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If you’re on this website, it’s likely that you’re considering buying a property. That means you’re also likely in the early stages of searching for a mortgage product that suits your needs.

That’s a difficult thing to do. With so many lenders out there, it’s often difficult to find a loan that services your needs and keeps your monthly outgoings low.

Many new buyers consider interest-only loans as the best way to get a property quickly and keep their monthly outgoings to a minimum. But are they really all that they’re cracked up to be?

This article examines the good and the bad of taking out an interest-only mortgage.

The Pros

First, let’s look at the good side of things.

The most obvious pro is the lowering of your monthly outgoings. With an interest-only loan, you only pay interest for a set period of time. Usually, this is a couple of years before the loan reverts to having you repay both the principal and interest on the loan.

During this period, you may save hundreds of pounds every month because you don’t have to repay the principal. This can be a huge relief to new homeowners who’ve scrimped and saved for their properties and are already in a precarious financial position by the time that they’re ready to buy.

Moreover, this sorts of loans can be used by borrowers who want to build up a better credit history for a later house purchase. Making interest-only repayments on a smaller home may put you in a better position to buy a larger home later on down the line.

Investors often use interest-only mortgages to their advantage as well. Paying interest-only helps them to improve cash flow during the early years of the mortgage. It also means that they can save the money they would have spent on the principal to fund the purchase of another property. By the time they have to start repaying the principal, they should hopefully have a tenant in place who can cover the costs.

The Cons

Coming back to the investment issue, there have been some changes that directly affect investors in recent years. As of April 2020, you won’t be able to claim the interest that you pay on a property as a deductible. This only applies if you buy the property as an individual. Companies operate under the current rules that allow them to deduct some of the interest they pay.

This may cause major issues for individuals who are looking to rely on interest-only loans to lower their tax bills.

But what about regular homeowners?

The biggest con for them is that the principal of the loan doesn’t go away. You still have to repay it. But with an interest-only loan, you’re just delaying the inevitable. When the interest-only period ends, you’ll find your monthly outgoings rocketing up. Moreover, the amount of interest that you’re paying won’t have decreased because you won’t have made a dent in your principal.

That’s the major problem. Many people spend the money that they save when they go interest-only. This leaves them unprepared for the problems that might arise later on.

The Final Word

Picking a suitable mortgage product is no simple task. You have to put a lot of thought into both your current and potential future financial position.

Don’t go interest-only just for the lower monthly outgoings. Remember that you still have to think about how your repayments change in the future. Speak to a mortgage advisor to get advice that relates to your personal situation.

Once you’ve raised your deposit, it may feel like you’re ready to go full steam ahead into getting a mortgage so you can buy a property in London. But we’d encourage you to hold your horses for just a little bit. Buying a property is a huge investment, so you need to be sure that you’re getting it right.

That extends further than buying the right property too. You also need to get the right mortgage product for your needs.

That’s harder than it sounds. With so many products on the market, you’ll have to spend an eternity sifting through them all.

A mortgage advisor can help. Here’s the lowdown on why using one may be a good idea.

Less Research

When you go it alone, you’re going to have to research every mortgage product that you find individually. Sure, comparison and aggregation websites can help you to whittle the list down. But you still have to spend hours of your time trying to figure out what different interest rates and features actually mean.

With a mortgage advisor, you place all of that work into the hands of somebody else. Advisors already understand all of the terminology and complexities of the market, which makes them well positioned to find a mortgage product that suits your needs.

Access to More Products

Another good thing about mortgage advisors is that they have connections in the industry. As a result, they can access mortgage products that you may never come across during your own search.

This may include products from the major lenders that they don’t necessarily advertise on their websites. But it also means you get access to products from smaller lenders that may not show up on aggregation sites. Simply put, you get access to a greater variety of products with an advisor.

Extra Protection

A mortgage advisor is legally obligated to find the best product for you. That’s an instant relief to anybody who’s worried about working with an advisor who’s just in it for the money.

You get protection when you’re working with an advisor. They have to recommend products that suit your budget and earnings. This benefits you in two ways. For one, you know that you won’t end up with a mortgage that could cause you serious problems down the line. Secondly, should the advisor break this duty of care to you, you’re able to chase them through legal channels to get compensation for their bad advice.

Access to Advice

As the name implies, an advisor offers advice. This means that they can tell you more about what the various aspects of a mortgage mean. Better yet, they can help you to relate that information to your current financial situation.

Simply put, you have somebody available who can answer any questions that you might have. This extends beyond the mortgage products too. A mortgage advisor can tell you more about the various processes that go into buying a property. That’s invaluable advice that you can only otherwise get through hours of research.

So, those are the reasons why you might want to use a mortgage advisor instead of going it alone. But you also need to find the perfect property in London. That’s where the Hills Estate team can help. Browse our selection of properties today and we’ll help you to find your forever home.

So you’ve found the perfect place to rent and want to move in as quickly as possible.

But there’s a problem. The landlord has a lot of other offers, which means you need to find a way to stand out from the crowd.

You need to become the most attractive tenant available. Thankfully, there are a few ways that you can do this.

Method #1 – Have a Strong Credit History

Whether you’re buying or renting, your credit history can work for you or count against you. It’s essentially a record of your reliability. Landlords want to see that you’re able to may your rent payments on time, every time. They don’t want to have to waste time and money on chasing you every month.

You can strengthen your credit history by ensuring that you don’t make late payments on credit cards and personal loans. The less debt you have, the better you look. Moreover, make sure you apply for properties that fall within your achievable price range. If a credit check shows that you already struggle with money, a landlord isn’t going to want to pick you as a tenant.

Method #2 – Offer References

What others have to say about you can go a long way towards swaying a landlord’s opinion. If you’ve rented before, try to get as glowing a reference as possible from your previous landlord. Make sure this reference focuses on your payment history, as well as the good condition that you left the property in when you departed.

This gets more difficult if you haven’t rented before. In this case, your references need to be detached enough from you to not be biased, while also close enough to comment on your reliability. A boss is usually a good bet here, as they can talk about your performance at work without coming off as a friend saying whatever it takes to get you into the property.

Method #3 – Be Punctual

It’s such a simple tip, but it’s one that many overlook.

Being punctual reflects well on you as a person and gives you a professional air that extends over into your personal dealings.

Try to arrive early to viewings and other meetings. This demonstrates your interest in the property and shows your potential landlord that you care about securing it.

Method #4 – Don’t Haggle Too Much

Trying to drive the price down when a landlord has other potential renters knocking at the door will usually end in a refusal.

If you really want the property, you’re going to have to be prepared to meet the asking price. You might be able to haggle a little bit on the security deposit, but don’t try to drive the rent down when you know others are willing to pay it.

Method #5 – Dealing With the Pet Problem

Most landlords are wary of pets because they can cause damage to properties. Trying to hide your pet to get around this is a breach of contract that most landlords take very seriously.

If you have a pet, be upfront about it. If you meet resistance, suggest a pet interview that allows the landlord to see how well-behaved your animal is. Any certifications you have from training schools can help here, as can your pet’s veterinary records.

Unfortunately, some landlords simply don’t accept pets into their properties. When that happens, you’re better served looking elsewhere.

Are you a tenant who’s looking for the perfect property? Hills Estate can help you. Our Lettings Agents in London can help you to find a great property to suit your needs. Check the properties we have available for rent today.

Whether you’re buying or renting a property in London, you’re going to need contents insurance. These policies protect what’s inside your home from fire, theft, and other damage. Simply put, you need it just in case some emergency situation leaves you without your most valued possessions.

The trick comes in choosing the right contents insurance for you. Don’t just pick the first policy that you see. Instead, follow this advice to get the most comprehensive policy possible.

Tip #1 – Choosing the Right Type

Typically, your insurance provider will offer you a choice of three types of contents insurance. These are as follows:

• Sum Insured – You figure out the value of your possessions and take out a policy based on that. This is usually the option that you’ll get if you use a price comparison website to choose a policy.
• Unlimited Sum Insured – The insurance policy has no limits, so it protects everything in the house at all times. The drawback to this is that you often have to pay more for the privilege.
• Bedroom Rated – Your insurer figures out how much cover you need based on the number of bedrooms in your property. This is an estimate that usually works out to about £50,000 worth of cover. That’s usually enough to cover most properties, but you may want to reconsider if you have a lot of valuable collectibles, jewellery, or similar items that have more value than the average collection of household furniture.

Choose carefully when picking your policy. A Bedroom Rated policy may not always provide an accurate estimate, but it’s much easier to take out. Unlimited Sum Insured policies offer the most comprehensive policies at a higher price, while Sum Insured offers you more control over the specifics.

Tip #2 – Check the Single Article Limit

While the above allows you to ensure the general contents of the building, you probably have a few valuables that you want to take specific care of.

Contents insurance providers use the Single Article Limit for this purpose. This is the maximum amount that they will pay out on a single thing in your home.

By default, this is usually set at around £1,500. However, this may not be enough if you have a particularly valuable piece in your home. For example, you may have a piece of jewellery that’s worth thousands of pounds. Taking out a policy with such a small Single Article Limit means that you won’t be able to replace that item fully as part of your insurance policy. You’ll only get $1,500 towards it.

Speak to your insurer about their Single Article Limit. Most will raise it if you have items of higher value, though you may have to pay more for the privilege.

Tip #3 – Insuring Electrical Devices

Most policies cover electrical items that you’ll take out of your home on occasion. Laptops and mobile phones are good examples of this.

However, not all cover the things that are stored in those electrical items. For example, you may have spent hundreds of pounds on music downloads that are lost when something happens to your laptop. If your policy doesn’t cover those downloads, you may have to buy all of them again.

Check the policy to see if it covers these digital losses. Most don’t, but you may find a few that do.

The Final Word

That covers the major things that you need to know about contents insurance.

Now, you need a home to put your contents in. Get in touch with the Hills Estate team to find out about great properties for sale and rent in London, Ilford, Essex, and Redbridge.

As a new renter, you want to ensure your relationship with your landlord is as smooth as possible. After all, you may have this relationship for several years. Issues with it lead to issues with your living conditions.

You want to be a happy tenant and we want to help you get there. Here are four tips for ensuring your tenancy goes well.

Tip #1 – Don’t Settle

Our first tip relates to the property itself. Searching for a new home is a difficult process that will require several viewings of a host of different properties. Choosing something that doesn’t suit your needs means you’ll never be a happy tenant. Instead, you’ll resent paying rent on a home that you don’t want to live in.

Create a shortlist of things that your ideal property must have. Go through this list during every viewing to see how each property stacks up.

Now, it’s unlikely that you’ll find something that ticks every single box. But you want your property to cover most of the boxes if you’re to be a happy tenant.

Tip #2 – Check the Small Print

Your tenancy agreement is the most important document you’ll sign in relation to your renting of a property. If it doesn’t suit your needs, you’ll run into issues whenever a problem arises.

The important thing is to check every single word in the document. Don’t just hit on the major points and assume that the small print is okay. You need to understand everything, from what happens if you miss a rent payment through to how you raise issues with your landlord.

Read every detail and highlight issues that you have with the document. Discuss them with your letting agent in London to ensure you get a tenancy agreement that works for everyone.

Tip #3 – Figure Out the Changes You Make

Landlords don’t want you to make wide-scale changes to their properties. They have to think about future tenants as well as you. However, you also want to make your new house a home.

You need to compromise.

Discuss what you intend to do to the property with your new landlord or letting agent. You’ll often find that landlords are more flexible than their tenancy agreements make them out to be. As long as you’re able to make good on the changes you make when you leave, you’ll usually be able to do a lot more with the property than you may have thought.

Tip #4 – Check the Inventory

Losing your security deposit is something that all renters want to avoid. However, it happens to many who don’t pay attention to their new home’s inventory.

When you move into a property, you’ll receive an inventory that discusses every asset that the property has. It will also outline any issues that the landlord or letting agent is aware of.

Your first task is to go through the inventory with a fine-toothed comb. Check that everything is as the landlord say it is. If you find any new issues, take photos and send them to your letting agent. Make it clear that those issues were there when you moved in and they won’t come back to bite you when you move out.

Hills Estate wants to ensure that you enjoy your tenancy. Contact us to find out more about great rental properties in London.

So you’ve saved up a deposit and you’re ready to start your search for a new home. It’s an exciting time. You’re making the transition to true freedom and are getting ready to commit to the single largest purchase that you’re likely to make in your life.

However, many first-time homebuyers go through this process unprepared for taking on the true costs of home ownership. It’s much more than your monthly mortgage repayment. There are a few other costs that you have to keep in mind.

Stamp Duty

The value of the property you buy determines whether you’ll pay any stamp duty. First-time buyers are exempt up to a value of £300,000, whereas other buyers have to pay on any property worth over £125,000.

Stamp duty also applies at different rates, depending on both the property’s value and what you’re buying the property for. It could be as low as 2% of the property’s value if you’re buying the property to live in, up to 15% if you’re buying a property worth over £1.5 million to rent out.

Whatever the case may be, it’s going to cost you thousands of pounds on top of your mortgage. Some lenders may allow you to capitalise your stamp duty onto your mortgage, though this is fairly rare. Usually, you’ll have to come up with the extra money on top of the deposit that you pay.

Valuation Fees

Most lenders look to make money in ways other than your mortgage repayments, which leads us to the valuation fee. This is a fee, usually between £150 and £1,500, that you’ll pay to the lender to assign a value to your property. This also determines how much you can borrow.

Some lenders waive these valuation fees, especially if you’re able to provide a large deposit. Generally, you’ll pay higher valuation fees if you offer a small deposit. However, it’s important to check several lenders as each has its own policy when it comes to valuation fees.

Insurance Packages

Everybody knows that they need building and contents insurance when they buy a new home. However, you may also want to consider repayment insurance and a mortgage indemnity guarantee.

Furthermore, it might be worth taking out a life insurance policy that’s to the value of your mortgage. Plus, your property’s location may also affect how much you pay for car insurance.

Conveyancing

Buying a property is a legal transaction, which means you need to bring a solicitor on board to handle all of the details. Conveyancers are the professionals for this job, and they’ll handle all of the paperwork, such as the transferral of the property’s title into your name.

But those services don’t come cheap. You’ll usually pay between £800 and £1,500, depending on the property’s value. The purchase having extra conditions attached can also raise the amount of money that you’ll pay to a conveyancer.

You can handle the conveyancing duties yourself. However, with no experience, you’re prone to making mistakes that could prove more costly than hiring a conveyancer.

At Hills Estate, we want you to be ready for all of the challenges that home ownership brings. Contact us today to get help in finding the property of your dreams.

At Hills Estate, we provide property management and lettings agency services for clients throughout London. If you take a moment to browse our properties, you’ll see that we have several available for rent. From apartments to houses, you can find something to suit your needs with us.

Of course, there may be some of you who aren’t sure about renting. Perhaps you’re wondering if renting or buying is the best option for you. Buying gives you complete ownership of the property, plus the money you spend each month builds equity.

That may make it seem like an attractive option. However, there’s plenty of pros of renting too. Let’s take a look at some of them.

Short-Term Contracts

When you buy a home, you lock yourself into a long-term mortgage. This limits your options if you need to move. You’ll have to go through the whole selling process, plus there may be fees involved if you try to end the mortgage early.

That’s not an issue with renting. Typically, you’ll start on a six-month contract, with many landlords switching to rolling monthly contracts after that. If you know that you’re on the move a lot, or if you’re looking for somewhere to live while you save for a house, renting is the best option.

Low Maintenance Costs

When you own a home, everything inside that property is your responsibility. If the boiler stops working or a window breaks, you have to pay money to get it fixed. Furthermore, you also have to spend valuable time looking for contractors and can’t be sure you’ve made the right choice until they do the work.

All of those burdens are lifted off your shoulders when you’re renting. Your landlord or property manager handles all of the maintenance concerns. Of course, you have to pay for anything that you damage yourself. However, general wear and tear is the responsibility of the property’s owner, not the tenants. You can also feel safe in the knowledge that your landlord has chosen contractors that can do the job, so that’s another weight lifted.

Lower Initial Costs

The initial cost of buying a property is enormous. Not only do you need to save a deposit, which can often end up being in tens of thousands of pounds, but you have all sorts of additional fees to worry about. Lenders and legal professionals all take a slice of the pie.

The cost of moving into a new home decreases drastically when you rent. Typically, you’ll only pay a month’s worth of rent up front, plus a security deposit. You also get the deposit back when you leave the property, assuming you haven’t caused any damage.

That lower initial cost means that it’s far easier to handle the moving in process. It also means that you have more money to spend on the essentials that you need for your new home, such as your furniture and white goods.

The Final Word

It’s important to note that both renting and buying have their pros and cons. This just gives you an idea of the benefits you’ll enjoy when renting.

If you need more advice or would like to discuss your options, call the team at Hills Estate.