We have put the full (unbiased) guide to mortgages on our website. It covers mortgage porting, equity release, re-mortgaging and green mortgages.
Everything you need to know about mortgages
December 6th, 2024
Mortgage rates are starting to look more attractive.
Mortgage rates are falling, so it’s a good time to see if you can refinance your mortgage and get a lower interest rate.
If you’re feeling overwhelmed by the many mortgage options available, Cavendish Residential can help you navigate the process seamlessly.
Whether you’re considering “porting your mortgage”, need to make a swift move, or are looking to release equity to buy your dream home, we’ve got you covered. With mortgage rates on a downward trend, now is the perfect time to explore your options.
Our dedicated team of mortgage experts will guide you through the available options and find the best solution tailored to your unique needs. Don’t let uncertainty hold you back – let us make your next move as stress-free as possible.
What is mortgage porting?
Mortgage porting is when you move to a new property and transfer your existing mortgage to the new property. This means that you can keep your current interest rate and loan terms, which can save you money in the long run.
To be eligible for mortgage porting, you must meet certain criteria, such as:
- Your existing mortgage must be in good standing.
- You must be moving to a property of similar value to your current property.
- You must be able to afford the monthly payments on your new mortgage.
- Your lender must be willing to port your mortgage.
If you are considering mortgage porting, it is important to speak to your lender to see if you are eligible and to get a quote for the porting fees.
What is equity release?
Equity release is a way for homeowners to access the money they have built up in their property’s value without having to sell it. This can be a great option for older homeowners who need extra cash for retirement or to pay for home improvements.
There are two main types of equity release:
- Lifetime mortgages: These mortgages allow you to borrow a lump sum of money or a regular income from your property. You don’t have to make any repayments until you die or move into long-term care.
- Home reversion schemes: These schemes allow you to sell part of your home to a provider in return for a lump sum of money. You will continue to live in your home rent-free until you die, when the provider will take ownership of the property.
Equity release can be a good option for homeowners who need extra cash but don’t want to move out of their home. However, it is important to understand the risks before you commit to an equity release scheme. These risks include:
- You could end up owing more money than your home is worth.
- You could lose your home if you can’t afford the repayments.
- You may have to pay a large amount of interest on the money you borrow.
It is important to get independent financial advice before you commit to an equity release scheme. A financial advisor can help you to understand the risks and benefits of equity release and to find the best scheme for your individual circumstances.
What is remortgaging?
Remortgaging (also known as refinancing) is when you take out a new mortgage to replace your existing mortgage. This can be done for several reasons, such as:
- To get a lower interest rate.
- To extend the term of your mortgage.
- To borrow more money against the value of your property.
- To consolidate debt.
- To move to a new lender.
If you are considering remortgaging, it is important to compare the interest rates and terms of different lenders before you decide. You should also make sure that you can afford the monthly repayments on your new mortgage.
Here are some of the benefits of remortgaging:
- You could get a lower interest rate, which could save you money in the long run.
- You could extend the term of your mortgage, which could reduce your monthly repayments.
- You could borrow more money against the value of your property, which could give you the funds you need for a home improvement or other project.
- You could consolidate debt, which could save you money on interest payments.
- You could move to a new lender, which could give you better customer service or a wider range of products.
Here are some of the drawbacks of remortgaging:
- You may have to pay early repayment charges on your existing mortgage.
- You may have to pay valuation fees and legal fees.
- Your new mortgage may have different terms and conditions than your existing mortgage.
- You may not be able to get a new mortgage if your financial circumstances have changed.
Overall, remortgaging can be a good way to save money or to access more funds. However, it is important to weigh the pros and cons before deciding if it is the right option for you.
What is a green mortgage?
A green mortgage is a type of mortgage that offers lower interest rates or other incentives to borrowers who purchase energy-efficient homes or make energy-efficient improvements to their existing homes. Green mortgages are designed to encourage people to make sustainable choices when buying or improving a home, which can benefit the environment and potentially save homeowners money on their energy bills.
There are a few different types of green mortgages available, each with its own set of criteria. Some green mortgages require borrowers to purchase a home that meets certain energy efficiency standards, while others offer incentives for borrowers who make energy-efficient improvements to their existing homes. Some green mortgages also offer lower interest rates for borrowers who purchase homes that are certified as LEED (Leadership in Energy and Environmental Design) or Energy Star.
If you are considering a green mortgage, it is important to compare the different options available to find the best one for you. You should also make sure that you qualify for a green mortgage and that you can afford the monthly payments.
Here are some of the benefits of green mortgages:
- Lower interest rates: Green mortgages often offer lower interest rates than traditional mortgages. This can save you money on your monthly payments and over the life of your mortgage.
- Incentives: Some green mortgages offer incentives, such as cashback or points, for borrowers who purchase energy-efficient homes or make energy-efficient improvements to their existing homes.
- Environmental benefits: Green mortgages can help to reduce your environmental impact by encouraging you to choose a more energy-efficient home. This can benefit the planet and potentially save you money on your energy bills.
Here are some of the drawbacks of green mortgages:
- Eligibility requirements: Green mortgages often have stricter eligibility requirements than traditional mortgages. You may need to have a higher credit score or a larger down payment.
- Cost: Green mortgages can be more expensive than traditional mortgages, as they may require you to pay higher closing costs or fees.
- Limited availability: Green mortgages are not available from all lenders. You may need to shop around to find a lender that offers green mortgages.
Overall, green mortgages can be a good option for borrowers who are looking to save money on their mortgage payments, reduce their environmental impact, or both. However, it is important to weigh the pros and cons before deciding if a green mortgage is right for you.
Are you looking for mortgage advice?
We offer fee-free mortgage advice to help you find the right mortgage for your needs. Get in touch with us today to discuss your options.
