Rishi Sunak’s second Budget as Chancellor brought two pieces of welcome news for the property sector as the Government attempts to transform “Generation Rent” into “Generation Buy” to help stimulate the UK economy, namely the new 95% Mortgage Guarantee and an extension of the Stamp Duty Holiday.
The name of this scheme is misleading as not everyone that applies is guaranteed to be offered a mortgage, it is still subject to affordability and credit score. The “guarantee” itself is that the Government will ensure Lenders don’t stand a loss if they grant a 95% mortgage to a customer who then subsequently falls into arrears and is repossessed leaving behind negative equity.
This scheme should in theory give Lenders more confidence to lend even though the applicant only has a smaller deposit to put down. Of course, Lenders never want to repossess someone’s home unless it is the last resort, but if that happens then the new scheme would cover any shortfall.
Lenders have been worried about the prospect of home values decreasing so this measure should alleviate that concern although of course, the chances of negative equity occurring will naturally reduce should property prices increase as a result of these announcements!
The scheme is available to both 1st Time Buyers and Home Movers, it’s available on any property (not just new build) and will run until December 2022. Some major High Street Banks have already signed up to the scheme and it’s likely more will follow later on. It’s still a big challenge for Lenders to cope with the demand they are getting for mortgages due to the difficulties training and supervising staff working from home but they will want to offer as many of these mortgages as they can.
When the Stamp Duty Holiday was launched last year we all hoped life would be very much back to normal by the cut-off date of 31st March 2021 but things didn’t pan out that way as we know. Solicitors are struggling to keep up with the workload and if lots of chains had collapsed then it would have partly defeated the object of the exercise.
Therefore it was good to hear the scheme has been extended to 30th June for purchases up to £500,000 and 30th September for purchases up to £250,000.
The Government certainly sees the property sector as an area that can play a big part in our economic recovery and if you are looking to buy a home or remortgage this year please reach out and we will be happy to advise you.
Earlier this week we welcomed a new addition to our mortgage advisor team, Joe Dewsbury.
Joe is the son of near 40-year veteran advisor Wayne Dewsbury, whom you may have seen or spoken to over the years if you’ve followed our social media or had an appointment with us.
Joe previously had worked at a high street bank for 3 years, before deciding to take the leap to the mortgage advisor world. Tutored by star advisor Matt Collinson, Joe hopes to make quite the impact as a part of our illustrious team.
Wayne, ever the comedian, believes Joe is working with Matt instead of himself due to the top brass wanting to “stick him with a proper advisor”. One thing is for sure, is that if he can even be slightly like Matt or Wayne he’ll be a force to be reckoned with in the wide world of mortgages.
Throughout the year we like to help out charities where we can. Making donations, sharing images, educating the workplace and those who follow us online. When we saw that the 18th October 2019 was going to be a charity day bringing awareness to another great cause, we just couldn’t resist taking part.
The occasion was to raise money and awareness for Breast Cancer Now, a charity that aims to help fund a future where everyone who develops breast cancer survives, living a long and fulfilled life.
Merging with Breast Cancer Care earlier this year, they’re supporting nearly 450 of the world’s best researchers across the UK and Ireland, to try and make a better life for anyone affected by this awful disease.
We started our charity day, by arriving in our pink t-shirts (Compliance Manager Paula also opted for big pink heels) and getting everyone “glittered up” with pink glitter on their faces, hands, arms and beards. Then as the day went on, things got wilder! We had photoshoots with all the staff, a quiz was passed around (it was a lot harder than it looked), there were a variety of cakes dotted around, and we even had a raffle – Everyone loves a good raffle!
Overall the day was fun and full of excitement, finishing off with the fantastic news that we’d raised £161 for Breast Cancer Now. We’re incredibly grateful for all involved and their willingness to shed light on a cause that desperately needs more attention. In particular, we want to say thank you to our very own Mortgage Administrator Kayleigh Steward, whom without we wouldn’t have had this brilliant day.
We want to thank everyone who took part today, we couldn’t have done it without you too! It certainly has been a day to remember and I’m sure that we will be back next year!
For National Apprenticeship Week 2020, we thought we’d pause for a minute to think about to reflect upon our younger employees who recently completed their apprenticeships, as well as those who are currently working their way through one.
Following the success of earlier apprentices Thomas Bowes (formerly of the Customer Care team, now a Mortgage Advisor in Beverley) and Laura Aves (a Dedicated Case Handler who assists our Mortgage Advisors in Beverley), we decided that apprenticeships were the way to go when looking to hire new employees.
It gives us a feeling of pride and accomplishment, allowing youngsters to encounter an opportunity in what is likely their first employment, allowing them to learn and grow with skills they wouldn’t otherwise learn. We’re helping to build their futures whilst they’re also able to earn a living.
Former apprentice Michael Sallabank undertook a Digital Marketing Apprenticeship with the company.
Two years after his starting date and Michael is very much still a part of the Moneyman team. It’s been several months since he completed his apprenticeship and he’s now a fully-fledged digital marketer.
As a collective, the Marketing team helps create brand awareness, allowing potential home buyers to take their first steps towards Mortgage Advice in Beverley.
Next, we have Chloe Masters, who is celebrating her 1st work anniversary today. Chloe is one of the youngest members of the Beverleymoneyman team, now becoming a Dedicated Case Handler.
Finishing her apprenticeship recently, Chloe now joins fellow former apprentice Laura in assisting the Mortgage Advisors in Beverley with their work.
At this present time, the Beverleymoneyman group has two Apprenticeships. Lee Underwood (left) and James Lawson (right) both joined the group in late 2019, undertaking a Digital Marketing Apprenticeship. The marketing disciples hope to take the mortgage world head-on and create even more brand awareness for budding home buyers looking to find expert Mortgage Advice in Beverley.
Here at Beverleymoneyman, we appreciate everyone who walks through our doors and we always enjoy watching our apprentices grow over time as both workers and people. We look forward to seeing who joins our team in the future!
As your local Mortgage Broker in Beverley, we always aim to provide outstanding customer service so that everyone who goes through the mortgage process with us leaves happy. Going above and beyond for every customer is part of our excellent service as well as being responsive, open and honest with you. The customer always comes first at Beverleymoneyman, no matter what.
Taking your first steps onto the property ladder can sometimes prove quite difficult. Having a Mortgage Broker in Beverley by your side can make things much easier and less stressful.
We are always faced with complex cases that need lots of attention and a bit of extra moneyman magic applied to them. No matter how complicated the case is, we will still try to get by it so don’t ever hesitate to call us as we have probably got through something similar before.
We love receiving amazing reviews; however, the best reviews are from First Time Buyers in Beverley. This is because getting your first home is a huge milestone in your life and we have helped them achieve that so they are extremely grateful for our help. The reviews they send in to show us how they have loved our service and most importantly that they love their new home. Here are some of the First Time Buyer reviews that we have received at Beverleymoneyman, your local Mortgage Broker in Beverley:
“Super helpful throughout the entire process. As a first time buyer, you don’t always know what to expect but the team explained everything clearly and they really listened to what I wanted from my mortgage. I would recommend to others looking for a mortgage!” – Bethany R
“Beverleymoneyman got me a fantastic mortgage deal. All of the staff are very professional and kept me informed at all stages, even finding me a better deal as my circumstances changed. 10/10” – John L
Some employees’ incomes are made up of various different elements. There is almost always a basic income on a payslip but there can also be other items such as overtime, bonuses and shift allowances.
Not all of these additional strands are guaranteed so as we discover in this case study, lenders view this in different ways.
James, a First Time Buyer in Beverley, worked for the NHS, and his payslips were incredibly complicated. In addition to his basic income, he was paid different hourly rates for the various shifts he worked.
There was overtime too at the time and a half and holiday pay; in fact, one payslip had six different elements of payment on it!
His Bank would not lend him and his family enough to buy the home they had made an offer on, and he approached us for a second opinion.
The reason lenders can have an issue with multiple elements of pay on payslips is that these additional strands are rarely guaranteed.
Therefore, in the event of a repossession taking place, they might struggle to justify to a Regulator why they granted the mortgage in the first place based on income, which they knew was variable.
As a result, lenders often take an arbitrary view; for example, they might take 60% of overtime if it’s on every payslip. Others take bonus into account if it’s payable monthly or paid annually, things can get very complicated!
We managed to help James; in fact, we found two lenders who would lend him the amount he and his family needed. lender one had a policy of taking 100% of the shift allowance and overtime into account as long as it could be evidenced on every payslip.
They applied an average of the last six months’ payslips to give them confidence that the income was smoothed out and sustainable.
Lender two would also lend more than enough but assessed the income differently. Instead of evaluating all the various elements individually, they simply asked that we provide James’ last two years’ P60’s and took an average of those.
This method also works well for employed applicants who work in sales roles with low basic salary but high commission and bonus.
James was delighted he contacted us for our mortgage advice, he knew the mortgage was easily affordable, and he knew that his income was sustainable, it was just a case of finding a lender who took a different approach.
Whatever your situation, whether you are moving home in Beverley, buying for the first time, or looking to Remortgage. If your income is made up from several different sources, I would recommend you make contact with us well in advance of making an offer so you can be sure of your maximum borrowing capacity upfront to avoid potential disappointment.
More and more people these days pay much closer attention to their credit rating, especially First Time Buyers as they tend to worry about being accepted. Consumer awareness of credit scoring is higher now than ever before. We’d say at least half of the people who contact us for the first time, have already looked at their credit report online.
There are many different credit reference agencies out there. Most people will have heard of Experian or Equifax, but we recommend potential new clients to use Check My File for a 30-day free trial, which is £14.99 a month thereafter and can be cancelled at any time. This is because of this report “sweeps” several of those reference agencies and collates the information into an easily understandable colour-coded report.
Often, clients ask if we will be doing a credit search on them, because they are aware that too many searches can have an adverse effect on their credit score. Lenders always run credit checks but we always seek a client’s permission before doing so. There are 2 different types of credit searches that Banks can run on a customer: hard searches or soft ones.
A hard credit search is an in-depth look at your credit report. Any financial institution carrying out one of these should seek your permission to do so. The advantage of a “hard” search is the lender is looking into your situation quite closely. If you pass the credit score then it’s fairly likely that your application will ultimately be successful. The only thing that can really go wrong from then on, is if for some reason you cannot provide satisfactory documentation to back up the information you have disclosed. Either that, or it turns out you have provided false details.
The bad news about a hard search though is that it leaves a “footprint” on your credit file. This means anyone who looks at your report in the future can see you have had a search carried out. This isn’t necessarily a bad thing, but if you have several footprints registered in a short period of time then it could look like you applying for lots of credit at the same time.
The footprint does not state whether your application was successful or not. However, if you have several searches over a few weeks, then lenders’ systems could wrongly assume you are being declined on the basis of; “Why else would you go to lender number 2 unless lender number 1 had said no?”.
The odd hard footprint on your record from time to time is no big deal. There’s no need to worry too much about this, just be careful not to have too many.
A soft credit search is a “lighter touch” look at your financial situation. This is the kind of search that would routinely be carried out on price comparison websites. This would give you an indication of what products might be available to you. It can also be useful if someone wants to verify your identity.
Some mortgage lenders do soft searches in the first instance. More and more lenders seem to be changing to doing this type of search. Whilst the financial institution doing a soft search obtains less information about you than if they had done a hard search, an agreement in principle from one of these lenders is usually still an extremely strong signal that your full application will be accepted.
You will be able to see that someone has carried out a soft search on you if you check your credit file. The good news though, is that these searches are not visible to other financial institutions like banks. This means that you can apply for an agreement in principle for a mortgage, without it damaging your credit score. This is irrespective of whether it is successful or not.
If you are wanting to make an offer on a property, we always think it is an excellent idea to have your mortgage agreement in principle in place prior to contacting the estate agent. You want to give yourselves the best possible chance of securing the property you want at the lowest price so if you can present yourselves as having your finances in place then you are definitely putting yourself in a stronger position. Having the agreement in principle also sometimes puts the agent off trying to “cross-sell” their own in-house mortgage services to you.
According to the Office of National Statistics, the UK is going through a bit of a self-employed “boom”. The number of self-employed individuals rose from 3.8m in 2008 to 4.6m in 2015. This could be down in part to people being inspired to become the new Peter Jones on Dragon’s Den or Richard Branson. More realistically it’s just that work patterns have been changing for several years now.
No longer would someone be expected to leave school at 18 and work for one employer all the way through to retirement. The rise in new engineering and digital occupations, in particular, give rise to self-employed roles and short-term contracts. However, the uncertain nature of this type of work can make Banks nervous about issuing mortgages.
It’s not impossible to get a mortgage if you are Self Employed by any means but it certainly is a specialist area so here I take the opportunity to help you get prepared if you are in this position and thinking of buying a house.
At the moment it’s a minimum of one year’s trading with some lenders wanting a minimum of two. The reason for this is that so many businesses fail in the first year Banks aren’t willing to take on that level of risk.
Most lenders take the average of your last 2 years’ earnings. Some go off the latest year. This could be good news for you if your profits are increasing.
Yes and no. Yes, you are employed but no, the lenders do not assess you as an employee unless you own less than 25% of the shares. Most lenders add your salary to your declared dividend to calculate your annual earnings with the odd one using net profit (this can be good if your business retains some profit).
This is a familiar question but there’s not much that can be done. Your mortgage application is assessed on the income declared (net profit or salary/dividend) to the Revenue. If you want to get a mortgage then you need to have paid some tax.
This is the same as an employed applicant. A minimum of 5%, although it may be more if you only have one year’s accounts.
The more deposit you are able to put down the better deal the lender is likely to offer you. This means you will have a wider choice of lenders, in terms of the maximum mortgage that will be made available to you. Although this doesn’t make a massive difference.
Yes, it can be. Lenders do seem to like Contractors at the moment. If you’ve built up a good track record then the lenders can consider taking your “daily rate” and applying a multiplier to this, rather than your net profit. I have seen lenders offer bigger mortgages to contractor applicants using this method, especially for IT contractors.
Unfortunately, “self-certs” were widely abused in the pre-credit crunch days and there is no sign of this type of mortgage returning.
Taking out a mortgage as a sole trader, partner or Company Director can certainly be more complicated. More so than it would be for an employee. Some lenders are more flexible than others. In my opinion, it’s a good idea to get a reliable Mortgage Broker in Beverley on your side early on in the process. This is so you have realistic aspirations from the start. Long gone are the days when a Bank Manager could “take a view” on your circumstances just because you are a loyal customer. The lenders lean increasingly upon their computerised credit scoring systems. Like lots of things, it’s just knowing where to look.
The two most common questions we are asked on a daily basis are, “Can I get a mortgage in my situation?” and “How much can I borrow?”. In this article, we explain the latter which has changed quite a lot in the past decade.
Back in the ’80s and ’90s, most mortgage applications were manually underwritten. That is to say, there was lots of “human intervention” in the process of approving mortgage applications. You’d make an appointment with your Building Society Manager, and they would interview you.
They would encourage you to save with them for a while until you prove yourself credit-worthy. The manager would then grant you the equivalent of an agreement in principle. This would then be followed by advice on how much they were prepared to lend.
This sounds very much like a highly personalised process with a common-sense approach. That being said, it could lead to inconsistent decision-making. The manager has the discretion to interpret the lending manual. In other words, it would be possible to approach the same Building Society in a different town or city. You could possibly obtain a different outcome.
With a view to eradicating the above and more importantly, cut costs, Lenders moved to automated affordability calculations. “Caps” were applied so they would lend you more than, say, 3 or 4 times your household income.
As the 2000s progressed, lenders were becoming more and more generous in how much they would lend. Some lenders would offer self-certified mortgages. This was where no background checks would be carried out as regards how much an applicant actually was earning!
The market crashed and to all intents and purposes, 2008-2010 were very difficult years if you were trying to get on the property ladder. The lenders battened down the hatches and created a very cautious (over-corrected) lending environment.
The market recovered and in 2014 the regulator launched the Mortgage Market Review (MMR). This was a new set of guidelines for Lenders to adhere to. Gone were the old-style income multipliers which took little account of household expenditure. Before 2014, two applicants earning the same could borrow roughly the same as each other.
This was irrespective of how much they spent each month. Then came new affordability models. These took a much more forensic view of how mortgage applicants managed their money on a monthly basis.
There is still a “cap” in place (most Lenders will not go past 4.75 times your annual income) but your spending habits are analysed also. So, for example, if you have high childcare costs, lots of credit commitments and a student loan you will be offered less than your work-colleague who doesn’t have any of that expenditure.
We are still constantly surprised by the large variances lender to lender in how much (or little) they will lend. Some lenders seem to penalise low-earners (perhaps they are not looking for that type of applicant), some take pension contributions as a fixed outgoing so would often lend, say a public sector worker with a big pension deduction less than a private sector and so on.
It really is horses for courses and if you need to maximise your borrowing capability to obtain the home you need to buy then you’ll definitely need a Mortgage Broker in Beverley on your side who can research the market on your behalf to see if anyone will lend you the amount you need.
Critical Illness Insurance pays out a lump sum if you are diagnosed with one of the conditions on the policy such as Cancer, Heart Attack or Stroke. Sometimes Insurers receive criticism for declining claims when someone is very ill but with an illness not covered on their policy but most major providers actually payout over 90% of claims.
If claims are denied it can also be because the claimant did not disclose an underlying medical condition they had when they took the policy out.
In the event of a claim the lump sum is paid out irrespective of whether the claimant returns to work or not, the key thing is whether the illness they had matched the definition on their policy.
The claimant can use the lump sum they receive for any purpose they wish. Be this to repay their mortgage, pay for medical care or make modifications to their home.
Different insurers cover different illnesses on their policies and it’s wise to take advice prior to selecting a policy. This will ensure that you end up with one that is suitable for your needs. Critical Illness Insurance is much more expensive than life cover because the chances of you making a claim are far higher.
Your chances of surviving the types of conditions covered are far higher than they were 30 years ago. However, if you are unfortunate enough to contract one of them then there are often financial consequences. Hence the popularity of the cover, especially for applicants who have mortgages or children to think about.
It’s very important to us that all of our customers are given an equal opportunity to take insurance out through ourselves. We wouldn’t be doing our job right if we didn’t mention it!
We offer all of our customers a free, no-obligation protection review where we’ll have a look at any existing policies you have in place and assess their suitability. We’ll then recommend which insurances, including critical illness and income protection, meet your needs. If required, we’ll then tailor the plan to match your available monthly budget.
Providing Critical Illness Insurance Advice in Beverley & Surrounding Areas