencies to dissolve these financial associations if the respective accounts have been closed.
It’s important to recognise that the depth of information you provide to our esteemed and knowledgeable mortgage advisors in Cambridge significantly influences the quality of their guidance.
Equipping them with a comprehensive understanding of your financial landscape empowers them to provide tailored advice and assistance tailored to your unique circumstances.
By fostering transparent and open communication, you substantially enhance your chances of receiving optimal support throughout the entire mortgage journey.
We typically find that first time buyers in Cambridge can get overwhelmed by the whole mortgage process. Once you have found a property that you are interested in, how do you make an offer?
There are many different questions like this and applicants sometimes get lost in all of the jargon, confusion and stress that can sometimes come with getting a mortgage. It is important to remember that there are experts out there that can help you and take all of this stress away.
For example, did you know that our mortgage advisors in Cambridge can help you make an offer on a property? We want to make your mortgage experience run as smoothly as possible and will do everything in our power to help.
Making an offer on a property can be a whole minefield. In this guide, we look at things you need to consider when making an offer on a property in Cambridge.
Once you have found a property in Cambridge that you want to purchase, your estate agent will want to make sure that you have sufficient funds to continue with the sale. To prove this, you will be asked to provide an agreement in principle.
An agreement in principle (AIP) is a document that is issued by your mortgage lender that states that they are willing to let you borrow from them. This is agreed in principle of you providing supporting documents to evidence your income and overall affordability for a mortgage. We are able to obtain an agreement in principle for you within 24 hours of your free mortgage appointment.
Once you have issued your AIP to your estate agent, they will also carry out their own anti-money laundering checks. This check involves looking over your identification and proof of address. Essentially, they are checking that you are who you say that you are.
Some estate agents may be cheeky and try to sell you additional products and services. One example would be their in-house mortgage advice. Using an estate agents in-house mortgage advisor often comes with high fees; fees that could potentially be lowered when using a mortgage broker in Cambridge. We find that most homeowners nowadays are savvy enough to recognise these sales tactics and go elsewhere anyway.
This is why it is important to prepare when getting ready to make an offer on a property. Arrange your AIP in plenty of time, speak with a mortgage advisor in Cambridge and most importantly be vigilant and don’t fall for an estate agent’s tactics.
Speaking directly with the seller and learning about their situation can be a great start when making an offer on a property. There is always an emotional side to selling a property and playing on that part of the process can be a great part of the negotiation process.
One example of playing on the emotional side could be if you were planning to raise a family in the property. If the seller has raised a family of their own in the property, this can build a positive relationship with the seller and create that emotional connection.
Taking time to understand the seller’s motivations for selling and their future plans can give you leverage when negotiating the purchase price.
When making an offer on a property in Cambridge, you may find that the purchase is part of a property chain. This is where the seller of the home that you are looking to move into is waiting on their seller to move out of their property. This can go on and on, to the point where moving dates are pushed back.
If you are lucky enough that your purchase is not part of a property chain, you may want to speak with your seller or the estate agents and let them know that you can move into the property as quickly as possible. If the seller wants a quick sale and wants to move on from the property, this could encourage them to progress the sale much quicker.
In some cases, if there are several other buyers interested in the property, letting the seller know that you can advance through the purchase quickly, then they may favour your offer over others, you never know!
The “art of negotiation” comes into play here. Taking time to understand the seller’s situation can really help you when making an offer on a property in Cambridge.
The most important thing to consider when making an offer on a property in Cambridge is that you should never offer more than what the property is worth or more than you can afford.
The strategies that are commonly used are either;
1) Make your first offer your best offer to show that you are a serious buyer and to avoid a lengthy negotiation process.
2) Start off with a lower offer to leave some room for negotiation if your initial offer is declined.
The strategy that you choose will differ, the main factor being how much you want the property.
Have confidence in your offer! When you put forward your first offer, do not worry if it is below the asking price. Your offer is what you are willing to pay for the property, and if you are declined, don’t worry about it.
Most other buyers who have put forward an offer will have likely done the same. Sometimes, it can take more than one offer to be accepted, it’s perfectly normal.
If you are able to find out the other offers that have been made on the property, this could give you a good indication of what you may need to match. Again, this depends on how much you want this property in Cambridge.
If you feel unsure about how to make an offer on a property in Cambridge, don’t hesitate to get in touch with our team. Even if you are not a first time buyer in Cambridge and are planning to purchase your second home and need help, don’t worry, our job is to help you through your mortgage process no matter your situation.
Unfortunately, just because your offer has been accepted by the seller, you are still not guaranteed to get the property until all of the documents have been signed and your mortgage lender accepts your mortgage application.
As a mortgage broker in Cambridge, if your offer has been accepted we would recommend requesting that the property is taken off the market so that other buyers can’t put in more offers.
To complete your mortgage application, you need to contact your mortgage advisor in Cambridge and speak to your solicitor to set a realistic target date for exchange.
To obtain an agreement in principle, a reliable mortgage broker in Cambridge like us can assist you by acting on your behalf and communicating with the mortgage lender. You can schedule a free mortgage appointment with one of our experienced mortgage advisors in Cambridge either through our Get Started online form or by giving us a call.
During this appointment, your mortgage advisor in Cambridge will request proof of your income, employment, credit history, and other relevant personal information that will be helpful in assessing your eligibility for a mortgage.
Once you’ve provided this information, we can usually obtain your agreement in principle within 24 hours. This will give you an approximate idea of how much you may be able to borrow, providing you with confidence as you navigate the property market.
Obtaining a mortgage agreement in principle can be a smart move before starting your property search, as it gives you a general idea of your borrowing capacity. This helps you avoid wasting time on properties that are beyond your financial means. As a first time buyer in Cambridge, this can save you a lot of time!
Additionally, having an agreement in principle can give you an advantage when making an offer on a property, as sellers and estate agents may view you as a serious buyer. However, it is important to note that an agreement in principle is not a guarantee of a mortgage, but rather a useful tool in the home-buying process.
We recommend arranging your mortgage agreement in principle before searching for a new property. This pre-agreement provides you with a general estimate of the amount you can borrow, enabling you to avoid wasting time on properties that surpass your financial capacity.
Furthermore, holding an agreement in principle can enhance your position when making an offer on a property. Sellers and estate agents are more likely to perceive you as a committed buyer, granting you an advantage over those who lack an agreement in principle. When moving home in Cambridge, if another buyer has an AIP and you don’t, they may have the upper hand against you.
It is important to recognise that an agreement in principle does not guarantee a mortgage but serves as a valuable aid in the home-buying journey.
When applying for an agreement in principle, your mortgage advisor in Cambridge will collect personal information such as your full name, date of birth, current address, length of time at your current address, employment status, length of time in your current job, income details, regular outgoings, credit history, and more.
This information is used by the mortgage lender to assess how much they are willing to lend to you. The lender may also require additional information, such as bank statements or proof of income, before making a final decision.
An agreement in principle is different from a mortgage offer. An agreement in principle provides an initial indication of the amount a mortgage lender is willing to lend based on the information you have provided. It is not legally binding and does not guarantee a mortgage offer.
A mortgage offer, on the other hand, is a formal agreement from a mortgage lender confirming that they will lend you the necessary funds after conducting a thorough assessment. It is one of the final stages of the mortgage process and sets out the terms and conditions of the mortgage.
Typically, obtaining an agreement in principle for a mortgage will not significantly impact your credit score, as most mortgage lenders perform a soft credit check that is not visible on your credit report. However, some lenders may perform a hard credit check during the agreement in principle process, which could affect your credit score, especially if you’ve applied for multiple agreements in principle within a short time.
It is important to limit the number of mortgage applications you make and only apply for an agreement in principle when you are genuinely considering purchasing a property.
Having an agreement in principle provides several benefits. It gives you a clear understanding of how much you can borrow, helping you search for properties within your budget and saving you time.
It can also give you a competitive edge when making an offer, as sellers may prefer buyers who already have an agreement in principle.
Additionally, it can expedite the mortgage application process once you find a property to purchase. However, it’s important to limit your applications and only apply for an agreement in principle when you are genuinely interested in buying a property.
Before making any property offers, we recommend speaking with a mortgage broker in Cambridge. By obtaining an agreement in principle beforehand, you can determine how much you can borrow and narrow your property search within your budget.
As a mortgage broker in Cambridge, we can provide an agreement in principle within 24 hours of your initial mortgage appointment. Book your free mortgage appointment today and let us assist you in obtaining your agreement in principle as you embark on your mortgage journey with the support of a trusted mortgage broker in Cambridge.
If you’re a homeowner with a mortgage, you may have come across portable mortgages in the market. These mortgages provide you with the flexibility to transfer your current mortgage to a new property without incurring any penalty charges.
This feature can be beneficial if you’re currently on a fixed-rate mortgage with low-interest rates and planning to move to a new home. By transferring your mortgage, you can avoid an Early Repayment Charge (ERC) that would have been applicable if you paid off your existing mortgage before its maturity.
In addition to avoiding ERC, portable mortgages allow you to keep the same terms and conditions as your previous property. This can be advantageous if you have favourable interest rates, repayment terms, or other features that you’d like to retain.
However, it’s important to note that not all mortgages are portable, and some may have restrictions or conditions when transferring them to a new property. It’s crucial to carefully review the terms and conditions of your mortgage before making any decisions.
Not all mortgage deals in the market are portable. Specialist mortgage lenders, in particular, may have complex qualification criteria that don’t allow for porting your mortgage. If you’re considering moving home in Cambridge and want to know if you can transfer your mortgage, it’s best to consult with your mortgage lender directly. They will provide you with guidance on whether porting is an option and any associated restrictions.
If you find that your mortgage in Cambridge cannot be ported, you may need to explore alternative options such as remortgaging in Cambridge or paying off your existing mortgage before purchasing a new property. In such cases, it’s crucial to seek specialist mortgage advice in Cambridge from a qualified advisor. They will assist you in making an informed decision that aligns with your personal and financial circumstances.
While portable mortgages offer flexibility, there are situations where porting may not be suitable. One common reason is if your current lender is unwilling to lend additional funds needed for the new property. Another reason could be higher interest rates on the additional funds compared to your existing mortgage. In such cases, homeowners may choose to obtain a separate mortgage for the additional funds with more favourable rates.
Before making any decisions, it’s recommended to consult with a mortgage advisor in Cambridge. Getting a second opinion from an expert can help relieve stress and ensure you make the best choice. They will guide you through the process and help you assess all available options.
A sub-account is created when homeowners choose to port their mortgage and take out additional funds on a different deal than their original mortgage. This allows homeowners to retain their existing mortgage product while accessing additional funds at a different rate. The sub-account will have a separate interest rate, payment schedule, and terms and conditions from the original mortgage. It’s important to review and realign sub-accounts to avoid potential issues and ensure they still meet your financial needs.
If you’re planning to move home and require mortgage advice in Cambridge, it’s essential to consult with a qualified mortgage advisor. At Cambridgemoneyman, our experienced advisors specialise in helping clients with their moving home mortgage needs. We take a personalised approach to understand your unique situation and find the most suitable mortgage product for you. With access to a wide range of lenders, we can offer a comprehensive selection of mortgage products. Contact us today for expert guidance on your mortgage application.
Mortgage Protection Insurance is a term that is used to surround different kinds of cover. The purpose of this cover is to limit financial stress on you and your loved ones from any unforeseen circumstances that may occur.
Below, Malcolm has put together a video highlighting the significance of having the correct insurance in place for your situation. Due to the past events of the coronavirus pandemic, the importance of health and getting insurance is more prominent than ever.
When it comes to protecting you and your family, there is a range of insurances to choose from. Cambridgemoneyman can compare lots of providers and tailor the appropriate policy to your circumstances. Here are the insurance policies that we can offer to you:
One of our experienced Mortgage and Protection Advisors in Cambridge is always at the other end of the phone or email. If you need more information, book your free insurance review today.
Life insurance is there to protect your loved ones financially in the circumstance that you or another joint policy holder pass away. Here at Cambridgemoneyman, we can talk you through all the different types of life cover accessible to you and advise the most suitable plan for you.
This type of policy covers serious illnesses detailed within a policy. Usually, this includes stroke, heart attack, certain types and stages of cancer, and more.
You will find some illnesses will not be covered, this will be detailed within your policy. Furthermore, if you have pre-existing health issues you knew you had before taking out the insurance, it’s unlikely they will be covered. In the policy, the specific illnesses covered and not covered will be stated.
If you fall victim to one of the several specified critical illnesses, the benefit gets paid and pays you whatever the long-term prognosis of that illness. Seeking specialist mortgage advice in Cambridge is key because the type of conditions covered vary from company to company, and this is why this type of insurance cannot be solely price-driven.
Usually, many businesses will offer Life and Critical Illness cover as a combined policy, and the order of pay-out would be dependent on which event happens first, either death or severe illness, the pay-out is made. They could also get written on a single or joint life basis.
Unlike Life and Critical Illness, where the cover pays out a lump sum, Income Protection pays out a monthly sum that acts as a replacement of your wages in the event of you being unfit to work. Furthermore, there are no limitations on the illnesses or injuries covered, except whether they make you unfit to work.
One restriction, however, is the amount you can cover and how quickly the benefit would start to get paid. The policies are underwritten on your health and lifestyle when you applied, just like Life and Critical Illness Cover. When it comes to Income protection, the policies are written on a single life basis.
A menu plan is when you combine your Life Insurance, Critical Insurance, and Income Protection. A discount is added by the providers each time you add a benefit which can make it cost-effective.
Furthermore, a menu plan provides you with a range of cover and benefits that you can mix and match. This allows you to tailor a plan that is appropriate for your needs. Covering yourself and your family is something we strongly advise should the worst happen. Our mortgage advisors in Cambridge can help you with providing more information if you are unsure.
Family Income Benefit is the least common, but can often be useful. In particular, for households with young people. These plans can get taken to Life and/or Critical Illness Cover, and get underwritten in the same way.
Unlike the traditional forms of policy, rather than pay out a lump sum, the cover would pay an annual or monthly income for the remainder of the term of the plan. Therefore, it can replace the payment of the primary worker for several years, dependent upon a particular client’s situation and, because of this, would usually be written on a level or basis, or an index-linked basis designed to keep up with inflation.
You will find that many people have more than one different type of policy, and it wouldn’t be right to think of Mortgage Protection Insurance is something that is not needed because you are thinking the unexpected won’t happen.
Our Mortgage Advisors in Cambridge are here to discuss with you and tailor the type of cover to be the most suitable combination to your family’s priority and budget. To find out more, give us a call or fill out our enquiry form to speak with one of our Dedicated Protection Specialists Advisors in Cambridge today.
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.
If you are a first time buyer in Cambridge or are looking at moving home in Cambridge, 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.
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Authorised and Regulated by the Financial Conduct Authority.
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Cambridgemoneyman.com & Cambridgemoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.
Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk
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