DIY Mortgages - Advice for those who don't want a Mortgage Adviser

This may seem like a strange post for a mortgage broker to be publishing but I’m going to give you a little DIY advice.

Due to the wonders of the world wide web, you no longer have to trawl the high street and talk to each bank and building society you can to find out who has the best mortgage deal.

There are loads of comparison sites you can access now, from the convenience of your sofa, and you’ll largely get to see the same deals that I can on my system (so why would you need me? Answer here).

How To Compare Mortgage Products

When inputting your details I would try and put as much information in as possible so the data returned is more accurate. Often on the comparison sites when the deals are shown there may be “sponsored” deals at the top. This is a bit like a Google search where the sponsored links are at the top of the page, so make sure you check the deals lower down to ensure you are getting the full picture.

Another thing to look out for are the fees. All the lowest interest rate deals on the market have lender arrangement fees; on average £999. Paying a fee isn’t necessarily always appropriate, depends on how much you are borrowing really.

Valuation fees usually are payable when you are purchasing a property, the amount is dependent on the value of the property so watch out for this as well.

Often overlooked are the cost of legal fees. This is mainly when you are seeking a remortgage. Many lenders offer “free legals” which basically means the lender will pick up the cost of a standard remortgage. In my experience the comparison sites are not very clear on this so often the deals that appear to be the cheapest might not include the costs of legal fees. This can be around £500 so it is often more cost effective to have a deal where the lender pays for this.

You need to be financially confident that you understand the jargon and you know your circumstances so you can narrow down the right deal. Ideally if you are confident then you can apply direct via a lender’s website thus bypassing the wait for their adviser to call you.

The lender will perform their own affordability calculation to establish if you can afford the mortgage so you’ll need to disclose all your financial information to them. As a rule you’ll need to give them details of what comes in (income) and what goes out; personal loans, credit cards, school/nursery fees etc. etc..

Make sure you are prepared to send in your paperwork. They may ask you to email or upload your documents to a secure portal. If this is the case it is probably best to have all your documents scanned in ready before you apply. You will need:

• Copy of your Passport or Driving Licence

• Address ID – utility bill or Mortgage Statement or Council Tax bill (not mobile phone bill)

• Latest P60

• Last 3 months payslips

• Last 3 years accounts if self employed and last 3 years SA302 Tax Calculations with corresponding Tax Year Overviews (from HMRC Website)

• Last 3 months personal bank statements

• Evidence of Deposit/Savings

Once the application is underway the lender may come back and ask for more stuff, depending on how the credit score pans out, and some lenders also ask for clarification on items they see on your bank statements.

All in all it is about being confident that you can understand all the terminology and you have the time to complete the application yourself. It is certainly getting easier these days with all the technology.

The final thing to be aware of though is that if you decide to do it all yourself then you will not be deemed as having received advice. This means there is no comeback on the lender, you can’t have been mis-sold if you sold it to yourself.

You should also bear in mind that if your mortgage application is refused it can affect your credit score. This in turn may affect your ability to secure another mortgage product. Therefore it is important to make sure that your figures add up, you have all the documentation needed, and that you’re confident that your application should be straightforward. One of the advantages of using a mortgage broker or adviser, is that they’re expertise increases the chances of being offered a Mortgage Agreement in Principle and that also helps protect your credit score.

However I wouldn’t let these factors put you off, as I said it’s all about your own confidence to carry out the legwork.

If you decide it is not for you, you know where I am!

A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME OR PROPERTY. YOUR HOME OR PROPERTY  MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT. 

Mortgage Agreements in Principle - What steps should you take beforehand?

Whether you’re a first time buyer or an old hand at the mortgage game, if you need a mortgage you’ll also need a mortgage agreement in principle to proceed with your house purchase.

Just to clarify, a mortgage Agreement In Principle (AIP) is where the lender will carry out a credit score on you and give you an indication that they would be willing to lend subject to valuation. Some lenders refer to it as ‘decision in principle’.

As they are going to carry out a credit score this is likely to leave a ‘footprint’ on your credit file and technically this can affect your credit rating. If this is the case then you want to be prepared, as you want the best chance possible to pass the credit score.

Check Your Credit Report Before Applying For A Mortgage Agreement In Principle

First of all check out your credit report and see how you will look to any potential lender. I always point people towards Noddle.co.uk as it is a free for life rather than one of those free for 28 days then we’ll charge you as you will inevitably forget to cancel. That said lenders tend to use Call Credit (Noddle), Experian and Equifax. So if you don’t think you are getting the full picture from Noddle then you might want to try the other two.

Once you have got your credit report you might need to act upon the information. For example if there has been activity on your file you don’t recognise you’ll need to find out what it is and if it is negative, get it sorted.

If you don’t have a lot of credit this can also be negative. In these circumstances I often recommend you get a credit card wherever you can (try your bank in the first instance) and use the card sensibly. Maybe fill the car up once a month with it and then pay the bill in full. After a few months you should see an improvement in your score.

Of course if you want to get an agreement sorted now regardless of your credit score then make sure you have all the correct information available regarding:

Income – last three months payslips and p60, do you get bonuses or commission, if so then have the exact figures for the last year.

Expenditure – how much do you pay for loans, Hire Purchase, Childcare etc.?

Credit Cards – is there an outstanding balance, even if you pay off each month you’ll need to know how much is outstanding today.

Deposit – You’ll need to know how much you are putting down as a deposit so the lender carrying out the AIP can put you in the right loan bracket.

Some lenders leave a credit footprint on your file so the more times you applying the worse it can be for you. However, some lenders don’t leave a footprint on your file so if you can find them you are having a shot at nothing that won’t affect your score. Most brokers will be able to point you in the right direction.

I hope these tips help and if you need any further guidance then feel free to get in touch.

Tips for Getting on the Property Ladder in Surrey

The Surrey property market is notoriously competitive and expensive, with prime property getting snapped up very fast. This makes it hard for both local Surrey residents and for anyone wanting to move to Surrey from elsewhere in the UK or overseas.

However, there are ways to increase your chances of finding the perfect home, and getting your offer accepted. Here I share my top tips.

Make Yourself Attractive To Sellers!

I don’t expect you to get a new haircut or a makeover – although if you turn up looking scruffy for a viewing it could count against you, as people do make assumptions about others based on their appearance. However there are other ways to make yourself more attractive to sellers that don’t involve your physical appearance.

Actually the first people you need to impress are the local estate agents. They’re the ones who have the ear of the Seller so if you can make a good impression with them, they’ll help you get taken seriously by sellers.

There are three key areas estate agents and sellers will be interested in:

1. Finances: can you afford the property and do you have the finances in place?

2. Circumstances: do you have a property to sell, are you constrained by any other factors?

3. Flexibility: are you prepared to compromise and be flexible? Whether that’s waiting until the Seller has found a property to buy as well, to compromising on completion dates etc.

So what will appeal to sellers and estate agents?

Cash is king so if you’re a cash buyer you stand a good chance of getting first pickings on any Surrey homes in your price range. Next up are those people who only require a small mortgage, for example investment buyers looking for a buy-to-let or property to do up and sell on.

If you do require a mortgage you probably won’t get through the door of most properties currently on the market without having a mortgage ‘agreement in principle’ (AIP). No one wants to waste time with buyers who haven’t tested whether they can get a mortgage. If you want to see if you can, contact me here to find out.

If you’re a first time buyer you’re very attractive as you won’t need to sell a property and any chain starts with you. If you do need to sell your current home, buyers who are prepared to sell and move into rental are also attractive as they have the potential to be the start of the chain too. Failing that, a buyer who already has accepted an offer on their property is the next best thing, although any chain your side could affect your desirability.

Feeling attractive?

When contacting estate agents it’s really important to make sure they can see your positives. Property experts like Kirsty Allsop even recommend outlining these qualities as bullet points on a record card and giving them to the agent.

Having demonstrated that you’re a great buyer, local estate agents should be getting you in to see lots of suitable properties shouldn’t they? Perhaps not. It’s a competitive market in Surrey and there are lots of other house hunters equally or more qualified than you looking for that elusive home. So don’t sit back and expect them to contact you.

Register on Rightmove, Onthemarket etc. to ensure that you get properties arriving in your inbox when they get added, register with individual estate agents, and be prepared to move fast when they have something to see.

Be open-minded too. If they send you details about a property that doesn’t meet your requirements, give them the benefit of the doubt. This is an opportunity to show your commitment to your search, so that hopefully when something more suitable does come up they will get you in quick. It’s also a chance to build relationships with local agents by chatting about your needs, and it will also help you get your ‘eye in’ when viewing future properties.

House hunting inevitably calls for compromises. By viewing plenty of properties you’ll get a better idea of what ‘must haves’ and ‘nice to haves’ are important to you, and where you’re prepared to compromise.

When you follow up with an estate agent after seeing somewhere you’re not interested in, it’s a good chance to highlight your requirements again and any changes. For example, if the house wasn’t right but the area was, make sure you say that you like the area and you’d be keen to see other properties in that neighbourhood. You may then be the first to know when a new property comes up in that part of Surrey.

Often compromises can turn to your advantage. Many towns and villages in Surrey are very affluent and house prices are high. But sometimes neighbouring towns and residential areas are not as pricey, and these can benefit from the ripple effect as wealth spreads to these areas too. While bargains may be hard to find in Surrey, you could still snap up a property that will see above average growth as the area becomes more desirable.

For more affordable places to buy in Surrey, read this blog.

Finally when you do find a property you want to offer on, make sure you highlight those attractive qualities again. If the Seller has more than one offer this is your chance to differentiate yourself from others. If you’re prepared to offer some flexibility on completion dates etc., now’s the time to make sure the agent conveys these positives to the Seller.

However flexibility is all very well, but money talks. The most important thing you need to do to help your offer get accepted is to make sure your finances add up. If you haven’t yet got a mortgage agreement in principle (AIP), now is the time to do it before starting your search.

To get started call me to chat through your attractiveness! If you need a mortgage to buy your Surrey home an AIP won’t cost you anything, but it’s essential if you want a chance at finding the right property.

Contact me today to get started; call 01252 759 233 or email info@thesurreymortgagebroker.co.uk