Deciding to buy your first property is a challenging task. Therefore, you must take your time, look around for various options thoroughly and make an informed decision.
As you might anticipate, we believe there are some excellent reasons to use a mortgage broker in Hull. Whether the brokerage service is online, you can still pay a visit directly to the lender. Even in technological advancement, we find that most people still refer to a mortgage broker. Hence, we will take you through the pros and cons of both methods.
Firstly, a well-versed mortgage broker will take the time to have an initial conversation with the applicant to help him decipher if you are mortgage ready to make an application. When contacting us and gathering the necessary details, one of our mortgage advisors in Lincoln will make sure to shop around and get the best deals possible.
One of the most notable advantages of going with a mortgage broker is valuable expertise in the home buying or refinancing process. Mortgage brokers have ample industry experience to lean on when offering mortgage solutions to their customers.
Similarly, our mortgage broker in Hull also has access to try and find wholesale rates on home loans. These rates can be lower than the retail interest rates, helping borrowers save a substantial amount of money over the life of a home loan.
Most importantly, a Mortgage broker can be your point of contact from the time you first call them right up to when you finally get the keys of your house in your hands, and we will guide you through the entire process.
On the contrary, going to a bank helps save you a broker fee, saving yourself a reasonable amount. In earlier years, another significant advantage of a bank was that the branch manager knows an individual’s finances in and out. However, that all went by the wayside when credit scoring came in and is no longer the factor.
Likewise, some Lenders offer exclusive ‘direct-only’ deals that a broker would not have any access. Lenders do this to attract a wide range of applicants to make a good spread of business from consumers and brokers alike, turning exclusive products on and off when deeming necessary. On the other side, some products may only be available via the broker and not direct with the lender.
From 2014 onwards, lenders got restricted to sell mortgages on a non-advised basis to just anyone. Up until that point, many applicants felt like the non-advisors had been trying to force actual advice on them. They weren’t able to benefit from some consumer protection that goes with mortgage sales conducted by professionally trained mortgage advisors.
Lenders were coming to terms with and hence the issues present in these services led to a significant shift towards more applications getting made via mortgage brokers who are quick enough to offer you same day mortgage service.
You also need to check carefully if a lender is willing to lend you a considerable amount of money. It does not matter how good a lender’s deal might seem, but he should lend a significant amount. For this reason, people opt to go to an apt and professional mortgage broker in Lincoln.
Nowadays, mortgage applications are no more straightforward. Many factors make a case more complicated. A few of the examples are as follows:
– Poor credit history
– Too much debt
– Payday loans
– Self-Employed Income
– Mixed source of deposit (savings/gift)
– Let to Buy (keeping your current house and buying another)
– Contract workers/zero-hours contracts
In the past years, lenders could stand out from the competition by offering a better deal to the applicants. In the current era, this is different because the lending criteria vary from one lender to another. Some lenders lend more to Self Employed applicants or take a more empathetic view of their credit report’s previous discrepancies.
When you explain your case to an experienced mortgage broker in Hull, there is a possible chance that they have encountered the same thing earlier in the past, allowing them to personalize their service and help you through the process. With extensive experience in the field, your mortgage advisor will hopefully be able to recommend the most suitable lender for you at the lowest rate possible.
More than that, it is not just about getting the Mortgage. Even if the application itself is self-explanatory, we offer extensive experience and knowledge to our clients. For example, we will discuss how much we will deliver on the property they are buying. Our team of mortgage advisors in Hull can recommend other professional services such as Solicitors and explain the different types of protection and survey available.
Another significant advantage of using a mortgage broker is that the brokers are far more responsive than some lenders. Delivering personalized service is the differentiating factor between the broker and a lender.
Besides, another significant reason for hiring a mortgage broker is that it helps you save time. Most customers prefer a broker because they are too busy nowadays. they might need a mortgage but have no time to get it done so that our advisor will take the weight off for you.
You only need one application with a mortgage broker rather than individually filling out forms for every lender. Your mortgage broker can also provide a comparison of any loans recommended; guiding you to the information that accurately portrays cost differences, with current rates, points, and closing costs for each loan reflected.
Whether you are looking to Remortgage or are a first-time buyer, when lenders ask for your bank statements you can expect them to look for various different things. However, their one objective that stands above all, is their job to assess whether you are the sort of person who manages money responsibly and therefore likely to maintain regular mortgage payments.
So, with regards to gambling, what questions do we need to answer in particular?
Whether you have an annual flutter on the Grand National or a regularly use internet betting sites, clearly there is nothing illegal about properly licensed gambling.
With many of the bookmakers advertising on mainstream TV and radio, a lot of people see gambling simply as a mainstream hobby or pastime similar to many others.
However, it shouldn’t be forgotten that even the gambling advertisers urge customers to “please gamble responsibly”. This is the key to bear in mind when applying for a mortgage.
Thus, whilst it is not a lender’s job to tell you how to live your life. How to spend your money or indeed to moralise on the ethical rights and wrongs of gambling. They do have a duty (underscored by mortgage regulation) to lend responsibly.
Lenders need to prove to the regulators that they are making prudent lending decisions. So it isn’t entirely unreasonable of them therefore to expect the people to whom they lend to adopt a similar approach when it comes to their personal finances.
As touched upon previously, it is not illegal to gamble. Just because you have the odd gambling transaction on your bank statements, you won’t necessarily immediately be declined for a mortgage.
It is however, up to lenders discretion as to whether or not these transactions are reasonable and responsible. Thus they will particularly look at the frequency of these transactions, the size of the transactions in relation to the person’s income and the impact upon the account balance.
If these transactions are infrequent small amounts that make no significant impact on a regular credit bank balance, then they are not likely to be regarded as important.
As we’ve seen, basically lenders are looking at your bank statements to show how you manage your money. To help them establish whether this gives them either the confidence that you are financially prudent or the evidence that you are not.
Remember, lenders are financial institutions. They, either directly or as part of a wider group, often sell current accounts, overdraft facilities credit cards and personal loans. So they understand that these things can all play a part in prudent financial planning.
The key for a mortgage applicant is how these facilities are managed. For example, having an overdraft facility and occasionally using it, is not inherently a bad thing; regularly exceeding the overdraft limit – not so good.
Thus, lenders will look for excess overdraft fees or returned direct debits. This is because these would normally show that the account is not being well conducted.
The simple answer is – be sensible and, if possible, plan ahead. Typically, a bank would ask for up to three months of your most recent bank statements that show your salary credits and all your regular bill payments.
Thus, if you know you’re likely to want to apply for a mortgage in the not-too-distant future, try to make sure that you avoid any of the above pitfalls.
Take a break from gambling for a short while and work on presenting your bank account in the best possible light. Your mortgage broker can help you as there are some lenders who may ask for fewer bank statements than others or indeed some may not even ask for them at all.
At the start of the Coronavirus pandemic, the Government promised that all borrowers would be allowed a three-month mortgage payment holiday on the condition that they needed it. Most lenders followed the Government’s guidelines and did their best to help out their borrowers during these hard few months.
We felt that it is best, to sum up, what mortgage payment holidays are, what lenders are doing, and who can deliver you with help and advice through these next few months.
Mortgage payment holidays are agreements you make with your bank, building society or mortgage lender, allowing you to take a break from your monthly mortgage payments for a set period. In the case of the current COVID-19 crisis, homeowners are being granted 3-months relief.
The 3 months will be added on at the end of your term or your payments will be recalculated at a slightly higher level, meaning you will still have to pay those 3 months back eventually.
Your interest, however, carries on as normal, meaning you’ll technically be paying an additional 3 months of interest on top of what you’ve paid already.
Most lenders would likely prefer to not extend your mortgage term, as you may end up going beyond their standard retirement age. There’ll be more information on this over time.
Depending on the mortgage deal you have in place, you may be able to pay off a lump sum later on in the year to bring your mortgage in line with where it would’ve been had you not taken a holiday.
Mortgage Payments Holidays are available for those with residential mortgages and Buy to Let mortgages, meaning landlords will also have help if their payments are affected.
The full proposal is in detail below:
To discuss your options for Mortgage Payment Holidays, we would recommend speaking to a Mortgage Advisor in Lincoln to start with and not jumping straight into taking a holiday.
We’ll be able to take a look for you first and see if this option is something worth your time. Lenders will no doubt be facing an influx of calls, needing to be free to speak with the most urgent matters over everyone else.
We’ll look through your personal situation and see if there are any other options for you first before you decided to take a Mortgage Payment Holiday.
For a customer, up to date with payments, not in arrears and impacted by COVID-19:
Generally, these can show up on your credit score as a negative mark, but most lenders have said if your case is linked to the virus, they’ll make sure it doesn’t affect your credit score at all.
It’s important that you speak directly with your lender to ask them this, recording their response. Also take the date and time, as well as the name of who you spoke to, to avoid any confusion later on. Different lenders will handle these things differently than one another.
Controversial for some, but there is now evidence that lenders are asking borrowers to try and not make changes to their mortgage whilst within the holiday period. This means, for the time being, you can’t take out a remortgage or product transfer.
In simpler terms, borrowers reaching the end of their current product may be forced to move to the higher lenders variable rate. This means many borrowers who act too quickly could find themselves on a Mortgage Payment Holiday that gains interest on a more expensive variable rate.
This is another reason why we highly recommend speaking to a Mortgage Advisor in Lincoln first, to determine the right path for you to take. If possible, try arranging a transfer prior to asking for a holiday, as that seems like a more sensible option.
Some lenders are offering a temporary switch to interest-only, in order to reduce monthly payments by a large amount, while not adding on any further amount to the loan, by still servicing the interest each month.
You may not need to convert the entire mortgage to an interest-only mortgage and it may be that putting only a portion of this mortgage on that basis could give you room to breathe.
Those who have savings may prefer remortgaging onto an offset basis. This would reduce their monthly payments whilst keeping their savings safe and intact.
For example, someone with a £500,000 loan and £100,000 in savings would only pay interest on £400,000 reducing their payments accordingly.
For others, remortgaging onto another lender, calculating the cost of any early repayment charges, maybe all you need to ease the pressure you currently face. You could also simply extend your current term, thus spreading your payments across a longer time frame.
To discuss any of these options, or to just have a helpful chat about your current situation please contact us and we’ll see how we can be of assistance.
If you’ve decided to stay in your current property instead of moving, then you should probably look to Remortgaging. Remortgages are where you switch to better rates on your current deal. As experienced Mortgage Advisors in Lincoln, this is something we may be able to help with.
The banks rely on their customers sticking with what they know and not shopping around. It’s not uncommon for there to be cheaper offers for you elsewhere, all you have to do is have a look at a price comparison website or contact a mortgage broker to compare deals on your behalf.
If you’ve had your mortgage for quite a long time, then you could be on a low Bank of England tracker deal. You may even be paying less than 1%. If this explains your situation, you might be thinking about leaving that mortgage where it is for now. However, your payments will increase when the base rate eventually goes up.
Subject to the usual affordability checks and assuming you have got equity in your property, then it is entirely possible to increase your mortgage for potential home improvements.
This can be a good investment if you use the money wisely. Often, we see customers do this to facilitate building an extension or converting their loft into an additional room.
You can borrow extra funds for most legal purposes, examples of this would be:
Remember by increasing your mortgage you will end up paying back more interest, so you need to be sure you are doing this for the right reasons.
It can be a bad idea to add debt to your mortgage, as you will end up paying back more interest overall by extending the term of your debts to make the payments lower.
You are also taking debt, which is not secured, and securing it on your home. This puts you at risk of repossession if you cannot afford repayments. Consolidating debts that you can afford or credit cards that are at 0% interest will almost certainly be the wrong thing to do.
However, if you need to reduce your monthly outgoings to avoid missing payments, (which could damage your credit rating), then it might be a possible option.
Often your current Lender will offer you a new deal to stay with them, they may call this a “Product Transfer” or “Retention” product. This isn’t necessarily guaranteed and sometimes you have to contact your provider directly to see what is available.
Some lenders allow you to make a product switch online without taking advice or providing further information/documentation.
Whilst it may be easier to stay with the same provider and switch products rather than put forward a new application to a different lender, you may find that you could save a lot of money by doing so.
Also, many Banks still offer preferential rates to new borrowers over existing ones. One day, Lenders will get their act together and realise that taking a more ethical approach would breed loyalty amongst their customers.
Generally, the longer you look to fix your mortgage the higher the interest rate is. Therefore, if you are looking for the lowest rate possible then it’s short term fixed rate you need. The downside is your mortgage will be up for renewal quicker and when you come to remortgage your payments might increase.
On variable rate, your monthly repayments are subject to change when interest rates change. Many people worry about interest rate rises, particularly after such a long period of low rates. Many people expect a rise in the near future. As such looking to a fixed-rate mortgage deal offers the certainty of monthly outgoings, with no sudden rise in the monthly mortgage repayment
If you don’t like the idea of sorting out a remortgage so quickly then a medium-term fixed rate would be the way to go. Five year fixed rates are popular and you have certainty that your monthly payments cannot increase in the foreseeable future. There is a risk that interest rates might drop meaning you are paying more than you might have been had you fixed for a shorter period.
There are only a limited number of 7 and 10 year fixed rates mortgage deals on the market. These have always been the least popular. Customers tend to feel this is too long to fix in for as a lot can change in a decade! These are the most expensive fixed mortgage products available.
When choosing your mortgage deal be careful to watch out for booking and arrangement fees. A booking fee is payable up-front and an arrangement fee is payable on completion. Some people add fees to their mortgages, but this increases the total amount repayable as interest accumulates on the fee.
If you are taking out a small mortgage then it is more likely that you would want to take out a mortgage with no fees, even if a slightly higher rate of interest applies. The opposite applies if you are taking out a medium or large mortgage, your Advisor will help you with this tricky decision.
Choosing a mortgage requires consideration. There is no one mortgage product that suits everyone. Your selection will depend on your personal circumstances. For example, if you think you may be moving in the next two or three years you may wish to choose a fixed deal for that period. (It is possible to ‘port a mortgage’ but you may be better discussing this with your mortgage advisor in advance). If this is your final move, perhaps a longer-term fixed rate may be more suitable.
Also known by their official title of “Second Charge Mortgage”, a Secured Loan is a loan that helps secure the property of your dreams, albeit with higher than standard interest rates.
The reason for this is because, in the event of a repossession, the provider of the Secured Loan must wait for the original provider to sell the property before getting their money back. Whilst this is often known as an expensive “last resort”, they can often be incredibly helpful for certain situations.
Your mortgage stays exactly how it is if you take out a Secured Loan. The new amount is borrowed from a different provider and a separate direct debit.
The length of this new amount varies, as you could take it out over a shorter or longer-term than your main mortgage. If you’re only in need of a small amount, you may benefit from looking at unsecured borrowing.
If you are possibly considering taking some form of equity release mortgage, it is understandable that you will want to know what the risks are.
Equity Release Mortgages may not be suitable for everyone so it is important that you get proper specialist advice before making any arrangements. Most people’s concerns fall into the following categories:
With a traditional mortgage, lenders have the right to take possession of a property should the borrower fail to keep up regular monthly repayments. However, since most equity release schemes don’t require a monthly repayment, then this question of “affordability” becomes irrelevant.
With a Lifetime Mortgage, your interest would normally “roll up” so there should be no reason why you would lose your property to a lender.
Historically there have been instances where lenders took possession of properties but these days this type of lending is highly regulated and the industry works hard to avoid circumstances where repossession is required.
The terms of your agreement would normally allow you to stay in the property until you die. If your circumstances changed – for example, you needed to go into long term care – then the property would normally be sold.
With a Lifetime Mortgage, the lender would then be repaid all capital plus any rolled up interest from the sale proceeds and you would retain any excess over this amount.
If you have a Home Reversion Plan, you would have already sold the home to the provider, so in these circumstances, they would then sell the property on the open market and keep all proceeds.
This is one reason why it is important to understand the difference in the type of plan, so make sure your advisor goes through these fully and clearly before making any commitment.
With Lifetime Mortgages, upon your demise, the property would be sold and the capital, plus all accumulated interest would be paid back to the provider from the sale proceeds to settle their mortgage.
The difference between the sale price and the settlement figure would then go into your estate to form part of your inheritance. People often ask: “What if the debt has increased above the value of the property? Will my family have a debt to pay back?” However, you would normally receive a “No Negative Equity Guarantee” which, in simple terms, means that if the above occurred, then that is a risk the lender would have to take and there would be no further repayment required from your family.
Finally, should you have any further concerns, there is an industry body known as The Equity Release Council which exists to ensure that all products of this type are safe and accessible.
All participants in the Equity Release Market should subscribe to the Council’s Statement of Principles which you can check on their website – https://www.equityreleasecouncil.com – along with any other details that may concern you.
In a nutshell, therefore, as long as you ensure that you obtain advice from a firm whose advisors are members of the Equity Release Council, and who recommended products from providers who are also members, then you can be confident that you will receive full, clear information about any worries you may have.
At Lincolnmoneyman.com, we have a history of providing you with bespoke, detailed, local mortgage advice as to what may be the most suitable way forward in your particular circumstances.
To add to this service, we’ve now teamed up with an Equity Release Specialist and between us, we’d be happy to come to meet you in the comfort of your own home to answer any questions you may have on anything mentioned above by way of a free consultation.
Equity Release – How can it help me? Equity Release mortgages can help people in a number of ways. Many people have heard of them, but are unsure as to whether they would be eligible and what benefits they may obtain, so in this article, we’re going to look at:
Firstly, your “equity” can be summarised as the value of your stake vested in the bricks and mortar of the property. So, if you already own your home, then your “equity” is the open market value of your house less the balance of any mortgage outstanding on it. If you’re a buyer, your “equity” is the amount of cash deposit you are putting into the transaction.
Secondly, Equity release Mortgages are aimed at older borrowers. Thus, you’d need to be at least 55 years old to be considered for an Equity Release plan and for some types that increase to age 60.
In general, it’s fair to say that the older you are, the better terms you’re likely to be offered from a lender. Other factors that would be considered in a traditional mortgage application, however – for example, earned income, pension income, number of dependents etc. – do not come into it. It is purely base on the value of your property.
The answer to this question is not entirely straightforward. Put simply, the amount you can borrow on this type of deal will be dictated by a combination of how old you are and how much equity you have?
Most providers have their own calculators and these can vary, but it’s fair to say the older you are, the more equity can be released. Your Equity Release Advisor will be able to accurately calculate this figure for you when you meet up.
The uses of Equity Release are many and varied, here are just a few examples:
In short, most legal reasons can be accommodated. Don’t forget, Equity Release mortgages are not necessarily suitable for everyone and in some of these instances there may be other, more suitable courses of action, but your Advisor will help you with this.
At Lincolnmoneyman.com, we have a history of providing you with bespoke, detailed, local mortgage advice as to what may be the most suitable way forward in your particular circumstances.
To add to this local service, we’ve now teamed up with Equity Release Specialist and between us, we’d be happy to come to meet you in the comfort of your own home to discuss any questions you may have on anything mentioned above.
Considering consolidating credit card debt into your mortgage may seem like an easy way of dealing with your debt. Consider this move wisely and look into getting specialist advice in detail before you decide.
Consolidating unsecured credit into your mortgage is a step not to be taken lightly. This is due to the fact that you are taking your credit card debt – debt which is unsecured. Then securing it on your home.
You also will probably know that you will end up paying back more interest because you are likely to be paying this back over a longer period of time.
However, by consolidating your debt into a mortgage you will be reducing your monthly outgoings, which could be the objective you are working towards.
Debts can have been accumulated due to home improvements that you have made to your home. In most instances having also increased the property’s value. Other times it’s just that the debt has been outstanding for several years in other areas and expenditure and it can be hard to reduce this debt.
You could consider taking out zero % credit cards and take the sensible step of looking for a new card when the zero % period ends. However, it’s not guaranteed that you can always get a transfer and it’s when that happens that home owners decide to take action. Consolidate rather than pay a double figure interest rate is often preferable and more manageable.
A debt consolidation remortgage is not something most people would want to arrange without taking advice. Speak to a Broker and you will benefit from the consumer protection which is in place and a suitable mortgage will be recommended to you, tailored to your specific needs. Note that the Broker works for you and not the lender so will ensure you get the right outcome.
The savings some people make are hundreds per month if they are carrying large debts and some people prefer to have everything within one monthly payment too.
When your introductory mortgage deal comes to an end your mortgage lender may offer you a new deal to stay with them, this is known as a product transfer.
Unfortunately, lenders do not always reward your loyalty and the offer they make you may not be competitive with deals you could get elsewhere. Even more annoyingly, these product transfer rates are not as good as the deal they offer new customers either!
Whilst swapping to a new deal with your current Lender may well be fairly easy online, it is always in your interest to see what other deals you may be eligible for. Lenders will also tempt you to effect a new deal online without taking advice.
This can be really dangerous because if you do this without advice you are waving goodbye to all the valuable consumer protection you would otherwise have benefitted from.
We have seen numerous examples of customers effecting these “follow-on” deals and locking themselves in to an inappropriate deal. Because they opted out of advice then they have waived a lot of their rights in terms of making a complaint.
We did have a recent case where a customer who was pregnant did this and was declined for a small further advance to fund some necessary home improvements a few months later. She then had to pay a hefty early repayment charge to swap to a new Lender who would grant her the additional funds.
If we think a product transfer is the most suitable deal for you we will recommend that as a course of action for you and if we arrange the mortgage for you as a mortgage broker then all the regulation and consumer protection will apply.
In short, even if your requirement seems straightforward we recommend you always take advice – a second opinion costs nothing and making a mistake when taking a new product can be costly.
The remortgage market is highly competitive and savings can generally be made by searching the market for a new deal.