Moving home is an exciting time and we want to ensure the mortgage aspect is as straightforward as possible so you can focus on the good bits. We have a wide range of mortgages, so whatever stage you're at we could help you find a TSB mortgage to suit you.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
You've made the decision to move but there are still lots of things to think about - from searching for your new home to working out how much you can afford to spend and what sort of mortgage will suit you best. We've put together a simple guide to help you.
At TSB we are very mindful of the environmental impact of moving home and how it affects carbon dioxide (CO2) emissions. For every residential house move that we provide a mortgage for, we pledge to plant a tree to help offset the carbon footprint of the move. To find out more you can visit www.eforests.co.uk/tsb.
Don’t forget buildings cover before you exchange contracts.
The 2 year tracker you’re free to leave at any time. This rate tracks a percentage above the Bank of England Base Rate (BBR), so your monthly repayments will go up or down depending on how the BBR moves.
Planning ahead will help you make progress towards your goals and show lenders that you are prepared, which could make it easier for you to get a mortgage.
Unless you've sorted out your home-buying fund, you will need to start saving, cut down on any borrowing and make sure your credit record is as good as possible.
Build up a solid savings balance:
Mortgage lenders now require a deposit, usually a minimum of 5% of the property price. The more money you can put in as a deposit, the better the mortgage deal you can get. This could mean a lower interest rate.
Reduce your debts:
Most lenders work out how much you can borrow based on your outgoings as well as your income, so it's worth looking at any existing credit agreements you have to see if these can be repaid before applying for the mortgage.
Keep up to date with payments on loans and credit cards.
Check your credit rating with a credit rating agency such as Experian and Equifax to make sure it's accurate.
Remember, any missed or late payments will be reflected on your credit report and could stay there for years, so be sure to keep paying on time, even if it's just the minimum amount. Also make sure you cancel any unused store cards, credit cards and bank accounts.
What can you afford?
The checklist below is quick and easy way to help you work out how much you can afford to spend on your mortgage each month. Subtract your total spending from your total income and the amount left over might give you some idea of how much you could afford for your monthly mortgage payment.
Total - What you earn each month
Minus - What you spend on household commitments each month
Minus - Your everyday spending each month
Minus - Your occasional spending on things like holidays
Total available to spend on your mortgage each month
Extra costs when buying a home:
Moving home is expensive and there are costs that we often forget but could have a real impact on your decisions. You can make things easier by budgeting for them.
You'll need a deposit, usually a minimum of 10% of the property price. Generally the bigger the deposit you have, the better the mortgage deal you can get. This could mean a lower interest rate. So the sooner you can start saving the better. Get started by opening a separate savings account and setting up a monthly standing order.
Many lenders charge an up-front fee for setting up a mortgage.
Mortgage Product Fees:
Most lenders have a selection of mortgages with a product fee on certain deals.
Most lenders charge a fee for having the property you're buying valued.
Legal searches and fees:
You'll need a solicitor or licensed conveyancer to take care of the legal details.
If you're borrowing a high percentage of the value of the property, the lender may charge a fee to take out insurance cover. This protects them in case you can't pay back your loan and they have to sell your house at a loss.
This is a tax on buying property. You can calculate stamp duty based the jurisdiction where the property is located by following the applicable link below.
If you own a property that you are not living in and would like to rent it out to tenants, then you will need a buy-to-let mortgage to rent it out. It could be classed as mortgage fraud if you rent out a property without a buy-to-let mortgage. You can change your mortgage to a buy-to-let or apply for a consent to let.
Permission to let gives you permission from your lender to let out your home on a residential mortgage for a specified time. You may need to apply for consent to let if you’re moving into a new property but can’t sell yours.
Your lender can refuse your application for consent to let. If they accept your application, they can charge you. If your application is granted, you’ll still need to take out landlord insurance and ensure the property is habitable for tenants.
Existing TSB mortgage customers can find more information about buy-to-let or consent to let on our dedicated page.
If you are not granted consent to let by your lender, you will need to switch from a residential mortgage to a buy-to-let mortgage. You will need your lender to approve this. If they decline, you can switch to another lender.
Often, the deposit for buy-to-let mortgages is more than a residential mortgage deposit. This is to protect the lender in the event the landlord defaults on their payments, due to issues with collecting rent from tenants.
The deposit for a buy-to-let mortgage is often between 20-40% of the property's value.
How much you can borrow for a buy-to-let mortgage will depend on how much rental income you plan to receive from tenants. Generally, lenders suggest the monthly rental income you receive should be at least 25% more than your monthly mortgage payments. This way, as a landlord you can cover costs like insurance, repairs, and agent’s fees.
It’s important you estimate what you’ll need to spend on the property each year, as well as account for any time the property will be vacant where you won’t be receiving rental payments.
Your interest rate will stay the same for a set period. Many lenders offer fixed rates for two, three or five years, sometimes longer. The benefit of a fixed-rate mortgage is that it helps you to budget more easily, because your interest rate will stay the same for the length of the deal. Early repayment charges will almost always apply if you switch away from the mortgage before the fixed-rate period ends.
With this type of mortgage, the interest rate tracks a rate that is outside the control of the lender, such as the Bank of England bank rate (also known as the base rate). Every time that rate goes up or down, so does the interest rate on your mortgage. Naturally, you will be better off whenever the interest rates drop and your monthly payments will be less. But, you should make sure your budget will allow you to make higher monthly payments if interest rates were to go back up. Early repayment charges will sometimes apply if you switch away from the mortgage before the tracker deal period ends.
Did you know:
If you want your mortgage to continue past your planned retirement age, or the age of 70, we may only consider your retirement income.
You can apply for a mortgage on your own or for a joint mortgage with a partner or friends
You will usually need at least a 5% deposit, although you will need a 15% deposit if you're buying a new build property - that means one that was first occupied less than 6 months ago
Lending Limits are subject to the availability of suitable products at any given time
How to apply
We need to talk you through your mortgage application, but you can save time by starting the process online. It'll take about 20 minutes, and then one of our mortgage experts will call you back at a time to suit you to complete the process. Or you can call us and speak to an advisor directly, or book an appointment to see one of our advisors at your nearest branch.
You'll need to have the following details to hand:
Your last three months' payslips
Your last three months' bank statements if you want any other income to be considered (for example rental or investments), and as a reminder of your outgoings
If you already have an existing mortgage elsewhere, your last year's mortgage statements
Your address for the last three years
Details of any loans you currently hold, including student loans and car payments
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.