Allerton Mortgages
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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage
Basic life insurance can provide a specified lump sum if the insured person dies during the policy’s specified term. Life insurance can be used to ensure the repayment of your mortgage or other debts. Additional options are available, such as waiver of premium and guaranteed premiums.
Critical illness cover provides a specified lump sum if the insured person or persons are diagnosed with one of the many specified critical illnesses during the policy’s term. It is a more comprehensive form of life cover, offering financial security for the insured during their recovery. Unlike basic life insurance, which only provides a specific amount upon the death of the insured, critical illness cover supports the insured in times of serious health challenges.
Terminal illness cover is different from critical illness cover, and it is sometimes confused with it. This type of cover provides an early life insurance payment when recovery from a critical illness is not expected, typically during the last year of the insured person’s life.
Getting life insurance for the first time can seem daunting. Having to think about something as significant as how your loved ones will cope financially once you are no longer here can be quite overwhelming. We’re here to help break things down and help you make the right decision for your unique needs.
For some, especially young people, taking out life insurance might not be something you have ever thought about seriously. Life insurance is a crucial safety net designed to protect your loved ones in case the worst happens. Sadly, many families would find themselves running short of money very quickly if the main breadwinner were to die unexpectedly. Receiving a payout from a life insurance policy can be the difference between your loved ones facing a financial struggle at a challenging time and being able to maintain their same standard of living.
There can be a lot to think about when it comes to choosing the right life insurance policy. Here are four key questions you might be asking:
There’s no one-size-fits-all approach to life insurance. In deciding how much cover you need, consider your existing and future financial obligations, including mortgage and any other debts you may have. Think too about how much income your loved ones might need if you were to pass away.
There are two main types of policy: • Term life insurance policies run for a fixed period of time, e.g. 10 or 25 years and pay out if you die during the term of the policy.
• Whole-of-life policies provide cover that lasts a lifetime. This type of policy doesn’t normally have an end date, so premiums are paid until you die
Every policy is different so there’s no definitive answer! But, with products starting from a few pounds a month, there is a policy for every budget. It’s a very small price to pay for the safety net of knowing that your loved ones won’t suffer financial hardship.
In a word – no! When applying for life insurance, it is important to be honest about your health and lifestyle habits. If you provide any information that later turns out to be misleading, this could result in your policy being cancelled or your claim being denied.
Sorting out the right life insurance cover can seem a formidable task. When the stakes are so high, it’s a good idea to get advice from an expert – we’re here to help.
Income protection insurance pays you a regular income if you are unable to work because of sickness or disability. These payments continue until you return to paid work or you retire. Income protection insurance is also known as permanent health insurance. The amount of income you can claim will not replace the exact amount of money you were earning before you had to stop work. The calculations are done based on around half to two- thirds of your gross earnings from your normal job. This is because some money will be taken off for the state benefits you can claim, and the income you get from the policy is tax free. Your policy documents will confirm how much you can expect to receive. You cannot claim income protection payments straightaway when you fall ill or become disabled. You usually must wait a minimum of four weeks, but payments can start up to two years after you stop work. The period will depend on the premium and terms you agree when taking out the policy. This is because you may not need the money straightaway as you may get sick pay from your employer, or you may be able to claim statutory sick pay for up to 28 weeks after you stop work. This is called a deferment period. If your situation changes then your adviser can usually arrange cover with a different deferment period. The amount of benefit and the deferment period will be stated in your policy documents, and you should check regularly to ensure this meets your ongoing requirements.
The mortgage market can be exceedingly complex, offering a wide array of mortgage options. It is not merely a matter of seeking the lender with the lowest interest rate; while interest rates can serve as a critical starting point, it is essential to consider how these rates may fluctuate in the short, medium, and long term.
“YOU could lose your HOME or property IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE or any debt secured on it.”
We conduct a thorough review of key factors that could influence the actual cost to you. For instance, if a lender imposes an arrangement fee, a fee that is excessively high may render the overall cost of the mortgage less attractive compared to alternative options.
Embarking on the journey of homeownership as a first-time buyer can be a thrilling experience. Whether you are purchasing a property independently, alongside a partner, family members, or friends, it represents one of the most significant and financially impactful decisions you will ever make. In recent decades, a significant increase in property values has made it more challenging than ever to take the first step onto the property ladder.
There are various incentives available that may help reduce costs for first-time buyers. Many options can be accessed through mortgage brokers and may include support with mortgage valuation fees, legal expenses, mortgage application fees, and other competitive mortgage options.
You will possibly consider a home mover mortgage if you need a bigger house, have to relocate or may be downsizing to a smaller property.
Home mover mortgages are the same as standard residential mortgages. It’s simply the process of applying for a new mortgage when moving into a new property. Your personal circumstances will be assessed by a mortgage adviser to ensure your new mortgage is suitable, remaining affordable whilst matching your current and future requirements.
Things you have to consider before redeeming your existing mortgage are redemption fees. If you decide to move to a new property whilst tied in with your existing lender on a specific rate for a certain period such as: two, three or five years. There may be redemption fees to pay. We can discuss these details during your application and see if these fees can be avoided.
It might be possible to port your existing mortgage to a new property depending upon the terms of your existing mortgage. This can eliminate redemption penalties.
What is a remortgage?
A remortgage is when you change your mortgage deal by switching to a different lender on more competitive rates or suitable terms.
The reasons why people remortgage is simple.
You want to invest in property and become a landlord so require a buy-to-let mortgage.
Maybe you’re already a landlord and want to purchase another rental property. You might need to remortgage an existing rental property to raise money for your deposit on another property.
Possibly your a landlord and your mortgage deal has ended so you require a competitive mortgage deal to reduce your mortgage payments.
Allows you to borrow money to buy and move into a new home while your existing residence is let out to tenants (Which generates an income).
You need a mortgage to buy a home for holidays, a split job location or for other reasons like for your child to live in while in further education.
As a parent or close family member, you want to help someone else buy their own home by taking on some of the risk of the mortgage by acting as a guarantor. This usually requires offering your home or savings as security against the loan and agreeing to cover the mortgage payments if the homeowner misses a payment.
You want to buy a house at auction but you don’t have sufficient cash in the bank to purchase the property.
Commercial loans related to purchasing, letting or refinancing commercial property .
Commercial loans are used to build property or refurbish properties.
Bridging loans might be used to:
• Buy property at auction
• Refurbish property and sell
• Refurbish property and let
• Complete the urgent purchase of one property which would otherwise fall through.
Capital Repayment provides certainty that your mortgage will be repaid at the end of the mortgage term.
Interest Only means your monthly payment only covers your interest repayment. The amount borrowed at the start of the term will be outstanding at the end of the mortgage term.
Interest-only mortgages are most commonly used for buy-to-let property purchases but can be used for residential homeowner loans, subject to meeting lenders’ criteria.
Find more information on repaying your mortgage on the repayment vehicle page.
The size of the deposit required is influenced by your credit history, affordability, age, purchase price, and other considerations.
When applying for a mortgage on owner-occupier properties, the deposit can be as low as 5% of the property valuation for first-time buyers with good credit history. In other cases, the mortgage deposit required can be 35% if applicants have adverse credit or when buying rental property. We need to understand your situation before determining the size of the deposit you will require.
A gifted deposit helps home buyers purchase property without using their own savings. Instead a small sum of money is gifted from the relative of the person or persons buying the property and the remaining balance is funded by a mortgage.
A gifted equity deposit can help purchase property by using a discount in the property’s value as your deposit. A percentage of the property value will be classified as your deposit.
A gifted cash deposit is a transfer of funds from the person gifting your deposit to your bank account. Typically and most commonly family gifted cash deposits are acceptable by lenders.
Family can gift a much larger deposit compared with gifted deposits paid by non-related persons, vendors and builders.
Vendor deposits and builder deposits of 5% are typically accepted by lenders when the person is not related.
The proof you are required to supply to evident the source of your mortgage deposit will depend on where the funds are coming from. For example, if personal savings are being used, most mortgage lenders ask you to submit 6 months of bank statements to confirm the build up of funds over time.
If the deposit is a gifted deposit either in equity or cash mortgage lenders would require a letter signed by the donor confirming:
– the funds are not repayable
– the amount being gifted
– the donor will not live in the property
– the donor will hold no interest in the property upon completion.
A vendors gifted deposit from a non family member or builder might be considered by various lenders.
In order to obtain your mortgage approval, we have to verify all sources of income. As a broker, we understand that income can come from different sources. Some sources of income can be more difficult to understand than other sources of income. Additionally, some income types are may not be acceptable to some lenders but might be acceptable to other lenders.
Your borrowing limit is assessed using affordability criteria, which can vary between lenders.
Affordability and borrowing limits are calculated based on factors such as annual income and annual expenditure, combined with income multiples. Since income multiples differ among lenders, it is possible to obtain larger mortgages from one lender than another based on the same income and expenditure figures.
There is no single formula to determine the exact borrowing limits for all borrowers across all lenders.
Borrowing limits on residential homeowner mortgages are also subject to maximum loan-to-value (LTV) ratios. This means some individuals can borrow up to 95% of the property valuation, while others may only be able to borrow up to 70%. Consequently, borrowers will require a minimum deposit or equity amount ranging from 5% to 30%.
The maximum LTV and minimum deposit required can be influenced by the applicant’s credit profile. Typically, borrowers with a less-than-average credit history will need to provide a larger deposit.
Buy-to-let affordability and borrowing limits are calculated differently than those for homeowner mortgages. Assessing affordability for buy-to-let mortgages can involve a two-step process. Some lenders require borrowers to have a minimum combined annual income to be eligible for a buy-to-let mortgage, and this minimum income varies between lenders. Conversely, some lenders do not have a minimum income requirement.
Borrowing limits for buy-to-let mortgages are assessed based on the market rental valuation of the property. The property should be self-financing; if it is not, most lenders will not approve the requested amount. However, this does not mean that your application will be declined; it simply means that lenders may consider a smaller loan amount in line with market rental valuations.
During the affordability assessment for buy-to-let mortgages, lenders apply stress rates well above the interest rate being charged. This approach ensures that mortgages are approved with significant consideration for potential interest rate increases.
Borrowing limits on buy-to-let mortgages are also subject to maximum loan-to-value (LTV) ratios of around 80%. This means borrowers will require a minimum deposit or equity amount of 20% to be approved for a mortgage.
Each lender sets its own criteria regarding the minimum age of applicants at the time of application and the maximum age of applicants at the end of the mortgage term. The minimum age is typically 18 years, while the maximum age at the end of the mortgage term can be 85 years.
Age limits for buy-to-let mortgages may differ from those for homeowner mortgages. If buy-to-let properties are self-financing, the maximum age of applicants at the end of the mortgage term may be higher.
If applicants are considering extending their mortgage term into retirement age. Or if applicants are retired and want to apply for a mortgage based on retirement income. Providing applicants income is sufficient to support the mortgage payments. There won’t be any issues.
If applicants don’t have a pension plan or another income to show they can afford to pay the monthly mortgage payment. The maximum age of applicants at the end of the term is typically set between 66 years of age and 70 years of age. When employment comes to an end.
The mortgage market is extremely diverse in lending criteria, as one size doesn’t fit all. Criteria from one lender cannot support the requirements of all clients. Our panel of lenders, representative of the whole of the market, has a variety of mortgage options available, creating more opportunities for approval on more competitive terms. We aim to support clients with:
– Perfect credit history
– Less-than-perfect credit history
– Missed payments on credit commitments
– Defaults
– CCJs
It’s important you’re aware of the different features applicable to the many different types of mortgages available on the market. Some of those key features you need to consider are:
If you wish to partially or fully repay your mortgage during its term.
If you move you may wish to keep your current mortgage.
Would you benefit by fixing the interest rate with the lender for a set period?
What is the real cost of borrowing, not just the interest rate charged?
The ability to overpay, take payment holidays, or switch repayment types
How often the lender calculates and adds interest to your loan, for example daily, monthly, or annually, can affect the cost of your borrowing.
We will advise you so that if you ever need to make a claim you or your dependants will receive what you were expecting. This is why analysing and monitoring the enormous range of products is important. This ensures you get the best solution.
Arranging any type of finance comes with fees and costs. Here are some examples that may apply, depending on whether you are buying a new property or remortgaging an existing one:
This is a tax you pay when you buy a property based on the property’s value.
You will pay fees to your solicitor for doing the legal work associated with your purchase. This work is known as conveyancing.
A fee for registering your ownership of a property.
Payable to your agent if you are selling through one. Typically this is a percentage of the final sale price.
Fees vary depending on how far and how much you’re moving. You will typically pay 50% as a deposit and the rest on the day you move. It’s best to get several quotations before deciding which firm to use.
This is for the lender’s benefit not yours. It satisfies them that the property is worth what you say it is.
This is for your benefit and satisfies you that there are no issues with the property you’re buying. You may pay for a full structural survey or a less comprehensive homebuyer’s survey.
You pay this to the lender for arranging your mortgage, either up front or by adding it to your loan. Arrangement fees can vary significantly depending on the mortgage product you choose.
If you repay your mortgage in full, or in part but exceed the agreed partial repayment level, before the end of your mortgage term you can expect to pay a fee. This can range from a simple administration fee to significant early-redemption charges.
Where you are borrowing a high proportion of your property’s value your lender will insure itself against you defaulting and property values falling. The lender will usually pass this cost to you by adding it to the loan.
Property insurance, such as buildings insurance is designed to provide financial protection in case of damage to the structure of your home, including the walls, roof, and floors. It usually covers damage to fixtures and fittings as well. Garages, sheds, and fences may also be covered, along with the cost of replacing items such as pipes, cables, and drains. However, you should check your policy to ensure these are included if they are important to you.
Buildings insurance pays out for repair or replacement within your home, ultimately covering the cost of rebuilding the property itself.
Often, the sum insured will be different from the value of your house, as it is calculated based on the amount required to rebuild the property to the same standard and specification. This is known as the rebuilding cost.
The aim of this type of insurance is to provide peace of mind, ensuring that in the event of damage requiring repair or replacement, you will receive payment to cover part or all of the costs.
If you have a mortgage on your property, it will be a requirement of your mortgage conditions that you take out and maintain premiums on a buildings insurance policy.
Contents insurance is designed to cover you against loss, theft, or damage to your personal and home possessions. It can also cover you if you take items out of the home, such as on holiday. The insurance protects your possessions as well as those of close family members living with you.
Contents insurance covers loss and damage caused by specific insured events, which can include fire, storm, theft, and vandalism.
A policy excess applies, meaning that not all of the loss will be covered by a claim. Having a larger excess can help reduce the cost of the policy but will limit the amount you can claim.
You should ensure that you agree on the level of cover and what is protected with your adviser, and then re-check this when you receive your policy documents.
The aim of this type of insurance is to provide peace of mind, ensuring that in the event of loss or damage requiring repair or replacement, you will receive payment to cover part or all of the costs.
Landlords need to protect buy-to-let properties against unexpected damages using a different type of insurance policy, compared to standard building insurance policies.
Homeowners Income Protection, also known as accident, sickness, and unemployment cover (ASU), is a type of income protection insurance. This means that if you are unable to work for a period, you will receive regular payments to help cover your mortgage and other expenses.
This is a short-term income protection policy designed to pay you a tax-free benefit if you cannot work due to an accident, illness, and/or unemployment not caused by your own actions (depending on the cover you have selected). If you purchase unemployment cover, you will also be entitled to coverage if you leave your job to become a carer for a member of your immediate family.
Payments begin after the qualifying period specified in your policy documents.
Policyholders must be working for at least 16 hours a week in the UK when taking out the policy, be under 64 years of age, and have a mortgage agreement on a property they live in permanently in the UK.
You should fully disclose any illnesses, conditions, and medical treatments you have undergone when applying for the policy.
Additionally, you must inform the insurer if your circumstances change, particularly if you change your address, working arrangements, or if your income changes. Your coverage may be invalidated if you fail to do so.
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