You’ve managed to save up for a 5% deposit and are ready to start making offers on properties. However, you are still being let down and being asked for a larger deposit. Not being enough to save for a lerger deposit could be down to anything, e.g., sellers’ preference, other competition or your credit history.
From in-depth discussions about utilising the government schemes to simple points such as saving more money and waiting, here are some ways that can help you obtain a mortgage with a small deposit.
Taking advantage of government schemes can really help you through your mortgage journey. There are lots of schemes available that come under the ‘Own Your Home’ umbrella. These schemes were designed to allow opportunities for first time buyers and home movers to get themselves onto the property ladder.
The Help to Buy Equity Loan is a scheme that allows you to increase your total deposit size, hence increasing your chances of your offer being accepted.
The scheme works like so; you take out a Help to Buy mortgage with a minimum of a 5% deposit and your total deposit is topped up by the government to make a total of 25%. The percentage that they give you is the ‘Equity Loan’. This amount will eventually need paying back as it is a loan and not a gift. The loan will be interest-free for the first five years, then, if it hasn’t been paid off, the remainder of the loan will begin gaining interest starting at 1.75%.
Please note that this scheme is only available for new-build purchases and for first time buyers only. Therefore, if you’re a first time buyer in Leeds, this scheme could be perfect for you and help improve your chances of securing a property with just a 5% deposit!
The Shared Ownership scheme is very different. Shared Ownership lets you take a mortgage out on a percentage share of a property (usually between 25%-75%) and then pay the rest back via rent.
Since you are only taking out a mortgage on a smaller percentage of the property, your total deposit amount should be lower. Also, it’s worth knowing that you can increase the share of the property that you own further down the line if you want to. This can be a great stepping stone to get you onto the property ladder.
The scheme is a little complex in some cases. So, we’d recommend that you speak to a mortgage advisor in Leeds like us before diving headfirst into the scheme.
A Lifetime independent savings account should be introduced when you’re thinking of moving or buying your first home in Leeds.
This is because it’s a savings account where your money grows year on year interest-free. You can put as much money in it as you’d like each month, as long as it doesn’t exceed a total of more than £4,000 over the year. This is the maximum that you can save each year.
Each year, the government will top up what you’ve saved by 25%. So, if you save up to the maximum you will get an extra £1,000 for free. The savings from the account can be used for one of two things: buying your first home or saving for later in life.
If you set up a Lifetime ISA at the very start of saving for a deposit, you may only require a small deposit as the lifetime ISA can cover some of it for you!
If you’re currently living in a council house and planning to make an offer on the property, you may only be required to put down a small deposit, or in some cases not one at all.
This is because some lenders offer a right to buy discount through the government since you’ve already been living in the property.
This government-led scheme allows you to get a mortgage with just a 5% deposit. Therefore, if you go down this route, there shouldn’t be many reasons why you’ll be declined.
Of course, getting a mortgage is not guaranteed in any way shape or form. You’ll still be required to pass credit checks, affordability assessments etc.
There are other ways besides using government schemes to get a mortgage with a smaller deposit.
An agreement in principle (AIP) or also known as a decision in principle (DIP), can boost your chances of getting a mortgage with a smaller deposit.
An AIP shows that a lender is willing to lend to you given that you can provide sufficient documentation to prove that you’ll be able to afford a mortgage. If you’re making an offer on a property, you may be putting yourself in front of someone who’s also put in an offer who doesn’t have an AIP in place.
In this situation, it’s not really about the deposit. The indication to the seller will be that they’ll be able to continue through the process quicker by choosing you. Either way, they’re selling their home, choosing you will just speed up their process!
An obvious alternative would be to carry on saving up. Even pushing back your home buying journey for a further 6 months could boost up the total amount of your mortgage deposit.
Your small deposit could become much bigger if you knuckle down and save for just a little longer, in fact, it could get you over the edge that you need.
If there aren’t that many houses on the market that are appealing to you, there’s even more of a reason to wait for a little longer.
Remember that the 5%-mark changes depending on the property. If you want to move into a larger home, you may need to save up more anyway.
This is a very specialist situation and often, lenders will not allow it. As a mortgage broker in Leeds, we’ve seen it happen before, but it’s always on rare occasions.
Taking out a loan to cover your deposit can sometimes affect your ability to get accepted and this is because you are essentially borrowing 100% of the mortgage.
This results in having to account for multiple repayments. Lenders will question whether you’ll be able to afford it or not. They can’t risk lending to you if that loan is going to affect your ability to keep up to date with your mortgage payments.
Again, this is a specialist topic, and we would advise that you speak to a mortgage advisor in Leeds and get in touch with us first. Taking out any sort of loan during the months leading up to your mortgage application could potentially be a bad idea.
We firmly believe that there are many positives to taking on the services of an expert mortgage broker in Leeds, more than there would be to going direct. That’s just our opinion though, of course we’d say that!
In reality, there are positives to going elsewhere, so it definitely is worth exploring your mortgage options. Thankfully for us, the majority of people will opt to speak with a mortgage broker in Leeds. That being said, we will take a look at the pros and cons of both routes.
The first tick in the column of Team Mortgage Broker is that whilst most high street banks can be approached directly, not all mortgage lenders can be.
This means that to get the best deal across all lenders, you’ll benefit from speaking with a mortgage broker in Leeds, though a mortgage lender may still have some deals you cannot get going to a mortgage broker.
An experienced mortgage broker in Leeds will typically require a fee, whereas this likely won’t be the case when going direct. That being said, we can help to recommend other services that you’ll need for much cheaper than they might be with a lender.
Previous arguments could be made saying that “the bank manager knows my finances inside out,” but this was a nullified argument once credit scoring was introduced.
If you know what you are doing and what you are looking for, going direct can be a quick and easy process. On the other hand, if you do not know what you are doing, you could harm your chances of ever obtaining a mortgage, as you won’t match all lenders criteria.
A trusted mortgage broker in Leeds will be able to review the different lenders mortgage criteria and will be able to match you up with the most suitable mortgage deal. We always aim to get this recommendation right first time, which more often than not, we do.
In days gone by, mortgage advisors from high street banks would approve you for a mortgage, whether they were adequately qualified or not. You would not benefit from correct mortgage advice or consumer protection.
As 2014 arrived, this type of practice was banned by the government. Only experienced mortgage advisors could go about providing mortgage advice to customers, making recommendations for products.
The downside to having to now having to only speak with specific individuals at a bank, meant you could be waiting months, just to speak with someone. That’s not good if you’re keen to get it done quickly!
Because of this, usage of a mortgage broker in Leeds rose, becoming a much more popular option. As a company ourselves, we offer various time slots throughout the week, allowing you to pick a time that is convenient to you, and not months in advance!
Quite often, if you’re lucky when booking your free initial mortgage appointment, you’ll be able to speak with someone the same day.
Nowadays, the hardest part of the mortgage process is matching up against the right mortgage lenders criteria. It’s also important to remember that deals with the lowest rates often have higher arrangement fees.
At the end of the day, a deal may be really good, but you’ll need to pass affordability checks and be eligible for that deal in the first place. With the help of a mortgage broker in Leeds, you’ll be able to find deals that are suitable for you.
Thanks in part to the regulations that followed after the credit crunch back in 2008, mortgage applications perhaps are not as straightforward as they used to be.
This isn’t necessarily a bad thing, however, as it makes for fairer lending and less chance of anyone falling into arrears, which both customers and mortgage lenders alike would much rather do without.
That being said, there are still a handful of situations that could cause some issues for applicants, of which a mortgage broker in Leeds may be able to help with.
Over our time as an expert mortgage broker in Leeds, we have seen mortgage lenders demonstrating their competitive prowess, trying to offer better interest rates than their fellow mortgage lenders.
Once again because of the changes to regulations, the other difference between these lenders, is their mortgage lending criteria and whether or not the customer can match up with it.
Examples of how these may differ, is that some mortgage lenders may have more products for self employed applicants than others, whereas others may not but will be more lenient to something like bad credit mortgages.
Whatever your situation may be, it is unique to you. When you get in touch with a mortgage broker in Leeds and discuss your case, we may have encountered something similar before and will use that knowledge to help.
As a part of our service, we aim to go above and beyond for every customer who gets in touch with us. Customers rely on our help, so even if it seems relatively straightforward as far as cases go, we will still give it our absolute all.
During your process, one of our mortgage advisors in Leeds will be able to discuss what your budget is for making an offer on a property and recommend additional services such as trusted solicitors and the right property survey to undertake.
They can also run through any potential insurance options with you, helping prepare you and your family for the future, in the event of anything unfortunate occuring that could hinder your families financial state.
A further aspect of our service that is worth shouting about as a mortgage broker in Leeds, is how responsive we are to our customers. Oftentimes going direct can leave you unsure of what is going on and not always being able to make contact.
Our trusted mortgage advisors in Leeds will always keep you in the loop, with availability from early until late, every day of the week, responding as soon as they possibly can, no matter what you need them for.
Additionally, an overlooked factor as to why people may prefer the services of a mortgage broker in Leeds, is that nowadays people just seem to be so busy. It’s often easier to use a professional service, to take the stress off your shoulders.
This is especially beneficial for professional applicants who are dealing with customers of their own, perhaps not having the time to run through their process themselves.
If you would like to go direct, that is great! Generally though, whether a customer is a First-Time Buyer in Leeds, Self-Employed in Leeds, or looking to Remortgage in Leeds, they prefer to enlist the services of an expert mortgage broker in Leeds.
Book your free mortgage appointment today with a fast & friendly mortgage broker in Leeds and we will see how we can help you along your mortgage journey.
During the mortgage process, you will come across a “mortgage illustration”, but what is it? Although it can sound complicated, a mortgage illustration is simply a document that outlines every detail of your mortgage product.
As a mortgage broker in Leeds, we will be the ones who provide you with a mortgage illustration. The process works like so:
Your mortgage advisor in Leeds will run through all of this with you… So, especially first time buyers in Leeds, don’t panic!
For a quick, simple explanation of “what is a mortgage illustration”, watch the video below. For more videos just like this, head to MoneymanTV on YouTube!
Your mortgage illustration highlights the main details of the product, the costs of taking out the product, your monthly repayments, legal fees and sometimes valuation fees.
The main details of your product include who you are taking out the product with, the length of your fixed term and the interest rate.
Costs of taking out a product
With most types of mortgages, you will be charged a fee for taking out the product, however, depending on the product, you may not be charged a fee. This will be outlined in your mortgage illustration.
Your monthly repayments are how much you will have to pay each month for your mortgage. These will be calculated by the total mortgage amount, interest rate and fixed-term.
Legal fees include the services of a solicitor. Your mortgage broker in Leeds will talk you through this and the other costs involved before handing you over to the solicitors.
You will see details of property surveys and valuations fees inside of your mortgage illustration. These costs can change depending on the type of survey you choose to take out.
No, you do not. At this stage of the process, you have only been recommended a product, therefore, you are under no obligation to continue with it. In some rare cases, you may even want your mortgage advisor in Leeds to find you another deal.
If you choose to part with us and the deal, you will have to search elsewhere for another product.
Though we would like to, we would never guarantee someone a mortgage. A mortgage illustration is only an outline of your mortgage recommendation, therefore, you have not submitted your application yet and have not been approved by the lender.
Prior to receiving your mortgage illustration, you will have received an agreement in principle to show that a lender is willing to lend to you. This is not the same as a mortgage illustration.
This is also not a guarantee, they are agreeing in principle that you can provide sufficient evidence of your income and affordability. After your illustration, we will prepare your mortgage application with you if you want to continue.
As a mortgage broker in Leeds, it is our job to help you through the whole mortgage process. We will be on hand to answer any questions that you may have about the mortgage process.
Your free mortgage appointment includes a mortgage illustration. Book your free mortgage appointment online and we can get your process started today.
The Financial Conduct Authority does not regulate some types of buy to let or commercial mortgages.
Depending on the situation that you are in and the mortgage lender you have a mortgage with, yes, you can convert your existing mortgage into a buy to let.
After being a homeowner for a while, you may want to switch things up. Perhaps you will be living with a friend or partner, who owns a home? Perhaps you want to live somewhere new? Occasionally, homeowners may wish to go back to renting.
In either of these circumstances, you may wish to hold onto your current home, turning it from a residential property, into a buy to let property, going from just a homeowner, to a landlord as well.
This is something that can be quite beneficial for many, as it will supplement your income over time.
If you wish to make a change to your mortgage and make it a buy to let in Leeds, the first thing you will need to do is speak to your mortgage lender to make sure this is something you can do. If they confirm you can, you’ll need to get in touch with a mortgage broker in Leeds.
The reason is because in order to switch, you will need to remortgage onto a new type of mortgage. Whether you stick with the same mortgage lender or find a new one, one of our expert mortgage advisors in Leeds will help find the best deal for you.
It will be a remortgage, because you are modifying the terms of your deal. You signed up to a residential, not a buy to let, so this will be updated. It isn’t as straightforward as asking the lender to switch, as you need to pass their mortgage criteria for a buy to let in Leeds.
First and foremost, before anything else you’ll typically need to have remained within your property as a homeowner for at least six months. Once you’re past the six month point, there are all kinds of factors that a mortgage lender will consider.
Your affordability is something that entirely depends on the rental potential of the home you’re converting. Most lenders will want to stress-test your property to make sure that you are able to cover at least 125% of what you’ll be paying per month.
Whilst technically you won’t need a deposit to take out this new mortgage, you will need to have a sufficient amount of equity sitting within your property in order to be able to remortgage it onto a buy to let in Leeds.
Lenders will want to see that you have at least 20-25% equity in your property, though this can be more with poor credit history. Chances are you’ll need even more than this, in order to also cover the deposit for a new home to live in.
If your credit history is pretty poor, your chances of obtaining a mortgage will be slimmer. That being said, it’s not always impossible for you to do so!
There are plenty of mortgage choices out there for bad credit mortgages, which extends to people wanting to do a buy to let in Leeds. If any new credit problems have cropped up since your initial mortgage, obtaining a buy to let mortgage may be more challenging.
The important things to remember are building up your credit score again and the amount of time that has passed since the initial issues cropped up. To give an example, the more time that has passed since being given a CCJ, the better chance you’ll have of getting a mortgage.
The type of property you are letting out can have an impact on your mortgage process. You’ll find it more limited if you are looking to take out a mortgage on a HMO or Holiday Let, as they are specialist areas that require the assistance of a mortgage broker in Leeds.
Some landlords won’t offer mortgage products to first time landlords. If you have been a landlord in the past, you will have access to a wider variety of mortgage deals with more mortgage lenders.
On the other hand, there are multiple mortgage lenders that we have on panel, with some of these offering products to first time buy to let landlords. To learn more, speak with a mortgage advisor in Leeds.
No, you are not allowed to live in a property that you have a buy to let mortgage on. This would is a breach of your mortgage agreement and will very likely have a large negative effect you and your home.
Alternatively to a buy to let in Leeds, you could let out your existing home as a way to buy a new property to live in. This process is called let to buy. It is popular amongst homeowners who wish to supplement their income and also live somewhere else.
This works the same as a typical buy to let, though you’ll be applying for two mortgages this time (one to convert your property into a buy to let and one to buy a new home. As such, your lender will need to confirm you can afford both of these.
Whether you’re a new landlord planning ahead or an existing landlord ready to expand upon your property portfolio, you may be wondering how many times you can have a buy to let in Leeds.
Whilst there isn’t necessarily a strict limit on how many buy to let mortgages you can have, it will depend on the risk to the lender as to whether or not you’ll be able to take out further buy to let mortgages. Speak to a qualified buy to let mortgage advisor in Leeds to learn more.
Some homeowners may have the option of accessing something that is called a consent to let. This is typically something used more in the short term, with your home only being a temporary buy to let.
Depending on lender, you will usually have a limit that is between 30-90 days per calendar year. You need to check with your lender beforehand, to make sure you are able to do this.
To gain a further understanding of the options available for making your home a buy to let in Leeds, book your free mortgage appointment and speak to a mortgage advisor in Leeds.
A dedicated member of our team here at Leedsmoneyman will be able to review your circumstances and inform you of the deals you may be able to access, as well as helping with any additional buy to let mortgage advice in Leeds you require.
So, you have had your offer accepted on a property but, is the house actually worth what you said you would pay for it?
If you are wanting to know what the actual value is and the property’s overall condition, a property survey can help with this.
This survey will mention any significant repairs or alterations needed, like repairing the roof.
There are a plethora of survey options available, however, the most common types include mortgage valuations, homebuyer’s report and a full structural survey. You might find the survey is free of charge, however, this depends on the lender. For more information on the different types of surveys, check out the content below.
The surveys differ depending on the outcomes on the report. For example, you may receive a report that is more detailed and thorough, whereas you might get one that only mentions certain aspects. The more in-depth a survey is, the more it will cost.
Navigating your way through the process can be daunting and you might want to choose the cheaper option. As much as this will save you money at the time, it may not be worth it in the future and become far more expensive.
In the event that you find something on your survey about your property that you weren’t notified about, by law, you can approach the seller and negotiate a fairer price.
The most basic property survey is Mortgage Valuations. You usually have this carried out on when you are working out how much a property is worth. This is helpful to the lender as they need to be sure that the property price matches the amount you are set to borrow from them.
For instance, if you put an offer above the property’s actual value, the seller will likely accept your offer but, your lender won’t. Unless you have the funds to make up the difference, the lender will pull out of the deal which is known as down valuation.
The one drawback with this survey is that it doesn’t highlight any apparent repairs and damages. On the other hand, it can let you know of any obvious structural defects that will require a further look at. If you are looking for a more in-depth property investigation, you will need to pay extra to upgrade your survey. This could be worth it in the long run.
A Homebuyers Report looks at safety. It checks out how safe the property is and if it is suitable to live in. Surveyors will want to know of any mould problems, damp issues or something that does not pass the current building laws.
The report will be carried out by a property expert. They will examine the property from to bottom to see if it’s safe for you to move into.
You might have made an offer on an older building. As a Mortgage Broker in Leeds, we would strongly advise that you undergo a Full Structural Survey.
With the whole property being surveyed, this does make this survey type the most expensive one. This property survey will provide a lot more detail compared to the three primary surveys with showing what condition the property is in and the changes that will need to made if the property price goes through.
A Full Structural Survey can take as long as a whole day, depending on the property size.
It can take a surveyor as long as a whole day to carry out a Full Structural Survey, however, this does depend on the property size.
When it comes to new build properties, surveys work a bit differently. There is a property survey designed for new builds called a Snagging Survey. This will inform you of any minor and significant issues. The issues could range from a crack in the ceiling to a missing hinge on the door.
The new build might be built and ready for you to move into which, in this case, means you would want to look at getting a snagging survey carried out prior to moving in. By doing this, you are able to negotiate the price if there is anything wrong with the property.
If you are wondering which survey is the best one for you, please don’t hesitate to get in contact with our team. We have extensive experience helping many First Time Buyers in Leeds and people looking to Move Home in Leeds find the most appropriate property surveys.
You can receive the services of a surveyor to carry out a Homebuyers report or building survey through the Royal Institution of Chartered Surveyors.
Over the years as a Mortgage Broker in Leeds, we have found an increase in people paying a lot more attention to their credit rating. As a result of this, we have found that many people who get in touch with our team have already researched online to find a copy of their credit report.
There are many different credit reference agencies to choose from, but the two most popular companies you may know are Experian and Equifax.
Our team highly recommend that new customers who contact us look to use Check My File. By doing this, you’ll find a report that offers customers a collation of information from various sources (the aforementioned two included) in an easy understandable colour-coded report.
You sign up for a 30-day free trial with Check My File and after the 30 days, you will be charged £14.99 a month. This can be cancelled at any time before the end of those 30 days.
When dealing with customers, our Mortgage Advisors in Leeds are often asked if they will be doing a credit search on them. This is usually a customer who knows that too many searches can negatively impact their credit score.
Our mortgage advisors will always get permission for the customer to run a credit check, whereas the lender will run their own checks. There are two types of credit searches, one is hard searches and the other is soft searches. Below we will explain the difference between the two as well as how they can help.
A hard credit search is a type of credit check that provides an in-depth look at your credit report. All financial institutions that carry out one of these will need to seek your permission before undertaking this check.
One of the benefits of a ‘hard’ search would be how detailed it goes. Having this carried out and passing it can increase the chance of you being successful with a mortgage, however, this is not always guaranteed).
After passing this, the only thing that could go wrong with your mortgage process is if you cannot provide the required documentation to back up the information that you have presented to the lender, or it turns out you have provided incorrect information altogether.
Another advantage to having a hard credit search carried out will leave a ‘footprint’ on your credit file meaning that anyone looking at your report can see that this search has already been done on your file.
Having this mark on your file is not a bad thing at all, however, if your credit file shows that there have been multiple searches carried out in a short period of time. By having these displayed, it could give the impression to the mortgage lender that you are applying for lots of credit at the same time which wouldn’t work in your favour.
An important point you need to know about the ‘footprint’ is that it will not leave a note to confirm whether or not your application was successful. Therefore, having several searches highlighted on your report can result in the lenders’ systems assuming wrongly that you are being declined regularly. Think about it; why would you apply for credit with a second lender, unless you’d been declined by the first?
If you have the occasional hard footprint on your record it’s not going to be a massive issue which is why you don’t need to worry about it too much. It’s best to be careful not to have too many of these taken out.
The other type is a soft credit search. Opposite to a hard credit search, this would be a more straightforward approach by looking at your financial situation. These are normally done through price comparison websites, so you can find out what options may be on offer for you.
Another way it can be used is to verify your identity. Some mortgage lenders will carry out soft searches of their own. It can be common to find these days that even more lenders are changing to this type of credit search.
Even though the one drawback of a soft search is that you will get less information out of it in comparison to a hard search, if you managed to obtain an Agreement in Principle from a lender, this still can be a positive indicator that your application will be accepted.
The one factor that makes soft searches appealing to customers is that you are able to see soft searches that others have carried out on you (many are often surprised by how many have been carried out on them), but these searches will not be visible to other financial institutions like a bank or lender.
Because of this, you will be able to apply for an Agreement in Principle ahead of a mortgage in Leeds, without causing any damage to your credit score, whether you are successful or not.
In the case where you are a First Time Buyer in Leeds looking at making any offers on a property, our expert Mortgage Advisors in Leeds would highly recommend you get a mortgage Agreement in Principle before getting in touch with an estate agent.
It can be ideal to give yourself the best possible chance of securing your dream property at the lowest possible price. Therefore if you present yourselves as having your finances organised, it’s likely you will give yourself the upper hand in your mortgage situation.
Having an Agreement in Principle to hand can also help stop an estate agent from trying to cross-sell any of their own mortgage products to you.
Property chains can be a common hurdle for homebuyers going through the process. The moving home journey can be interrupted if you are in a property chain as some factors can stall the process.
Having said that, you may encounter a range of problems and hurdles when obtaining a mortgage. It could be that your application is stuck in the pipeline or there might be an issue with your offer not being accepted, it’s possible that you can encounter issues when going through the journey of Moving Home in Leeds.
A property chain involves a group of sellers that are connected so will be relying on each other for each purchase to go through. In the case where you are a First Time Buyer in Leeds, you will always be at the beginning of the chain, unlike a seller who would be placed at the end.
For example, a person is ready to move into a property they’re buying. From this, the buyer needs to wait for the seller to move out first. Then if that seller is in the same situation, they will also be waiting for them to move out to move in.
This all comes down to the seller’s situation which you will be unaware of.
Sometimes, you may not even know that you are in a property chain, and the full process could run smoothly. This is the ideal situation for everyone because it makes the moving home process go smoothly and straightforward.
On the flip side, if things don’t run as well, this can involve waiting. This is why our team recommend you start your process with at least six months of preparation. Within this time, you can look for that perfect home and provide some time if you get stuck in a property chain.
The full chain could suffer if you are linked with a property chain and one purchase does not go through. Therefore, if this chain breaks, you will either have to wait or look for another property.
In the case where the property chain breaks at your purchase, there can be a way to stop it from damaging the overall chain if you act fast.
An option for sellers could be to contact the people planning to buy your property by speaking to your estate agent. By doing this, you can inform them of the situation sooner rather than later.
It’s best to prepare for a break in the property chain regardless if you are on a seller’s level or your level.
You could buy a property that isn’t in a chain or a small chain, sell your property, rent temporarily, buy a new-build property etc.
There could be a number of reasons why a property chain can break. This could happen at your’s, your seller’s or even your buyer’s level:
Above is just a small number of examples, there are many more reasons. As mentioned, the length of the property chain you are in will depend on how these situations impact your ability to move home.
Avoiding a property chain can be difficult, especially if you are buying at a busy time of year or when the market is hot.
Furthermore, you could research and speak to your estate agent to get an idea of your position in the midst of the application stage. It is best that you organise your finances as early in the process as possible. Being prepared for things that could go wrong, the better.
In the case where you avoid a property chain (also known as ‘chain-free), the moving process will more likely be straightforward. This is obviously factoring in that you provide evidence that you can afford a mortgage and deposit the property.
Our moving home Mortgage Advisors in Leeds can help you through the process if you are looking to buy and sell your property.
If you are looking for help with the moving home process, book yourself in for a free mortgage appointment.
When it comes to applying for a mortgage, it’s important to make sure you are aware of the current state of your credit score. The higher that it is, the higher the likelihood of having an offer accepted. Your credit score will be affected by a variety of aspects.
As an example of this, the fewer addresses that you have present on your record, the better it will be. Even though that is the case, we are finding that applicants are going about this in the wrong way.
We tend to find that a lot of applicants who are moving out of their parents home, into rental accommodation, are leaving things like banks statements, electoral roll information and credit cards all registered at their previous address.
Before a mortgage lender is able to perform a credit check on you, you need to have the utmost confidence that you are going to pass without issue, that nothing will hold you back.
You should check all of your accounts, such as credit cards and current accounts in your name, as well as the electoral roll, to make sure they are linked to your new address.
As touched upon, lots of first time buyers in Leeds will be currently renting and won’t have updated all of their addresses to where they are currently living. This should ideally be done as soon as you can after you have moved out.
The reason why this is such an important factor to mortgage lenders, is that your address confirms your identity. It also shows that your circumstances don’t change too often and you have a stable life. Too many different addresses can flag up as a concern to the lender.
Updating your address across all mediums, allows for consistency and will make the lender more confident in accepting you for a mortgage. It also has an impact on your credit score, as your score will look better if everything is aligned.
You’ll need to make sure you know exactly when you moved in your rented apartment and when you moved out. If you get these dates wrong, it can often look like you’re living in two places at once.
So long as everything in your name is up-to-date and accurate, you’ll have a huge advantage towards being accepted for a mortgage. On the other hand, if your address is outdated and incorrect, you are less likely to be accepted for a mortgage
Changing your address is something that is pretty easy and benefits you greatly in the long run. If you require any Specialist Mortgage Advice in Leeds from a team of mortgage experts, book your free mortgage appointment using our online booking feature, and we’ll see how we can help.
With the right help and guidance, your mortgage process should go smoothly. In some cases, it’s not always guaranteed to go so well. Speaking to customers some applicants had face various hurdles along there mortgage journey. As a Mortgage Broker in Leeds, below we listed some of the most frequent mortgage hurdles that we came across in the past.
You shouldn’t be declined a mortgage because of childcare costs. But depending on the amount, having child care costs can sometimes be a large outgoing and having these costs, may reduce the mortgage amount you can borrow.
Most lender class childcare costs as a loan or a credit commitment. Which means even if you didn’t have these costs, having children in general means you will have large outgoings going out each month.
Because of this, you are likely to borrow less than a mortgage applicant with the same income, that doesn’t have any kids of their own. There are some mortgage lenders out there who will take child care costs into account, which can increase this amount, though this isn’t always guaranteed.
Nobody ever buys a home with a partner, only to result in divorce or separation. It’s does happen, and leaves the family finances in need of a drastic reorganisation. Some of the most frequently asked questions we receive include:
All of the above can be done, though this will depend on a case by case basis. You will need to seek out expert mortgage advice and speak to a experienced Mortgage Advisor in Leeds. In some cases, if you rece any child maintenance, this can sometimes be used as assessable income for a future mortgage.
It all depends on the mortgage lender, some lenders will require you to have been in work continuously for a certain period of time, whereas there are others with different criteria.
You will also find that it is entirely possible to get a mortgage. If you are soon going to start a new career. A signed contract and written job offer communication will often be a good way of helping you achieve this.
There could potentially be some hurdles if you have had any gaps in employment, as some lenders will flag that up. In other cases any probationary periods should be okay.
Anti-Money Laundering precautions are very strict. All Lenders will require evidence of your deposit, and you will need to prove the origins of your savings. You may also be asked for this by an estate agent or solicitors, depending on who you go with.
Cash deposits are not ideal at all. Any red flags in your bank statement will be heavily questioned and it is entirely possible your mortgage application will be rejected.
You may be able to utilise a gifted deposit, with some of or all of the deposit being gifted by a family member or friend. That person needs to confirm in writing that it is not intended to be paid back as a loan, becasue as the name suggests it’s a gift.
If you’re facing hardships as a First Time Buyer in Leeds, stressed because of Moving Home in Leeds, book your free mortgage appointment to speak with one of our expert Mortgage Advisors in Leeds.
Even if we haven’t listed a situation your in, it’s possible we’ve helped another customer in a similar situation. Let our trusted expert Mortgage Advisor in Leeds help you with your mortgage application.
If you are wanting to know the maximum amount you can borrow for a mortgage, you can book yourself a free mortgage appointment to speak with one of our expert Mortgage Advisors in Leeds.
From our experience, the two most popular questions we find that First Time Buyers in Leeds in and Home Movers in Leeds ask us are; can I get a mortgage in my situation and if so how much can I borrow?
Here we will take a closer look at the latter of the two, which has changed a lot in the past decade, followed by what happens now during your mortgage process.
Looking back to the 90s, before credit scoring was a thing, people would manually underwrite all mortgage applications, which means that the process of approving mortgages got left to real people and not just computers.
You would book an appointment for an interview with your local building society to speak to the building society manager. From there, you would present and discuss your case.
Back then, you could probably guarantee that this would turn into a sales pitch, where they would assist you to start saving with them for a while until you can prove to them that you are creditworthy.
The manager would then grant you what a past equivalent of today’s Agreement in Principle was. Following this, the customer would then be given some advice on the amount they could borrow.
While sounding like a highly personalised process with a simple and common-sense approach, there were many wrong decisions. The manager had the discretion to interpret the lending manual in the way that they wanted to.
In other words, you could have gone to the same building society in a different location and left, having obtained an entirely different outcome than the previous branch you visited.
To prevent this and to cut any costs that weren’t necessary, lenders started using automated affordability, so when lending to customers, only provide them with a figure three or even four times their annual income.
Going forward to the early 2000s, lenders relaxed, even more, becoming arguably even too generous in how much they would be willing to lend their customers.
Some lenders would offer out self-certified mortgages, a process that meant no background checks would take place, and the customer could self-certify their income, even if the buyer falsely inflated the amount they were declaring.
The market fell apart, and these kinds of practices brought about the infamous Credit Crunch of 2008. The years that followed, between then and 2010, were incredibly challenging times.
This was especially the case if you were trying to get onto the property ladder for the first time. At this point, lenders had to change, and much stricter lending criteria had to be put in place.
Through lots of dedication and perseverance, the market recovered. In 2014 the regulator launched the Mortgage Market Review (MMR), a brand new and completely revised set of guidelines for lenders to follow to prevent the Credit Crunch from happening again.
No longer were the old-style income multipliers available, which took little account of household spending habits.
It may come as quite a surprise, but before 2014, whether their credit histories were good or bad, two applicants earning the same income could more or less be able to borrow the same as each other.
This was also not factoring in how much they were regularly spending. All-new affordability models came from that point, taking a much more forensic view of how exactly those applying for a mortgage handle their finances.
As well as this new cap, typically, most mortgage lenders will no longer go past 4.75 times your annual income, and they prefer to have an in-depth analysis of your spending habits.
Your habits may entirely depend on your situation, such as having high childcare costs, a potentially large amount of credit commitments, and in some cases, any student loans to pay off. In cases like these, a mortgage lender will most probably offer you less than, say, your work colleague who has far fewer outgoings.
Nowadays, there are significant differences between lenders in how much or little they will lend to some customers. From time to time, some lenders have been known to penalise low-earners.
It could just be that they are not looking for that type of applicant. Some take pension contributions as a fixed outgoing, so may lend, for example, a public sector worker with a significant pension deduction, less than a private-sector worker.
Each of these different lenders has its unique lending criteria, and each customer has its own situation. Suppose you need to maximise your borrowing capacity to have a chance at buying your dream home.
You will highly benefit from expert Mortgage Advice in Leeds. Our team will search the market on your behalf to try and match you to various lenders criteria.
If you want to know exactly how much you should borrow for a mortgage and are ready to go, please get in touch and book yourself in for a free mortgage appointment to speak with one of our Mortgage Advisors in Leeds today. We will talk to you and work out your finances with you to ensure you are comfortable with the maximum amount you can borrow and what your monthly payments will be.