Buying a House and Moving before Christmas

If you’d like to wake up on Christmas morning in a new home, you need to act fast. December will be here before you know it, and you’ll want to be in your new property at least a couple of weeks before the 25th, so you can decorate the Christmas tree and put a wreath on your front door. Aside from the Christmas decorations, you’ll want time to turn your house into a home too.

Buying A House Fast

If you’ve decided your current home isn’t big enough, you fancy upgrading, moving to a new area or you’re buying your first home, you should dedicate some time to deciding what you want and don’t want from your new home. If you’re buying with someone else, compromise might be required. Having a clear search area, property type and budget, can stop you from wasting time looking at properties that aren’t suitable.

Make sure that you’re registered with local estate agents and that they know you want to move fast. If you’re also selling a property to enable your purchase, you’ll need to find a buyer who is equally as keen to get moving.

Get a mortgage offer quickly

Don’t wait until you’ve found the perfect property before booking an appointment with a mortgage broker. They’ll be able to offer your invaluable advice, answer any questions you have about the house buying and mortgage process, and provide you with a mortgage in principle.

A mortgage broker or adviser will look in detail at your finances and circumstances, asking a number of affordability questions, as it’s vital that you’ll be able to keep up with your mortgage payments, month in, month out, or you could end up losing your home.

They will then search the market for you to find the best mortgage deals, saving you valuable time. Many mortgage comparison sites don’t search all available lenders, and therefore won’t necessarily identify all mortgage products that are suitable for your needs. A broker has access to everyone and will spend the time stress testing each option and exploring alternatives. They’ll then go through the best deals with you, explaining how they each work, e.g. some may be fixed deals for 2 years, 3 years, or 5 deals, which are often ideal if you want to know exactly how much you’ll have to pay each month. If this isn’t something that matters to you, you may decide that a tracker mortgage is better.

Once you find a deal you like, your broker can put in an application, and you’ll receive a mortgage in principle letter. This means that you should be able to get a mortgage for a given amount; so can act as proof that you’re a serious buyer when you place an offer on a property.

From offer, to exchange, to completion

Placing an offer on a property is exciting, but until it’s accepted and the property is taken off the market you won’t be able to begin the conveyancing process. The conveyancing process is what happens when a property legally changes hands. Generally it takes around 6 weeks from instructing solicitors to exchange.

Your mortgage adviser will most likely be able to recommend several local solicitors, for a speedy purchase and / or it is best to get them lined up early so you can instruct as soon as your offer is accepted. They will also act on behalf of the mortgage lender (who is essentially buying the house for you, or at least part of it) and will need details of the mortgage offer to proceed.

The mortgage lender will send a surveyor to assess the property you want to buy, to confirm that the property is worth as much as you say it is. If it’s down valued, you might not be able to get the full amount you were hoping for. If this happens, your mortgage broker will explain the different options available to you, one of which will be to apply again this time with a different lender. Having an independent mortgage adviser to help you through this process, can take the pressure off and make it a lot less stressful than trying to do it yourself.

Once your mortgage has been approved, your broker will probably also recommend buildings insurance products – you need to have this in place from the date of exchange – but you do have the option to shop elsewhere for buildings cover if you choose. Your solicitor will arrange a date for exchange of contracts, and a completion date, which is the day you’ll get the keys to your new home. Once you know these dates, you’ll be able to begin packing up your belongings and book your removal company.

Need a mortgage broker?

Moving home can be stressful especially in the run up to Christmas, but if you have the right professionals in your corner, you should have as smooth a move as possible. If you need mortgage advice, or a general chat about your options for buying a property, please get in touch.

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. 

10 Questions to ask your Mortgage Adviser

Whether you’re buying your first property or your fifth, it’s a good idea to chat with a mortgage advisor about your situation and the best type of mortgage products for you.

Of course, you can search for a mortgage deal yourself, perhaps by visiting your own bank and or searching online. However this method may not get you the best mortgage deals as your bank will only recommend their own products, and online comparison sites don’t include every deal available.

An independent mortgage broker or mortgage advisor has access to both the high street banks and building societies, and less well-known mortgage lenders. They also have specialist expertise in this area and therefore can often save you money by getting the best deal for your individual circumstances.

If you’re thinking about engaging a mortgage broker to look after that aspect of your property purchase, here are 10 questions to ask them.

Mortgage Broker / Advisor FAQ

1.How do you charge for your services?

Mortgage brokers and advisors typically charge a fee, work on commission or a combination of both. Some mortgage advisors will charge a fee for arranging your first mortgage and then will arrange subsequent mortgages for free. Any money you do have to pay will be nominal when you consider how much you’ll save long term.

2. Are you able to cover the whole mortgage market?

Some mortgage advisors will, others only work with a select number of lenders. To get a good deal, you’re best choosing a mortgage advisor who covers all the major lenders as well as the smaller ones. If you’re still tempted to go it alone it’s worth noting that some lenders, such as The Mortgage Works, will only work with mortgage advisors and you won’t be able to get a deal direct.

3. Are you authorised by the FCA?

You want your chosen mortgage advisor to be suitably qualified and authorised by the Financial Conduct Authority. This is your protection from poor advice or mis-selling. To see if they are, you can search the financial services register >

4. What are the different types of mortgages available to me?

If you’ve never had a mortgage before, or have opted for the same type of mortgage time and time again, you may want your mortgage advisor to explain what the pros and cons of fixed rate, standard variable rate, tracker and the other types of mortgages are. They can advise which might be best for your particular circumstances but you’ll have to make the final decision.

5. Can you give advice about other things?

Mortgage brokers are financial advisors, so they are qualified to advise on related financial matters. Insurance is a key area that’s closely related to mortgages so if you need advice on life insurance, mortgage life insurance (find out the difference between these here), income protection and other insurance products, it’s worth speaking to your mortgage broker about these too.

6. How much of a deposit will I need?

The bigger your deposit, the better the deals your mortgage advisor will be able to find you. You need to know roughly how much you can put down as a deposit before your first meeting together. There’s little point telling your mortgage advisor that you can put down 40% of the purchase price only to backtrack later and admit you can only put down 20%.

7. How much can I/we borrow?

Your mortgage advisor will ask you a lot of questions and run through affordability checks before they tell you how much you could potentially borrow. It’s important that your credit score is good and it’s always advisable that you hold off from applying for any form of credit in the months leading up to your first meeting/applying for a mortgage.

If you aren’t able to borrow as much as you would like, you could choose to go away and save a bigger deposit or adjust your property search criteria accordingly. Remember, you can’t use a credit card or loan to cover your deposit, lenders simple won’t allow this, so savings and windfalls are the only way.

8. How much is the mortgage arrangement fee?

Lenders charge mortgage arrangement fees which can be up to £2000 but on average are £1000. You can choose to pay it straight away or add it onto your mortgage, the choice is yours. If you can afford to pay it straight away, you won’t end up paying interest on it. There are other costs too, such as mortgage valuation fees, surveys, and sometimes mortgage account fees and booking fees.

9. How much will I have to pay each month?

Depending on the type of mortgage you choose you might know exactly how much is going to come out each month (with a fixed mortgage) or it might vary depending on the interest rate and other factors. If you’re on a fixed deal for a set number of years, you need to be aware that the amount you pay is likely to go up once the deal ends, which is why many people decide to remortgage and find another deal when this happens.

10. How long should it take to arrange my mortgage?

This can vary considerably as it depends on how quickly you can get the documents needed, how quickly your mortgage broker does what’s required of them (super fast in my case!), and how long it takes your lender to approve you and the property you intend to buy.

If you’re wanting to put an offer on a house, your mortgage broker can give you a document stating that you’ve got an offer in principle from a lender, which shows estate agents that you’re a serious buyer.

Ready to take the next step and start looking for a mortgage? Contact me so you can quiz me on the above questions! Call 01252 759233 or email info@thesurreymortgagebroker.co.uk

5 Questions to ask when Remortgaging

Remortgaging can fulfil a variety of needs. From releasing equity to pay for the things we love, to reducing the time it takes to pay our debt in full, many of us will consider a remortgage at some point in our home owning lives.

Ultra-low interest rates have driven a surge in remortgage applications, with 120 per cent more applications last winter than there were in 2014. The reports of massive savings and reduced mortgage terms is enough to send us all running to the lenders for quotes, but it’s important to think things through when it comes to a mortgage.

A mortgage is unlike any other form of lending; it’s the one biggest purchase most of us make in our lifetime, and is something we’ve got to live with for many years of our lives. Added to this is the ongoing concern that if we get it wrong, we could end up homeless. With all this in mind, it’s clear that a remortgage should be undertaken with the utmost care and consideration.

Here are the questions you should be asking yourself, and your lender, before entering into any kind or remortgage deal:

1. Is this the right time to remortgage?

Depending on your situation, it could be a great time to remortgage, or a really bad one. If you’re in a good value mortgage deal already or have big penalties to pay if you leave, chances are it’s not the right time to switch. However, if you’re at the end of your current deal, are on a fixed rate which is no longer good value, or want to release some of the equity from the house, it could be a good time to consider a remortgage.

1. How much is this going to cost?

Unfortunately, nothing in life comes cheap, and the same goes for your remortgage deal. Aside from any exit fees you might have with your current lender (be sure to check these out thoroughly before going any further), there are several other costs associated with remortgaging. For example, you’ll need to pay an arrangement fee to join a new lender, will need survey and legal fees and there may be other administrative costs to cover depending on how your lender is set up.

1. Will I be able to get a good / better deal?

New mortgage rules came in during 2014 that could mean you’ll struggle to obtain a good value mortgage in the current economic climate. Lenders must closely analyse your income and expenditure, and will undertake much more rigorous tests to ensure you can afford the new mortgage. If your circumstances have changed since you last got a mortgage, don’t presume you’ll get the same or similar deal as you did last time.

1. What am I trying to achieve?

There are numerous reasons people consider a remortgage, so be certain of your financial goals so you can effectively ensure they are being met. For example:

• You want to pay off other debts: If you want to remortgage to release equity and pay off credit deals elsewhere, make sure your mortgage is the right vehicle for doing this. Once you’ve taken into account the fees and charges, a personal loan might be better.

• Your deal is ending or poor value: This is a great reason to remortgage, but you need to be confident you’re getting a better deal from your lender. Do your sums, and don’t sign until you’re confident it’s worth it.

• Your home has appreciated: If your home has gone up in value significantly, you could be in a new loan-to-value band, meaning you could be eligible for much lower rates of interest.

Other reasons include changing from an interest-only to a repayment mortgage, or to reduce the overall term on the agreement now you’re able to pay more. Whatever reason you’re remortgaging for, have your overarching financial goal in mind and assess any offer to ensure it’s ticking your box.

1. Is my credit file healthy?

It almost goes without saying that a good credit record is fairly essential to switching to a new mortgage. The more black marks or outstanding debts on your file, the fewer deals will be open to your application. Get a copy of your report before you start applying, and check everything on there is fair and accurate to avoid nasty surprises later on.

More on credit reports and how to improve your score here.

As a homeowner, it is your right and privilege to seek out a better deal for your mortgage. Many borrowers report saving thousands of pounds over the lifetime of their mortgage as a result of switching away from their original deal, so it could pay dividends to compare the market from time to time.

However, as with any loan, do make sure you can afford the repayments and that the overall deal makes good financial sense before you sign on the dotted line.

For more advice on remortgaging and help finding a great deal, contact me on 01252 759233 or email info@thesurreymortgagebroker.co.uk

Can I get a Mortgage when I'm Retired?

The number of people who still have outstanding mortgage debt when they hit retirement is on the rise. In fact, according to the Office for National Statistics (ONS), there are currently around 350,000 over 65’s who still owe money on their house. With around 40,000 of these mortgage deals coming to an end each year, retirees have no choice but to renegotiate a new deal on their borrowing.

Getting a mortgage is certainly possible in retirement, but it can be more difficult. Whether you want to move house or remortgage your existing home, it’s important you understand the challenges you face so you can adequately prepare for your financial future.

The Challenges Facing Retired Borrowers

There are several key challenges facing older borrowers if they are looking to remortgage or change mortgage providers in their retirement. Some of these are:

• Mortgage repayment periods are getting shorter

Big banks and lenders are getting tougher about when mortgages are expected to be repaid. For instance, Skipton recently cut their maximum repayment age from 80 to 75, and West Bromwich Building Society reduced theirs from 80 to 70. Many of the big players such as Halifax, Lloyds and Santander have a maximum age of 75, or 65 for interest only loans.

• Lower income may restrict the offers available

Once you are retired, your income will inevitably drop. Depending on how much this leaves you with, as well as how much you owe on your house, you could find your options more limited than they would have been if you had secured a deal while you were still working.

• Higher risk may increase the interest rate

Because it is viewed as riskier for a lender to take on an older borrower, you could end up paying a lot more for your mortgage than a younger person would. Interest rates may be higher and repayment terms shorter, so affordability can be a big challenge.

If you are still working at the moment but feel that the amount you are paying right now on your mortgage may not mean you’ve paid it off by the time you retire, speak to your lender sooner rather than later. While you’re still employed, you have many more options and better value for money deals available to you than you will when you eventually stop work.

How To Find A Good Mortgage Deal

If you are facing the reality of getting a mortgage either in retirement or one that won’t be paid off until after you retire, finding a great deal in good time should be top of your list of priorities. You can start by looking at online price comparison sites, however bear in mind that not all mortgage products will be represented on these. Try to use at least two or three different sites to get a good overview of the market.

Once you have an idea of what you could be paying and who is likely to take you on, consult a mortgage broker to uncover any other deals on the table. Some specialist deals for older borrowers are only available through brokers, so it’s well worth taking the time to go through things with these an independent advisor.

Make sure you pick a mortgage that is right for your circumstances, and one that you can afford the repayments on. Equity release may look appealing, as it could help you fund your retirement and pay off your mortgage sooner, but make sure you understand fully what this scheme involves before signing up to anything.

If you are struggling to find a mortgage, give me a call and we can explore your circumstances in more detail. Call 01252 759 233 or email info@thesurreymortgagebroker.co.uk

6 Reasons a Mortgage Application is Declined and What to do

So you’re buying a house. You’ve found your dream property. It’s in the right location, it’s the right type of house and it’s within your budget… happy days. But.

Despite your bank being very confident you would be approved for a mortgage, you’ve been declined. Despite keeping your credit record squeaky clean for years and years, some pen pusher has said ‘no’. Despite working hard to save for a deposit and spending months looking for the right property, your dream home is slipping out of your hands.

Sometimes life doesn’t seem fair, but you don’t have to take this lying down. Here’s a list of some of the most common reasons a mortgage is turned down, and what you can do about it:

1. There’s a problem with your credit file

If you have a poor credit history, it’s a good idea to improve your credit rating before you even start to apply for mortgages. However, sometimes you can have a perfect credit record, but a simple mistake on your file could make you look like a risky borrower. Contact the credit reference agencies (Equifax, CallCredit and Experian) and get a copy of your file to make sure everything is as you expected.

2. You’re not on the electoral roll

Lenders like to confirm that you are who you say you are, and that you live where you say you live. For this, most will check your application details against the electoral roll. This is an easy one to overlook, and if you find you are not on the register, it’s an easy one to resolve too. Simply contact your local council to be added or do it yourself at www.aboutmyvote.co.uk

3. You have debt, unsecured loans or payday loans

Borrowing is not seen as a bad thing per se. But borrowing over your means is. If you’ve taken loans, overdrafts or other credit, make sure you’ve paid back as much as you can before searching for a mortgage. Payday loans are the worst, as these are seen as emergency credit that is taken out by people who can’t cope. Any payday loan since 2011 will show up on your file, even if you paid it off on time, so avoid taking these at all costs.

4. Your deposit is too small

You can get a mortgage with as little as 5% deposit but many lenders are currently asking for more. This is especially true if you don’t score highly in other areas of a lender’s criteria, they may still be prepared to lend but will want a larger deposit. Try to boost your savings as much as possible before entering into the application process. The larger your deposit, the greater your chance of being accepted and the more preferential the rate you’re offered will be.

5. You’re retiring during the mortgage term

New mortgage affordability criteria which came in during 2014 have seen many more people being turned down for mortgages despite having good salaries and clean credit records. If you or your partner are due to retire during the mortgage term, your lender may look unfavourably on your application. With housing so expensive, some borrowers are seeking out 30 year mortgages, which could see you being turned down as young as 40 years old. If this is the case, see if you can increase your monthly payment budget and reduce the mortgage term so you are not retiring during the loan period.

6. Application errors

Nobody is perfect, not even your lender, and mistakes can sometimes happen that were simply a human error. At some point, the information from your application form was entered into a computer database, and a simple typo in this situation could see you turned down. If the refusal is really unexpected, schedule an interview with the lender to discuss your application.

7. You just don’t fit their criteria

Some lenders have a specific demographic that they like to lend to, and if you don’t fit the bill, then you could be turned down. If you think this has happened, try approaching an independent mortgage advisor for help, as they will have a better idea of which lenders are likely to accept your application.

Whatever the reason you’ve been turned down, don’t let it dishearten you. There are things you can do to make your application more attractive to another lender. Get in touch if you’re in this situation and want some impartial advice. I’m always happy to chat through your options so call me on 01252 759 233 or email richard@thesurreymortgagebroker.co.uk