Our Free Service Will Provide You With Up To 3 Free Quotes From Mortgage Lenders In Guernsey
Are you in the market for a new mortgage in Guernsey or beyond? Whether you’re looking for your first property or you’re remortgaging at the start of your retirement, it’s always smart to look for the best mortgage rates and terms.
A mortgage is a special type of loan that can help you buy a property, like a home or a rental investment. However, unlike a typical loan, mortgages are repayable over a longer period of time, usually between 15 and 30 years. You make fixed payments on the principal of your mortgage (the amount you borrowed) as well as the interest it accrues.
Choosing to get a mortgage and deciding which mortgage to go with are both huge decisions. You need to save over time for your mortgage deposit and also make sure you can afford to make your mortgage repayments every month for decades moving forward.
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There are quite a few different mortgages available in the UK, and you might be wondering what is best for your needs. Your best mortgage will depend on your personal circumstances, including income, employment history, and your future plans. Of course, it also depends on the property you want to buy.
A fixed-rate mortgage gives you guaranteed repayments for two to five years, allowing you to plan your next few years. Your payments will be fixed, so even if the interest rate increases, you’ll still pay the same rate. However, if the interest rates drop, you’ll be tied to that higher rate until the set period is up.
Variable rate mortgages fluctuate when the Bank of England interest rate changes, but your lender can also choose to raise or lower the rate. That means you sign up for a certain degree of risk, and so you usually get better terms and rates.
Here are some of the most common variable-rate mortgages available:
Lenders look at a long list of factors before they decide how much they want to lend you for your mortgage. They’ll look at:
Most lenders want you to have a deposit of 5% - 10% of the entire mortgage amount. If you can manage to save more than this, you can usually negotiate a better terms, lower fees, and lower interest rates.
That said, it can be difficult to save the required amount for a mortgage deposit. If you’re struggling, look into certain government schemes and programmes, including Right to Buy and Help to Buy. Both schemes help people who want to buy a home but don’t have a large enough deposit.
You’ll usually see mortgages referred to as repayment (the most common option) or interest-only (which is less common). But what do these terms mean?
Repayment mortgages are the most common option on the market. Simply put, you pay back the principal (the amount you borrowed for the house) plus the interest accrued over time. With every payment, your principal gets lower until you eventually own the property outright.
With an interest-only mortgage, which is uncommon for residential properties, you only pay the interest every month. You pay nothing towards the principal that you borrowed at the beginning of your mortgage term.
When the end of the term is over, you then owe the entire principal. You need to save for this amount separately or sell the property to pay back your mortgage. This is a more common option for buy-to-let mortgages.
Lenders offer different mortgages for a wide variety of circumstances.
Many lenders offer mortgages for first-time buyers. You’ll qualify if you have never owned a residential property, even if you never lived there.
You might be able to ‘port’ your mortgage if you’re moving home – essentially, this means taking it with you. However, if your new property is valued higher or lower than your current property, you might run into problems. You’ll need to undergo new credit search when you port your mortgage, which is a problem if your score is lower than it was.
If your current mortgage term ends in less than six months, you might be able to remortgage your home. Some people make the switch to a repayment mortgage, choose to borrow more money, or find ways to money on their current payments.
Buy-to-let mortgages allow you to rent out your property to tenants or use it for AirBnB. These mortgages cost more and usually have higher interest rates, and lenders will want to see that you have previous landlord experience.
We’ll ask for some specific details to check your eligibility.
Tell us your name, address, and employment details. We’ll also ask if you’re applying on your own or if this is a joint application.
Do you want to buy a new build, a flat, or a home? Is the property freehold or leasehold?
Do you want to remortgage? Are you a first-time buyer? Are you moving to a new property?
What amount are you hoping to borrow? Most people look for the cost of the property, less the deposit they have.
How much do you earn before tax every year? Make sure you include extras like overtime pay, commissions, and bonuses.
Comparing mortgage rates is a great way to find the best terms and rates. But you can also be proactive and make changes to your lifestyle to get the best possible mortgage rate – make sure you’re doing the following:
The bigger a deposit you can save the less money you’ll have to borrow. If you have a larger deposit, you can usually negotiate better terms.
All lenders want to see your credit score before they commit to lending you money, and on what terms. It pays to try to improve your credit score before you apply for mortgages.
Get on your local electoral register, and make sure it’s updated every time you move. This is a quick and easy way to boost your credit score.
Missing bill payments sends the wrong message to lenders – they’re much less likely to lend you the money you need if you miss any payments.
There’s no better time than the present – start paying down debt and saving for your deposit now. Lenders usually look at around a year’s worth of your credit history.
These are some of the most frequently asked questions about getting a mortgage in Guernsey.
Getting a mortgage in principle (also called an agreement in principle) can show you how if a lender is willing to lend you money, and how much. To get a mortgage in principle, they check a few things about your income, look at your credit score, and assess your monthly spending.
Mortgages in principle don’t harm your credit score, because they are ‘soft checks.’
Most mortgage terms are between 15 and 30 years, but there are shorter and longer terms available in rare specific circumstances.
Cashback mortgages give you a lump sum of cash, which most people use for fees, renovations, and moving costs.
Most cashback mortgages have less than favourable rates, so be sure you’re clear on the costs.
Even if you have a bad credit rating, you can still be approved for a mortgage. You’ll likely need a guarantor or provide other types of evidence that show you can afford your payments.
Don’t distress - we can help you find a mortgage even if you have bad credit.
Some people really struggle to save enough for a deposit. Some mortgages will allow you to make a low deposit, such as 5%.
Not all lenders offer low-deposit mortgages, and you might need a guarantor.
Self-employed people often find it difficult or complicated to get a mortgage. But it is possible! You’ll need to provide lenders with two or three years of accounts to prove you have a stable income.
We’re here to help you with the entire process.
Unusual homes demand unusual mortgages! You might need a bigger deposit, but there are a few lenders out there who will help you. We can help you find the right lender and guide you through the process.
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