Can I get a mortgage?

Can I get a mortgage with bad credit? Lenders are reluctant to offer mortgages to those with poor credit score as they would not want to be portrayed as encouraging you to take on more debt where there is potential of repayments not being made on time.  It may be an idea to improve your credit score before applying for a mortgage. This can be done using a “credit builder” credit card in which you pay off the full amount owed each month to show you can manage your debts responsibly. However, these cards often how low credit limits and […]

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How to get a mortgage

The first step in getting a mortgage would be to sit down with us and discuss your circumstances and what type of mortgage you are looking for. There are several types of mortgages, each suiting different people’s circumstances. Fixed Rate Mortgage With fixed rate mortgages, your interest rate and monthly repayments will be fixed for a certain amount of time. This will mean you will know exactly how much you are paying each month for the term of the fixed rate. This would mean however, that your interest rate will stay the same even if other rates go down. Also, […]

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Different Types of Mortgages

Mortgage Types explained Different types of mortgage include the following: Repayment Mortgages Interest-Only Mortgages Fixed Rate Mortgage Variable Rate Mortgage Tracker Mortgage Discounted Rate Mortgage Capped Rate Mortgage Cashback Mortgages Offset Mortgages Flexible Mortgages 95% Mortgages Buy to Let Mortgages First Time Buyer Mortgages   Repayment Mortgages  This is the most common way of repaying back a mortgage. Each month you will pay back some of the capital and some of the interest that you owe. At the end of the mortgage term, you will have paid back the full mortgage amount and thus, will own your house outright. Interest-Only […]

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What do I need to apply for a mortgage?

For any type of mortgage, there are specific documents that will need to be readily available. We will ask for these before we submit the full application to the lender.  The specifics will be dependent on your circumstances and the lender of which you are applying to. A great place to start would be getting a copy of your credit report. Ensure you are registered on the electoral roll at your current address Ensure your address history is accurate Avoid payday loans and overdrafts where possible Different lenders will look at your credit report differently, however we are able to […]

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How long does it take to get a mortgage?

The amount of time it takes to get a mortgage depends on a variety of different factors including: The type of mortgage being applied for i.e. a remortgage or a purchase The time it you takes to gather the necessary documentation for the application The turn-around time of the mortgage lender The turn-around time of your conveyancer The complexity of the mortgage application   Typically, the process begins by getting a Mortgage Agreement In Principle. The mortgage lender will perform a credit search and agree a figure that they would be willing to lend you for mortgage purposes. However, this […]

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What is a mortgage decision in principle and how long does one last?

A mortgage in principle is an agreed figure from the lender that they would be willing to lend you. In order to do so they will gather basic information and perform a background credit search. A mortgage in principle is not a guarantee and a full application and assessment will have to be made before the lender can issue you with a mortgage offer. A mortgage in principle can last between 60-90 days depending on the lender. Because a credit search is needed, multiple decision in principles could have a negative effect on your credit score.

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Mortgage in Principle & Mortgage Offers

A mortgage in principle is an agreed figure from the lender that they would be willing to lend you. In order to do so they will gather basic information and perform a background credit search. A mortgage in principle is not a guarantee and a full application and assessment will have to be made before the lender can issue you with a mortgage offer. A mortgage in principle can last between 60-90 days depending on the lender. Because a credit search is needed, multiple decision in principles could have a negative effect on your credit score.   A mortgage offer […]

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What is a mortgage offer and how long does one last?

A mortgage offer is confirmation that the lender will provide you with a mortgage. This will be after fully assessing your circumstances and a full application is made alongside a valuation of the property. The amount of time it takes to get to this stage depends on the overall complexity of the application. In general, it will take between 18-40 days for the processing of the mortgage  application and an offer to be produced. Mortgage offers can last between 3-6 months, depending on the lender. Some will be valid starting from the date of application whilst others start from the […]

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Finding the best buy to let mortgage

The buy-to-let mortgage market is a specialised one. In April 2014 the mortgage industry implemented the changes that came from the Financial Conduct Authority’s (FCA) Mortgage Market Review (MMR). The MMR changed the face of mortgage lending, forcing lenders to pay much more attention to affordability and expenditure rather than simply assessing gross rental income. Lenders view buy-to-let mortgages as higher risk than residential mortgages because they know that many landlords rely on rental income to make the mortgage repayments and if the property is vacant for a period there is no income. Because of this perceived risk, interest rates […]

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Niche Mortgage Products

Sub Prime Products Sub prime products are for people who do not fit high street lender’s lending criteria. This tends to be due to past credit problems such as missed payments, county court judgements or bankruptcy, which makes the borrower ineligible for standard mortgage deals. Sub prime products tend to have higher interest rates as the borrower is considered a higher risk.   Self-build Products Self-build products are for people building their own property or renovation projects. Lenders usually release the money in stages as they assess the building progress throughout. Some will ask that you have the plot of […]

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The buy to let market

The introduction of assured shorthold tenancies in 1997, which made the rights of tenants and landlords more equal, created the buy-to-let market that exists today. Some say buy-to-let has forced up property prices but there is no doubt it has a part to play as first time buyers are getting older and younger people are renting. The whole point of buying-to-let is for its investment potential – both capital growth on the value of the property and the income it generates in rent. Buy-to-let lending is to support investment, not home ownership. It is important to note that lenders carry […]

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Choosing the right buy to let property

When choosing a property to let, your main considerations are different to those you might apply when choosing a house in which to live. For example, you might not choose to live in an area heavily populated by students, but when looking for rental potential that same area may be exactly what you’re looking for. Choosing the right property with the right rental yields is important. This is true not just for your income but also because you want the rent to more than cover the cost of your buy-to-let mortgage. The Association of Residential Letting Agents produces a booklet […]

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New Build Mortgages

It is vital to get your timing right when it comes to new build properties and related mortgages as it is unlikely that you will be moving in straight away. You need to bear in mind that you will need a mortgage before you exchange contracts. It may be worth starting to plan your mortgage even before you find a property. The mortgage lender will need to be made aware that it is a new build property as there could be delays between exchanging contracts and completion.  Without doing so, your mortgage offer could expire and the whole process will […]

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What is a tracker mortgage?

A tracker mortgage is dependent on the Bank of England Base Rate, meaning when this fluctuates, your monthly repayments will also change accordingly. The interest payable on a tracker mortgage is usually a certain margin above the Bank of England Base Rate – for example the Base Rate plus 1.00% with some trackers having a “floor” of which the rate will not fall below. Lifetime trackers track the Base Rate for the full life of the mortgage. They tend to be at a higher rate than other trackers however due to not having to switch lenders or products every couple […]

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What information do I need for my life insurance application?

In order for us to submit your life insurance application we will need the following information from you: Your height and weight GP details – including name and address Your medical history including details of any current or previous illnesses Details of any current medication or previous medication taken in the last 5 years Details of any family history of serious illnesses Your existing policy information – including provider, sum assured, term of the policy and policy number. Bank Account Details – for the account you wish the monthly premiums to be taken from. Once your application has been submitted […]

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What is a variable rate mortgage?

The interest on a variable rate rises and falls as changes in interest rates occur. There are different kinds of variable rates offered by lenders including a standard variable rate, a tracker rate or a discounted rate mortgage. Your monthly mortgage repayments are most likely to fluctuate whilst being on a variable rate unlike those on a fixed rate for example meaning your mortgage repayments could be different each month. The rate you will pay is entirely dependent on your mortgage lender, with changes to it not necessarily being affected by the Bank of England Base Rate. Standard variable rate […]

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Deposit

Lenders are no longer happy to take all the risk of buying your next property, and so do not lend 100% of the value of the property. If you are unable, in the future, to pay your mortgage, the lender needs reassurance that it can take your home and cover the loan by selling it. Less risk taking means lower loan-to value (LTV) ratios, and personal deposits need to be larger than in the recent past. The source of the deposit may come from your current property, savings, inheritance or a gift. Be aware that deposit loans from family and […]

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House in Multiple Occupation (HMO)

If your property will have multiple occupants, you must check to see whether you require a license (www. propertylicence.gov.uk). You will find that this will limit the number of lenders willing to consider your application.

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Letting agreement

The type of tenancy agreement will influence the number of lenders who will consider lending to you. A six month assured shorthold tenancy agreement (AST) is acceptable to most providers. Your choice will narrow if you are considering letting to a local authority, a company or housing association.

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Let-to-buy

A variation on a theme, where you let the home you are currently living in, so that you can facilitate the purchase of your new home. You need to obtain permission to let from your current lender, and they may not agree depending on their appetite for risk. They may also alter the interest rate you pay. You may need to review the market for other options. Your let-to-buy is then treated like a traditional buy-to-let application, and your new home purchase would be a related, but isolated, application. The Financial Conduct Authority does not regulate Let to Buy mortgages

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Limited company

Whether you choose to buy the property in your own name, or that of a company, will have tax implications for you. You may also find that some lenders will not lend to a company, or still require a personal guarantee. You should seek professional advice from a tax specialist.

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Regulation

Buy-to-let mortgages are not regulated. There are best practices that any reputable mortgage adviser or lender will follow and these are based on the practices and processes that apply in the residential mortgage market. The Mortgage Credit Directive (2016) has also included Consumer buy-to-lets as a regulated product. Consumer buy-to-let is defined as a contract which is not entered into by the borrower wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by the borrower. The legislation sets out a series of circumstances that would constitute a buy-to-let customer acting for the […]

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Rental voids

You need to ensure you have enough personal income and resources to maintain payments if your property becomes vacant. This is because your monthly payments to the lender will continue irrespective of your rental situation.

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Rental yields

What may be a suitable return for you, may not be seen the same way by a lender. Typically minimum rental yields are formulaic and driven by two things: the rate used to calculate the mortgage payment a percentage over-ride to allow for any rental void or increases in short-term interest rates which might impact your personal finances (these range between 100 – 130%).

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Rent guarantee insurance

A tenant that falls into arrears can jeopardise your ability to meet your mortgage repayments. If you fall into arrears with your mortgage repayments you risk losing your property. Rent guarantee insurance covers you if tenants default on their rent and protects your ability to pay your mortgage. Some policies also cover any associated legal costs.

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Risks

As with all investments, the value of a property can go down as well as up. Past performance is not a guide for the future. If your mortgage loan exceeds the property value, you will have negative equity. Also factor in the costs of selling, such as using an estate agency, into your net value. However, if you pick the right area, and are realistic about returns, you can reduce the risks. Unforeseen structural problems could prove expensive, so budgeting for regular maintenance is crucial, as is having the right level of buildings insurance. Rental income from buy-to-let properties can […]

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Tax implications

The UK Government in 2015 announced a new way that tax relief on mortgage interest payments and expenses will be treated for buy-to-let investors. This starts in April 2017 and will be phased in. The disposal of a buy-to-let property may be subject to capital gains taxation. You should seek professional specialist tax advice about this.

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Tenants

Not all lenders will allow students or DSS tenants, so consider carefully the type of occupant you wish to attract, as it may limit the number of lenders willing to lend to you.

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