You are able to get 100% shared ownership mortgages with some lenders, but typically you may need a minimum 5% deposit. We would recommend you seek advice from an experienced Mortgage & Protection Adviser.
This depends on the enquirer’s individual circumstances and we would recommend you seek advice from an experienced Mortgage & Protection Adviser.
Absolutely, you can treat this as your own home.
Disadvantages include not owning 100% of the property until you purchase additional shares and being aware that you have to pay rent to the Housing Association alongside the mortgage. We would recommend you seek advice from an experienced Mortgage & Protection Adviser.
This is an option if you are looking to get onto the property ladder but we would recommend you seek advice from an experienced Mortgage & Protection Adviser.
This depends on the enquirer’s individual circumstances and we would recommend you seek advice from an experienced Mortgage & Protection Adviser.
The majority of the high street lenders offer shared ownership mortgages and we would recommend you seek advice from an experienced Mortgage & Protection Adviser.
You buy a share of a property and you would pay a monthly mortgage in addition to paying the Housing Association rent who would also own the property with you. Over time you can buy additional shares of the property and this is an option you can look into when remortgaging your property, it is advised to speak with a Mortgage & Protection adviser when doing so.
No, they aren’t but you will need to take into consideration the rent you will need to pay back to the Housing Association alongside this each month.
You would pay less interest on a 15-year mortgage but the monthly payments would be higher, typically. In this instance, it would also depend on the enquirer’s individual circumstances and we would recommend you seek advice from an experienced Mortgage & Protection Adviser.
Yes, it is. However, it is slightly different to selling a property on the open market, you would need to contact your Housing Association as the sale must be done via them.
These mortgages are rare, and traditionally, no they are not common. This depends on the enquirer’s individual circumstances and we would recommend you seek advice from an experienced Mortgage & Protection Adviser.
In principle this is the same as any other mortgage, and the benefits could mean incurring less costs as opposed to a shorter-term arrangement where you would need to pay for administrative and set-up fees etc.
Yes, you can if you don’t pay the monthly rental, we recommend you seek advice from an experienced Mortgage & Protection Adviser.
Yes, this is possible, to pay for your share of the property you can either use cash to buy it outright or borrow the funds via a mortgage.
This depends on the enquirer’s individual circumstances and we would recommend you seek advice from an experienced Mortgage & Protection Adviser.
Yes. Shared ownership allows buyers to purchase a share of a home (usually 25% and 75%). They will pay a mortgage on the share they own and a below-market-value rent on the remainder to a Housing Association.
Help to Buy is a government backed scheme where the Help to Buy equity loan enables purchased to buy a new build home - the government provides a loan of up to 20% (40% in London) so the purchaser only needs to raise a 5% deposited with a 75% mortgage making up the rest.
Buying a property is an investment and you won’t be paying someone else’s mortgage which is what happens when you rent! You will build up equity within a property and it is also a good option for saving money for children/grandchildren.
This is allocated by the relevant Housing Association who determines the rent depending on factors such as the property size. We would recommend you seek advice from an experienced Mortgage & Protection Adviser.
This depends on the enquirer’s individual circumstances, but each lender has its own specialisms so the advice would be to shop around or even better, get the right advice from an experienced Mortgage & Protection Adviser.
This depends on the mortgage and on the enquirer’s individual circumstances. We would recommend you seek advice from an experienced Mortgage & Protection Adviser for them to be able to calculate this for you.
FIXED - where your interest rate is guaranteed to stay the same for a set period of time.
TRACKER – where the interest rate you pay is based on an external rate - usually the Bank of England base rate - plus a set percentage.
DISCOUNT - where the interest rate is pegged at a set amount below the lender’s standard variable rate (SVR) for either a set period (e.g. two or five years) or for your whole mortgage. The SVR is an interest rate set by your lender, which can increase or decrease by any amount and at any time.
This depends on the enquirer’s individual circumstances, however, making overpayments on your mortgage product would be the most straightforward way to pay any outstanding balance. It is always worth checking with your lender or whichever mortgage broker set this up to make sure it is feasible and without any penalties such as early redemption charges.
Alternatively, remortgaging to a reduced mortgage term will speed this process up depending on the individual’s circumstances.
Typically, it is more cost effective to refinance with a mortgage broker as they will be able to give you access to more lenders and preferential rates. Did you know that 74% of mortgages are arranged via a mortgage broker? Get the right advice from an experienced Mortgage & Protection Adviser.
Initially your credit score will drop as you are taking on a substantial loan (in the form of a mortgage) but if you continue to make regular mortgage payments this will strengthen your credit score.
No, not necessarily. Again, it depends on the enquirer’s individual circumstances and in some cases refinancing with your current lender might be the cheapest option.
This depends on many external factors including the state of the economy leading into 2021. It will also depend on the enquirer’s individual circumstances and mortgage requirements.
This depends on the enquirer’s individual circumstances, however, making overpayments on your mortgage product would be the most straightforward way to pay any outstanding balance off within a five-year period. It is always worth checking with your lender or whichever mortgage broker set this up to make sure it is feasible and without any penalties such as early redemption charges.
Absolutely. This is a good way to ensure you can achieve a lower rate, get a better deal for yourself, perhaps reduces the term of the mortgage and ultimately benefit from lower monthly payments.
This depends on the enquirer’s individual circumstances. A ‘like for like’ remortgage with no adverse credit or a low Loan to Value mortgage with no adverse credit would likely be the ‘easiest’ to achieve.
Some lenders will offer five times your salary but we would recommend you seek advice from an experienced Mortgage & Protection Adviser who will have access to many more mortgages with preferential rates and so on.
A personal loan is typically unsecured, whereas a mortgage will be secured against bricks and mortar, i.e. the home that you are buying or have bought.
Typically, it is four and a half times your income but each lender is different. We would recommend you seek advice from an experienced Mortgage & Protection Adviser.
The best way to compare mortgages is to speak to a qualified mortgage and protection expert. They will be able to search the marketplace on your behalf and tailor their activity to meet any specific requirements you might have.
Why should I remortgage?
Very rarely do you take out a mortgage and stick with the same one for the whole term – i.e. 30 years – until it’s all paid off and you’re mortgage-free (oh, the dream!). Instead, it’s much more likely you'll find yourself looking to remortgage to take advantage of a new deal to suit your needs and current budget.
Each household is different and there are various reasons why you might look to remortgage. Perhaps you want to borrow more money, or maybe you’ve seen a better rate that you’d like to switch to.
The interest rate has dropped from 0.25% to 0.1% so there could be an opportunity for you to save money by remortgaging. Just be aware that sometimes, the lender will ask you to pay an early repayment charge before you can switch. It’s important to weigh up the price of the early repayment charge (sometimes referred to as exit fee or admin fee) against the costs you’ll be saving with the lower interest rate.
Your current fixed deal is up for renewal
If you took out a fixed rate mortgage where you pay the same amount every month and the interest rate remains the same, once the initial term has ended (it would have been 2,3,5 years), you’ll fall onto a standard variable rate (SVR) where you could end up paying a higher interest rate than you were previously. This is usually the time when you might look to remortgage in order to switch to a better mortgage deal.
You want to move from interest-only to repayment
Perhaps you’re on an interest only mortgage and you want to move to a repayment mortgage. Generally speaking, your lender should be able to change this for you without the need to remortgage but if they can’t offer you the deal you want, then you might consider a full remortgage.
You want to make overpayments
You might have a higher paying job now than you did when you took out your mortgage, meaning you now have more disposable income and can afford to make overpayments, but perhaps your current lender doesn’t allow you to. Therefore, you might want to look at changing over to a new mortgage with a lender who will allow you to make overpayments.
Borrowing more money
Moving home can cause a lot of upheaval and can be very expensive by the time you’ve paid for all the fees and moving costs. Choosing to stay put and make home improvements can be a cost-effective way of getting the house you’d like.
In order to cover the cost of the improvements, whether for an extension, loft conversion etc., you might consider remortgaging. Don’t forget to do your research first though and weigh up the pros and cons of paying the early repayment charge, as you might find that a home loan is overall better for you than remortgaging.
Just be aware that your lender will want to know what you intend to use the money for and may ask to see builder’s quotes etc. as evidence.
Do I pay more money when I remortgage?
This depends on the lender, and why you are choosing to remortgage. Sometimes the lender will require you pay an early repayment charge before you switch, which does add to the overall cost of remortgaging. However, this may be offset over time by the lower interest rate you find with a different lender.
For the most part, homeowners tend to remortgage to take advantage of their improved rate as they near the end of a fixed term mortgage deal. This better loan-to-value allows you to make reduced payments over the new mortgage term, and can have a positive impact on your monthly budget.
Do I need to remortgage?
No. Although remortgaging can be useful to help free up money, reduce your monthly bills or help you borrow more money, not everyone needs to remortgage.
If you’d like to find out more about remortgaging your home, talk to our team of expert mortgage advisers and we’ll go through your options with you and find a product and a rate that’s the right fit for you. Call us on 08454 500200 or click here to make an enquiry.
Critical illness cover is a type of health insurance policy that will give you peace of mind and can provide a considerable payout if you’re diagnosed with a life-threatening illness. Illnesses covered vary widely depending on your critical illness policy provider, but a number of core conditions are traditionally covered by all:
- Heart attack
- Kidney failure
- Coronary artery bypass
- Multiple sclerosis
- Major organ transport
- Permanent disability caused by an illness or injury
Critical illness policies usually carry a number of specific conditions that would render a claim invalid, so always check the exclusions to ensure you’re adequately covered. These exclusions could include pre-existing medical conditions, minor heart attacks or early cancer diagnoses.
In contrast to income protection insurance that provides you with a regular payout to replace your lost income, critical illness cover gives you a lump sum, tax-free payment that you can use to pay your mortgage, your living expenses and, if required, your treatment.
Why you should consider critical illness cover:
- If you don’t receive any benefits that would cover you for long-term sickness from your employer.
- If you don’t have enough savings to pay for your care or your living expenses if you become ill and can’t work.
- Depending on your financial circumstances, you may be able to claim statement benefits of around £100 per week – if that isn’t enough, critical illness can bridge the gap.
- If you’re single and don’t have any dependents, critical illness will give you a one-off payment as opposed to a payment they’ll need in lieu of your income.
The cost of premiums for a critical illness policy will vary according to your age and health, i.e. the level of risk you represent to your insurer, so it’s important that you talk to an independent financial adviser who’ll have access to multiple products from trusted insurers across the entire market.
If you’d like to know more about critical illness protection, talk to our team or insurance specialists and we’ll help you find the most suitable cover. Call us on 08454 500200 or click here to make an enquiry.
What is mortgage payment protection insurance?
Has the pandemic made you concerned about how you’ll pay your mortgage if you’re made redundant or can’t work due to sickness? Don’t worry, you can take action to protect yourself. And one way to do this is to take out mortgage payment protection insurance (MPPI). Here’s what you need to know.
Why would I need it?
For the majority of homeowners, their mortgage is their biggest monthly outgoing. So, if losing your job or not being able to work due to an illness or accident means you’ll struggle to pay it each month, it’s sensible to protect yourself. If you live by yourself and don’t have savings to fall back on it may be particularly important. Similarly, if you live with a partner who does work but you can’t manage on their income alone, it may be a good option.
There are varying levels of mortgage payment protection insurance you can take out depending on what you want to be covered for. These are ‘unemployment only’, ‘accident and sickness only’, and ‘accident, sickness and unemployment.’ The level of cover you take will help determine the cost of the premiums. So, consider which would suit your circumstances best.
But, you need to bear in mind that due to the pandemic, some insurers have added Covid-related exemptions to their policies, so make sure that you check before you take out any protection. Many providers have also begun to cover people who are self-employed. However, it’s always important to make sure you check the small print carefully to make sure you’re not exempt.
Can’t I take a mortgage payment holiday instead?
Many people are taking mortgage payment holidays at the moment due to the impact of Covid on their finances. But it’s important you don't see being able to take a payment holiday as an alternative to MPPI.
Mortgage payment protection insurance is a policy that pays out after you successfully make a claim, so you can pay your mortgage each month. In contrast, a payment holiday means you are deferring paying what you owe.
Also, you may be able to take a payment holiday due to Covid right now and may continue to be able to do so for the next few months as the scheme has been extended. But you can’t assume this will continue to be the case next year.
And there are other consequences of taking a payment holiday too. For example, while the advice from the FCA is that a mortgage holiday will not affect your credit record, it could affect future lending decisions.
How much does mortgage payment protection insurance pay out?
The point of mortgage payment protection insurance is to cover the cost of your mortgage in the event you need to make a claim. And these policies will typically pay out for up to two years. But you can choose for the policy to pay out more than the cost of your mortgage so other bills are covered too. Alternatively, you can opt to receive a proportion of your salary. Again, the level of cover you choose will have an impact on the cost of premiums.
When do I get the money?
You’ll usually need to be off work for a specified number of days before the policy starts paying out. This can range anywhere from 30 to 180 days. The longer the period you’re prepared to wait, the cheaper the policy will typically be.
So, consider your own circumstances. If you’re entitled to sick pay from your employer, bear this in mind when you’re deciding how long you’re happy for the waiting period to be. However, it is possible to get ‘back to day one’ policies which don’t have a waiting period before you can claim.
What other types of protection are there?
This pays out a proportion of your salary each month if you’re unable to work due to accident or illness. Income protection policies typically pay out for a longer period than MPPI. Policies vary but they may pay out until you are able to return to work or reach retirement. Income protection tends to be more expensive than MPPI.
Critical illness cover
This will pay you a tax-free lump sum in the event that you're diagnosed with a serious illness covered under your policy. You could use a lump sum to either service the payments on your mortgage, or pay it off completely, depending on the amount you receive.
These policies will only pay out if you pass away. But they're worth considering if you have dependents as they pay out a lump sum.
Who should I talk to?
Life can throw curveballs at us when we least expect it, so it’s really important to have a plan in place in case things go wrong.
If you want to find out a bit more about protection and insurance policies, whether it be against illness, accidents or losing your job, our expert protection advisers will be happy to help. For insurance business, we offer products from a choice of insurers. Feel free to get in touch with one of our expert advisers.
With mortgage and protection advisers in Winchester, Southampton, Farnham, Bishops Waltham, Alton, Chandlers Ford, Alresford, Romsey and Park Gate, you are never too far from insurance advice.
Development finance is a loan that’s used to fund residential developments, such as new-build construction projects or refurbishment schemes for converting property into flats, bedsits or HMOs. Whether you’re an experienced property developer, a landlord or you’re keen to kick-start your first new-build or renovation project, there’ll be a development finance route that suits your initiative.
Development finance is a form of short-term funding that will enable you to pay for your construction and development costs. It could mean a ‘refurbishment bridge’ that will fund a few months’ building costs of a light refurbishment project or the more substantial costs from covering your initial land investment outlay to completion of the final plot.
Your lender may agree to finance a proportion of the plot purchase and another percentage of the build – this way you would need to inject far less of your personal money, which would be freed up to cover the cost of other projects or unexpected expenses. When you have a property portfolio with a lot of equity, you can use your property to secure further lending – this could be invaluable when you have insufficient liquid cash to grow your portfolio.
Property development can be a challenging environment and weighing up your best and worst-case scenarios is a critical exercise when it comes to funding your project. Getting your finance right in good time will ensure your development activities can proceed and thrive – regardless of the economic climate.
To find out more about development finance for your next project, talk to our team of expert advisers and we’ll help you find a funding stream that will help you from the ground up. Call us on 08454 500200 or click here to make an enquiry.
Is a bridging loan right for me?
Are you worried you’re going to miss out on buying your dream home because you can’t find a buyer for your current house? Or do you want to snap up a property at auction but you’re worried about getting a mortgage in place in time to complete the purchase? Then a bridging loan could be the answer. Here’s what you need to know.
What is a bridging loan?
Bridging loans are short-term loans, used mainly for buying houses. They’re a useful option if you need to access cash quickly for a short period of time.
They’re often used by home buyers to ‘bridge’ the gap if they want to buy a new house before they can sell their old one.
They can also be used for:
- Buying a property at auction
- Buying a house under market value where a quick completion is required
- Buying a property that is deemed unsuitable for mortgage purposes with mainstream lenders (e.g it has no kitchen or bathroom) in order to renovate it
- Releasing equity from a property, for example to pay a tax bill or divorce settlement
What do I need to know?
It’s important to know there are two different types of bridging loans:
Closed bridging loans: With these, you’ll have a fixed repayment date. These will typically be used if you have exchanged contracts with a buyer but you’re waiting for the sale to complete.
Open bridging loans: These are different because there isn’t a fixed date when you’ll need to repay it. These could be used if you want to buy a house but you haven’t found a buyer for your existing home yet. Or it might be useful if you’re an investor and you plan to renovate a property, then sell it on to pay off the loan. However, while you won’t have a fixed repayment date, you’ll usually need to pay it off within one year.
Fixed and variable rates
Just like traditional mortgages, you can get fixed and variable rate bridging loans. As you would expect, with fixed-rate bridging loans, the interest rate remains the same over the term. Whereas if you choose a variable-rate deal, the interest could increase or decrease, which would result in you paying back higher or lower amounts.
What is the difference between a first and second charge bridging loan?
When you take out a bridging loan, a ‘charge’ will be placed on your property. And if you default on the loan, this legal agreement dictates which lender will be repaid first.
Usually, if you have a mortgage on your house, the bridging loan will be a ‘second charge’ loan. So if you’re unable to make your repayments and the property is sold to pay your debts, your mortgage would be repaid first.
However, if you own your home outright, you would take out a ‘first charge’ bridging loan. This means that if you default on the loan, the bridging loan would be repaid first.
If you take out a first-charge bridging loan you can usually borrow more than if you take out a second-charge one.
How much can I borrow?
This can vary hugely as lenders could lend anything from £30,000 to £50 million. However, the amount you can borrow will depend on the value of your property. Lenders may offer a maximum LTV of 65-80%, although you may be offered less depending on your circumstances. However you may be able to borrow 100% LTV, subject to additional security.
How can I get one?
We work with excellent advisers to make sure you get the right advice when it comes to taking out a bridging loan, so that you know this is definitely the right option for you.
How quickly can I get the money?
You’ll usually get a decision on whether your application has been successful between one and two days after submitting it. And the funds will typically arrive around two to four weeks later.
What do I need to consider?
While bridging loans can be an excellent short term option, you should be aware they’re usually much more expensive than a traditional mortgage. Plus you’ll often need to pay fees such as administrative fees too. So, it’s always better to get advice before taking one out and consider if there are any alternatives that might suit you better. For example, could you remortgage your home on a buy-to-let property and use the equity released as a deposit to get a mortgage on your new property?
To find out more about bridging loans, please contact our team of advisers and they can talk through your options.
How does remortgaging work?
You may well have heard of remortgaging but never fully understood what it means. In layman's terms, remortgaging is when you look to move from one mortgage deal to another, either sticking with the same lender or moving to a new one.
A mortgage is likely to be your largest financial commitment lasting you many years, but you don’t necessarily have to stay on the same mortgage as the one you initially took out, as your personal circumstances may, and probably will, change over the years, giving you a reason to remortgage.
Just as you did when you took out your first mortgage, it’s important to reevaluate your finances every now and then, and consider all your options in order to know you’ve got a mortgage that is right for you at that moment in time.
What is remortgaging?
Just as you might shop around for the best broadband deals and the cheapest energy rates, the same applies to your mortgage. You can shop around to see if there is an opportunity to save money.
If you do find a cheaper mortgage rate, you could end up switching onto the new mortgage deal, and this is what’s known as remortgaging.
Things to consider
Before you decide to go ahead and switch onto a new mortgage deal, it’s worth weighing up a few things first:
- Check if your new lender is offering a fee-free mortgage (many lenders will write to you near the end of your current mortgage term and offer you a new deal to switch to), or if there is a product fee involved as this could counteract the savings you could have made by remortgaging.
- There may be an early repayment charge on your current mortgage that you have to pay off before you can switch to a new deal. Again, this could outweigh the benefits of switching.
- The lower your loan-to-value (LTV), the more mortgage deals that may be available to you. You can work out your LTV by dividing your outstanding mortgage balance by your property’s current value. For example,
Your outstanding mortgage is £100,000. Your property is valued at £250,000.
100,000 divided by 250,000 is 0.4.
0.4 x 100 = 40
So your LTV is 40%
- Make sure you're mortgage ready. Just because you have a mortgage already, doesn’t mean the same checks won’t be carried out when you apply for another one. Make sure your credit score is healthy as the lender will still perform the same affordability checks.
- Consider speaking to a mortgage adviser. Our mortgage advisers understand the criteria that lenders are looking for and can compare mortgage deals to help find the right one for you. We have access to over 90 lenders and can search 12,000 mortgages, saving you time and taking the hassle out of doing it yourself.
When and why do most people remortgage?
There are various different reasons why people choose to remortgage. Some of these might include :
- Take advantage of low interest rates
- Your current fixed deal is up for renewal
- You want to move from interest-only to repayment
- You want to be on a better rate than you're currently on
- You want to be able to make overpayments
- You want to borrow more money
For instance, you may have initially taken out a fixed rate mortgage where you pay the same amount every month and the interest rate stays the same. However, once this initial period has ended (it could have been a 2,3,5 year fixed) you will fall onto a standard variable rate (SVR) where you could end up paying a higher interest rate than you were previously. This is usually the time when many homeowners look to remortgage in order to switch to a better mortgage deal.
If you’re keen to remortgage your home, you should take advice from an independent mortgage broker who will be impartial and have access to a wide range of products on the market. Call us on 08454 500200 or click here to make an enquiry.
What's different about a first-time buyer mortgage?
As a first-time buyer, there’s a great range of first-time buyer mortgages to suit your circumstances and your budget and to help you get on the first rung of the housing ladder.
As you’re new to the housing market, you may well be offered incentives or cashback schemes to encourage you to apply for a mortgage with them. The deposit you’ll need for a first-time buyer mortgage could be as low as 5% although, again, you’ll need to meet the relevant criteria to show you can afford your mortgage repayments.
You’ll also need to consider what type of first-time buyer mortgage will be right for you. There are several that you might be offered – your mortgage adviser will be able to talk you through the mortgage product that’s right for you, but here are the key features of each:
- A fixed-rate mortgage is a sensible option for first-time buyers because you’ll pay the same monthly payment for as long as your fixed-rate period lasts. After that you can apply for a remortgage to secure another good deal. If you overpay or leave the deal early, you’re likely to pay a penalty, but the rates are usually lower than a variable rate deal.
- Variable rate mortgage monthly repayments are linked to the bank base rate so, when rates are low, your repayments will be low too, but you’ll pay the price should rates rise. Tracker mortgages and discounted rates are also guided by the bank base rate.
- Offset mortgages offset the interest on your savings against your mortgage – talk to your mortgage adviser to check if this is the best use of your savings.
- A repayment mortgage means that every monthly payment you make will go towards paying the capital sum you’ve borrowed until you own your home outright.
- Help to Buy loans are designed to make it more affordable for people to get onto and move up the housing ladder. You’ll need to save a deposit of at least 5% to qualify for the government’s Help to Buy equity scheme, which will give you an interest-free loan of up to 20% (40% in London) to put towards a new-build home valued up to £600,000. You’ll pay interest from Year 6. You can find out more about Help to Buy mortgages
There’s lots to think about when it comes to buying your first home, but we’re here to help you through the process. Talk to our team of expert mortgage advisers about your options and we’ll help take the stress out of your move. Call us on 08454 500200 or click here to make an enquiry.
How much do I actually need as a deposit?!
If you’re a first-time buyer and you’re saving for your first home, you’ll want to know how much deposit you’ll need to get together as early on in the process as possible.
Just to clarify – you’ll be classified as a first-time buyer if you’ve never owned a property, either freehold or leasehold in the UK or abroad.
In most cases, you’ll need to have a deposit of between 5% and 20% of the cost of your first home. The more you save, the less you’ll need to borrow. By having less to borrow, the greater access you’ll have to more mortgages with better rates as you’ll be a less risky investment for lenders.
The difference between the deposit you’ve saved and the first-time buyer mortgage you need is known as the loan to value (LTV) ratio – the higher your LTV, the higher the interest rate you’re likely to pay.
Remember there are other costs associated with buying a new home. You’ll need to pay solicitor’s fees, survey and search costs, mortgage arrangement and valuation fees, buildings insurance and removals costs. As a first-time buyer, you don't have to pay Stamp Duty on the first £300,000 for homes worth up to £500,000.
There are many different Government-led schemes to help first time buyer get onto the property ladder. These include Help to Buy Equity Loan Scheme, 95% mortgages, First Home Scheme, Shared Ownership and more. Be aware that schemes for England, Greater London, Wales and Scotland, and they all vary.
Buying your first home can be as nerve-wracking as it can be exciting, so talk to our team of expert mortgage advisers about your options and we’ll guide you through the process. Call us on 08454 500200 or click here to make an enquiry.
Tips for improving your credit score
If you were about to lend someone a large amount of money then you’d want to know that they are responsible, capable of paying it back and aren’t hiding anything below the surface, right?
That’s why lenders look at credit ratings to help decide whether to a) lend you money b) how much to lend you, and sometimes c) how much interest to charge.
Given this, there are a number of ways to prove you are a trustworthy individual who can manage your finances responsibly, and are able to pay back what you borrow. If you can clearly prove that you have a good credit score, then you’ll stand a better chance of getting the mortgage deal you want, and ultimately will be able to borrow the maximum amount to help you buy the house of your dreams.
1. Check your credit score
The first place to start is to find out how good or bad your credit score is. There are various companies out there i.e. Experian, Equifax, Callcredit, who can give you your credit score. This will be a thorough report of all your credit accounts, including outstanding loans and any missed or late payments over the last six years, as well as any other people who are financially linked to you.
2. Show an account history
Start by proving you have a good history when it comes to managing your finances. Having a history of bank accounts e.g. a current account, savings accounts, ISAs, credit card etc. will give your mortgage adviser a decent history of your credit to look back through.
3. Declare your address
Lenders will need to see proof of your name and address in order to trust you are who you say you are. Register on the electoral roll and make sure all of your bills are registered to your current address. This way, everything is easy to trace back to you and confirms your identity.
If you’d like to find out more about improving your credit score, talk to our team of expert mortgage advisers on 08454 500200 or click here to make an enquiry.
Why use a mortgage broker?
Does giving up a day of your time to sit in an office or bank, answering questions and filling out paperwork sound like your idea of fun? No. Ours neither.
Most people assume that getting a mortgage means heading straight to your bank or building society, but unfortunately this can mean missing out on the right mortgage for your circumstances. It’s a bit like searching for car insurance - you want to have a look at all of your options first before making a decision. The problem is, it’s not always clear where to look and that’s where a mortgage broker comes in.
What does a mortgage broker do?
Ultimately, it’s a mortgage broker’s job to find you the right mortgage for your needs, and here’s how they can help you do just that.
1. Assess your requirements with a simple chat
As mortgage brokers, we start by arranging one of our expert mortgage advisers to assess your requirements. This includes listening to your requirements, looking into your current financial situation and taking the time to understand your personal circumstances. Because we understand that your time is precious, and your monthly budget is very important to you, we try to take up as little of your time as possible.
2. Make recommendations that put your needs first
Once we’ve assessed your situation, we go away and search the market using our bespoke sourcing system, to find a product we recommend for you. At Mortgage Advice Bureau, we work with over 90 different lenders - so you aren’t restricted to just one bank or building society’s products or lending criteria. Having this flexibility means you’ll have much more choice and find the mortgage deal that’s right for you.
3. Deal with the application, so you don’t have to worry
Once you’ve decided on a mortgage product, you can leave the rest in our hands - it’s that simple. You don’t have to waste any of your time filling out paperwork - we manage the whole application process for you. This means you can be left to concentrate on what really matters; whether that’s planning the move or creating new boards on Pinterest for your dream decor!
Why should you use a mortgage broker?
With a better understanding of what a mortgage broker actually does, the next question is obvious: should you use a mortgage broker? Although some people may be happy to go straight to a single bank or building society, many home buyers find that it is better to use a mortgage broker for the following reasons:
A mortgage broker can save you money
We aim to make sure you never pay a lender more than you need to. We do this by assessing your current financial situation, and making sure you’re on the right mortgage deal for your needs. If you aren’t, we work within your best interests to make a recommendation. We have access to over 90 different lenders, which gives us the flexibility to offer you a range of products. If one lender should reject your application, we’ll try another. We can also tap into exclusive deals that aren’t available on the high street which, again, gives you more variety.
They can also save you time
We understand that life is busy, so we like to offer our customers flexibility when it comes to appointments. Our advisers offer evening and weekend appointments, both face to face or over the phone, so you don’t have to worry if you don’t have the time to see us, we can get all the information we need with a phone call.
Some mortgage brokers can help you find mortgage protection too
Not only will we make sure you get the right mortgage for your needs, we’ll be there for you long after you get the keys to your new home. Unsure if you need life insurance? We offer advice on various kinds of mortgage protection - including critical illness cover, income protection, buildings and contents insurance. We want to make sure that, if the worst was to happen, you’d be able to stay in your home and your loved ones would be looked after.
No mortgage advice is ‘free’, but a broker can give you value for your money
Mortgage brokers earn money on the commission paid by all lenders. This means that even “free mortgage advice” is still paid for in one form or another. Many mortgage brokers may also charge a fee. For Mortgage Advice Bureau, charging fees allows us to spend more time advising you, supporting you throughout your application and means our advice can be wholly focused on your needs, rather than dependent upon the value of the lender commissions.
After all, a mortgage is probably the biggest investment you’ve ever made, so it makes sense to know you’re getting the right deal.
Still wondering why you shouldn’t just go to a bank?
Many people choose to use a bank or building society over a mortgage broker, simply because they prefer to stick to what they know. Others feel like they need to remain loyal to their bank - perhaps you’ve banked with them for years and like going in and seeing a friendly face. If you have banked with a particular bank for many years, you might find they offer a discount if you take out a mortgage with them, which also might help sway your decision.
Just be aware that by going direct to a bank you’ll be limiting yourself to one lender. You might find this is fine and they offer you a product that you’re more than happy to go with. However, if you feel that what they’re offering doesn’t quite fit the bill for you, then maybe that’s the time to get in touch with a mortgage broker who has access to a wider range of products.
Which one is better for you?
Everybody is different and there is no right or wrong way to go about getting a mortgage. We can’t tell you which route you should take, but if you want to receive honest, trustworthy mortgage advice and discover more about Charters Financial Services, please feel free to get in touch with us today and we’ll be more than happy to talk with you.
What size mortgage can I afford?
When you apply for a mortgage, there are lots of different cost involved. These not only include the deposit, solicitors fees, surveys, etc, but also the ongoing repayment of the mortgage itself! Therefore it is important to know what you can afford to pay back over time.
Why do I need to worry about my repayments?
A specialist mortgage adviser can help you calculate what you can afford to repay. They will look at your income and expenses, as well as if interest rates go up or if you were to experience a change in personal circumstances. These could include having a baby, experience long-term sickness, taking a sabbatical or career break, being made redundant or taking early retirement. At the end of the day, whatever happens, we want to keep you safe and sound!
You can use our mortgage repayment calculator to get a rough estimate of what your monthly repayments would be.
How much can I borrow?
Mortgage lenders used to calculate how much you could borrow by multiplying your income. For example by three, four or five times, to determine the size of mortgage you’d be eligible for. Since 2014, mortgage lenders cap your ‘loan-to-income’ ratio to ensure you can afford the monthly repayments after taking account of your monthly income and outgoings. If your mortgage lender suspects you might struggle to meet your mortgage repayments, the size of mortgage you may be offered could be reduced, which could, in turn, affect your ability to secure the new home you’ve been looking for.
Use our mortgage calculator to estimate how much you could borrow!
The best way to determine what size mortgage you can afford is to talk to a specialist mortgage adviser with the expertise and independence to guide you through the maze of mortgage products and lenders that are best suited to your circumstances. Call us on 08454 500200 or click here to make an enquiry about your new mortgage.
Do I qualify for a new mortgage?
When you’ve made the decision to move to a new house, remortgage, or get onto the housing ladder you'll need a mortgage to fund your purchase. Before you have finalised anything, you'll want to ensure you’re eligible to borrow enough funds to secure your new home.
The first step should always be to talk to a specialist mortgage adviser. They will talk you through your options, check to see if you’ll qualify for a mortgage and can afford the monthly repayments before you reach the application stage.
All mortgage applications are subject to strict lending and eligibility criteria. A number of factors will determine whether you’ll qualify for a mortgage, including:
- the size of your deposit.
- how much you want to borrow
- and your credit history.
Your credit rating, employment status, your income and expenses, existing borrowing, dependents and age will also be assessed to verify your mortgage eligibility.
Your mortgage adviser will run through your financial history, your salary and your budget. You will also be subject to identification checks and are likely to be asked for evidence of any savings and/or investments and your earnings. To make the process go a little quicker, you could print off recent payslips, tax documents and bank statements, etc. ready for mortgage appointment. Oh, and don't forget to take your driving licence or passport to use as ID.
Your mortgage adviser can also carry out a ‘soft’ credit search that won’t impact your credit score, so you’ll be able to start the application process with confidence.
If you’re thinking of applying for a mortgage, talk to our team of expert mortgage advisors and we’ll arrange a convenient time to meet you and check your eligibility. Call us on 08454 500200 or click here to make an enquiry.
When you’ve made the decision to move to a new home or remortgage your existing property, getting the best mortgage deal is likely to be at the top of your list of wants. By far the most effective way of securing a good mortgage rate from a trusted provider is to talk to an expert mortgage advisor. A good mortgage specialist will have access to the most competitive rates available on the market and be able to find a deal that’s the right fit for you and your circumstances.
Before you start house-hunting, you’ll need to do some groundwork to assess how much you can afford to spend on your new home – remember to include your deposit, legal fees and Stamp Duty, etc. When you have an idea of what you need to borrow, you can then work out what your mortgage payments are by using our mortgage repayment calculator.
By talking to a specialist mortgage adviser early on in the process, you’ll get all the advice you need on the mortgage product that’s right for you. Your deposit, your age and having a joint borrower may determine the rate and the term of your mortgage. You’ll need to decide which type of mortgage you’d like, such as a fixed-rate, variable rate, first-time buyer, repayment or interest-only mortgage. There may be fees, penalties and, of course, incentives available that could also sway you towards a particular product too.
When you’ve found the right mortgage product, your mortgage adviser will get the ball rolling and, when you’ve found your dream home, the next exciting step will be to make your offer.
No matter where you are in the house moving process, talk to our team of expert mortgage advisors and we’ll guide you through it all. Call us on 08454 500200 or click here to make an enquiry.
How much can I afford to borrow?
If you’re buying your first home, you’ll need to know how much you can afford to borrow and how much you’ll need to save for a deposit.
Your affordability will depend on your salary, your monthly outgoings and the size of the deposit you’ll have to put down – these may also have an impact on the interest rate you could be offered.
What is taken into account?
First-time buyer mortgage lenders use a range of criteria to judge your affordability and must obey strict guidelines to ensure you’ll still be able to afford your monthly mortgage repayments if interest rates rise significantly.
Lenders will assess your income and expenditure – they’ll take account of big monthly bills and will want to be assured that you’re living within your means. Your outgoings checklist is likely to include your weekly food shop, bills, insurances, hire purchase payments, finance, credit card and debt repayments, childcare, entertainment, car and travel costs, etc.
Your prospective lender will want to see what your monthly budget comprises so, to give yourself a head start, try to boost your savings and watch what you spend in the months leading up to your mortgage application.
How can I prepare?
In the meantime, you can estimate the size of the mortgage you may need and use our handy mortgage repayment calculator to work out what your monthly repayments will be based on the value of your new home, your income and expenditure. Remember, you may be eligible for the government’s Help to Buy scheme, which will make your house purchase more affordable by reducing your monthly repayments.
Buying your first home can seem daunting so, when you’re ready to talk about mortgages, our team of expert mortgage advisors are on hand to guide you through it. Call us on 08454 500200 or click here to make an enquiry about first-time buyer mortgages and Help to Buy.
How much does Help to Buy cost?
The Help to Buy: Equity Loan scheme is a government backed initiative to help get first time buyers onto the property ladder.
The scheme is designed to be more affordable for first time buyers, as you only need least a 5% deposit for your new home. The government will lend you up to 20% of the value of the property (40% in London) and you’ll need to take out a mortgage for the remaining 75% (55% in London).
Each month you’ll make repayments on both your Help to Buy loan and your mortgage. Here’s an illustration of what you would pay on the Help to Buy initiative each month:
- Purchase price: £310,000
- Less deposit: £15,500
- Help to Buy equity loan: £62,000
- Mortgage: £232,500
- Your monthly repayment: £806.87*
*This illustration represents a capital repayment mortgage over a 30-year term on a two-year fixed rate of 1.54% with a £999 arrangement fee and a free basic mortgage valuation. Example rates vary daily so this illustration does not constitute an offer and any mortgage is subject to full underwriting, affordability and credit scoring via the lender. Both this rate and the product were valid at the time of writing.
Don't forget, there are solicitors fees, moving fees and protection costs that you need to budget for too!
Remember that a mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
If you want to find out more about Help to Buy or would like to know if you’re eligible for a Help to Buy: Equity Loan, contact our expert mortgage advisers and we’ll talk you through your options. Call us on 08454 500200 or click here to get in touch.
The new Help to Buy Equity Loan: here’s what you need to know
Are you considering using the Help to Buy Equity Loan scheme to buy a home? Then it’s essential you know all the details...
What are Help to Buy Equity Loans?
Launched by the government in 2013, Help to Buy Equity Loans are aimed at helping those who are struggling to get on the property ladder.
In a nutshell, with the Help to Buy Equity Loan scheme:
- The government will lend you up to 20% of the cost of your new build home. This increases to up to 40% of the cost if the property is in London. This is called an equity loan.
- You’ll need to save a minimum of 5% of the purchase price as a deposit, and you can use contributions from your Help to Buy ISA or Lifetime ISA to pay this. The remaining 75% comes from a specialist Help to Buy mortgage product.
- As you’ll have a larger deposit, you won’t need to raise as much of a mortgage. This means your initial mortgage payments will be lower. It should also help with affordability calculations when you apply for your mortgage.
- The equity loan is interest-free for the first five years and you don’t need to make any repayments on it during that time.
- The current scheme is open to first time buyers and existing home owners. It’s also only available on new build homes, up to a maximum purchase price of £600,000.
What are the specifics of the Help to Buy Equity Loan scheme?
• Only first time buyers will be able to use the new Help to Buy Equity Loan scheme.
• New regional price caps will be introduced. As a result, the maximum value of homes that can be bought with the scheme's help will be dramatically cut in most areas. The caps have been set at 1.5 times the average first time buyer price in each region (as of Autumn 2018).
What are the regional price caps?
|Yorkshire and The Humber||£228,100|
|East of England||£407,400|
What are my other options?
While Help to Buy has been popular with first time buyers, it’s not the only route available if you have a small deposit.
- 95% mortgages: The average rates on mortgages that require just a 5% deposit have reduced significantly in recent years. This has made them considerably cheaper. And unlike with the Help to Buy Equity Loan scheme, you won’t be restricted to new build properties. However, as James explains above, you may struggle to get a high loan to value mortgage on a new build property.
- Shared Ownership: Also known as ‘part buy, part rent’, this scheme allows you to buy a share of a property and pay rent on the rest. And as you'll only need a mortgage for the share you’re purchasing, you'll need a much smaller deposit than if you were buying the home outright. Find out more about Shared Ownership here.
- Guarantor mortgages: This is when a parent or close family member uses their own property or savings as security against your loan. This means lenders may accept a smaller deposit than usual and sometimes they won’t require any deposit at all.
For more information about the Help to Buy Equity Loan, feel free to get in touch with our friendly team of mortgage advisers.