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HOME MOVER MORTGAGES
Moving home can always feel like a daunting prospect. If you’re doing it for the first time, it can be tough to know where the pitfalls are.
There are some important things to consider before you take out an all-important mortgage
How Much Will It All Cost?
Whilst you can use the equity you have in your current home, you may also need to use some of your own money to put towards a deposit on your next one.
There are many factors on affordability, but you typically need to stump up at least 10% of the purchase price, preferably more if you can.
As well as your deposit, there are other costs associated with buying a property and taking out a mortgage.
Typical ones that apply to most buyers include:
Conveyancing fees, typically between £850 – £1500
Stamp Duty Land Tax/Land, which is upwards of 2% of a property valued above £125,000
Valuation fees, which are often between £200 – £600
Land Registry fees, which are between £20 – £900 depending on the value of your property.
If you hire removal men, the typical cost is £50 – 60/hr.
There are often unexpected costs that crop up in buying a property so it makes sense to have some money aside as a contingency.
These are example prices and may vary.
THINGS TO CONSIDER BEFORE GETTING A MORTGAGE
Mortgages can last for a long time, so it’s important you get one that’s right for you – and Velvet can help you find it. Velvet will help you find what type of loan you want, how long you want it for and what type of product you’d like.
There are many different types of mortgage product nowadays, but the most common are fixed rate, tracker and Standard Variable Rate (SVR).
Fixed rate locks you in for a rate over 2-6 years (sometimes more) and doesn’t fluctuate, regardless of the Bank of England base rate.
Tracker rates literally track the BoE base rate, with the lender applying a set % on top. So if the base rate was 0.75%, the lender may add 1.25% so you pay 2% on your mortgage. Should the base rate go up to 1%, your rate would increase in line to 2.25%.
SVR changes on the lender’s discretion. It doesn’t track the base rate like a Tracker mortgage, but it is a factor, amongst other things, in determining the rate.
You will also have to consider the mortgage term too. There are mortgage terms of up to 40 years available:
A longer term reduces your monthly payments, but increases the cost of credit as interest is applied over time, so you pay more overall.
A shorter term increases your monthly payments, but as you’re paying over a shorter period, you pay less overall on your cost of credit.
Loan To Value
Loan to Value – (LTV) is expressed as a percentage of the purchase price being covered by a mortgage.
Assuming you’re moving to a £200,000 house and have £50,000 to put down, that’s a 25% deposit and 75% LTV. LTV is important as the lower it is, the better the interest rate you will be offered.
SEALS OF APPROVAL
Velvet go all out to help you! Offering honest, easy to understand advice, Joanna and her team can’t be bettered!
Thanks for all your help I recommend you to anyone looking to secure a mortgage and their critical life cover.
Highly recommend – very supportive and informative throughout the entire process. very professional team and clearly want to get the best deal. Even a global pandemic didnt stop them getting me a great mortgage deal! will be using the team again for my next property!