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Having the best help and support from an expert team can help your mortgage journey run smoothly. Obviously, in some cases, it’s not all plain sailing. Here at Beverleymoneyman, we have helped many customers overcome a range of hurdles to get towards their homeowning goals. Below are just a few of the most common mortgage hurdles we have encountered as an expert Mortgage Broker in Beverley.
It’s very likely that you would be declined for a mortgage because of childcare costs. One thing to keep in mind though is that your borrowing capacity may be reduced because of these costs usually being such a large sum of money.
You will find that most lenders will view childcare costs as a loan or credit commitment. Therefore, regardless of if you have these costs or not, having children, in general, would still be seen as a larger outgoing each month.
If you are in this circumstance, you may be likely to borrow less than a mortgage applicant with the same income but with no children. Depending on the mortgage lender, you may find that some take child care costs into account so could mean your amount is increased but this isn’t always the case.
Usually, you buy a home with your partner with no intention of going through a divorce or separation. Unfortunately, this can happen and can result in a significant change in shared financial commitments.
This all comes down to the mortgage lender. One may require you to have been in work consistently for a certain period of time though some may have different criteria.
On the other hand, you may still be able to get a mortgage if you are beginning your new job very soon . You may need to have a signed contract and a written job offer in order to achieve this.
Keep in mind that having gaps in employment could make the process challenging as this will be bought up by some lenders. However, probationary periods should be fine.
Anti-Money Laundering precautions are really strict. This is why you will need to provide evidence of your deposit to your lender as well proving the origin of your savings. As well as your lender, an estate agent or solicitor estate agent or solicitors may ask you for this as well, it just comes down to who you go with.
When it comes to cash deposits, these are not ideal! Parts of your bank statements that are worrying to a lender could be questioned and could result in your mortgage application being rejected.
There is a possibility for you to go down the gifted deposit route where you are gifted a part or all the deposit from family or friends. It’s important that the person gifting the deposit states in writing that is not intended to be paid back as a loan and, like the name, is a gift.
If you are finding the mortgage journey difficult as a first time buyer in Beverley or are finding the moving home in Beverley journey stressful, book your free mortgage appointment to connect with one of our Mortgage Advisors in Beverley.
These are only just a number of situations so if you don’t apply to any of the ones above, there is a chance we have helped someone in your situation before. Get the help and support you need for your mortgage application from one of our open and honest Mortgage Advisors in Beverley.
Beginning the mortgage journey as a first time buyer in Beverley can be an exciting but daunting experience, especially if you have little to no knowledge of the process. With a Mortgage Broker by your side, this doesn’t have to be the case. To make the most out of your house buying journey, it’s best that you are prepared. Here is 9 questions to ask yourself when purchasing a house as a First Time Buyer.
Getting a mortgage could be one of the biggest financial commitments in your life is it’s best that you give yourself some thinking time about a property before proceeding.
To determine how much thinking time you have, it’s best that you ask how much interest the property has got so then you aren’t missing your chance of potentially getting a property. For example, if the property has had a lot of interest, it’s likely you will need to come to a decision quickly.
A property occurs when there are a number of transactions happening at the same time for every sale purchase to be completed.
The mortgage process can be affected if the property is part of a property chain.
If there is no onward chain like a new home, bereavement or emigration, there is more chance that you would be able to move in quickly considering that you are not part of a chain yourself. In the case where you don’t need to sell your own property first, you will have more of an advantage because you won’t be disturbing the buying process.
This is something that can benefit you when negotiating property prices.
In some cases, the previous owners may leave some previous items behind, which can be a benefit for you. Items like washing machines, fridges, freezers or a shed may be left for the next occupant.
Providing that the appliances work, it can be perfect for new buyers who are looking to save a bit of cash to get something new and modern in the future. If you don’t want these items, it’s the new buyer’s responsibility to dispose of them.
For new properties, you may have the option to purchase any extras that are brand new and others for you on your moving day.
When it comes to deciding on a property, it’s best to see what your neighbours are like. Having a good or bad neighbour can be a key component in your decision. This is important if you are moving into an area you don’t know much about.
Neighbours can be an element that many people factor in when they are deciding to move into a new home. First impressions are not always key, however, it can be good to get on with the as you may live there for a while.
This can depend on where the property is in Beverley. Because of this, it’s good to ask about this as well as do some research yourself. Questions could include how much the council tax is or the average spends on utilities which you could ask your seller or look into. This can be useful information to know and can also be helpful when managing your budget for each property.
This is another aspect of property hunting that many people see as an important requirement to them. You may fancy relaxing in the garden in late summer evenings as well as reading in natural light. Having this feature can mean you pay a more premium price so you have a south-facing garden with sunlight shining on you for most of the day.
The work that may need to be done on the house might need to be factored into your budget. Some topics you may want to consider include:
Negotiating a property price is a standard part of the house-buying process. With this, you need to be as prepared as possible to make an offer on a property that you like.
Speak with the seller or estate agent if you want to get an idea of how low in price the seller would want to go. Furthermore, it’s good to ask if any other offers have been made and rejected before your bid.
It’s good to have a moving date set out so you can plan what you need to do before that date. You will need to plan tasks like instructing a conveyancing solicitor, packing your belongings, and organising a removal van to transport your belongings to the new property.
Most people have heard of the Lifetime ISA, however, how does it exactly work?
As a Mortgage Broker in Beverley, it’s not unusual for applicants to present us with a Lifetime ISA or for them to have an interest in it. This new ISA replaced the Help to Buy ISA in 2020, creating a new way for First Time Buyers to get onto the property ladder. It is a new, modern approach to saving for a mortgage deposit.
An ISA is an independent savings account where your saving builds up over time. A Lifetime ISA is the same, however the government top it up by an extra 25% at the end of the tax year. This 25% applies to the amount that you have saved in that year.
The maximum that you can save is £4,000 per year, therefore, you will end up with a total of £5,000 when combined with the government’s 25%.
The funds inside of your ISA can only be used to purchase your first home. You cannot use these savings on anything else.
A Lifetime ISA is meant to be built up over time so that you can maximise your total deposit amount.
There is one other use for the Lifetime ISA, and that is to help you save for later in life. As a Mortgage Broker in Beverley, we do not offer our services with this version of the Lifetime ISA. If you are a first time buyer in Beverley looking to buy your first home with the Lifetime ISA, we are more than happy to help.
Here are the requirements that you will have to meet in order to qualify for the Lifetime ISA:
If you are more than happy with continuing with the Lifetime ISA and want to speak to a Mortgage Advisor in Beverley, feel free to get in touch with our team.
You can find more information on the government’s Lifetime ISA at ownyourhome.gov.uk.
As a first time buyer in Beverley, it can be difficult to know where to start the mortgage process; we are here to help! The Lifetime ISA could be the perfect option for you and help you save for a deposit.
First of all, we can check whether or not this is the right scheme for you. There are different other schemes available and you may find that these will benefit you more. Our team will tell you if this is the case.
Most government-led schemes have been designed for First Time Buyers, therefore, if you are moving home, there may be another route that you will need to go down. We can discuss this with you and explore your options.
A 95% mortgage is as simple as the name would suggest; you are borrowing against 95% of the price of a property, and then you are covering the remaining 5% with your deposit. An example of this is if you looked at buying a property that was worth £150,000 with a 95% mortgage, you would be putting down £7,500 as your deposit and borrow the remaining £142,500 from the lender.
Off the back of the March 2021 Budget, Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, making 95% mortgages more readily available from the bigger high street banks.
This is fantastic news for First-Time Buyers and Home Movers alike, as this scheme will continue running until December 2022. Certain terms and conditions will apply though, which is something your Mortgage Advisor in Beverley will be able to look at, to see if you qualify.
All our customers who opt to get in touch will receive a free, no-obligation mortgage consultation where one of our dedicated mortgage advisors will be able to make a recommendation on the best possible route for you to take.
95% mortgages are usually accessible by both first time buyers in Beverley & those who are moving home in Beverley. Whilst saving for a 5% deposit sounds like a pretty straightforward concept, you’ll still need to have an acceptable credit score and prove that you are able to afford your monthly mortgage repayments, in order to access a 95% mortgage.
A good credit score is essential in the process of obtaining any mortgage, especially a 95% mortgage. Things like paying any current credit commitments on time, ensuring your addresses are updated and checking that you’re on the voters roll, can all help with your credit score.
Affordability is another one that is important to take note of. By giving the lender details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments, your lender will be able to get a general overview of whether or not you are able to afford this type of mortgage.
Nowadays we see lots of family members helping each other get onto the property ladder, especially parents looking to further their children’s lives. The way this usually happens is by gifting the person looking to find their home, the deposit required. Known through the industry as the “Bank of Mum & Dad, Gifted Deposits are only intended to be a gift, and not as a loan. The lender will need proof that this has been agreed, before it can be used towards your mortgage.
When looking for a 95% mortgage, you want to make sure you have the right type of mortgage. Each mortgage type works differently, with that choice allowing you to find one that is most appropriate for your personal and financial situation.
Some homeowners and home buyers prefer Fixed Rate or Tracker Mortgages, mortgage types which mean you either keep interest rates at a set amount for the term given or have your interest rates tracking the Bank of England base rates.
Alternatively, you might find that Interest-Only or a Repayment Mortgages are more your style. Interest-Only allows cheaper payments until you need to pay a lump sum at the end (mostly now used for Buy-to-Lets), whereas a Repayment mortgage (a normal mortgage if you’d like) means you’ll be paying interest and capital combined per month.
Seeing as a mortgage is such a large financial outgoing, you need to be prepared and need to be aware. You might find things like higher interest rates, remortgaging difficulties due to less equity and then negative equity all cropping up if you’re not.
There is no need to worry though, as all these can be avoided if you’re savvy enough with your process to begin with. The more deposit you put down for a property, the less risk the lender will see you as.
A larger deposit, of say 10-15%, would not only reduce the rates of interest by a noticeable amount, but would also give the property more equity and reduce the risk of negative equity, thanks in part to you borrowing less against the property.
So, whilst the risks may seem intimidating, planning ahead and saving for a bigger deposit to access something like a 90% or even an 85% mortgage will be a massive help in your mortgage journey and something you’ll be able to reap the rewards from in the future.
More and more people these days pay much closer attention to their credit rating, especially first time buyer in Beverley 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.
Try it FREE for 30 days, then £14.99 a month – cancel online anytime.
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 in Beverley 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 from first time buyers in Beverley 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.
Whether you are a First Time Buyer in Beverley actively viewing properties or a Home Mover in Beverley with your house on the market, you may have noticed that some of the larger estate agents and builders are very keen for you to use their in-house mortgage advisor and conveyancing services.
Being part of a stand-alone mortgage business we receive lots of feedback as to what sales tactics can be used, examples of this are:
It’s very likely that you will be asked what your credit score is like when it comes to applying for a mortgage. There are a plethora of factors that can affect your credit score. For instance, the fewer addresses you have on your record, the better your credit score.
As mentioned, fewer addresses on your file can support your mortgage application when done correctly.
We do find that many applicants, particularly first time buyers in Beverley, leave their previous addresses on their records. They may have done this accidentally or as a way to keep their credit score from lowering but they do need updating.
There is a range of documents you will need to update whether it be bank statements, credit cards and electoral roll information. We do find that many applicants disregard this information as they believe it won’t harm their credit score, however, it can create a significant amount of damage.
You may be in a situation where you get an unpaid ticket that is sent through to your old address. If you don’t let the post office know to make sure all mail gets forwarded, the longer it goes unnoticed which can result in receiving a CCJ.
Receiving a CCJ on your credit file could result in losing lots of points on your credit file. This will damage your credit history and make things more difficult for you when it comes to being successful in your mortgage application.
We do recommend that you give your application a thorough check from start to finish. Begin with your address by making sure that the address on all of your accounts (credit cards / current accounts) and electoral roll are all registered to your current address.
This is usually targeted at applicants who are currently living in rented accommodation and haven’t changed their address from their previous property.
It’s best you double-check everything when applying for a mortgage just in case you miss anything. Keep on top of your address, making sure everything is updated can make a positive impact on your mortgage application.
Find out the exact date you moved into your rented apartment / new home and when you moved out. This will prevent any cross-over that may show you were living in two different addresses at once.
If you don’t do this could lead to confusing the lender and could potentially cause damage to your credit file or mortgage application.
It will be very beneficial to have a Mortgage Broker in Beverley to provide a helping hand as they will make sure your application is perfect before it’s submitted. They will also check that all information is updated correctly to have the best possible chance of being accepted.
Demonstrate to the lender that you tried your best to get your application accepted. You may have evidenced your deposit to show how you have saved up or you have consciously updated your address. Either way, it will massively help your application and impress them.
In the situation when you have an outdated address that is connected to one of your accounts, your lender will see that you didn’t check to see if any of your addresses needed updating. This could show to a lender that you haven’t taken things seriously.
To conclude, it’s important to change your address and any other factors stated above in order to prove to the lender that you are serious about this financial commitment. Therefore, we do strongly suggest that you check up on your file to make sure your application is up to date. If you are wanting a second set of eyes on your application, take advantage of our free mortgage appointment in Beverley.
Here at Beverleymoneyman, we have a team of expert moving home mortgage advisors in Beverley who are available 7 days a week. We look forward to helping you secure a great mortgage deal and get your application looking ready to go!
Many schools now only offer Newly Qualified Teachers (NQT’s) a 12-month initial contract as standard. This can prove a problem for many Teachers if they want to buy a property because most of the High Street Mortgage lenders will class them as a “Contract Worker” and as such will require you to have 12 months in the role.
As a result of your circumstances, it may be necessary for you to look at moving home in Beverley, if perhaps you are currently living in a home that is located much further away from your new job than is commutable.
Fortunately, some smaller lenders are more sympathetic to this situation and will consider an application without the 12-month history. Some of the key things that can be considered are as follows.
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Authorised and Regulated by the Financial Conduct Authority.
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Beverleymoneyman.com & Beverleymoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.
Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk
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