First time buyer Archives - Leedsmoneyman

How to Save For a Mortgage in Leeds

First time buyers in Leeds may find the home buying process a little bit daunting. It is no surprise, you need to make sure your credit score is good enough, and that you have a reasonably large deposit saved, amongst other things. The latter is what we will talk about in this article.

Work Out How Much You Need to Save

To work out how much you need to save for a mortgage, you are going to need to work out your monthly disposable income. Once you have deducted your expenses and monthly expenses from your monthly income, you will be able to calculate and estimate how much you can allocate to your mortgage savings. This allows you to set clear and realistic goals for how much you need to save each month.

As a rule, when taking out a mortgage with a high street lender, you must provide at least 5 percent of the property cost. We tend to find most first time buyers in Leeds aim to save a minimum of 20% of the property price. The larger deposit you put down, the lower your monthly payments will be. If your credit is bad, your lender may want you to provide a larger deposit. This might be somewhere around 15% – 30% depending on your circumstances.

One of the reasons it may be better to save for a larger deposit is that you will have more access to competitive mortgage deals, some with lower interest rates. To work out the maximum amount of how much you can borrow for a mortgage, speak to a mortgage advisor in Leeds.

It is also worth saving some additional money to put towards the additional costs of buying a property. As well as your mortgage and protection advisor in Leeds will offer you insurance or cover for you and your property.

Are there any schemes available?

With a range of different government schemes available it is worth seeing if you are entitled to any of these schemes. One of these includes the Help to Buy Equity Loan Scheme, which was designed by the government to help first time buyers in Leeds onto the property ladder. As long as you provide a 5% deposit and fit the criteria, the Government will lend homebuyers up to 20% of the cost of a new build property.

There is also the Shared Ownership Scheme which provides the opportunity for those who can’t afford a mortgage or 100% of the home. Unlike the Equity Loan Help scheme, this type of scheme allows you to buy a portion of your property (usually between 10% and 75% of the value of the home) and make up the remaining share through rent. Further down the line, you do have the option to buy larger shares if you can afford to.

If you are looking for more information about these schemes, please feel free to contact us or book yourself a free mortgage appointment with one of our expert mortgage advisors. Another alternative is to browse the government’s OwnYourHome Web site.

Help From Elsewhere

gifted deposit from a family member or friend can be a significant help when buying your first home. As the name suggests, gifted deposits are given with the understanding that the money does not need to be paid back and the amount you would like to gift is entirely up to you.

Review Your Outgoings 

Flick through all the bills and subscriptions you currently have. You might find that you can find cheaper deals for your mobile phone and broadband packages. It is helpful to shop around for these. More leisurely services such as gym memberships or streaming services are best to see if you get the value of your money or if there are other cheaper alternatives out there. This frees up more money to save on a deposit.

Have you considered buying a property with a friend or partner?

Buying with a friend or partner is a suitable option for many first time buyers in Leeds to get on the property ladder and can also help when it comes to saving for a deposit. Because you buy with another person, it makes savings for a deposit faster than saving from a single income. However, if one of you defaults, the other person may be responsible for the full mortgage.

There are several types of mortgages designed for those who want to buy a property with their friend or partner, these include but not limited to:

Joint Tenants

This includes both individuals who own the entire property and have equal shares in it. If one of the owners dies, the property will automatically be passed to the remaining owner. From a lender’s point of view, you are one unit so you both must agree if you want to sell or remortgage the property.

Tenants in Common 

Both owners have a certain share of the property here. This can be a popular option for relatives or friends who buy together. Because you do not have an equal share, you can act individually and have the right to sell or give away your share.

Saving For a Deposit if You Have Bad Credit

Getting a mortgage with bad credit in Leeds may be possible, however, it is likely that you have higher interest rates that could cause you to need a larger deposit. It may be best that you start by improving your credit score. Below are some ways to improve your credit score:

Register on the Voter’s Roll

This can show lenders that you have stability, so registering on the electoral roll is helpful. Make sure all the information on the form is correct with your name spelled correctly and your current address is registered. All this can be done online.

Try to Keep Within Your Maximum Limit

Maxing your card every month can have a negative impact on your score. It’s best to use a credit card and pay off your balance in full each month.

Meet Payment Deadlines 

Paying on time and in full is a great way to show a lender that you are a responsible and reliable borrower. Older and well-managed accounts usually improve your score.

Build up a Credit History 

It can be a challenge for companies to assess you if you do not have a lot of credit or none. Some people do not have as much of a headstart and find this a problem for reasons like car finances, credit cards and bills.

Close Down Any Unused Credit Accounts

If you do have any credit cards you no longer use, you must contact your providers to close the account. This can have a temporary negative impact on your score because if you close your account or provider, the credit reference cannot decipher. This should not put you off doing this as it can be a wise thing to do as it can prevent you from falling potential victim to fraud.

Detach Yourself From Any Financial Links to Others 

One of the factors that could have a negative impact on your score is being financially linked to a family member or ex-partner. Remember that you will not be able to do this if the account is still active. To do this, you must contact the credit reference agency to make a request.

Our Expert Mortgage Advisors in Leeds

Here at Leedsmoneyman, we can provide the help you need when going through the mortgage journey. We offer all our customers a free mortgage appointment which you can book yourself in for through our ‘Get Started’ process on the website. During this appointment, you can speak to one of our knowledgeable mortgage advisors in Leeds who will provide you with the support you need toward your mortgage goals. 

Can I Buy a Home in Leeds With a Small Deposit?

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.

Different Government Schemes in Leeds

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.

Shared Ownership

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.

Lifetime ISA

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!

Right to Buy

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.

95% mortgage guarantee scheme

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.

Alternative to using government schemes

There are other ways besides using government schemes to get a mortgage with a smaller deposit.

Have an agreement in principle at the ready

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!

Keep saving!

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.

Taking out a loan to cover your deposit

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.

Why Should I Use a Mortgage Broker in Leeds?

The Benefits Of Using a Mortgage Broker in Leeds

Why use a Mortgage Broker? | MoneymanTV

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.

Mortgage Broker in Leeds vs Going Direct in Leeds

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.

Mortgage Advice Past vs Present

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.

Modern Day Challenges

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.

Newer Regulations

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.

  • You have a poor credit history.
  • You are receiving a self-employed income.
  • There is a mixed deposit source, i.e. Gifted & Savings.
  • Opting for Let to Buy. Renting your current home to buy another.
  • Being a contractor or working under a zero-hours contract.
  • You perhaps can’t quite meet affordability requirements.

Lending Criteria

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.

The Benefit of a Mortgage Broker in Leeds

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.

Still, need more convincing?

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.

Book Your Free Mortgage Appointment

If you would like to go direct, that is great! Generally though, whether a customer is a First-Time Buyer in LeedsSelf-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.

What is a Mortgage Illustration?

Mortgage Illustration Leeds

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:

  1. After booking and attending your free mortgage appointment in Leeds, your advisor will search through 1000s of mortgage deals in order to try and find the best one for you.
  2. Once they find a deal that suits your personal and financial situation, they will recommend this product to you.
  3. During this recommendation, you will be presented with a mortgage illustration which will showcase everything about the product.
  4. If you are happy with the product and want to continue with us, we can start to prepare your mortgage application.


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!

What is included in a mortgage illustration?

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.

Main details
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.

Monthly repayments
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
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.

Valuation fees
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.

Do I have to agree to your mortgage recommendation?

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.

Does going through a mortgage illustration guarantee me a mortgage?

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.

Is a mortgage illustration the same as an agreement in principle?

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.

Speak to a Mortgage Broker in Leeds

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.

What is a Property Survey?

Property Survey Mortgage Advice in Leeds

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.

Different types of property survey

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.

Mortgage Valuation

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.

Homebuyer’s Report

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.

Full Structural Survey

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.

Do I need to get a survey on a new build?

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.

Mortgage Advice in Leeds

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.

Agreement in Principle: All About Hard & Soft Credit Searches in Leeds

Credit Score Mortgage Advice in Leeds

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.

What is a hard credit search for a mortgage?

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.

What is a soft credit search?

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.

The Importance of Updating Your Address in Leeds 

Don’t Pretend to Live Somewhere Else

After you’ve moved home, there’s always the situation of having to update your address on any account to match your new address, so that any posts, packages, and any other bits and pieces go to the right place. From your doctor’s surgery to any accounts that need an address, there’ll be plenty to work through.

We understand that missing an address can easily happen. When applying for credit, having less varied addresses on your accounts will look better on your credit score.

Because of the impact, it has on your credit score, this means it will also be beneficial for you when it comes to applying for a mortgage.

We tend to find first time buyers in Leeds, and home movers in Leeds would have a much better understanding of how credit scores work and the importance of updating their address sooner rather than later.

Whereas with other applicants have moved out of their family home and are now renting their own place. They don’t see the harm in leaving their bank statements, electoral roll information, and credit cards at their previous address. But having everything under the same address will give you an advantage during your mortgage process.

Records of Your Address 

Every time you’ve moved house, there will be a record of it somewhere on your credit report. Any bills related to your name, like car insurance, any orders from places like eBay, Amazon, or even online food shops, will show up with a record of the selected address you choose.

If it looks like you are living in two places at once or have failed to disclose information to the mortgage lender, it may go against you during your mortgage process. After all, your mortgage lender needs to know you are reliable for a mortgage. 

Keeping Your Address Up-to-Date 

When looking to buy a new home, and applying for a mortgage, the best thing you can do is make sure all addresses under any account are up to date and accurate.

This includes checking all those shopping accounts, electoral roll, credit cards, and anything you can think of that has your address, are all up to date, and have the current address for you and your current home.

When it comes to updating your address to your new location on the electoral roll, make sure that you definitely get the right dates for when you moved in and out, as getting this wrong can also give off the impression that you are living in two places at once which may mess up your chance to vote.

Keeping all addresses up to date is a much more open and honest way of applying for a mortgage with a lender. Not only will it work in your favour, but it will make your process go a little bit easier.

What else can be done to help me obtain a mortgage in Leeds? 

As well as keeping your address up to date, there are other tips that could also be beneficial to first time buyers in Leeds, these tip can include.

Managing your bank accounts, avoid any unnecessary charges and limit any gambling transactions, (if that is something you do regularly). These can have a harmful effect on your mortgage process if you do the following too often.

Remember that your bank account will be a reflection of your ability to maintain payments, generate income and handle your finances appropriately. This is a large factor in determining whether or not you are able to get a mortgage.

Gifted Deposit 

A gifted deposit is a great way to help first time buyers in Leeds get onto the property ladder. A gifted deposit is where a close family member or friend, gifts a portion or the full amount of a deposit to a homebuyer. As the name suggests, a gifted deposit is purely to be a gift and not a loan to be repaid.

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Hurdles Obtaining a Mortgage in Leeds

Specialist Mortgage Advice in Leeds

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.

Child Care Costs

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.

Mortgages following Divorce/Separation

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:

  1. How do I remove my ex’s name from my mortgage?
  2. Can I remove my name from my ex’s mortgage?
  3. Am I allowed to have a second mortgage?

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.

Starting a New Job – Can I get a 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.

Evidencing Your Deposit

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.

Speak to an Experienced Mortgage Advisor in Leeds

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.

How Much Can I Borrow for a Mortgage in Leeds?

How Much Can I Borrow For A Mortgage | MoneymanTV

Mortgage Advice in Leeds

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.

Historic rules

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.

Mid 2000s approach

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.

Nowadays approach

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.

Deeper analysis

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. 

How can a Mortgage Advisor in Leeds help?

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.

The Credit Crunch

In The Beginning of The Mortgage Market

In order to understand what occurred in the 2007/08 “Credit Crunch”, we need to see what events lead up to it. As a First Time Buyer in Leeds in the 1970s and ’80s, you were likely to approach a building society to take out a mortgage.

It can be hard to imagine, but banks have not always been involved with mortgages! To determine whether or not you qualified for a mortgage, you first need to arrange an appointment with the building society manager. The process will include customers being encouraged to take out savings accounts with the building society, and then the building society would use that money to lend to other customers. Interest rates would also be higher to borrowers than the rate they were paying to savers so that they could make a profit.

When the banks began getting involved in mortgage lending, they swift away from the older model. Instead, they would “buy” the money from markets, to accelerate the rate at which they could lend out to customers.

Mortgages in The 2000s

Towards the mid-2000s, there were a lot of new specialist lenders working in the market. Many of them originating from North America.

The method they would do things would be through selling their book of mortgage customers, allowing them to raise new money and lend again, this is known as Securitisation. These investors usually come from larger financial institutions like pensions funds and High Street Banks.

From this, the market started to make a lot of money, and these new lenders use this opportunity to relax their lending criteria. This means that a poor credit history or a self-certified mortgage wouldn’t have been a problem, so they thought.

Problems Arise For The Mortgage Market

As you can imagine these mortgages began to default. This affected major banks with them losing confidence in each other, because of the uncertainty of how exposed they were in the fast unraveling sub-prime mortgage market.

The banks’ share prices quickly dropped. A number of banks were bailed out by the UK Government (or more accurately, the taxpayer) to prevent them from going under, while many failed to carry on.

In the midst of ‘The Great Recession”, almost 80 different banks, building societies, and lenders spanning across 20 different countries filed for bankruptcy or were acquired. Because of this, lending dried up fast.

Everyone lost confidence in the UK economy as the property prices significantly dropped. The market took nearly a decade to fully recover.

Economy Recovering

This event is something that no one wants to repeat, in particular, the UK Government. Investigations were carried out to look into the cause of the “Credit Crunch”. These were accumulated and led to the creation of the “Mortgage Market Review of 2014”.

Since then, self-cert mortgages have now got banned, however, the biggest change that came was the responsibility of ensuring the mortgages were affordable, now is responsible to the lender.

They are in charge of looking in detail at customers’ incomes and outgoings with more precise lending criteria. Lenders delve deep into credit commitments, childcare, and other outgoings. This can ensure the lender that customers could consistently afford their mortgage repayments.

Obviously, this has made getting a mortgage more challenging than before. It’s required for the customer to reorganise their paperwork to prove their finances get taken seriously. Running up to the Credit Crunch, many mistakes for made. The important thing is that the industry has learned a lesson and hopefully minimised the chance of this ever happening again.

Open & Honest Mortgage Advice in Leeds

Leedsmoneyman.com & Leedsmoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.

Authorised and Regulated by the Financial Conduct Authority.
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The information contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.
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www.financial-ombudsman.org.uk

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