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Mortgage Q&A

We work with a large number of lenders that offer mortgages where there have been issues with credit in the past.

The rules around Buy to Let mortgages were changed in 2017 by the Prudential Regulation Authority (PRA). They defined a portfolio landlord as an individual who has more than four mortgaged properties.

Whether you own investment properties, solely, jointly or in a Limited Company, the team at Key Life Financial Services are well versed and experienced in this area and, can provide you bespoke and specialist advice tailored to your circumstances.

There are three repayment methods available:

Capital & Interest – Your monthly payments will include repayment of the capital (loan amount borrowed) and interest. Your mortgage will reduce over time and will be repaid in full at the end of the term.

Interest Only – Your monthly payments will only pay the interest charges on your loan, and not any of the capital borrowed. Your outstanding mortgage balance will not reduce over the mortgage term and will still need to be repaid off in full at the end of your mortgage term.

Part Interest Only/ Part Repayment – This is a combination of capital repayment and interest only. The capital repayment element will be paid off by the end of the term. However, the interest-only element will still need to be repaid off in full at the end of the mortgage term.

 

The ability to make overpayments depends on the lender and type of product you have.

Typically, if you have a fixed rate product, the lender will have a restriction of overpaying a maximum 10% of the balance annually. If you have a Standard Variable Rate product, then there are usually no restrictions to the amount you can repay at any time.

We have access to special products giving your flexibility to make payments which exceed your 10% allowance without a penalty, as well as allowing you to clear the whole mortgage without incurring an early repayment charge. However, the lender may charge a small exit fee which is typically a few hundred pounds.

A handful of lenders have recently started offering loans at 80%. However, the majority of Buy to Let lenders will cap the LTV to 75%. The LTV will depend on the monthly Rental, tenancy type, personal income, experience, credit rating and property type, to name a few.

Based on your individual circumstances and requirements, we can obtain the best rate and mortgage product for you.

Yes, you do not necessarily need to own a property to obtain a buy to let mortgage. You can essentially be a first time buyer, first time landlord.

Yes, as if you own a property anywhere in the world, you are deemed to be a property owner and you may be liable to pay an additional level of Stamp Duty. You need to consult your legal & tax advisor to confirm your status on this matter.

We work with over 50 of the UK’s biggest Mortgage Lenders. Please see the full list in alphabetical order below for the lenders that we deal with directly:

Accord Mortgages, Aldermore, Axis Bank, Bank of China, Barclays, Bluestone Mortgages,BM Solutions, Buckinghamshire Building Society, Chorley Building Society, Clydesdale Bank,Coventry Building Society, Cynergy Bank (Bank of Cypress), Danske Bank, Dudley Building Society, Fleet Mortgages, Foundation Home Loans, Godiva, Halifax, Hanley Economic Building Society, Hinckley & Rugby Building Society, Hodge Lifetime, Interbay, Kensington Mortgages, Kent Reliance, Landbay, Leeds Building Society, Lendinvest, M&S Bank, Magellan Home Loans, Mansfield Building Society, Melton Mowbray Building Society, Metro Bank, Monmouthshire Building Society, National Counties Building Society, Nationwide Building Society, NatWest, Newcastle Building Society, Norwich and Peterborough Building Society, Nottingham Building Society, Paragon Mortgages, Pepper Money, Principality Building Society, Progressive Building Society, Saffron Building Society, Santander, Scottish Widows Bank, Shawbrook Bank, Skipton Building Society, State Bank of India, The Family Building Society, The Mortgage Lender, The Mortgage Works, Together Mortgages, TSB, Vida Homeloans, Virgin Money, Zephyr Homeloans

With an interest-only mortgage, your monthly payment will only cover the Interest charge on your mortgage and your actual mortgage balance (or capital) will not reduce. Therefore, at the end of the mortgage term, your balance will be the same as the original amount borrowed.

With capital repayment, you will not only be covering the interest charge but also some of the capital borrowed each month, which means that as long as you keep up with repayments, your mortgage will be paid off at the end of the mortgage term.

A bridging loan is taken out to ‘bridge’ the gap between the purchase of a new property and the sale of an existing one – usually when you are moving home. The loans are generally short term and secured on the existing property but repaid once the current property is sold.

In a commercial sense, Bridging Finance is more commonly used to buy a property that is in disrepair, will undergo extensive redevelopment or requires planning permission to change its use to name a few, in these examples a conventional mortgage may not be available. They are also commonly used for auction purchase where a transaction is needed to meet deadlines.

These types of loans will help you secure your new purchase and are more expensive than conventional finance/ mortgages. With any Bridging loan, you need to have a long-term solution (often referred to as the Exit) on how the bridging loan is to be repaid.