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How Do Buy to Let Mortgages in London Work?

The Financial Conduct Authority does not regulate some types of commercial or buy to let mortgages in London.

When it comes to the world of mortgages, there are many different routes that a property purchaser can take. From first time home buyers making their first steps onto the property ladder, to homeowners remortgaging, as well as holiday lets and even HMO’s, there’s a lot you can achieve!

One particular mortgage area that we frequently encounter when we speak to customers, is for a buy to let mortgage in London.

What is a buy to let purchase and mortgage in London?

A buy to let in London will be classed as an investment property; You are prohibited from personally residing in it, it is solely there for profit. If you have privately rented previously, you will have likely been living in a property with a buy to let mortgage attached to it.

In order for a property to count as a buy to let in London, it has to be intentionally mortgaged as such, with the landlord making clear their plans to rent it out. The tenant will pay a monthly rental cost, that should be able to cover the monthly mortgage costs, plus a little more.

Am I eligible for a buy to let mortgage in London?

There are a lot of different areas that you can look at, to figure out whether or not you are eligible for taking out a buy to let mortgage in London.

Some of these factors can include what type of property it is that you are looking to buy, how old you are (there will typically be a limit of between 21 and 75, with mortgage lenders who work past 75 for a buy to let in London being limited), as well as your buy to let landlord experience.

The biggest factors that will be looked at by a mortgage lender are your affordability, the minimum deposit requirements and the current status of your credit score.

Affordability

So that you can prove order to prove your eligibility for taking out a buy to let mortgage in London, you must first prove your affordability to the mortgage lender. The vast majority of mortgage lenders will have their basis for this centered around your projected rental income.

Projected rental income is the amount that your mortgage lender feels you should charge in rent, in order to cover all of your monthly mortgage payments, plus additional funds. They will have a specific requirement for this, and the mortgage lender will calculate it using the properties value.

As well as using what they deem is the projected rental income, some buy to let mortgage lenders will also have their own minimum income requirement, which is typically around £25,000, though this is entirely dependent on the mortgage lender you will be borrowing from.

An expert mortgage broker in London with experience in working with buy to let mortgages in London, such as our team here at Londonmoneyman, will help you find the most suitable mortgage lender for your plans and on the most suitable mortgage deal.

Minimum Required Deposit

As will generally be standard with most purchases, you must put down a deposit for your buy to let mortgage in London. Typically speaking, the minimum for this is around 20-25% of the value of the property, though this can differ depending on your mortgage lender.

This is so that the mortgage lender has a reduced risk. By having a much higher deposit, you’re borrowing less funds against your property. This in turn will open you up to between a 75-80% loan to value, which gives you access to much better interest rates.

If you do fall into the category of a high risk purchase, say if you’re looking to take out a buy to let mortgage in London with bad credit, you may be asked to put down a deposit that is even higher than that.

Credit Score

You may be eligible for taking out a buy to let mortgage in London if you have a low credit score or a history of bad credit, though your choice of mortgage lenders will be greatly reduced. There are plenty out there, who may not even lend at all to someone with bad credit.

For the mortgage lenders who are still willing to help customers in these kinds of situations, they will be looking at factors such as, how serious your bad credit actually is and why it is that way. You may also be required to put down a bigger deposit.

How do I apply for a buy to let mortgage in London?

Before you make an application for a buy to let mortgage in London, you will of course first need to find a property you would even like to make a purchase on.

Once you have done that, book a free mortgage appointment and speak with an expert buy to let mortgage advisor in London, as they can confirm whether or not you are eligible, find the best deals out there for you, and find you a mortgage agreement in principle.

Following this stage, you will have the freedom to go and make an offer on that property, which will kickstart your full mortgage application process, providing you have had your offer accepted.

What type of buy to let mortgage in London could I apply for?

As a general rule, you will find that buy to let mortgage investors will take out their buy to let in London as an interest only mortgage. This means you only pay the interest per month, drastically lowering your monthly outgoings.

Once your term has reached its conclusion, you will owe the capital balance that remains. This is usually either paid off by selling the property or taking out a remortgage and moving it onto a repayment mortgage. You may also be required to set up a repayment vehicle, in order to cover the cost.

Whilst an interest only mortgage tends to be the more tax-efficient and popular of the mortgage types for a buy to let in London, you are still also able to take out repayment mortgages on your properties. This means you will be paying a combination of capital and interest per month.

Though this of course will increase your monthly mortgage payments, it will mean that equity can grow within your property. At the end of your term, you would own your property outright, without the need to make any capital payments back to the mortgage lender.

How much can I borrow for a buy to let mortgage in London?

As mentioned previously, a mortgage lender will want to stress-test your projected rental income, to review the amount you need to be charging in rent, so that you are able to cover the cost of your monthly mortgage repayments.

In terms of the amount that you would like to borrow, as long as your projected income can cover the amount that you are asking for, you will typically not be limited. That being said, a mortgage lender will want to see your projected rental income is more than your monthly payments by a certain amount.

What documents are needed for a buy to let mortgage in London?

For you to be able to apply for a buy to let mortgage in London, you will also need to give your mortgage lender a selection of documents, before you proceed. These usually include, proof of your income, deposit, ID, address, any bonuses and commission, as well as your current or most recent P60.

If you are a self employed mortgage applicant, you will generally need to provide your SA302 tax returns. Existing landlords may also be required to give proof of rental income, which usually comes in the form of an ARLA-regulated report, as well as a mortgage statement of all your existing properties.

By making sure you have as much of this with you as you can, ahead of taking out a buy to let mortgage in London, you will find that your mortgage application progresses much quicker than it otherwise would have. It is definitely within your best interests!

Are there any additional costs included with a buy to let in London?

Of course, much like there would be with any mortgage, you will have basic costs involved. You will obviously need to put down a deposit, so that is a larger cost. Then there are mortgage arrangement fees, application and broker fees, as well as monthly mortgage payment costs.

On top of this, you may also have other fees that you will need to pay. Some of the more frequently encountered fees you will have to pay, include valuation fees, product fees and mortgage exit fees. Additionally, there may be solicitors fees and disbursement fees, as well as stamp duty.

Your open & honest mortgage advisor in London will be able to provide more accurate advice on the potential stamp duty rates you will be paying. If you ever wish to exit your buy to let in London early, you may have to pay an early repayment charge (ERC), which may be quite expensive.

Lastly, you will have to think about the types of costs that will go beyond what you would be already paying. Landlord insurance is also something that you will have to think about, as well as any letting agent fees, income tax and the general upkeep of the property, such as making repairs.

All the different costs included with a buy to let mortgage in London can be different, depending on mortgage lender, as well as your own personal and financial situation. Not all of these will be factored, though your mortgage advisor in London will make sure you are aware of every cost involved.

Can I remortgage a buy to let in London?

Yes, you will almost always be able to remortgage a buy to let in London. We typically see landlords looking to take out a buy to let remortgage in London as a way of releasing equity from the property, with the intention of putting a deposit down on another property.

The equity that is in your buy to let property will work a little differently than a standard residential property, if you currently have an interest only mortgage. Normally your balance and the interest will come down together, creating a much larger gap between value and balance.

When you have an interest only buy to let in London, only the interest will decrease. That means the equity in your property depends on how much deposit you put down and what the value of the property now is. Speaking of interest only mortgage, you may wish to also pay the capital balance as well.

To achieve this, you would be remortgaging your interest only buy to let mortgage in London onto a repayment mortgage, which would increase your monthly mortgage payments but give you the option of paying both capital and interest at the same time.

If I am a first time buyer, can I get a buy to let mortgage in London?

Though you may have limited options, it may actually be possible to get a buy to let mortgage in London as a first time buyer in London. When you look at first time buyer buy to let mortgage options, your deposit will likely need to be bigger, so that you can borrow the amount you need.

Additionally, please also bear in mind that in doing this, you would lose out on other benefits that first time buyers would get, such as stamp duty, because it is not a main residence for you and generally, buy to let landlords will be paying stamp duty.

For many first time buyers in London, becoming a landlord can actually be a really useful way to give a boost to your income, prior to affording a mortgage of your own on a residential property that you would like to live in.

Always remember that in situations like these, a mortgage lender will assess you on your second purchase, knowing that you already have a mortgage to your name, which in turn could affect future affordability or reduce how much you could borrow.

Should I Overpay My Mortgage in London?

Overpaying has its perks for a mortgage – but not for all

Whether you are looking for first time buyer mortgage advice in London, thinking of moving home in London or looking to remortgage advice in London, overpaying, even by a small amount, can make a difference in the amount on the interest you pay back over your mortgage term.

According to a survey, 56% of homeowners with a mortgage never get around to overpaying. This is very interesting data because almost all mortgage applicants start off their mortgage journey with every intention of doing so (or at least that’s what they tell me!). 

All Homeowners know that overpaying, even by relatively small amounts, can make a big difference to the amount of interest paid back over the term. The earlier you start overpaying the better too as the extra payments have a longer period to have an effect. 

The survey by Compare the Market suggests that Homeowners cannot afford to make extra payments, but I feel the main reason is that life simply gets in the way. We know overpaying is the “right” thing to do but let’s face it, there’s always something else you can be spending your money on and plenty of those things are more exciting! 

Part of the problem here is actually remembering to overpay. It’s not something that’s particularly likely to cross your mind too often, except perhaps when your mortgage only has a few years left. 

What do I need to do before overpaying on my mortgage?

So, if you can see something of yourself in the above and would like to overpay so that, perhaps you can retire a year or two early then what should you do? 

I would recommend setting up a standing order payable to your lender each month. Set up the standing order to go out on the same day as your regular mortgage payment. E.g. your mortgage payment is, say £500pm and is collected on the 1st of the month. You can afford to pay an extra £75pm, so set up a standing order for £75pm to go out of your bank also on the 1st. 

The reason for the above is that very quickly you will start to “feel” that your mortgage is actually £575pm and you will get used to that within a matter of months. 

The beauty of doing a standing order is that, unlike a direct debit, a standing order is controlled by the payer, not the receiver. That means that if you have a financial emergency you can quickly log into your online banking and cancel the standing order so that it doesn’t go out next month. 

What impact can overpaying have?

Whilst it would be regrettable to have to stop overpaying, at least you would have benefitted from the overpayments made up until that point. Some mortgages will even let you make reduced payments or take a payment holiday if you have been overpaying for a while. Before taking a payment break though it’s important to check with your lender that you are eligible to do so to avoid a negative mark on your credit report. 

Overpaying your mortgage is a great habit to get into, you don’t need to go hell for leather at it unless you feel so obliged but even shaving a year or two off will be very welcome when you near the end of the term. 

Capital Raising Mortgage Advice in London

Specialist Mortgage Advice in London

If you have been doing your research on the world of mortgages or more specifically have been having a look at what your potential options for taking out a remortgage in London, you may have come across the term “capital raising” before.

Understandably, some may be confused as to what capital raising actually is. Simply put, capital is money, which means that capital raising is the financial terminology for the act of raising money.

There are a variety of different ways that this can be achieved and it is used for all manner of reasons.

Capital Raising Methods 

Remortgage to Release Equity 

As a general theme amongst conversations we have with existing homeowners, is that they would not only like to remortgage, but they would like to do so as a way to release equity for things like home improvements, to gift a deposit or something else.

If you are not too sure what equity is; Equity is the difference between your remaining mortgage balance and the amount that the property is valued at.

Further Advance Mortgage 

If during your term your property has increased in value, rather than enquiring about a remortgage to release equity, you may have the option of utilising something called a further advance.

This type of mortgage allows homeowners to take out an additional mortgage on their property to borrow an additional amount, as a way to release a portion of equity they have built up over time.

Further advances are typically taken over longer terms and have lower interest rates than standard personal loans, though you will also have to bear in mind that you will not only be paying back your primary mortgage, but also this as well.

Both these mortgages are separate from one another, the further advance is not added onto the first mortgage. This is two individual mortgages with the same lender, on the same property, with their own interest rates.

This mortgage type is something that can be a really good option for homeowners who perhaps don’t wish to remortgage or are tied into a deal so can’t remortgage. Remember the risks though, one of which being that there will be a higher risk of repossession if you cannot keep up your payments.

Second Charge Mortgage 

A second charge mortgage is a little similar to a further advance, allowing you to once again having another smaller mortgage running alongside your existing one, allowing you to release some equity.

The biggest difference between a second charge and a further advance, is that second charges are actually with a different mortgage lender and also have different interest rates.

If you were in an unfortunate circumstance where you were faced with repossession, your initial mortgage lender will be paid back from your homes sale, with any funds remaining from that sale then going to the second lender (but again, only after the first mortgage lender is completely paid back).

Capital Raising Mortgage Reasons

There are quite a few different reasons as to why you may find yourself in the market for something that allows you to capital raise against your home.

Popular options for achieving this include to fund any home improvements you would like to make, such as an extension, new home office or maybe even loft/garage conversions. We also often hear people wanting to consolidate unsecured debts against their home **.

Other instances where a homeowner may look to capital raise, is to perhaps gift a deposit to their children so they can get onto the property ladder, to buy a second home/property (common with those looking to start with a Buy to Let in London), and to pay for larger purchases.

Saving Your Time, Saving Your Money

If you have any portion of equity sitting within your property and are in the market for a capital raising mortgage, then you could be most suited for a remortgage to release equity. Of course our trusted mortgage advisors in London will make sure this is right for you before proceeding.

Book your free mortgage appointment and we will review your case to determine the most appropriate course of action. If a remortgage isn’t right for you, there may still be an alternative that fits what you are looking to achieve.

If you are aged 55+ and have a property worth at least £70,000, you may find yourself better suited for the option of equity release in London

To understand the features and risks of equity release, ask for a personalised illustration. Our typical advice fee is up to £1,495 only payable on completion.

A lifetime mortgage 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 repayable upon death or moving into long term care.

** With Debt Consolidation there are some risks to bear in mind. That is why we always recommend you speak with a qualified Mortgage Advisor in London, before you look at consolidating any unsecured debts against your property.

The Different Types of Mortgages Explained

Regardless of whether you are a first time buyer in London who is looking to find their dream first home, or you are looking to go through the process of moving home in London, it will soon become apparent that there are a lot of mortgage options out there for you.

There will be some mortgage options that are more popular than others, with some that are a little difficult to encounter altogether.

Below we have put together a comprehensive list of the different mortgage types that we come across. Each of these sections will also be accompanied by one of our video guides that explains them in more detail.

You can find many more useful mortgage guides here on moneymanTV. To learn more about the types of mortgages, go directly to our “Mortgages Explained” playlist here.

What is a fixed-rate mortgage?

What is a Fixed-Rate Mortgage? | MoneymanTV

A fixed-rate mortgage will mean that a homeowner will have mortgage payments that stay the same for the duration of a specific period.

It is entirely up to you how long your payments are fixed for, with many of them choosing to have between 2 and 5 years. This is to protect against any changes to inflation, interest rates or the economy, leaving you with the knowledge that your payments are safe and consistent.

You may wish to fix in for longer than this, however, a lot can change between 5 and 10 years, so it is entirely possible that fixing in for that long could leave you at a disadvantage at that point in time.

What is a tracker mortgage?

What is a Tracker Mortgage? | MoneymanTV

The Bank of England will have a set base rate, of which a tracker mortgage will follow alongside. This means that neither you or your mortgage lender will be setting the interest rate of your mortgage.

It will typically be at a percentage above the Bank of England base rate. If the base rate was sat at 1% and you were tracking 1% above that base rate, then you would be on an interest rate of 2% on your mortgage.

These types of mortgages don’t tend to be as popular as fixed-rate mortgage, as they can often fluctuate throughout your introductory period.

What is a repayment mortgage?

What is Repayment Mortgage? | MoneymanTV

This is the “standard” type of mortgage that you may think of. When a homeowners has a repayment mortgage, they will be paying a combination of capital and interest.

So long as you continue to keep up your mortgage payments for the length of the mortgage term, you will be guaranteed to have paid off your entire mortgage balance by the end of the term and you will own your home outright.

On the topic of your mortgage payments, a repayment mortgage is considered to be the most risk-free way to pay your capital back to the mortgage lender. In the early days of your mortgage, you will be paying more interest than capital.

By the end of your term, you will be paying back more capital than interest, which will make your balance reduce much faster than it would’ve done near the start.

What is an interest-only mortgage?

What is an Interest-Only Mortgage? | MoneymanTV

Nowadays it is mostly modern buy-to-let mortgages that will be set up on an interest-only basis. It is much less likely for someone to obtain a residential property on an interest-only basis.

Though it is not so likely for a mortgage lender to obtain an interest-only product on a residential property, it may still be possible in some cases, such as if you were looking to downsize at an older age or if you have investments you can use to pay back the capital.

Mortgage lenders have very strict mortgage product rules and the loan to values tend to be much stricter now than they were in years gone by.

What is an offset mortgage?

What is an Offset Mortgage? | MoneymanTV

When you have an offset mortgage, your mortgage lender will set you up a savings account that will run alongside your mortgage account.

How this works is, for example, if you have a mortgage balance of £100,000 and you deposit £20,000 into this new savings account, you will only be paying interest on the difference, so in this case, £80,000.

This is often considered to be a fantastic way to save yourself some money, especially if you are a higher rate taxpayer. That being said, it’s not for everyone. As is the case with all these options, speak to a trusted mortgage broker in London to see which option is best for you.

What are the 7 best places to live in London?

The best areas to live in London

If you are considering Moving Home in London, you are either in one of two boats; you are set on whereabouts you want to live, or you have no idea and have just started the process!

For those still unsure about where you want to live in London, we have put together a list of the best areas to live in and around the area.

1. Camden

Camden is a large, vibrant area in North London and homes over 280,000 people. Many families, couples, and single homeowners have settled down in Camden over the last decade and it is likely that more will make the move here too! This popular London borough is sometimes considered to be the best place to live in London. 

Camden consists of four main areas; Camden Town, Bloomsbury, Chalk Farm and Hampstead. In these areas, you will find a wide range of property styles. Terraced housing is quite common, particularly around the Camden Town area, however, you’ll still find apartments dotted around and lots of semi-detached and detached property options. Whether you are looking to raise a family in a bigger space or move into a quieter place by yourself, you are sure to find something in Camden. 

How about things to do in Camden? Camden is one of the liveliest places to live in London. With eateries, wineries, bars, markets, museums, art centres and places to shop, in Camden, there is always something to do and things going on around town. You’ll even find regular music events at locations such as the Roundhouse, Keats House, The Fiddler’s Elbow and Regent’s Park. 

Whether you are a First Time Buyer in London or looking to Move Home in London, you should consider Camden as somewhere to move to. Camden is rapidly becoming the most popular area to live in North London, you could be a part of it! 

2. Brixton

Brixton is a small, lively district in South London, with a population over 80,000. It isn’t located too far from central London; just south of the Thames and East of Clapham. 

One of the best things about living in Brixton is the affordable housing. Usually, there is also something for every type of person and their budget. Typically, we find that more people choose to rent in Brixton than buy, however, there are still frequently properties up for sale. As a Mortgage Broker in London, we can help you through this process and try to find you the best deal available for your personal and financial circumstances and your property.  

In the trendy, modern town centre of Brixton, you will find many places to eat, drink, shop and explore such as markets and parks. You’ll also find cinemas, concert venues and nightclubs. With strong transport links directly to central London via railway or subway, you can get in, around and out of Brixton easily too!

If you are raising a family, you’ll be pleased to know that there are many excellent schools in the Brixton area. Brixton is home to many primary and secondary schools, which is perfect if you currently have a family or are looking to start one.

If are thinking of starting your moving home process and Brixton is on your list of potential places to move to, get in touch with our team and we can arrange a free mortgage consultation to discuss your mortgage options.

3. Richmond

Richmond is situated in South West London and is known to be London’s most picturesque borough. The area is full of magnificent green spaces and plenty of amenities dotted around the area. Furthermore, there are many celebrity connections with Mick Jagger, Sir David Attenborough and Richard E. Grant owning homes here.

If you are looking for a perfect blend of country life and city living, Richmond is the place for you! This town has beautiful architecture, luxurious properties and rustic pubs with beer gardens. Richmond has a variety of properties both modern and dated with flats and terraced housing that is perfect whether you are moving as a family or moving as a couple or even on your own.

The area has many secret gems including Marble Hill House, Pope’s Grotto, Garrick’s Temple and Turners House. Furthermore, there are plenty of gorgeous parks and gardens, historic houses, theatres, museums and galleries.

Richmond Underground Station is perfect for them Central London commutes, however, there are also plenty more transport options like train. Furthermore, the area has lots of schools if you have a family or are looking to start one each providing primary or secondary education. Richmond is a brilliant area for both First Time Buyers in London and Home Movers in London! Benefit from living in a beautiful part of London that has a thriving community with a stunning landscape and plenty of things to do.

4. Hackney

Hackney is a district in East London and forms around two-thirds of the area of the modern London Borough of Hackney. It’s known for being the home of Hackney Empire which was built in 1901 and has been reborn as one of the capital’s premier live comedy venues. There is also a large green space called London Fields that has a lido, basketball field and a cricket club.

There are plenty of activities to do for all ages such as Hackney City Farm. If you have a family, this is perfect for kids to experience a bit of rural life in the heart of the city. For an older audience, you may want to go to this unique experience of The Viktor Wynd Museum of Curiosities. Hackney is also brilliant for social outings with many bars and restaurants at your fingertips.

Living in Hackney comes with a warming, strong community that prides on its diversity. If you are a First Time Buyer in London looking for an exciting employment opportunity, this area is perfect for finding your dream job and is commutable to the centre of London and is home to many brands and head offices. From modern apartments to historic terraced houses, Hackney has a property for everyone!

Get in touch with a reputable Mortgage Broker in London like us to explore your option on starting your mortgage journey in Hackney.

5. Greenwich

Situated on the banks of the River Thames, Greenwich provides a picturesque landscape full of history and green spaces. It’s also famous for its naval and military connections.

The area is known for being one of South London’s most attractive places to live. There is a large number of properties available in the area with varying price ranges. If you are looking to grow a family or currently have one, Greenwich has many schools dotted around the area both public and private with primary and secondary schools also.

Living in the capital means you are spoilt with job vacancies that provide fantastic opportunities. There are also many nurseries if you are in need of childcare. One thing to keep in mind when it comes to commuting is the charge to drive in and around the city, however, there are brilliant transport links including the underground and the bus.

Greenwich is perfect for your amenities. There are plenty of high street to independent shops around the area for your weekly food shop. As mentioned, the area is full of green spaces including the well-known Greenwich Park which is perfect for a daily walk.

Rich in history, Greenwich has many museums highlighting their maritime history and its brushes with royalty. Furthermore, it can be a perfect night out with lots of pubs, restaurants and bars spanning across the area.

If you are interested in Moving Home in London or are looking to get on the property ladder as a First Time Buyer in London and Greenwich sounds like the place for you, we can help. Get in touch with us and your Mortgage Advisor in London will help you get started on your property venture in Greenwich.

6. Battersea

All kinds of homeowners are drawn to Battersea. Its flourishing culture, desirable Victorian and Edwardian properties are enough reasons to move into the area. From the local markets to green spaces, attractions are never in short supply in Battersea.

A strong stable of steadfast restaurants is peppered with a brace of culinary start-ups looking to become firm favourites. It’s easy to spend a whole day strolling beautiful Battersea Park and its gardens, looking out across the lake, and perusing the eateries.

With a population of over 70,000 residents, Battersea has plenty of transportation links. This includes a local underground station, connecting Battersea to the Northern line. Battersea Park Train Station also offers a quick route into the capital, taking several minutes to reach Victoria train station.

Since you are on the river, you’ll be able to take the RB6 water taxi, operating between Putney and Blackfriars, which stops at Wandsworth Riverside Quarter. Alternatively, you can hop onto the Thames Clipper with regular services into central London between Battersea Power Station and Tower pier – whatever floats your boat! There are also plenty of buses around the clock too. Battersea is full of schools offering both primary and secondary education which is perfect if you currently have a family or are looking to start one.

If you are looking for open and honest Mortgage Advice in London to get started on obtaining a mortgage. We offer all our customers a free mortgage appointment where you can speak to one of our expert advisors on your mortgage goals.

7. Kensington & Chelsea

Although Kensington and Chelsea are smaller than other London boroughs, they are amongst the most affluent areas and are described as “the centre of London’s high life”. In terms of properties, you are spoiled for choice! Over the years, the central location, architecture and design of the area, and access to high-end amenities have transformed Kensington and Chelsea into one of Britain’s most expensive residential properties, with some of the highest prices in the capital. 

Nevertheless, if you choose to live here locally then you’re in luck, South Kensington is home to three of the country’s most popular museums – the Natural History Museum, the Science Museum, and the V&A. All are within a short walking distance, and offer free admission; perfect for history lovers. 

There are plenty of eateries and a variety of shops across the borough. Whether you’re enjoying exploring the latest trends at the artsy Kings Road scene, picking up a rare find at the Portobello Road antique market, or enjoying some retail therapy in the boutique concessions of Harrods, the shopping experience in Kensington and Chelsea is one of a kind. 

Any families looking to move into the area will be happy to know there is a huge variety of schools to choose from. From public and private institutions to schools that offer help and support for children with learning difficulties or disabilities, you can rest assured that there’s a school to suit everybody’s situation. 

Whether you are a First Time Buyer in London or Home Mover in London, if you’re considering locating to Kensington and Chelsea, and you want to discuss your mortgage options, get in touch with a member of our expert Mortgage Advisors in London today. 

Can I Remortgage With The Same Lender in London?

Product Transfer Mortgage Advice in London

Towards the end of the initial fixed period of your mortgage, will be the time to start looking at your options for a Remortgage in London. If you were to consider remortgaging with the same lender, this would be called a product transfer.

This can be something that not too many people know about, particularly if you have been doing your research before your fixed period ends. Truth is though, that product transfers are perhaps just as, if not more popular than a remortgage itself.

What is the difference between a remortgage & a product transfer?

A remortgage is taking out a new mortgage with a new lender, which will replace your previous mortgage. That tends to come with more favourable interest rates and lower monthly repayments. Doing so would require documentation to be provided in order to qualify for that deal.

When you make a product transfer, you will be with the same lender. This means that providing your circumstances haven’t changed, you usually won’t be asked to submit any further documentation. You can choose a new deal that you qualify for and have it replace the previous one.

What are the benefits of a remortgage with the same lender?

The main reasons for looking to do a product transfer, are appealing to homeowners. First, you could save yourself quite a bit of money.

This is because it doesn’t require solicitors or a valuation, so those fees won’t be there. You also have the option of saving yourself from a redemption fee or early repayment charge (though arrangement fees might still be present).

It can also prove to save you a lot of time and allow for easier service. Remortgaging in London can often take a while to put together, whereas because the lender already knows what you are like and likely won’t require any documents, product transfers can often be a lot quicker to finalise.

Why might someone choose to do a remortgage over a product transfer?

Others may instead opt for a remortgage. The reason this is a popular choice is because of the flexibility involved.

You will have access to more than just your current lender, with potentially better deals available elsewhere. If you manage to find a much better rate than you are currently on, this will save you money in the long run.

Additionally, a product transfer only allows you to take out a new mortgage on the same term, whereas a remortgage can allow for new terms. Doing this could allow for your next remortgage process to go easier.

Another popular choice for people to look out for is to remortgage to release equity (the difference between what is owed and the value of the property), as a means of funding potential home improvements, putting down the deposit for another property, and more.

Releasing equity doesn’t quite work the same with product transfers, though you may be able to arrange something called a further advance. Get in touch with a mortgage specialist to learn more about further advance and product transfers.

Do I need a solicitor to remortgage with the same lender?

Typically speaking, because you are staying in the same property, with the same lender, you will not need a solicitor for a product transfer.

Where this will be appropriate, is if you are making changes to your mortgage terms, such as removing or adding a name to your mortgage. At this point, you will likely need a conveyancer or solicitor.

If I remortgage with the same lender, will I need to have a credit check?

Typically speaking, you will not need a credit check for a product transfer. This may potentially be different though for some lenders. The reason this is usually the case, is because the lender already knows they can trust you to pay back your mortgage.

Alternatively, if you have had credit problems during your current mortgage or are remortgaging with another lender to do something such as release equity, you may have another credit check taken out on you.

Is there anything else I need to consider when I do a product transfer?

When doing a product transfer, something you may need to look at is whether or not you have any plans to move home in the future. Your current deal may not allow you to port your mortgage to a new home.

Taking out a remortgage instead, can allow for the flexibility to port your mortgage if you need to.

How can a mortgage broker in London help with a product transfer?

Here at Londonmoneyman, our team can provide expert Remortgage Advice in London and will be more than happy to go over your case and take a look at what you’re hoping to achieve.

Not only will we be able to get you through the process quickly and efficiently, but you’ll benefit from the various deals available to you, thanks to the vast panel of mortgage lenders we have.

Our service goes beyond this though, as we genuinely care about our customers. If you’re looking to product transfer and we believe it’s in your best interests to remortgage instead, we will say so. The same goes if you were looking to remortgage and we felt like you should product transfer instead.

We believe in full transparency and honesty with the customer – you should be put first. To discuss your product transfer options, or for further remortgage advice, book your free remortgage review and we will see how we are able to help.

10 Factors to Help You Decide Where to Live in London

Home Buyer Mortgage Advice in London

Whether you are local to the London area or are moving from outside of London, one of the main factors when moving home in London is knowing more about the area you are looking to live in.

Of course this is beyond just simply looking at where you would like to live. You will also need to look at how the area currently looks, what any of the nearby facilities are, what would be included in your dream property?

To help you to create a better understanding of the type of area that you would prefer to live in, we have put together a detailed list of the different types of factors that you, as a home buyer, need to look out for when you are looking to find a new home in London. 

1. Busy city or relaxing countryside? 

Make sure to come up with an idea of the type of area you would like to start living in, after all you will likely be living within that property for a long time.

Seeing as London is mostly made up of city properties, it is perfect for those who prefer a more urban lifestyle. Of course if you prefer the country life, that’s going to be a little more challenging, as you may need to move slightly further afield towards the outer areas of London.

2. Transport Links 

Tying into the previous point, if you are looking to move more to the outside of London, rather than closer to the center, you will of course need to make sure there are plenty of transport links, especially if you do not drive.

Whether it is for work, to see family and friends or for the night life, transport is key to any area. Fortunately, because of the significance of London, you will find plenty of transport links allowing you to commute to and from the city itself.

Whilst that in itself is a positive, there is a cost element. What type of public transport are you taking? How much does it cost to get there and which method is most cost effective?

If you are driving, how much fuel will you need to pay for per week? These are all important things to bear in mind before making a decision.

3. Schools & Education 

If you are a home buyer who has their own children, you should do some research on what the nearest schools are. Review the school league tables and any Ofsted reports, in order to get a better idea of what they may be like.

If you currently don’t have any children, whether it’s on the cards for the future or not, it’s always worth checking this just in case, as a way to future proof yourself.

4. Nearby Facilities – What You Need Vs What You Want 

When you are making plans to live within a certain area, it is important to prepare for various facilities you would like to have nearby. Making a list of this is always handy, noting which ones are essential and which ones you just really want.

For example, if you would like to have any nearby shops or gyms, take a look at the local area to see what is there. Closer to the center of London, you are likely to find most of what you are looking for. The downside is that these things may be busier or cost more.

Of course if you’re living further away from London, you may need to prioritise what is essential, but you will have the benefit of these possibly costing less. Remember that shops probably outweigh facilities like a gym, due to the needs of general living.

5. Friends and Family 

Some people will factor in how far away their family and friends are, into where they are looking to live. Many will want their family and friends nearby, especially if they have kids. Others may prefer a quiet life, only socialising sporadically.

This relates back to the transport links topic too, as even if you are a little bit away from family and friends, you may still be within viable travelling distance, due to the amount of transport options around the area.

6. Is the property good value for money? 

Everyone wants to have something that is worth the money they are paying for it. This will entirely depend on the area you are looking to live in, especially when you consider London property prices.

Generally some people may look to go for a cheaper property initially, compromising on features and facilities they would’ve liked, in order to save some money, before moving later down the line.

With London being as expensive as it is, one of your compromises may be the area itself, if you would prefer the urban life. This is because these houses tend to be at a premium cost, and you are probably getting more value for money further out of the city.

7. What is the community like? 

An area is often defined by the local community. Some may prefer a quieter life, staying to themselves, whereas others may prefer to have a much busier community. It’s always worth speaking with an estate agent to learn more about what it’s like.

Additionally, there may be a community Facebook page or local newsletter to take a look at, as those have become more popular over recent years. Once again, because of London and the wider areas significance, a lot of information and opinion can likely even be found online.

8. Career Changes 

A lot of home buyers will be looking for a new home because they will have found or will be on the search for a new career. It is important to look at the level of distance between your new home and your new workplace.

As touched upon, many people will commute to work in London from the outskirts, with plenty of transport links to choose from. This makes quieter, more affordable living a much more viable option. Some people prefer to work from home, so this may reduce the need to travel to work.

9. Property Type 

There are various different types of property that are available on the property market, with the area you are looking to buy in being a factor in which type is more prevalent.

Some will prefer to live on an end-terrace with a garden to relax in on a sunny day, whilst others would much rather live in a modern flat or a studio apartment.

Make sure you review all of the different options that are out there for you. Look at the viewings to get a good idea of what sort of property you would prefer to live in.

10. Local Developments 

Any information you can obtain regarding future improvements in the area you’re looking to live in is also useful to have, especially if you’re looking to build a life within that new home and stay there for a number of years.

Online research will definitely be worth your while when you are looking to find any future investments. It’s important to consider whether or not these will be beneficial to you and your lifestyle.

If you prefer a quiet country life, your ideal perfect world may be turned upside down if there’s any plans for a sudden big housing development nearby.

Moving Home Mortgage Advice in London

When the time comes to start making offers on a property and getting yourself a mortgage, it is worth getting yourself booked in for a free mortgage appointment. Our fast & friendly mortgage advisors in London will be glad to help!

We work from early until late, every day of the week and including some weekends and bank holidays, subject to appointment availability. 

Whether you need help as a first time buyer mortgage in London or are moving home in London, we will be more than happy to help you along with your mortgage journey.

Lifetime ISA Explained in London

Lifetime ISA Mortgage Advice in London

The Lifetime ISA (LISA) is a new, modern scheme that helps first time buyers create a housing deposit to get onto the property ladder. This is not to be confused with the recently ended Help to Buy ISA scheme.

This scheme provides buyers with a great incentive to purchase a property using this scheme. There are many many benefits that can only make your mortgage process easier! As a Mortgage Broker in London, we are seeing a rapid increase of applicants with a Lifetime ISA in place.

It is becoming more and more popular, especially with the phenomenal increase in the cost of living. Having a deposit boost in place will benefit your application and could potentially put you in front of other buyers when making an offer on a property.

What is a Lifetime ISA?

A Lifetime ISA is a savings account where your money grows tax-free. It works just like a normal savings account where you can add money in lump sums or through smaller monthly instalments, it’s completely up to you.

For every penny that you save, you will receive a 25% government bonus. The way that this works is that every tax year, whatever the amount is that you have saved, you will receive an extra 25% bonus on top.

The total amount per tax year that you can save is capped at £4,000. So, the maximum that you can save per year is £5,000 (£4,000 own savings + £1,000 govt. 25% bonus).

Where can I use my savings?

You can only access the scheme as a first time buyer in London. And, the funds that you have saved can only be used on your first property.

Once money has been transferred into the ISA, it cannot be withdrawn without a 25% charge. For example, if you were trying to withdraw £500 from your ISA, you will only get £375.

There is another way to use your Lifetime ISA, you can use it for later in life savings. As a Mortgage Broker in London, we do not offer advice in this case.

It is also worth knowing that you can also only have one Lifetime ISA in your life, therefore, you will need to decide what you want to use it for.

What are the scheme requirements for Lifetime ISA?

In order to set up your Lifetime ISA account, you will need to meet the scheme requirements:

  • This has to be your first home purchase
  • You can only add a maximum of £4,000 to your Lifetime ISA each tax year
  • The property that you are buying must cost £450,000 or less
  • Your savings account must be open for at least a year before you can make a purchase
  • You must be over the age of 18 but less than 40


Find out more about the LISA on the government’s OwnYourHome website or get in touch with our team at Londonmoneyman. Our first time buyer Mortgage Advisors in London are available to talk 7 days a week, just give us a call!

LISA Mortgage Advice in London

If the Lifetime ISA sounds like the scheme that can help you make a start on your mortgage journey, make sure to get in touch with our team. First time buyer mortgage advice in London is only one call away!

Alternatively, follow our book online process and select a date and time for your appointment.

Can I Get a Mortgage on a Fixed-Term Contract in London?

Fixed-term contracts were once considered to be more of a less conventional form of income, though nowadays they’re a lot more commonly found.

As a general rule of thumb, the only difference between this fixed-term contract employment and regular employment, is how the contract that you have is structured.

Regular employment generally will typically mean you have to sign a contract at the start of your employment, which will remain in effect until you are either terminated or you hand in your notice to the employer.

If you are employed on a fixed-term contract, this will mean you are only a contracted employee for a specific length of time, as opposed to permanently. That being said, you’re still classed as PAYE, which is similar to what a teacher on a per year contract.

Is it possible to get a mortgage on a fixed-term contract?

Yes, it is absolutely a potential option. It may be a little challenging if you are looking for a first time buyer mortgage in London, though we do still have mortgage lenders on panel who will consider these types of circumstances.

Current Contract Length

How long your current contract length is can have an impact on whether or not you can obtain a mortgage. If your contract is a short-term one, you may find it even more difficult to take out a mortgage.

The reason for this, is because you are not guaranteed any sort of long-term employment. Coupled with a large, long-term outgoing such as a mortgage payment, this could be a risk to a mortgage lender.

Most mortgage lenders will want to see consistent, longer term contracts one after another. This will showcase to the mortgage lender that you are likely to keep on with regular contracted work, which in turn will help you in maintaining your mortgage payments.

In addition to this, you can further increase your chances of having a mortgage application accepted by having written confirmation from your employer that once your contract has ended, it will be renewed with the same employer.

Breaks in Employment

If you have had or are currently having any breaks in employment, mortgage lenders may see this as a problem due to their uncertainty of whether or not you can maintain your monthly mortgage payments.

On the off chance you have had any significant employment gaps over the course of the last 12 months, you may not be able to get a mortgage. This is dependant on the mortgage lender and their own criteria, though a more sustainable income may work in your favour more with some lenders.

Further to this, what is defined as a gap in employment will vary per mortgage lender. Some will see a week as a gap of employment, whereas others may deem 4 to 5 months as a gap.

An expert mortgage broker in London will be able to check lender criteria and match you up with the most appropriate one.

What documentation do I need to get a mortgage on a fixed-term contract?

In order for a mortgage lender to consider accepting your application for a mortgage, you will need to provide them with multiple pieces of identification.

The types of documentation you will need to submit to a mortgage lender, include;

  • Passport
  • Driving License
  • Proof of Address
  • Proof of ID
  • Most Recent CV
  • Most Recent Employment Contract
  • Proof of Previous Employment (If Possible)
  • Last 3 Months Bank Statements
  • Last 3 Months Payslips

An expert mortgage advisor in London will be able to take a look at your documents in advance, to make sure it is all suitable for passing along to a mortgage lender.

If they require any other forms of ID from you, they will let you know so that you are more prepared for your mortgage journey ahead.

How much can I borrow on a fixed-term contract?

It is very likely that, providing you have a solid history of consistent employment, with very few or no gaps and a contract with a good amount of time left on it, you will be able to apply for a 95% mortgage, only putting down a 5% deposit.

Unfortunately, because it is deemed to be a risk to the mortgage lender, if your contracts are more short-term or you have some gaps in your employment, you may need to put down a much larger deposit in order to secure a deal with a mortgage lender.

Can you get a remortgage on a fixed-term contract?

Perhaps you are already a homeowner. If this is the case and you are on a fixed-term contract, heading towards the end of your fixed mortgage period, you may be curious of the options you have present.

It is at this stage that we would greatly recommend getting in touch with remortgage experts like ourselves and benefitting from remortgage advice in London.

This is because on top of the possibility of new deals that you may be able to access, there may well have been a change in your income. Maybe you aren’t working as often as you were in the past? Is your average income lower than it used to be?

It is elements like this that can have an effect on your ability to remortgage your property. Depending, you may have limited options, perhaps even with extra costs.

Enquiring for remortgage advice in London with expert mortgage advisors is definitely recommended ahead of jumping in to remortgage your home.

Book Your Free Mortgage Appointment

For anyone who is curious about whether or not it is possible for a home buyer or homeowner to obtain a mortgage whilst on a fixed-term contract, the simple answer to this question is yes, it is.

In order for you to have a much better chance of getting a mortgage with these circumstances, book a free mortgage appointment today with a dedicated mortgage broker in London and we’ll see how we are able to help you.

Gifted Deposits FAQ’s | Mortgage Advice in London

Gifted Deposit Explained | Mortgage Advice in London

During our time as an open and honest Mortgage Broker in London, we understand that sometimes scraping together a deposit, is one of the biggest hurdles for a First Time Buyer in London to get onto the property ladder.

We tend to find, parents, grandparents and on rare occasions, even friends who want to help the ones they care for get onto the property ladder. They’ll provide either a portion or the entire amount of the deposit to put down on a property and obtain a mortgage. Find out what gifted deposits are and how they work.

What is a gifted deposit?

A gifted deposit is money given by parents, grandparents, or friends to a homebuyer to use towards your deposit to put down on a property and obtain a mortgage. It can either be a portion or the entire amount.

The money given isn’t a loan and gifted deposits are given to you with an understanding that the money doesn’t need to be repaid.

How can gifted deposits help out? 

Gifted deposits are helpful to First Time Buyers in London. Mainly those who are financially capable of covering their mortgage repayments, but struggling to save up for the initial deposit.

We tend to find, that these situations happen quote often. Perhaps they’ll have larger outgoings, such as rental payments, home energy bills, and essentials. That there isn’t anything else left to put into savings for a deposit.

By receiving a gifted deposit, this will allow you to gain access to much better rates of interest during your mortgage process, especially if that gift is above the minimum 5-10% deposit requirement.

Who can gift the deposit? 

As we’ve said, it’s mainly parents or carers who can gift you the deposit. This is often discussed online using the terminology “Bank of Mum & Dad”, don’t let the name throw you off this can include adopted parents too.

Sometimes other family members may also be able to help out with a gifted deposit. Though this entirely depends on the mortgage lender that you end up with. That’s why it’s worth getting in touch to speak to a Mortgage Advisor in London beforehand.

Do your parents know you need help? 

We often hear back from customers who have no idea their parents can help with their mortgage! This is why we aim to inform and encounter more people to ask for some extra help, so more people can get a chance to get onto the property ladder.

The majority of parents are more than happy to help their children to find a home of their own, comfortably living as opposed to struggling whilst living in a rental property.
 
In some areas taking out a mortgage may save you more money per month than you would get from renting, of course, this depends on several factors, but in some circumstances, it can happen.

Gifted deposits can come from inheritance, although parents can sometimes gift it much earlier if they have enough money saved or have released equity from their own home.

Gifted Deposit vs Loans 

Some mortgage lenders out there won’t accept loans as a means of paying off your deposit. It will be often related to the lender not being so sure if you can afford to pay back both simultaneously.

Is there a maximum or minimum gifted amount? 

There are no limits to the amount that can be gifted to a home buyer, it’s worth remembering that some lenders will want you to have a minimum of 5% from your own savings.

The more you can afford to put down, perhaps combining savings and gifts, you’ll open yourself up to better deals. 

Who could benefit from a gifted deposit? 

We tend to find, that it’s normally First Time Buyers and Home Movers in London who will benefit the most from the gifted deposit.

A gifted deposit can be used to cover the initial 5% deposit for the Help to Buy Equity Loan Scheme. However, this will depend on the lender.

What proof is required? 

Your donor will need to sign a gifted deposit form stating that it is not a loan and is in fact a gift. Additional proof such as ID, address, and bank statements will be required.

Our Mortgage Advice Service in London 

As a fast and friendly mortgage broker in London, we aim to provide our customers with the highest level of customer service, through a fast and friendly Mortgage Advice in London service.

No matter your mortgage situation. When someone gets in touch with us for Mortgage Advice in London, we will consider all cases, no matter how complex, and try our best to find a resolution.

Book Your Free Mortgage Appointment 

A trusted and experienced Mortgage Broker in London is available seven days a week, from early on until late. Our Mortgage Advisors in London will be ready and waiting to offer their support at all times.

Book your free mortgage appointment today with an expert mortgage advisor in London and we’ll see how we are able to help you on your mortgage journey. 

 

 

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