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Mortgages for Newly Qualified Teachers (NQTs) in York 

Newly Qualified Teacher Mortgage Advice in York 

Congratulations, you have now passed all of the necessary exams and now class yourself as a Newly Qualified Teacher. Now it’s time for the next step, which is for you to now make use of your new skills and find yourself a teaching job using your well-earned qualification.

Depending on where you’ll be working, you will need to start looking into the different options that are available for you with Moving House in York, as you could be working further away from where you currently live.

Later down the line, you may find yourself looking to move somewhere else, perhaps maybe finding it a little more challenging between finding the balance between homeownership and getting into your new role.

Throughout our time as a mortgage broker in York, we have worked with a lot of home buyers and homeowners, all of whom benefitted from speaking with one of our expert Mortgage Advisors in York, to take the stress away whilst they keep their minds focused on their new career.

Newly Qualified Teacher Mortgages York

We tend to find, that it’s not always so straightforward to search for a mortgage lender who will be happy to offer a mortgage to someone who is a newly qualified teacher. Problems tend to appear when there isn’t any work history they can look at or because they only have a non-permanent contract.

Although these can be an issue, there are still many options out there for Newly Qualified Teachers who are looking to obtain a mortgage. Over our time as a mortgage broker in York, our responsive team of Mortgage Advisors in York has helped many newly qualified teachers (NQTs) obtain a mortgage.

We aim to make the process goes smoothly, we have access to many mortgage lenders, whose criteria will be suitable for your situation, which in this case is usually what would be the most challenging part of the mortgage process.

When issues like these crops up, our experienced mortgage advice team in York will search through 1000’s of mortgage deals for you, doing everything we can to find you the most suitable deal for your situation. 

What mortgages for NQTs may be available? 

Make sure to bear in mind that whilst yes, mortgages can sometimes be complicated for Newly Qualified Teachers, it doesn’t mean you are restricted in what is available to you on the mortgage market.

Below we have listed some of the different types of mortgages that crop up when working with cases alongside Newly Qualified Teachers: 

  • Help to Buy Mortgages York – The Help to Buy Schemes was created by the government to help first time buyers in York who are in the market for purchasing a new build home get onto the property ladder.
  • Fixed-Rate Mortgages – A fixed-rate mortgage allows you to make sure that your mortgage payments are the same throughout your mortgage term. 
  • Shared Ownership Mortgages – If you’re a First Time Buyer in York, saving a big deposit can be tricky. That’s where shared ownership mortgages can help. You buy a share of the property, then pay a mortgage on your share, then pay rent on the rest.
  • Tracker Mortgages – A variation of a variable rate mortgage, where the movement of interest on your mortgage matches with the Bank of England’s base rate, regardless of whether that is up or down.  

Matching you to a Suitable Lender

There are some known mortgage lenders out there who do not need to see previous employment and may allow you to obtain up to a 95% LTV (loan-to-value).

Depending on the mortgage lender that you go with, you may find that a 12-month first contract is treated the same as a permanent job role, rather than just being seen as a temporary contract.

We tend to find, that there may be a selection of mortgage lenders around the country who are willing to get started on your mortgage before you officially start your job, though to do this you will have to provide evidence of a signed contract and a confirmation of your start date. 

This can come in quite handy, as you may potentially be prepared to start making your first mortgage payments at the time when you are due your first month’s wages from your new job, by the time your mortgage has been completed. 

How a Mortgage Advisor in York may Help 

Our open & honest team of dedicated mortgage advice experts in York have extensive knowledge and experience of helping customers across the mortgage and property markets, providing help to lots of first time home buyers with their mortgage needs.

There is a great deal of benefits to using the services of a trusted Mortgage Broker in York. We always strive to take away your stress, looking through thousands of different and tailored mortgage deals for you, our customer, suggesting possible conveyancing solicitors for you to use and more.

Find out what you may have available to you as a first time home buyer, by getting booked in online for a free mortgage appointment with an experienced and reputable mortgage advisor in York, who will collect information from you and help you onto the next step of your journey. 

What are the 7 best places to live in York?

The best areas to live in York

Are you a First Time Buyer in York on the lookout for your colourful, dream home? Have you yet to decide on the perfect location in York? There are many wonderful residential areas in and around York, it is just finding the right one for you!

To help you make the right decision, we have put together our top list of places to live in York.

1 – Fulford

Fulford is a lovely, small village just two miles southward of the York city centre. If you journey east of the York Racecourse and the River Ouse, you will find yourself in Fulford.

Fulford allows local residents to enjoy the calming life of the North Yorkshire countryside as well as the charming city life right on the doorstep. Fulford Ings park and gardens is a must-visit for all who enjoy a walk by the river. If you head south on the walk, you will end up at York Designer Outlet and if you head north, you will find yourself at the Millennium Bridge, Millenium Fields and Danesmead Wood.

Known for its verdant streets and rich background, Fulford could be the best place for you to live in York. Although, property demand in this area is very high because of the affordable housing prices. Home Movers and First Time Buyers should keep their eye out on websites like Rightmove if they are thinking of purchasing in the near future.

2 – Clifton

Situated on the opposite side of the city is Clifton; this is a large, lively residential area that also holds the city’s hospital. This suburb is considered to be one of the best places to live in York.

In Clifton, you’ll find cafes, bars, restaurants, cinemas, a shopping park and gardens. If you have a family, there is also a wide section of top-standard primary and secondary schools in the local area. There are many different property types in Clifton; terraced, semi-detached and detached are the most common.

If Clifton sounds like an area that you would like to live in in the future, we would recommend getting in touch with us. We can arrange an AIP within 24 hours of your application to give you the best possible chance of securing a property when making an offer in Clifton.

3 – Badger Hill

Badger Hill is a small, residential area in York, located east of the city centre. This area is ideal for all different types of people, such as couples, families, the elderly and single homeowners.

The stunning York University is located next door to Badger Hill. You’ll find that both campuses are within a 10-minute walk from the area. This also means that there are many transport routes in and around the city. This is ideal for getting to and from your place of work, dropping the kids off at school and picking up your weekly shop!

Rather than heading into the city centre, in Badger Hill, if you head further out of York via the A64 Northbound, you will find yourself at the North Yorkshire Moors National Park. This car journey is less than 30 minutes!

4 – Osbaldwick

The historic town Osbaldwick is a peaceful, green area that is perfect for all First Time Buyers in York and home movers! Its location is north of Badger Hill and east of the York city centre. If you are entering the city from Hull road or Murton, you will pass through Osbaldwick.

Being connected with Hull Road and the A64, Osbaldwick residents have easy access to the city centre and the motorway. Similarly to Badger Hill, the transports links in this area will suit your working and personal commitments.

Boarded by the countryside, lake by walks and playing fields, Osbaldwick is a stunning area to live. We would recommend this location to anyone!

5 – Hull Road

Previously mentioned Hull Road is a popular residential area in York. The long street sits 1.3 miles east of the York city centre. It connects the A64 to the York city centre, allowing easy access in and out of the city.

The area is mostly filled with terraced housing, therefore, it is perfect for small families, couples, single homeowners and the elderly. You will also find that students have warmed to this area due to the housing types and affordability.

There are many different types of eateries and amenities along the Hull Road stretch, each having a lively, friendly atmosphere. Families and children will also love the local community events and activities held in Hull Road Park.

6 – Heworth

Heworth is north of York, touching the border of the marvellous northern city walls. Described as a pleasant place to live, Heworth is a pretty suburb that homeowners in York should consider as a place to live.

Perhaps more suited to the elderly in some parts, Heworth’s most common housing type is semi-detached. There are great transport links to the city centre, with Heworth only being 10 minutes away by car or frequent public transport.

Additionally, if you’re looking for things to do, the possibilities are plentiful in Heworth. Two pubs, a selection of restaurants and takeaways, as well as a nearby shopping centre, superstores, pharmacies and more! If you’re into sports, you can enjoy local golf, rugby, cricket and football.

7 – Acomb

Sitting only 3 miles to the west of York, lies the popular suburb of Acomb. Covering the site of the original village of Acomb from the 11th century, Acomb is actually one of the largest areas of York, with six primary schools, a secondary school, various sporting clubs and a sports centre.

There are a wide variety of house prices in Acomb, ranging from affordable to high end, giving you plenty of options for places to live. You’ll have everything you need in one place, with plenty of supermarkets and a busy high street, as well as parks and outdoor facilities. It’s a great choice for families!

Many of the locals are fond of Acomb, attributing their enjoyment of living there to the community spirit. Events like Christmas lights switch-ons, Acomb Green activity days and other assorted entertainments allow for a wholesome, strong community vibe.

First Time Buyer Mortgage Advice in York

Are you thinking of buying your first home or moving home in York and need Mortgage Advice? If so, Yorkmoneyman is here to help!

20 years of experience within the mortgage industry has allowed us to access great mortgage deals. We will go through thousands of these deals and pick out one that perfectly matches your personal and financial situation. Your mortgage journey is made easy with Yorkmoneyman – your Mortgage Broker in York.

To speak to a First Time Buyer or Moving Home Mortgage Advisor in York, get in touch today and receive a free mortgage consultation. We know that the mortgage process can be stressful and that’s why we want to offer a helping hand. We would love to hear from you and assist you on you in the world of mortgages.

What is a Cashback Mortgage?

Cashback Mortgage Advice in York

There are lots of different types of mortgages, and some of them will be more suited to you than others. This is because each of them are different and can benefit you in different ways.

Here we are looking at the cashback mortgage and how it works. Will it benefit you and how does it compare to other mortgage options?

First of all, if you would prefer to watch our cashback mortgage YouTube video, make sure to watch it below. We regularly post helpful mortgage guides and tips on our YouTube channel MoneymanTV. Make sure to subscribe if you enjoy our content!

What is a Cashback mortgage?

To put it simply, with a cashback mortgage, after you complete your term, you will get some money back.

The way that this is worked out is through a percentage of what you have borrowed. It’s usually something small like 1%-2%. In some cases, lenders will state a fixed amount in your mortgage contract.

Will a Cashback Mortgage benefit me?

Like all types of mortgages, Cashback Mortgages have both advantages and disadvantages. For example, you may be offered a free property valuation with your Cashback Mortgage, it all depends on your lender.

They are very popular amongst those looking to borrow lower mortgages. This is because you will get some money back along with some benefits on the side. If you get offered a competitive percentage on your Cashback Mortgage, it is definitely worth considering as an option. You may get a lot of money back upon the completion of your term.

The disadvantage to Cashback Mortgages is that they often come with high interest rates.

Different types of mortgages in York

Cashback Mortgages, although they sound great, aren’t at the forefront of the mortgage market. They were more popular in the early 2000s.

It’s not a mortgage option that should be shoved under the rug, however. We still find customers taking out Cashback Mortgages; it’s not like they’re a bad choice. Quite a lot of buyers choose them as their backup option.

If you want Specialist Mortgage Advice in York and want to speak with an expert, get in touch with our team. We have experience with lots of different types of mortgages and can help you find one that suits you the best. A mortgage advisor in York will be right by your side during the whole moving home process.

A Guide to Remortgage in York: Top Reasons to Consider

Remortgage Advice in York

Although the mortgage journey can sometimes seem quite stressful, in the long run, it can be extremely rewarding. You’ll go down one of two paths on your mortgage journey; one is that you find the property of your dreams that you can see yourself living in for the foreseeable future and two is that you buy your first home to get yourself onto the property ladder and keep going up until you find a home that suits you best.

Whichever path you choose to take, you will always find yourself coming to the end of your mortgage term. At this point, you are going to have to decide whether you want to remortgage or move home.

Another option could be to buy another property as well as keeping your current one and let it out as a let to buy. Also, this can work in the opposite way if you want to purchase a property as a Buy to Let.

What is a Remortgage?

A Remortgage is simply using the funding for a new mortgage to pay off your current mortgage. The term ‘Remortgage’ is very vague, it covers a lot of ground. You can actually Remortgage for lots of different reasons and in this mortgage guide, we are going to cover the most common reasons to why people Remortgage.

Remortgage for a Better Rate

When you take out a mortgage product, its term will usually be somewhere between 2-5 years. There are lots of different types of mortgages, some being more popular than others. Their rate will vary depending on the product that you take out. For example, a Tracker mortgage will follow the Bank of England’s base rate; this rate will fluctuate depending on the economy and how it’s performing; whereas a Fixed-Rate mortgage will have set monthly payments that will never change until your fixed-term has ended.

So, you have a mortgage product that is perfect for you, however, your mortgage term is ending in 3 months time – what do you do?

– Firstly, you should check whether you can access a better rate or not. Occasionally, if from the point of when you took out your mortgage product you had a lower credit score than you do now, you may be able to get a better deal. To find this out for free, you should get in touch with a Mortgage Broker in York like ourselves. We will review your mortgage and your options to see whether or not you can access a better product.

– Secondly, once you find out about the options that are available to you, it’s your choice whether you want to renew your current deal or Remortgage/transfer products through your same lender.

If you don’t Remortgage, you will fall straight onto your lender’s standard variable rate of interest once your mortgage term has ended. Their standard rate is likely to come with higher costs than your current mortgage deal; that’s why you should always Remortgage! Ideally, you want to begin the process 3 months prior to your product ending.

You may be able to save money in places you didn’t think you could by remortgaging!

Remortgage for Home Improvements

If you feel like you’ve found your dream home and have no plans on Moving Home in York, you have an option to Remortgage for home improvements. Home improvements can mean anything from a loft conversion to a garden extension – it can be anything you could class as improvements for your home.

In the middle of the coronavirus pandemic in 2020, we received enquiries left, right and centre about Remortgaging for home improvements such as a home office, gym, new kitchen and even bars. We think that everyone’s mentality was the same at the time. This investment has not only provided more living and breathing space inside of the property, but has also risen the property’s value.

When you Remortgage for home improvements, you will be adding more to your total monthly mortgage payments as your total mortgage amount will increase to incorporate the costs for the home improvements. So, at first it may seem like it’s costing you more each month, however, in the long run you may find that the home improvements massively increase your property’s overall value.

Remortgage for Changes to Your Term

You can also Remortgage in York to find yourself a better mortgage term. Homeowners often do this to reduce their term or gain more flexibility with their payments.

Doing this can result in you having a shorter period of time to pay back your mortgage, which means that you won’t be tied down for a large portion of your life. Yes, this will increase your mortgage payments, but it will allow you to finish your mortgage quicker than before you decreased your term. The longer your mortgage term is, the less your mortgage payments will be, and vice versa.

Once you’ve got that mortgage payment history associated with your name and your lender knows that you are a reliable customer, they may allow for flexibility with your mortgage term. Doing this can sometimes allow you to overpay your mortgage.

Equity Release

It’s likely that you’ll have some amount of equity within your home, even if it is only a little. You can work out the amount of equity that you have in your home by taking the difference between how much is still owed on your mortgage and the current value of your property.

You can release some of this equity and turn it into a lump sum of cash. This money can be spent however you want as it is your equity; for example, you may want to use it for home improvements, to put down a deposit on another property, to pay off a car loan or to go on holiday – remember, it’s up to you!

Some people, usually older homeowners, will release equity in the form of a Lifetime Mortgage. You can find out more about this in our Equity Release in York article.

Remortgage to Consolidate Debt

If you have built up any unsecured debts in your past, did you know that in some cases you can incorporate these into your mortgage through remortgaging?

It may not be the easiest of tasks to consolidate your debts into your mortgage. Before allowing you to do so, lenders will look at how much money you owe, the value of your property and what your credit rating is like.

Lenders will always be very careful when it comes to letting applicants consolidate debts into their mortgage. One reason for this is that your monthly mortgage payments will be increased; they will question whether they think you’ll be able to manage the extra costs of consolidating your debts. Another reason for this is that if you fall into arrears and your house ends up being repossessed, all of these debts have been secured within the property, which may make the lenders get no profit from the property.

Before consolidating your debts into your mortgage, we always recommend that you speak to an expert Mortgage Advisor in York – particularly a debt consolidation professional.

Free Remortgage Consultation

If you are approaching the end of your fixed-mortgage term and you are thinking about Remortgaging for a specific reason, even if it isn’t one of these, you should get in touch with our team. We offer a free remortgage consultation/review to every customer in York, so we advise that you take advantage of this if you are thinking of Remortgaging.

You will get to speak with your own dedicated Mortgage Advisor in York, who will guide you through the whole remortgage process, trying to find the perfect deal for you and your personal and financial circumstances.

Yorkmoneyman Spring Budget 2021 Update

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.

95% Mortgage Guarantee

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.

Stamp Duty Holiday Extension

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.

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How Much Deposit Are First Time Buyers in York Putting Down?

First-Time Buyer Mortgage Advice in York

It can sometimes be difficult to get the ball rolling with your mortgage application, especially if you are a First-Time Buyer in York. There are lots of different things to get ready before you apply for a mortgage in York, and one of the most important things that you need is a deposit.

As a Mortgage Broker in York, we process many First-Time Buyer Mortgage applications and they all vary when it comes to deposit amounts, purchase prices and loan-to-value percentages. Here at Yorkmoneyman, we thought that it would be beneficial for those looking to buy their first property, to gain insight into the averages of these variables.

How Much Deposit Are First Time Buyers in York Putting Down?

Average deposit amount

House prices in York are typically more expensive when compared to the rest of Yorkshire, in turn, this leads to a higher deposit contribution. From our results, we found that the average deposit amount for a First-Time Buyer in York is around £36,000, whereas in Yorkshire the average is £23,000.

Whilst many First Time Buyers manage to save up a portion of their own deposit, a common occurrence in the home buying world is for family members or friends to provide additional support by gifting part of the deposit for them.

Sometimes, a gifted deposit can end up pushing an applicant into a lower loan-to-value bracket which opens the door to more competitive products and lower interest rates.

Average purchase price

As we mentioned above, house prices in York are typically more expensive across the board. When it comes to First-Time Buyers the average purchase price is currently £199,000. This is around 21% more than the average First-Time Buyer in Yorkshire.

Average loan-to-value (Ltv)

Now we have covered the average purchase price and average deposit for First Time Buyers in York. We can now work out what the average loan to value is.

With lower loan-to-value percentage, usually comes more competitive rates.

In York the average LTV is 82%, which is lower than the Yorkshire average of 85%. The infographic below shows how to work out your LTV percentage:

Loan-to-Value Percentage in York

Are you a First-Time Buyer in York?

York has been voted the best place to live in Britain, so it comes as no surprise that this is a very sort after place to live and demand is high. If you are looking to purchase your first property in York, it would be good to speak to a Mortgage Broker. We can then look at getting you agreed in principle with a lender, putting you in the best possible position to have any offers you would like to put forward accepted.

Mortgage Market Update: Stamp Duty July 2020

Introducing Stamp Duty

The Government has recently introduced a Stamp Duty Holiday announcement ending in March 2021 with hopes to get the Property Market back to normal after the recent Covid-19 lockdown.

The Bank Of England has set its interest rates at one of the lowest that the Property Market has seen for a while in order to give potential buyers the chance to get on the property ladder but with recent changes in place it means lenders are only accepting mortgages with a 15% deposit and higher.

Furthermore, there are alternative ways to get onto the property ladder such as new builds being okay with 5% deposit from your own funds, topped up to 25% with the Government Help to Buy Equity Loan.

At various times lenders will drift in and out of offering 90% Loan to Values to the general public but these will only be available for a limited amount of time due to the lenders discretion. For the Mortgage Market to get back to its normal state we need the ‘big banks’ to get back to normal, as right now, it’s the lenders which are pushing the boat out to try and make the Mortgage Market accessible to all that they are able to.

But lenders and banks are restricted like most companies during lockdown due to trying to adhere to social distancing regulations meaning that offices have a limited full capacity because they are struggling to get a sufficient amount of people back into the office. Further concerns are job loss data and lenders don’t want to have to repossess any customers who might end up in negative equity. These reasons are holding lenders back from offering the full range of the mortgages that they are able to.

Demand is still outweighing supply in terms of residential property so no changes have been occurring to house prices yet and there are no signs of this changing in the near future. However, we are noticing that there are multiple people going for the same houses that are available so it may be a good move for applicants to obtain Agreement in Principle before making an offer.

If you were aiming to apply for a mortgage and have already saved up the 10% deposit then it would be advantageous to keep on saving to a 15% deposit as this would also mean interest rates would be lower when the time comes to applying for a mortgage, so it would work out in your favour.

Our Mortgage Advisors in York are still available if there are any questions that you may have regarding the new mortgages updates, these can all be answered in a free mortgage consultation that we offer to all our customers.

Mortgage Market Advice in York

Debt Consolidation Remortgage

Consolidating unsecured credit into your mortgage is not something that should be considered a light decision. Before making this decision it is important to speak to a Mortgage Advisor in York to consider all the options.

Is Consolidating Debt a bad thing?

By rolling unsecured credit into your mortgage, you will normally pay back more overall. However, your monthly payments may be lower and for some people that is the main motivation behind it.

Remember, you are securing debt against your home. If mortgage payments are not kept up with then you will be at risk of your home being repossessed which is very different to missing payments on loans or credit cards.

Why do people run up large credit card bills? 

In the past, it has often been quite easy to obtain credit, perhaps too easy. It’s quicker for people to borrow money rather than saving up. Sometimes people have used the loophole of investing in remortgage for home improvements to increase the value of their property by a sizeable amount. It is hard to try and pay off the debt itself when over time it is accumulating interest. Not everyone qualifies for zero percent credit card transfers.

What are the other mortgage options? 

Before consolidating credit, it is best practice to do a budget planner beforehand which will allow you to analyse your outgoing expense. These may be luxury items that you are able to go without for a while, i.e. gym membership, takes, etc. Perhaps a personal loan to consolidate your credit cards could be an answer as a loan has a set end date whereas a credit cards. Additionally, since a personal loan is normally taken out over a shorter term than a mortgage then you may pay back less interest.

It may also be worth speaking with a family member who may be able to help. It may seem embarrassing for some people to ask for a bail out but often family members understand and if they are able to help then they will.

If all the available avenues have been exhausted, then a debt consolidation mortgage might be right for you. It certainly is one way of reducing your monthly payments if you are struggling to save but it could be difficult to carry out without an experienced Remortgage Broker in York.

The Credit Crunch

2007, a year in which one of the most critical economic situations had occurred, affecting many financial institutions and changing the way most High street banks lend – the credit crunch.

How did the Credit Crunch happen?

Many First-Time Buyers in York are unaware as to why this happened so gain a deeper understanding of this, we would have to rewind the clock and look back into the 70s and 80s where if you wanted a mortgage it would most likely be through your local building society, as there was a time where banks didn’t provide mortgages.

To start the process of a Mortgage years ago you would have to arrange an appointment with your local Building Society Manager who would check to see if you could be approved. The money that would be lent to you would be obtained from savings accounts of the branches’ existing customers. In order for this to happen, interest rates for borrowers would be higher than the interest rates that were being paid to savers to maintain the increase in profits.  

When banks had started carrying out the lending process they discarded this model and replaced it by ‘buying’ the money from the market as a faster alternative, helping them accelerate the rate at which they were able to lend.

Skipping ahead to the mid-200’s, Specialist Lenders had now become more integrated within the British property market. They had their own process of lending to customers then selling them onto different financial institutions, including high street banks. This kept income rolling between these institutions.

How did downfalls occur?

The market had become more fruitful and the new Lenders had meant lending criteria had become more relaxed, meaning customers with poor credit histories were able to be approved and meant they were able to self-certify their incomes without checks.

When defaults started building up on mortgages this had a downfall affect. Major banks lost confidence with each other due to not knowing each other’s place in the market. From this, bank share prices started plummeting leading to the UK Government and UK taxpayers having to bail them out.

As a result of this, property prices dropped and confidence was lost in the British economy. It took many years to recover the damage done to the market and investigations were carried out to reassure the general public and the government and ensure this didn’t happen again.

The reassurance for this came from the Mortgage Market Review in 2014. The outcomes that came from this was a ban on self-cert mortgages and a bigger responsibility of Lenders to make sure that affordability was evidenced. This meant that stricter rules were put into place in relation to customer incomes – both income and expenditures. A more focused approached meant Lenders took more time to look further into a clients credit commitments, childcare and other outgoings to overview affordability.  

Nowadays, there’s no doubt that it’s harder to obtain a mortgage compared to years ago due to the stricter regulations in which customers have to abide by, and evidence they have to present. It is because of the credit crunch scenario, that banks are taking more caution to make sure that a situation like this doesn’t happen again.

Experienced Mortgage Broker in York

How to get a mortgage if you’re over 40 in York

A recent survey carried out by the Mortgage Brokers in Nottingham Building Society had surfaced results showing that a rise has appeared when it comes to Mortgage applications being turned down in relation to clients who are over 40.

A survey conducted by Nottingham Building Society had revealed that they had experienced a rise in unsuccessful Mortgage applications from clients above the age of 40. When asking customers whose applications were involved, customers had replied and said the factor that they think it comes down to is age.

Looking At Past Mortgages in York

To understand why this is we would need to look back at the time where credit scoring was not computerised and regulation wasn’t as tight as it is in contemporary settings. If you were to apply for a mortgage with your local branch back in the day then the process would basically include an interview with an allocated branch manager/Mortgage Advisor. Following this, the interviewer would then go onto individually assess your personal details leading up to the decision as to whether or not you’re successful.  

If you do get approved then you’ll be told how much you’re eligible, this will be a multiple of your gross salary. For example, if you earn around £20,000 pa and the Lenders income multiple was 3.5x then you would be allowed a mortgage of £70,000.

With this calculation, the only thing it doesn’t factor in is age which means age didn’t matter therefore there were no set restrictions on how much you can borrow unlike nowadays. It may appear to be fair but it changes when you look at the bigger picture.

If we look over the individual applications, we can see how this can affect the applicants. Theoretically, if both applicants are due to retire at 65  and applicant one was granted a mortgage of only 15 years the mortgage payments would be higher than applicant two who was granted a mortgage upto 35 years.

To see how much of a difference this really is, let’s take a look at the above £70,000 mortgage and use that as an example and apply a 5% interest rate:

  • Applicant one mortgage payments on £70,000 over 15 years: £395pm approx.
  • Applicant two mortgage payments on £70,000 over 35 years: £252pm approx.

Dedicated Mortgage Advice in York

It is apparent that one applicant’s payments are higher, despite the two applicants earning identical amounts. If interest rates were to increase then the chance of underlying risks such as an arrears situation suddenly appearing would amount to be greater for applicant two. This would offer us an insight as to why mortgage calculators now review the maximum term of the mortgage in addition to your income and expenditure.

When the BBC got into contact with our Mortgage Advisors in York about the study, they stated how it wasn’t so much that the older customers themselves were being turned down, it’s about they were expecting a different outcome in terms of the amount they’re able to borrow. However, the irony included within this is that the Government keeps on telling us that retirement is coming at a later age before we qualify for a state pension but the Banks don’t seem to take this into account for numerous reasons.

Firstly, occupations including work involving manual work means it would not be viable to work after a certain age. In addition to this, Regulators closely monitor Lenders in terms of repossessions and arrears cases as it looks bad for all parties involved when these occur. The process of taking possession of a property is very costly and attracts unwanted attention by which Lenders try to avoid. It is because of reasons like this that they don’t want to offer a mortgage to individuals of a more mature age and then be seen kicking them out in the foreseeable future because payments were unable to be paid.

Though it isn’t all bad if you’re still after a mortgage. Lenders may consider granting mortgages past the standardised retirement age with proof of affordability which would be a letter from a pension provider showing potential future incomes. The problem in relation to this is that the majority of the general public will be exposed to a reduction in income at retirement. This will mean evidence will be vital to prove you can still keep up with your payments. Although this rarely works unless you’re after a very small mortgage which probably won’t go past your retirement age anyway.

The default retirement age was discarded in 2011 this has made it so as your employer can no longer make you retire thus Lenders will use the State Retirement age as a guideline as to which you should have your mortgage paid off by. Barring that, it has recently become more normal for Lenders to let you self-declare when you want to retire but this will also involve a plausibility check.

If you are thinking of going down this route then you must be prepared to answer questions on how you will be affording your Mortgage – Consumer protections and regulations are in place to protect consumers and encourage prudent lending. So, you will need to provide proof and demonstrate how you will upkeep payments.

Yorkmoneyman.com & Yorkmoneyman 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

The information contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.
Should you have cause to complain and you are not satisfied with our response to your complaint, you may be able to refer it
to the Financial Ombudsman Service, which can be contacted as follows

The Financial Ombudsman Service, Exchange Tower, London, E14 9SR
www.financial-ombudsman.org.uk

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Yorkmoneyman, York Hub, Popeshead Court Offices, Peter Lane, York, YO1 8SU.

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