If you are a First Time Buyer in York taking that first step onto the property ladder or Home Mover in York looking for a change in location but are unsure on where to live in York, we are here to help. Our expert Mortgage Advisors in York have created a list of the top things to keep in mind when deciding on a location.
To start, you need to establish whether you are looking for a city or rural landscape to live in. The bustling city centre of York may be the perfect place for you if you are looking for a lively atmosphere or the quiet and quaint rural areas to escape the city centre could be your thing.
Transport links can be an important element to some, especially if the reason for moving or locating within York was to be closer to family or work. Therefore, checking how close you are to the train station or bus stops or even main roads in and out of the city if you do drive could be a factor you need to look at.
Sometimes, people look for a property to be there ‘forever home’ where they want to start a family or where they want their family to live in for a long time. As well as the size of the property, it’s best for you to look at the schools around the area. There are plenty of authority websites and school league tables where you can look at how schools are performing.
It can be handy if you are located in an area where lots of facilities are just a short walk from your home. Obviously, everyone’s priorities and situations are different, you may want find a gym being close is more important to you or a certain food shop you prefer, this is where you can highlight your priorities when comparing areas. Again, people with children may want a local park to be within close proximity of where your home is.
Speaking to an estate agent can be good if you are wanting to know what is nearby, however, Google Maps does have helpful information regarding the facilities in the area and can provide you with an insight into how reputable these facilities are.
The deciding factor on a property could be whether you are close to your friends and family. Sometimes, this can be convenient as you can help each other out whether it be for childcare or transport. However, some prefer their own space and don’t need the help of their family and friends, this all comes down to your preferences.
When it comes to house prices, as well the property size, this comes to location. If your goal is to get somewhere that is value for your money, it can be best to look at an area in York that is a bit more reasonable. Because of this, you may need to compromise on additional preferences that you have decided on.
A thriving and friendly community may be your priority especially if you are looking to make some friends in the area. Facebook groups can be great for this with a number of communities also having their own websites. To truly feel the community spirit, it can be helpful to visit the area a couple of times before making a final decision.
Normally, the main reason for people to Move House in York is due to a career change which in turn means a location change. It’s likely that you are wanting a short commute to your work which could be the deciding factor on a property. If you are looking for jobs after the move, researching the business parks and the types of employers around the area can help you and can give you an idea of what is available to you in the area.
With a large selection of houses out there, there is plenty of properties to look at that could fit your preferences. You may decide an urban apartment just for you is the place or an end terrace with a beautiful garden would be perfect for you and your family. Exploring the various property options out there can be brilliant to find which one fits you and your circumstances.
When you have got an offer accepted, it’s good to be sure that your property is actually the amount it’s worth. Getting a property survey carried out on your property can truly determine whether or not your property is the amount it’s worth. There many types of property surveys out there which is why our handy guide on the types of property surveys could be helpful to you. Alternatively, a member of our team is more than happy to help you with this.
If you are looking to stay in your new home for a long time, it can be best to research if there is any planned investment within the area. You need to see whether potential investments will benefit you and not take away any of the other previous factors. For instance, if you are interested in a property in an overall quiet area but there are plans for further housing development near you, would this effect you?
Towards the end of your fixed mortgage terms, you might decide you want to stay in your current property instead of moving. This is when you can look at starting your Remortgage application!
In the current climate where many have gone full remote working since the coronavirus pandemic, having an area where you can work is important. A remortgage can give you the chance to make developments and modifications in your home like converting your kitchen, living room or even remortgaging for a home office in York.
When you have built up a large amount of savings for a deposit on your first property and are in a position where you can behind your mortgage journey. It’s then time to prepare for a mortgage in York!
It can make a significant difference if you do overpay your mortgage even if it is in small increments as well as the interest you pay back during your mortgage. The quicker you begin paying this, the sooner these extra payments can take effect.
As a First Time Buyer in York, you may be aware of the difference when you overpaying your mortgage and the impact it can have on interest when you pay it back regardless of whether you are only over by small amounts. The reason why overpaying early can be better is because the extra payments have a longer period to take effect.
In some cases, homeowners may not be able to make these extra payments but you could say that many decide not to overpay as they would instead use the remaining money on something more interesting and exciting!
With this in mind, we suggest you arrange a standing order payable to your lender each month. It would be wise if you do organise this standing order to go out on the same date as your standard mortgage repayment, this additional payment will hopefully start to feel a part of your standard mortgage payment.
The advantage of going for a standing order is that, instead of a direct debit, you are able to manage this, not the receiver. Therefore, if you have a financial emergency you can easily log into your online banking and cancel the standing order as this doesn’t go out the next month. As much as it’s not the best to stop overpaying, you still will be able to benefit from the overpayments make up until that point.
Getting into the routine of overpaying your mortgage is a great habit, the amount you overpay doesn’t have to be a large amount, however, you’ll be happy when you are at the end of your mortgage repayments and find you have taken off a year or two.
Sometimes, lenders will allow you to make reduced mortgage repayments or take a payment holiday if you provide evidence of a history of overpaying. Prior to taking a payment break, however, it’s key that you check with your lender that you are eligible. If you don’t, this could mean you end up with a negative mark on your credit report and this is something you should strive to avoid.
If you are looking to overpay your mortgage, you should speak to your mortgage lender to see if this is doable.
Another option for people who have already been overpaying and are seeking Remortgage Advice in York ahead of releasing their equity to remortgage onto a better deal, take advantage of our free remortgage review. Here at Yorkmoneyman, a designated Remortgage Advisor in York.
The coronavirus pandemic meant restricted guidelines with one being people must work from home. Fast forward to today, this event in time has created a new wave of workplaces offering either hybrid working (working from home or the office) or working remotely on a permanent basis.
Even though working from home has been around many years before the pandemic, this has been something people never imagined they would prefer doing. In terms of the mortgage industry, as a Mortgage Broker in York, we found that many people look into converting their kitchen, living room, or even a bedroom into a home office.
As mentioned, many people were already working from home prior to the pandemic and a few businesses have let their employees work from the comfort of their home, rather than commuting to the office. One of the benefits of doing this is that many people would be saving money in commuting to and from work.
Many homeowners who are working remotely on a permanent basis usually look at having a space in their home dedicated to work which can provide them with a somewhat work and life balance. As mentioned, many people look at updating a certain room in their home to achieve this goal and this is where Remortgaging in York can help. Creating a space for work or a home office has many benefits including:
With excellent technological advancements, many homeowners have benefitted from Remortgage Advcie in York when looking for extra funding to be put towards revamping a room or even a garage in to a new home office. This can be done through manageable payments, for example an interest rate of 2% that is manageable over 25 years may cost you:
You might find that it is not too much more than what you are paying at the moment which means it could be better for you to approach the route of improving your home, instead of moving, which can be a stressful and costly process.
When it comes to the amount you will need to pay back per month, this all comes to the the amount you can borrow overall, what your remortgage goals are and how you are going to do it e.g the size of an extension. Furthermore, you will need to keep in mind that you will need to undergo another affordability assessment, in spite of if you go to the dame lender and just switch deals.
If you are thinking of remortgaging for home improvements, this is the best time to look for a remortgage deal. If you are still unsure about Remortgaging in York, check out our article ‘top reasons to a consider a remortgage‘. Here at Yorkmoneyman, we can provide you with an expert Mortgage Advisor in York who get to know your remortgage goals and find you the best product perfect for your financial needs.
As a Mortgage Broker in York, we have a knowledgable team who have years of experience in the mortgage industry and can provide you with the help you need to look through your options and provide a friendly, helpful service that will support you through the remortgage journey.
With any remortgage, when you have come to the end of your term, you will automatically be placed on your lender’s standard variable rate of interest (SVR). If you do end up in this situation, it’s likely that your mortgage payments have increased due to the rate being higher than your original one. Therefore, having a mortgage review prior to your fixed term ending could save you money which further supports the idea of getting your mortgage reviewed in York.
When approaching the end of your mortgage term, it’s wise that you begin thinking about Remortgaging in York. We offer all our customers a free remortgage review where you can speak to a qualified Remortgage Advisor in York giving you access to a better and more competitive product.
Many people decide to stay in their current property instead of moving home. This is when they will look at Remortgaging in York to proceed with their mortgage journey.
The option to remortgage can be perfect if you are looking to remain in your current property in York with more pleasing interest rates. The way it works is by transferring from your existing deal to a more appropriate deal. With many years of providing open and honest Mortgage Advice in York under our belts, our team of knowledgable Mortgage Advisors in York are here to help.
Usually, the banks rely on their customers being unaware of the fact that they can shop around for a more appropriate deal. This can result in many people missing out on the cheaper deals that may be out there. By having one of our expert Mortgage Advisors in York by your side who can help you compare deals, you can be sure you are on a competitive deal that is right for you.
You could seek better deals through a comparison site, however, these only find you the best deal on an interest basis.
If you have been on your current mortgage deal for a while, you may be able to go on a low Bank of England tracker deal. In some cases, you may be paying less than 1% in interest which suggests that it may be best for you to stick with that mortgage deal. One issue with this is if the base rate rises over time along with your payments.
This is a possibility, however, it all comes down to whether you can pass the affordability assessment and you have an efficient amount of equity in the property. If this is an option you are interested in pursuing this, you may be able to increase your remortgage to fund these future home improvements.
If you decide to go for the option of remortgaging for home improvements on your property in York, this will provide you the opportunity to give your home a makeover which could increase the price of your
property. So if you are looking for financial support with updating your kitchen, converting a loft or creating a home office, Remortgaging could be the option for you!
Not only can you borrow more money for home improvements, but you may have the option to borrow additional funds for other things such as:
Increasingly building on debt to your mortgage is not a good idea. It will result in you having to pay back more interest altogether by extending the term of your debts to make the payments manageable.
This route would involve you taking debt, which is not secured, and securing it on your home. This is a major risk and could involve you having your home repossessed. One problem that could possibly happen would be consolidating debts that you can afford or credits that are 0% interest.
This is just another reason why it’s important to get in touch with an expert Mortgage Advisor in York before securing any debt against your home. There may be an option for you to reduce your outgoings to avoid missed payments. If you decide to take this route, you will be reducing the risk of your credit rating being in a bad state.
You may that the lender would offer a “Product Transfer” or “Retention” product. This gives you the opportunity to stay with your current lender who will provide you with a new deal. Keep in mind that this option isn’t always guaranteed, however, there is no harm in contacting your provider to see what is available to you.
Usually, some lenders will allow you to make a product switch online without needing to get further information or advice.
As much as sticking with the same provider and just switching products seems like the simpler option, you may save yourself more money if you put forward a new application to a different lender.
In many cases, banks would offer favourable rates to new borrowers over existing ones. As a Mortgage Broker in York, we hope there will be a point in the future when lenders will take a more ethical approach that could have a positive impact on customer loyalty.
There is the option out there for someone to have a second mortgage, however, this all depends on the individual’s circumstances with some situations requiring a person to have a second mortgage. Like with any mortgage, you need to know if you are eligible to do this.
Many people decide to go for this option for a number of reasons like:
In the circumstance where you have built some existing equity in your home, you may look at taking out a second mortgage. You might look to do this so you can release some of the equity to fund another purchase. Our expert Mortgage Advisors in York can help you out with this.
In this situation, a second mortgage is also referred to as a secured loan.
If you are currently on a lenders standard variable rate, you might find that a dedicated mortgage broker, like us, will be able to look around in the hopes to find you a more competitive deal for you along with helping you to release some capital.
Another option that may benefit you is further advancement with your current lender.
When people move home, usually they onto their new mortgage leaving their existing one behind by simply transferring to another deal. On the flip side, you may find that some people prefer to keep on to their current mortgage and property as a way to rent it out. As a result, your new second mortgage will now be your residential one. This is known as a Let to Buy and will only occur when you are Moving Home in York.
This has become an option that has become increasingly popular. In the current climate of property prices and inflation constantly rising, many First Time Buyers in York have found getting on the property ladder a challenge.
Because of this, many parents and grandparents see their challenging situation and provide a helping hand. You could see this as a different form of a gifted deposit, they could even give them their property and move out themselves.
Sometimes, people look for a second mortgage for a Buy to Let. This is perfectly acceptable, with landlords having multiple mortgage. Through our time providing Buy to Let Mortgage Advice in York, we have helped many landlords and built strong relationships with them to find them the best Buy to Let mortgage product. Our team are happy to help do the same for you!
Some of our customers are in situations in which they are currently named on another mortgage and are looking to purchase another property.
Normally, these types of customers are going through a divorce or separation. The good news is that we have extensive experience and rich knowledge in dealing with these cases. Therefore, one of our open and honest Mortgage Advisors in York will work hard to help you with this.
Whatever situation you are in that would lead to enquiring about a second mortgage, we can help you as a fast & friendly Mortgage Broker in York. We have access to a large panel of lenders which allows us to search through 1000s of mortgage deals for you.
This means you will be provided with a service where you will be recommended the most appropriate product that is perfect for your situation.
When lenders are requesting your bank statements, they will be looking into various things. By assessing these bank statements, the lender can get an idea of the type of person you are and how well they would be able to manage their mortgage payments. Through our experience, we have encountered numerous enquiries asked by applicants wondering if gambling transactions look bad on their bank statements.
As much as gambling can be a risky activity, we are not saying that it is an illegal act, however, lenders do judge applicants in a less favourable light if there are a large amount of gambling transactions in a shot space of time on their bank statements. You might have seen many gambling adverts on TV where they always urge customers to ‘gamble responsibly’, this is something in the mortgage industry we persuade too.
Obviously, it’s not the lender’s job to tell you what to do with your life with your finances or to lecture you on the rights and wrongs of gambling but, they do have a duty to lend responsibly.
Lenders need to demonstrate to the regulators that they are making judicious lending decisions. Therefore, it isn’t entirely unreasonable of them to have similar expectations of the people who are looking to borrow from them. Put it in this perspective, if you were to lend your own money, would you lend money to the individual who gambles or the one who doesn’t?
It is not illegal to gamble, therefore, the odd gambling transaction on your bank statement does not automatically mean you will be declined for a mortgage. On the other, these transactions will be judged by the lender as to whether these transactions are rational. Along with this, they will look at the frequency of these transactions, the size of the transactions in relation to the applicant’s income and the overall impact on the balance.
When the transactions are infrequent small amounts that make no big impact on a regular credit bank balance, then they are not likely to be regarded as important. On the other hand, if an applicant gambles most weeks and is constantly in their overdraft, the lender will see this as irresponsible and decline your application.
The reason lenders like to look at your bank statement is for them to understand your financial behaviour with managing money and can conclude whether or not they are confident in lending to you.
Lenders are financial institutions that, either directly or as part of a wider group, often sell current accounts, overdraft facilities credit cards and personal loans. With this in mind, you need to understand that these all factor in prudent financial planning. It’s important for a mortgage applicant to look into how these facilities work.
For example, if you occasionally find yourself in overdraft, this is not inherently a bad thing. Whereas regularly exceeding the overdraft limit is not so good. Furthermore, lenders will look for excess overdraft fees or returned direct debits as these would usually show that the account is not well conducted.
Credit transactions from pay-day loan companies; “undisclosed” loan repayments (e.g. if you said on the application that you have no other loans but here appear to be regular loan payment, this could be an issue) is just some of the things to look out for. They would also look out for outstanding missed payments and they might see how much of a typical month is spent overdrawn – i.e. if you only just go into credit on payday and for the rest of the month is overdrawn, how sustainable is this mortgage?
Be sensible and plan ahead, if possible. Usually, a bank would request up to three months of your most recent bank statements. This will show the lender your salary credits and regular bill payments. Therefore, if you are thinking of applying for a mortgage in the distant future make sure that you avoid any of the above pitfalls. It’s best that you take a break from gambling for a short time and work on presenting your bank account in the best possible light.
There are a number of lenders out there who may ask for fewer bank statements than others or some may not ask them at all, this is something a mortgage broker could help you with. Despite this, these lenders do still have the right to request bank statements in particular circumstances so it’s best you are prudent in the run-up to any mortgage application. It’s important you if you do gamble, please gamble responsibly!
Getting some specialist mortgage advice in AREA will benefit First time Buyer in York like yourselves, especially if you have little knowledge about mortgages. They can provide a helping hand with your application and look impressionable to lenders. Simply book online your free mortgage appointment to speak with one of our mortgage advisors in York today.
When it comes to removing a name from a mortgage, it isn’t as straightforward as it sounds. Many look at this option if they are going through a break-up, marital or otherwise, leaving joint ownership, or a rare case where you rather have the mortgage in one name.
Whatever the reason is, we have a team of hard working Mortgage Advisors in York who work around the clock to help you out by using their extensive experience as well as support you through financial separation.
This circumstance is one that we find is the most common. In some cases, a couple were tied to the mortgage but are looking to remove a name because they are getting divorcing/separating. Financial commitments should be a priority to sort out when going through a breakup.
If you do leave this until the last minute can create a lot of added stress that could have been avoided. You need to factor in time for the different companies you are financially tied to, like your mortgage lender, to process everything. This is something that will take time so be patient.
From your mortgage lender’s point of view, they will need to be sure that both parties will be able financially comfortable with only one income to draw from. For the remaining one on the property, lenders will need to be sure that they will be able to manage the monthly mortgage payments by themselves.
When it comes to taking a name from a mortgage, both parties will need to agree. Therefore, if one party disagrees, you will have to go through court proceedings. This can be costly, time-consuming and cause unnecessary negativity.
You will definitely find Specialist Mortgage Advice in York helpful if you are going through a difficult divorce or separation. Our team will be available to help sort out your mortgage.
This type of process is one that is surprisingly more simple than you would think, especially, with the assistance of a hard working Mortgage Broker in York.
This would involve the homeowner transferring equity to whomever they wish, whether it’s a family member or a friend. The mortgage will get transferred with the equity still inside of the home. As the new owner of the home, you will have to pass the lender’s eligibility and affordability checks.
When a member of the party isn’t keeping up with their end of the deal, the financial association can cause you problems. As an experienced Mortgage Broker in York, we have encountered this often and it’s usually because some of the party have fallen out.
If one person misses their bills, this may affect you also. One vital point you need to keep in mind is that signing for a mortgage with multiple names does mean you need to put your trust in their ability to manage their payments. If they miss any payments, it won’t only affect their credit score, but yours too.
If you find yourself in this situation, it’s wise that you get in touch with your lender. Another option that could be helpful to you is getting in touch with a Mortgage Advisor in York to see what you can do before the problem gets worse.
It may be clear that you are able to manage your monthly payments and have a good track record, but it’s that view your current situation from a lender’s perspective. You are still asking the lender to trust one income rather than two (or more if it’s joint mortgage) that they had originally.
A mortgage lender would favour the idea of both names being on the mortgage in order to improve financial security. Furthermore, they will want some form of a financial blanket if mortgage arrears or repossession occurs, as they will be able to chase two parties for payments. As well as this, the chances of being paid are reduced if there is only one party.
Removing a party comes down to affordability. In the case where you would like the home to be in your name, without your ex-partner or housemate, you will have to go through all the criteria checks that you would’ve done initially, so you can demonstrate that you are able to keep up with the monthly repayments by yourself.
It depends on the lender and your situation as to whether this will possible. It may be beneficial for you to seek help and support from a reputable Mortgage Broker in York.
You may find that, after speaking to an advisor, it is more suitable for you to switch mortgage lenders for a better deal in your sole name to ease any ongoing problems.
If you are struggling with this situation, we can help by providing Specialist Mortgage Advice in York in the hopes to relieve some of your stress. Get in touch today to see how we can help with your situation.
Here at Yorkmoneyman, we understand that getting onto the property ladder for the first time can be a daunting process for many, in particular, when you’re planning to purchase a property by yourself. Through our experience in dealing with First Time Buyers in York, we find a number of them look to buy a property with a friend or partner if it is appropriate to do so. This is because having two applicants can result in increasing the likelihood of being offered a mortgage as the costs will be split between the two of you.
When it comes to working out your maximum mortgage amounts, lenders will take into account the two incomes. It’s important to understand that if one defaults, the other could also be responsible for the full mortgage. Below we are going to talk about a few points we recommend as a Mortgage Broker in York to be aware of when moving into a property with someone else:
Many lenders will allow a maximum amount of four people to co-own a property. This might sound appealing to some as you will be paying a lot less towards the mortgage, however, there is a higher risk of someone backing out. This is why you need to be careful when choosing who you are purchasing a property with.
You may consider increasing your mortgage further down the line, however, all borrowers will need to agree. From this, it’s important to consider your future and establish the duration you are looking to stay within the property.
This option is commonly popular with civil partnerships or married couples. In the unfortunate event of one of you passing away, then the property will automatically be passed to the other owner. The law treats joint tenants act like one. Because of this, joint tenancy can be favoured amongst married couples or applicants.
In instances where you are looking to remortgage or sell the property, both parties need to agree to the decisions prior to proceeding with anything. ‘Tenants in Common’ can be a potential option to choose if you are sharing with a friend or relative. This option is where you both equally own the property.
You aren’t obliged to do so in shares. This is where one party makes a more significant financial input than the other. As a ‘Tenant in Common’, you can act of your own volition. For example, you do have the right to sell or give away your share of the property to another person.
In the case where one of you fails to pay their share of the mortgage, the other(s) will have to contribute to the shortfall in order to pay the full amount. From the start, a mortgage lender will state that all borrowers are mutually and severally liable.
When you buy a house with a partner it isn’t with the intention of splitting up in the future. It’s a big financial commitment, therefore, any potential changes you want to make in the future can often become a complex situation.
In the circumstance where children are involved, only one person will be staying in the home. There might be a point in time when that person would like to manage the mortgage on their own so will need to seek expert Mortgage Advice in York.
Regardless of whether you have been paying the mortgage without the assistance of your ex, this doesn’t change the point of the application being processed in joint names. Therefore, in the case of mortgage arrears, both of you will be responsible despite only one person keeping up with the payments.
Prior to removing a party from a mortgage, the lender will need to be sure that the remaining applicant can keep up the affordability on their own going forward which will then lead to a full assessment of income. This will still be carried out regardless of whether you have kept up mortgage payments in the past or not.
In some cases, someone can step in to replace the ex-partner such as a family member or a new partner. Through this change, an expert Mortgage Advisor in York is able to help you with this change.
Remember, all parties remain responsible for any joint financial commitment, even in the case of a separation/divorce. This is regardless of whether a person leaves the family home and even if both parties come to an agreement that one person will make up the payments.
In terms of purchasing a new property, the mortgage payments on the old property will be accounted for. This means that it’s key that a person should get Mortgage Advice in York before making an offer if you are in this situation. When it comes to the amount you could borrow does depend on how generous the lender is. Here at Yorkmoneyman, we will keep this in mind when recommending the most appropriate lender to apply for a Mortgage Agreement in Principle with.
If you are a First Time Buyer in York or are Moving Home in York with your house on the property market, you may be aware of the bigger estate agents and builders that have an in-house mortgage advisor and conveyancing solicitors that they would want you to utilise.
Over the years as a Mortgage Broker in York, we have worked as a trust and strived in providing a personal, caring service for all our customers. In order to provide this type of service, we don’t work with banks, building societies or estate agents meaning we work solely for you as our customer. When speaking to customers, we find that there are affected by increasing pressure from their estate agent to use their in-house financial services. Below are just some of the stories we have encountered:
It’s known that many estate agents out there are known to refuse to put an offer forward if you decide to use a different mortgage advisor instead of their own. In some cases, they have refused to forward an offer to the vendor due to someone who has utilised their in-house mortgage advice service and have an offer they’d rather show favouritism towards, even if it’s lower.
A reputation that we have heard about estate agents is how they quote ridiculously high when it comes to conveyancing fees. This is something many of our customers have experienced before. One significant case had the customer being charged £1,500 for a regular purchase with a particular estate agent.
The good news was our expert mortgage advisors helped with lowering this cost. From this, we recommend that the client approaches another conveyancer within the area and they were able to get this down to £750 which is half the quoted price.
When you have made an offer, you would expect to get a phone call confirming whether or not you’ve been accepted which seems logical. Unfortunately, this isn’t always the case. The estate agent will get in touch and demand to know which conveyancer you have used.
Furthermore, the estate agent will refuse to take the property off the market until you agree that you will use their own in-house service. As you probably have guessed, their quotation will be very overpriced and very unfair to the customers, however, they will put you on the spot and make you feel it’s your only choice to take. A Mortgage Broker in York can very much help you prepare for this. One question that you may be thinking at this point is…
They are highly illegal. As an individual, you have the freedom to use whichever companies you feel the best suit you in the process. You choose which broker, conveyancing or another financial service you want to use.
If you haven’t explicitly signed a contract in the beginning that you will only use their services (which you won’t be offered anyway), there is no obligation to use their services for anything besides the process between yourself and the seller of the property.
It’s good to keep in mind that when negotiating a purchase price to think if the people selling the property you’re looking to buy need to know your personal financial situation and know the amount you’re able to borrow in order to pay for that property. This is something that they will use to their advantage when pushing their in-house service.
You need to be vigilant and stand your ground and not fall under pressure. Your future dream home and financial situation lie in how well your mortgage process goes.
Here at Yorkmoneyman, our team always have your best interests at heart, keeping you updated in the process and helping you overcome any hurdles you may encounter to try and relieve any stress you may have.
If you are looking for support on your mortgage journey, please get in touch and our team will see how they can help in the hopes to achieve your mortgage goals.
Prior to present day of credit scoring, mortgage were manually assessed by your Building Society Manager. The 1990s bought lenders moving towards more uniform income assessments as a way to make the process more consistent and reliable.
In order to reduce people who couldn’t a mortgage getting accepted, a lending cap was introduced. By doing this, the number of people borrowing a lot more than they could actually afford was reduced with some borrowing more than 3 or 4 times more than their income.
As time went on, lenders were starting to be more generous with this lending cap along with their conditions which resulted in receiving more mortgage applications. A number of lenders were even granting their customers a mortgage without looking into the customer’s financial history and payslips.
As you may have anticipated, this cause the economy to collapse and became the catalyst for the Credit Crunch of 2007. At this time, lenders were only pursuing cases to those who could afford 20-30% deposit which made the mortgage process challenging for both a First Time Buyer in York as well as those Moving Home in York.
When it comes to the amount you could borrow for a mortgage, your income, expenditure and the lenders’ affordability calculations factor into this. Throughout the years, the number of banks that are able to lend for mortgages has ebbed and flowed. This can be due to the market conditions and appetite for risk at that time.
In the mid-2000’s, seven times annual income was more acceptable, however, it has also been as low as three times annual salary in the past.
The events after the Mortgage Market Review of 2014, it is rare that they apply this “multiple of salary” rule. These days, Lenders take a more thorough approach to your personal finances before working out the amount you are able to borrow. Below are the factors a lender would consider:
As stated before, how lenders calculate your borrowing capacity (affordability) has changed to be a lot more refined. From lenders working off simple incomes multiple of, say three times your gross annual salary to now having affordability calculators that range from lender to lender, it’s definitely evident of how lending has changed.
When it comes to income, lenders do have criteria for what they do and don’t accept because of the complexities in the way people are paid. You might be in a job where you earn a lot of overtime or bonus or commission, lenders may factor much more of this compared to others. A number of lenders will take in particular benefit income like child tax or working tax credits into account whereas some won’t.
When it comes to applicants who are Self Employed in York or own a limited company, lenders will assess your income in different ways. Due to this, the same customer would be assessed to have widely varying affordability levels from different lenders.
A final factor that can affect the overall affordability is the product that you want to take along with the term of years you want to borrow the money over. Furthermore, lenders will take out regular outgoings like personal loan payments, maintenance payments or credit card bills from your salary. Even though many lenders or brokers will have a ‘rule of thumb’ this is just a quick guideline. With this in mind, it’s key that you check with your mortgage broker for more accurate figures based on your specific circumstances.
Obviously, lenders will take a sensible approach when it comes to the amount they will lend to you. They won’t lend you more money than you can realistically afford which could put you under a lot of financial stress. This is why a lender’s affordability calculator is helpful for providing an accurate answer on whether lending to you an amount is viable or not.
When it comes to assessing affordability, this can vary from lender to lender, therefore, it’s helpful to complete your own budget planner as you can almost second guess whether you will pass the assessment or not. Something to remember is that owning your own home is not just about paying the mortgage.
You need to consider additional costs like council tax, utility bills and other committed payments like personal loans or insurance premiums as well as your regular food and drink bill at the supermarket. This is where you need to look at your lifestyle and how the costs will affect your affordability.
It may be best to look at your monthly income and deduct any of your other outgoings from this. If after this you have left what is more than enough to meet your mortgage payments, then you should be all good. If this isn’t the case, you can either make savings or sacrifices from our outgoings as a way to help you buy your dream home or look for something smaller!
Pre-planning can be beneficial with the overall mortgage process and can put you in a serious position to proceed. Here at Yorkmoneyman, we encourage our customers to be ‘mortgage ready’ and you can achieve this by checking out our article on ‘getting prepared for a mortgage‘.
Recently, the UK has had a reputation for frequent interest rate changes. It’s been many years since the Bank of England changed its Base Rate, however, there may still be some uncertainty among many people because of future rate increases. The best way to combat this fear is to complete a budget planner. These will allow you to have a good idea of the amount you can afford which means you can factor in possible increases in order for your mortgage to be affordable both now and in the future.
Fixed-rate mortgages can be good if you are in doubt and are looking for future stability. As the name suggests, the rate you pay along with your monthly repayment is fixed for a specific period of time. Usually, the longer you fix for, the higher the (and monthly repayment) is likely to be, however, you might consider that to be a price worth paying for the stability it provides.