When you apply for a mortgage, having a high credit score improves your chances of being successful. That being said, a high credit score alone won’t guarantee that the financial institution will approve your mortgage.
Every mortgage lender has its own unique mortgage lending criteria, meaning a high credit score in the eyes of one, might not necessarily be a high score in the eyes of another.
Speaking to a mortgage broker in York, like ourselves, is just one of the great ways to improve your chances of success. Using our knowledge of mortgages, we’ll look to get you matched up with a suitable lender for your circumstances.
If you want to get a much more in-depth knowledge of your credit score, you can take a look at a wide variety of credit scoring agencies. For people seeking mortgage advice in York, you will probably come across the bigger names, such as Experian or Equifax.
It is important to check more than just one of these though, so you can get a more accurate look at how your credit file is currently. It also helps to spot any mistakes or inconsistencies amongst the different platforms.
Of course if you’re doing multiple credit searches, you may also harm your chances of getting a mortgage approved by a mortgage lender, especially if you are doing too many.
Instead, try to limit it to a small selection of trusted credit scoring websites, in order to prevent doing any potential harm to your mortgage chances.
People on the voters’ roll are considered to be much more stable and organised than people who are not, and it is something that will reflect positively on your credit score.
If you have not done this before or have not updated your information, it may be worth doing so in order to possibly improve your credit score and consequently, your chances of being accepted for a mortgage.
Another way to improve your credit score is to know your maximum credit limit and make sure you don’t go over that amount.
Maxing out your credit limits your credit score may not help with your mortgage lenders perception of your ability to stabilise your finances.
A mortgage lender will prefer to work with individuals of whom they know can maintain their finances responsibly, with minimal to no risk of falling into arrears.
It is very important to update your address history to ensure that your provider knows where exactly you live at a given time. Failure to do so could give the impression that you’re living in two places at once.
Ensure that the details are correct, especially if you live in a flat- which could be quite difficult due to different address formatting.
If you have any old credit accounts that you no longer use, contact the providers to close the accounts. Doing so will be sure to streamline your finances, protects you from fraud and reduces the risk of harming your credit score.
If you have family, an ex-wife or husband, or any other person that you are financially linked to, it is important to sever those ties prior to a mortgage application.
The truth is, those links may potentially harm your credit score, especially if that person develops a poor credit score of their own. Due to the link, your score will also go down.
Whether you’re a first-time buyer in York, looking to remortgage in York, moving house in York or any other kind of mortgage scenario, your credit score should always be one of your top priorities.
Book online to speak with a mortgage broker in York. A dedicated advisor will talk you through any necessary steps for you to take.
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.
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.
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:
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.
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.
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.
If you have been saving up for a property and are ready to finally put a deposit down on a potential new home, it is now time for you to get prepared for a mortgage!
You may be a first time buyer in York, jumping into the world of mortgages with no experience. You could be moving home in York, looking to get a mortgage on another property you have your eye on.
In any case, obtaining open and honest mortgage advice in York will be beneficial ahead of your mortgage process, as one of our trusted mortgage advisors will guide and support you all throughout.
Below are some helpful tips on how to get mortgage ready, including information that can help you be prepared for the mortgage application process.
Here at Yorkmoneyman, a member of our dedicated mortgage advice team in York will be on hand to provide you with help and guidance all throughout your journey.
They will be there to answer all of your mortgage questions, suggesting the most appropriate course of action for you to take.
A true benefit of obtaining mortgage advice in York is that you will be able to take a look into the amount you will be able to borrow for a mortgage, as well as gaining an understanding of your monthly costs.
Once we have carried out an affordability and borrowing capacity assessment, your designated mortgage advisor in York will take a look through 1000’s of mortgage products in order to find the best one for your circumstances.
In order to do this, they will request that you provide them with an up-to-date credit report, so that they can understand your current financial position.
In the beginning of your mortgage process, you will need to look at obtaining an agreement in principle. This should be a priority for you, as you won’t be able to make an offer without one.
As a mortgage broker in York, we are typically able to obtain this for you, within 24 hours of your initial mortgage appointment. This will hopefully mean you have one less thing to stress about.
In addition to this, you will need to provide some proof of your identity. This includes your name, where you live and how much you earn.
With a lot of paperwork required, it is best that you keep organised. Collect documents in advance and create a file for these, so that you don’t lose them.
As mentioned, you will need to prove who you are in order to get started with the mortgage process. It needs to be photographic like a driver’s license or a passport.
A driver’s license can also be used for proof of address, though if you use it for this, you will need a separate document as proof of ID.
Once again, as discussed above, you will also need to provide evidence of where you currently live. You can do this by sending in a utility bill or original bank statement that is dated within the last 3 months.
Other big factors in whether or not you qualify for a mortgage, are your spending habits and how well you manage your finances.
Bank statements will be able to showcase both of these to your lender, going into detail about what comes in and what goes out of your account.
Lenders will prefer looking at your bank statements as it shows you would be able to meet your monthly mortgage payments along with your other expenses.
Another factor that lenders may look at, is if you have any gambling transactions on your bank statements.
If you are a frequent gambler, this is something lenders will not like seeing because it is a spending habit that could potentially cause issues in the future.
If you happen to be a regular gambler, the lender likely won’t want to risk it affecting your ability to pay back a mortgage. Exceeding your overdraft on a regular basis or having consistent bounced direct debits will also be detrimental.
Further to the above point, you will also need to evidence where your deposit funds have come from. Doing this is important, and keeps everything in line with anti-money laundering regulations.
You will be required to answer questions about your deposit and how exactly you were able to raise the funds to cover that amount.
To avoid questions and looking suspicious, we would highly recommend that you avoid moving larger funds around from account to account. This would confuse the audit trail and flag up to the lender.
They like to see that you saved up your money for the deposit, preferably inside a savings account of some kind.
Throughout our time working as a mortgage broker in York, we have seen an large increase in the popularity of gifted deposits, especially amongst first time buyers in York, looking to find their footing on the property ladder.
When it comes to gifted deposits, you need to evidence this correctly, regardless of your mortgage scenario.
Gifted deposits are typically donated from a family member or friend. Whomever the donor is, they must verify in writing that this is strictly a gift and not a loan to be paid back.
In order to prove that you actually can afford a mortgage, you must also evidence your income. You will be required to show your last 3 months’ payslips and your most recent P60.
Elements such as regular overtime, commission, shift allowance and bonuses are something else that a mortgage lender will need to know about ahead of time.
If you are self employed in York, proving income is a little different to other applicants, as you will need help from your accountant by requesting a tax year overview.
It is recommended that you look into what your estimated outgoings are as this can help you with being prepared for a mortgage in York.
Looking at your outgoings, such as council and utility bills. This will be helpful when comparing with your other monthly expenses such as food and drink.
Bearing all of this in mind, you will be able to get a rough estimate of the amount of disposable income you will need to pay out mortgage payments.
If you are at the point of applying for your mortgage in York, it can be challenging to do alone. Going through the mortgage journey with an expert mortgage advisor in York can make this easier for you.
Book your free mortgage appointment using our online booking feature today. Choose a time slot that suits you, and speak to an experienced mortgage advisor in York, subject to availability.
During your mortgage process, you will need to provide evidentially documentation to prove that you can afford your mortgage repayments. The documents that you’ll be asked to provide, include bank statements, proof of address, latest P60, payslips and photographic ID.
Lenders need to be certain that you are financially stable to afford your monthly repayments. If given an Agreement in Principle this will signify that you have been agreed in principle you providing substantial documentation to back up everything that you’ve said about yourself.
Your bank statements can say a lot about a person, they highlight your latest spending habits like the commonness of going to the pub, making gambling transactions, going shopping on a betting app. Everything transaction, even bank transfers to and from different accounts will need to be shown.
The lender needs to know whether they are lending to dependable applicants or not. For example, if the lender can see that an applicant spends too much money or exceeds their arranged overdraft limit every month, they will question whether you will be able to afford a mortgage or not.
It’s all down to risk. If the lender thinks that you are going to struggle with your mortgage payments due to how you spend your money, they are unlikely to accept your application.
The question is, what exactly are they looking for? What do lenders not want to crop up on my bank statements during your mortgage application?
The first thing your lender will look for on your bank statements is any gambling transactions.
Gambling transactions are one of the first things that your lender will look for on your bank statements. Believe it or not, depending on how frequently and how much money you gamble, gambling can affect your chances of getting a mortgage.
Don’t worry, the occasional gambling will be harmless. That said, if you are continually gambling enormous quantities of money, you will not be in the lender’s favour and you may be seen as irresponsible.
This is because lenders need to trust you and know that you will be able to meet your repayments on time.
Lenders need to know that you can afford a mortgage, so going in and out of your overdraft and reaching its limit every month is something that lenders won’t take lightly.
That said, there is nothing wrong with going into your overdraft, we have seen it happen with different applicants all the time. But if you have to do this every month, it might stop you from getting accepted.
Be aware that lenders will look out for any bounced direct debits. A bounced direct debit is when a company tries to take money from your account through direct debit, but your account doesn’t have the necessary funds to cover the bill, this usually occurs with monthly bills/subscriptions.
Whether this is a complete accident but if you accidentally missed a mortgage payment, this will be more detrimental than missing a Netflix subscription. But having repeated bounced direct debits will reflect badly on your credit file, so be wary in the future.
Lenders will be making a note to check for any personal loans and credit card commitments. You need to make sure to declare any expenditures and that you will still be able to meet your mortgage payments on time with these expenditures.
Here at Yorkmoneyman, we have worked with many First Time Buyers and Home Movers in York. We tend to find that most lenders will ask for at least three months worth of bank statements from their applicants.
Now, you can’t alter what your past bank statements show, but you can change what appears on them in the future. Before you decide to submit your final mortgage application, you need to get prepared and be mortgage ready so your finances mirror you in the right way. Here are some of our recommendations:
If you need help with making your application stand out, book your free mortgage appointment today with one of our expert Specialist Mortgage Advice in York. We have worked in the industry for over 20 years and helped many First Time Buyers in York achieve their mortgage goals.
We are confident to say that we know exactly how to help. You could be next, so if you have any mortgage questions, we have likely helped many applicants in your situation before.
First Time Buyers in York who are looking to put their foot onto the property ladder, or finding themselves once again at the end of their fix term, might find the process a little daunting.
Depending on the homeowner and homebuyer circumstances there are many different routes to take. Ideally, you’ll want a service that gets it right the first time, saving you time and money.
Here at Yorkmoneyman, we firmly believe that First Time Buyers in York like yourselves will find our service beneficial during the entire process.
Rest assured, you are in safe hands with us, we have absolute confidence in our ability to help customers. We also understand that some people may be wondering how a Mortgage Broker in York can actually help.
This is why we felt it was best to put together a balanced summary of why speaking with a Mortgage Broker in York will be beneficial, as well as why others instead choose to directly to a mortgage lender.
We promise to try our best to save money by going direct and finding your own mortgage deal. This isn’t entirely untrue, as a mortgage broker in York may charge a fee, though this is very much circumstantial.
If you’re experienced in doing it yourself, have a straightforward case and knowledge of lender criteria, by all means, this will be easier and more cost-effective. The downside to this comes with more complex cases and people who don’t understand the lending criteria.
If you have the basic understanding of doing it by yourself, have a simple case and have knowledge of the lending criteria, by all means, this will be a walk in the park and more cost-effective.
However, those with a complicated case and people who don’t understand the lending criteria could either end up on the wrong deal or unsuccessfully apply for a mortgage deal.
Both situations could poorly result in you spending more money than what’s needed, or harming your credit score, resulting in your overhaul chances of obtaining a mortgage in the future.
Our Mortgage Advisors in York aim to recommend the most suitable deal for your circumstances. Whilst again, this may come with a service fee, you could be saving yourself a lot more money in the long run.
Another point that many more senior customers think works in their favour of going directly to the bank, is the way the mortgage process was previously run. Before online banking and the ever-increasing popularity of technology, you would be a loyal customer of your nearest branch regularly, often communicating to the same people.
Back then before credit scoring, you would sit with the bank manager themselves, who understand your finances inside and out, and would accept you for a mortgage. Whereas in the present, a lot has changed since.
Now, the bank manager won’t run through your case personally. Instead, it goes through an online system, to determine if you are eligible to qualify for a mortgage. These days, more people get given a good chance to apply for a mortgage, it no longer matters which company you bank with for years.
You may have heard that you can get better access to better deals by going direct. This may be somewhat true, they can offer good deals, but these deals are only exclusive from their own company.
Not all mortgage lenders are banks and there are many other deals out there to choose from. The most suitable deal your bank can offer, might not be the best deal overall that you could have got, by going elsewhere.
At this point, seeking Mortgage Advice in York will be very beneficial. Our Mortgage Advisor in York will go through your case and find you the most suitable deal with one of the many lenders we have on the panel, rather than from just one source.
It’s also worth noting on the topic of exclusivity, that you may also find deals with a mortgage broker in York, that you can’t find anywhere else. Whether you are a First Time Buyer wanting to put your foot onto the property ladder, looking to Remortgage in York or have a specialist case, there will be more options for you when going with a Mortgage Broker in York.
Prior to the 2007-08 credit crunch, as summarised in the 2014 Mortgage Market Review, lenders were no longer allowed to sell mortgages to their customers on a non-advised basis.
What we mean is, you cannot just walk into a bank, tell them you want a mortgage and be accepted without any background checks.
These modifications also brought about consumer protection, that a bank otherwise would not have given you. Nowadays you are now in a position to complain to the Financial Ombudsman if you feel misadvised in any way. You also can make a claim via the Financial Services Compensation Scheme.
Whichever journey you are going down, going to either a mortgage broker or mortgage lender, you will be in safe hands, secure and professionally advised.
What gives a Mortgage Broker in York an upper hand is it can sometimes take time to try and speak with an advisor at the bank. Once you have made that contact and started your process with your bank, you’re not always guaranteed to be kept in the loop.
A benefit of using a Mortgage Broker in Durham is that we work around your busy schedule and arrange a time that suits you. Our dedicated teams of Mortgage Advisors in York are here from morning until late, every single day of the week, including weekends and certain bank holidays too.
Not only can you book yourself on a day and time that suits you, but sometimes we offer same-day appointments, subject to availability.
Don’t panic if you work a 9-5 job and need to speak with a qualified Mortgage Advisor in York. We’ve got you covered! With the help of our booking feature, it’s never been easier to speak with a Mortgage Advisor in York!
Here at Yorkmoneyman, we pride ourselves on being open and honest with our customers. All new and existing customers will always be kept in the loop no matter what stage of the mortgage process they’re in. Any changes made, you will be notified as soon as possible.
Over time the public perception of Mortgage Broker in York has changed. It’s thanks to our high level of customer service, had led to more people choosing brokers over going to a bank for Mortgage Advice in York.
Everyone’s mortgage situation can be more challenging than the ‘average’ case. Recurring examples of this that our team have encountered over the years working in the industry include (but are not limited to):
Previously, mortgage lenders could easily compete with one another by offering deals that were better than the other. Times have changed since then, and now the main difference in which deal you go with, is whether or not you match their lending criteria.
You may come across a cheap deal you aren’t eligible for. The lender will either do a hard or soft credit search, to see if you are eligible to have a mortgage.
If you apply for the mortgage and the lender declined you an agreement in principle, this may damage your credit file. The worst part is you will be given no reason as to why you were declined.
A Mortgage Broker in York like ourselves will be able to run through your case beforehand, ensuring that everything is good to proceed and inform you of anything you need to increase your odds of being accepted for a mortgage.
Utilising the vast amount of lenders of our pane, we can match you with deals that fit your eligibility and supply you with an Agreement in Principle. We aim to supply you with an Agreement in principle within 24 hours after your free mortgage appointment.
However, this doesn’t mean you’re guaranteed to be agreed, but it’s much safer for your credit file to be organised and get everything sorted beforehand. As expert Mortgage Advisors in York, we aim to get our recommendation right the first time.
As an expert Mortgage Broker in York, who has been in the industry for over 20 years, we have helped many customers achieve their mortgage goals. From First Time Buyers in York getting onto the property ladder for the first time, to people at the end of their fixed period, looking to Remortgage in York, it’s safe to say you are in safe hands with us.
As you can see, there are indeed pros and cons to going with a Mortgage Broker in York. Likewise, there are also pros and cons to going direct as well. It comes down to how quick you want your service to be, and how secure you want to be.
If you would like to speak with one of our Mortgage Advisors in York, feel free to book yourself in for a free mortgage appointment or remortgage review. Everyone here at Yorkmoneyman is here to help with all your mortgage needs, around a time that is most suitable for you, subject to availability.
For more information, please feel free to take a look at our genuine customer reviews. They are a reflection of the high-end levels of service that we provide to all new and existing customers.
Whether you are looking to buy a home as a first-time buyer in York, are moving home in York, or are ready to remortgage in York, you’ll quickly begin to realise there are a lot of options out there for you when it comes to taking out your mortgage.
In this article we have put together a comprehensive list of the most popular types of mortgages available to customers on the mortgage market.
If you have any questions regarding any of the mortgage options that we talk about below, then please do not hesitate to get in touch with a dedicated mortgage advisor for expert, open & honest mortgage advice in York & surrounding areas.
A fixed-rate mortgage will mean that your monthly mortgage payments will remain unchanged for the duration of your mortgage term.
The length of which you want to fix your payments for is your choice, with typical choices being somewhere around 2, 3 or 5 years or longer.
No matter what happens with inflation, the interest rates or the nationwide economy, you know that your mortgage payment, which is usually a person’s single biggest outgoing, will always be routinely consistent.
A tracker mortgage will serve the purpose of providing you with a mortgage interest rate that basically mimics the Bank of England’s base rate.
This means that neither yourself or the mortgage lender will set the rate and it will change as and when the base rate does. If the base rate goes up, your interest rate goes up. If it goes down, yours will go down too. Of course, this happening is beneficial to you.
You will be paying back at a percentage that is above the Bank of England base rate. If we use this in an example; Let’s say the base rate is 1% and you are tracking at 1% above base rate, that means you will be paying back your interest a rate of 2%.
When you take out a repayment mortgage this means that each month you will be paying back a combination of both the interest and capital. This is the standard mortgage people think of when looking to buy a home.
Going off the basis that you are able to keep your payments going for the mortgage term duration, you will be guaranteed to have paid it off in full and own the home of your dreams by the end of it.
This is generally, across the industry and wider world, considered the most risk-free way to pay your capital back to the mortgage lender. Early on in your term, the amount you’ll be paying will be mostly the interest, with your balance reducing at a slower rate. This is especially the case if your term is 25, 30 or 35-years.
The process quickens up within the last ten years or so of your mortgage, where you will be paying back more capital than interest, with the balance reducing at a far quicker rate.
Whilst we do still regularly encounter many buy-to-let mortgages being set up on an interest-only basis (this is an option that works out much better for many landlords), it is increasingly more difficult these days to get a residential property on an interest-only mortgage.
The reason for this is because once you reach the end of your term, you will still have the full mortgage amount to pay off all in one go, with no additional income to fund the amount you’re required to pay.
That being said, there are various unique circumstances where this can be a suitable option for customers, including downsizing when you are older or if you happen to have other investments you are able to use to pay back the capital.
Lenders are often incredibly strict when it comes to offering these products now and the loan to values tend to be much lower than they were in previous years.
The way an offset mortgage works is that your mortgage lender will set you up a savings account that will work in tandem with your mortgage account.
To explain this using an example, let’s say that you have a mortgage balance of £100,000 and you deposit £20,000 is into your savings account, you will only be paying interest on the difference between those figures, which in this instance would work out at £80,000.
This can be a very efficient way of managing your finances, especially if you are wont to be paying higher rates of tax.
Nowadays, First-Time Buyers in York are becoming more attentive to their credit score than they used to be. The public seems to be more conscious of their credit score role in obtaining a mortgage, so most people who contact us for Mortgage Advice in York seem to have already checked their credit report.
Credit reporting agencies like Experian, Equifax, and many others have come in handy in helping people get their credit report. However, for first-time homeowners, we often recommend Check My File. They offer a 30-day free trial and monthly £14.99 subscription package, which you can cancel at any time. Check My File provides a detailed credit report arranged in color-codes for ease of reference and understanding.
When offering clients Mortgage advice in York, they always inquire to know if we will check their credit score. We understand that excessive credit search could reduce one’s credit score, so we do not do any search unless with their permission.
A hard credit search entails detailed scrutiny of your credit report. Financial institutions should seek a client’s permission before conducting a hard credit search. Lenders always want to get a more exact and in-depth knowledge of your financial history to know if you meet their requirements.
Meeting their credit criteria after a hard credit search highly improves your chances of getting your credit approved. You need to ensure that you can provide evidentiary support of the satisfactory documentation and ensure that there is no falsification or error in the details contained therein.
The downside of hard search is that it will be indicated in your credit report, which would be evident whenever someone performs a credit search on your account in the future. This isn’t such a bad thing, but when lenders see that you have multiple credit searches on your report within a short time, they could misinterpret it to mean that you’re applying for different credits concurrently.
They may not inquire to know the circumstances that led to these hard credit searches. Instead, they may conclude that other lenders performed these searches, and after their investigations, they threw away your application, so you had to move on to other lenders.
Soft credit search only assesses your finances to know what you can afford with your available credit. It basically applies to price comparison websites and identity verification.
In recent times, some lenders prefer to conduct a soft credit search, although it doesn’t provide them as much information about a client’s financial history as a hard credit search does. However, obtaining an Agreement in Principle from the lenders is a strong pointer that your mortgage application will be approved.
The significant advantage of soft searches is that banks and other financial institutions will not see how many soft searches have been done on your account. However, the number of soft searches will be visible to only you- and you’d be amazed at how many have been carried out on your account. Since banks and lenders cannot see this information, you can apply for an Agreement in Principle for a mortgage- and it won’t damage your credit score irrespective of the outcome of the application.
Every aspiring homeowner wants to present themselves as financially responsible individuals. Therefore, it is pertinent to explore all legal routes of improving your chances of getting the property you desire at the lowest possible price.
This is the reason why the bulk of our mortgage advice in York revolves around helping people increase their credit score and keep their record in good standing to make them attractive for lenders and other financial institutions.
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.