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. 

How Surrey University is Driving House Prices in Guildford

Guildford in Surrey is the most expensive university town in the country*. With an average house price of £522,815 according to property site Rightmove; this town (actually a city) has seen prices increase by 26% in the last three years.

Therefore if you’re in the Buy-to-Let market, or perhaps you’re interested in buying somewhere for your child to live in while studying, property in Guildford could be a good investment.

While investing in property in a rising market is a great opportunity if you have the cash, there’s another reason to consider buying in university towns like Guildford. The rental income is not to be sniffed at; the average rental value of a house in Guildford is currently £548 per week, or if you want to rent out a room or two, double rooms in shared houses go for between £450 to £750 per month.

If you’re seriously considering investing in a property for your children to live in with the aim of seeing some capital growth, also consider the rental value of any additional rooms that can be let to other students.

Buy-To-Let Mortgages

Unless you have money in the bank, you’ll probably be looking at taking out a Buy-To-Let mortgage to fund your investment. These are different to ‘normal’ mortgages, as they don’t reflect your salary but instead the potential rental income from the property: although you may find it difficult to get a Buy-To-Let mortgage if you earn less than £25,000.

In most cases you will need a larger deposit than if you were buying your primary residence (usually 25% or more of the property’s value), and interest rates are generally higher too. However, most Buy-To-Let mortgages are interest only, so this could be a good product for you particularly if you plan to sell the property in a relatively short period of time – for example after your child has graduated.

When crunching the numbers and weighing up whether or not becoming a landlord is for you, also consider tax. To start with there is Stamp Duty, which now incurs a surcharge of 3% for people buying a second property. Therefore if you were to buy a property in Guildford paying the current average house price of £522,815, stamp duty will be £31,825. Then you must pay income tax on any rent, and finally when you sell you will have to pay Capital Gains Tax if your profits on the property exceed your personal tax threshold.

If you would like to explore the figures with a specific property value in mind, rental income and Buy-To-Let mortgage, get in touch and we can do the sums.

Without a doubt, the Buy-Let-Market has suffered some blows in recent years, especially with changes to Stamp Duty. However, if university towns like Guildford continue to sustain the growth in property prices that they’ve seen in recent years*, an investment could still be a good opportunity.

When weighing up whether a property is a good investment, particularly for the student market, the following factors will help:

University ranking: The University of Surrey in Guildford ranks 35th in the UK and 247th globally, making it a popular choice for many students. It’s also one of the UK’s leading research universities.

Student population: UofS has over 14,000 students many of whom need accommodation.

Availability of accommodation: UofS has 5,000 rooms in halls of residence, which are rented to first year students. 2nd and 3rd students need to find private accommodation off campus.

Rental values: as mentioned earlier, the average rent of a house in Guildford is currently £548 per week. Naturally student accommodation is typically at the budget end of the market, although not exclusively, local estate agents will be able to give a more accurate rental value for specific properties.

Proximity to university: when searching for property to buy for the student market, identify areas that provide easy access to the campus. The UofS is very centrally located close to Guildford city centre and therefore there are plenty of residential areas surrounding it.

Cost of property: whether a property is a good investment or not will depend on the market value, rental value, the cost of borrowing and ultimately on the market itself. While the housing market has slowed, Guildford remains a very popular town for private buyers and landlords looking for investment opportunities.

If you would like to discuss any of the above in more detail or need help finding a Buy-To-Let mortgage, give me a call and we can explore your circumstances in more detail. Call 01252 759 233 or email info@thesurreymortgagebroker.co.uk

* http://www.telegraph.co.uk/property/house-prices/university-towns-house-prices-have-risen-average-22pc-three/

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. 

Budget 2017 - Good news for the First Time Buyer in Surrey?

Sorry folks that I’m a bit late, unfortunately man-flu set me back a week or so, it’s that time of year!

It is also the time of year that we have a budget, formerly the Autumn statement and this time around it was largely unremarkable except for one headline grabbing titbit.

The abolishment of stamp duty for first time buyerswhere the purchase price is £300,000 or less. When buying above £300,000 to £500,000 the normal rules apply but they still don’t have to pay on the first £300,000. Above £500k all bets are off and you are back to the same rules as the rest of us.

With the average house price in Surrey currently standing at £343,289, stamp duty is now £2,164 for a property at that price for first time buyers, saving around £5,000 on the ‘average’ Surrey home.

Personally I think it is a good idea, anything that helps first time buyers has got to be a good thing. However I have spotted a negative comment, The Guardian’s Andrew Sparrow said:

“True, the Office for Budget Responsibility has exposed his main headline-grabbing measure, the abolition of stamp duty for first-time buyers for homes worth up to £300,000, as a £600m gimmick that will just push up prices. But, even though it would be nice to live in a world where bad policy always amounts to bad politics, sadly we don’t, and it is hard to see Hammond suffering any penalty for his home owner subsidy (apart from when he realises he has not got £600m to spend on something else). The Tory tribe (MPs and newspapers) will never complain about a tax cut, and it is not a measure that will be voted down in the Commons. (For example, we can’t even be sure Labour will vote against it.)”

Reading between the lines the Guardian rarely agree with anything the Tories do, so I’m going to take the comment with a pinch of salt.

Although I take the point that potentially house prices could be pushed up I feel that the amount of first time buyers that this will encourage is likely to have a minimal effect on the market as a whole. What it does do is give a helping hand to those who have made the effort to save up a deposit and it is a saving they can put towards their new home.

Policing this could well be difficult. Presumably the responsibility for checking the land registry records will be down to the conveyancing solicitor? The government notes on the plan do not give any guidance on this.

Another point to note is that for joint purchases, both parties need to be first time buyers.

What should have more of an effect on the housing market is the promise to build 300,000 homes a year with support for the house building industry and investment in infrastructure. Five new “Garden Towns” to be built as part of this initiative. Sounds great, not sure where the money is coming from or where they are going to build stuff but I’m sure the boffins in Whitehall have got a cunning plan! Locally the plan to develop an 1800 home settlement at Dunsfold has been approved so I guess a few of these up and down the country will be part of the plan. I do recall this being in the pipeline for quite a few years though, and as far as I am aware no bricks have been laid yet.

So my conclusion, some headline grabbing policies but only time will tell if they will work and, in the case of the housebuilding, rather a long time.

If you’re a first time buyer looking to buy a property in Surrey or elsewhere and need mortgage advice, please get in touch. Call us on 01252 759233 or email info@thesurreymortgagebroker.co.uk.

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.

The Happiest Place in Surrey - Why Move to Woking?

The ONS (Office of National Statistics) annual happiness and wellbeing survey has found that Woking is the happiest place in Surrey! In fact it is the eighth happiest place in the UK.

On average Woking residents rated their happiness as 8.0 out of 10, an increase from 7.4 in the previous year’s survey. The survey looked at four keys areas: Life Satisfaction, Worthwhile, Happiness and Anxiety. Across the first three categories Woking residents clocked up scores of 8.1, 8.3 and 8.0 respectively; and anxiety levels are down to 2.8 (compared to 3.0 in the previous year).

If you already live in Woking you probably know why, but for all those people who perhaps travel through Woking station as they commute to London, here’s why people in people in Woking are so happy.

7 Reasons To Move To Woking

1. Paul Weller is from Woking

I know, you may not rate this as the number 1 reason to be happy, or to move to Woking, but for some of us it’s a key selling point.

1. Property – your money goes further than in some Surrey towns

There is a wide range of housing in Woking and, relative to other popular Surrey towns, prices are fairly affordable. The average house price according to Rightmove is £498,281, detached properties average around £820,086, semi-detached £444,391, and flats £282,463.

1. Regeneration of town centre

Work started on the £460 million redevelopment of Woking town centre in September 17, which will see new retail space, a Hilton hotel, flats and a medical centre; alongside two new public plazas.

1. Easy commute to London

As someone who is already halfway though their journey into London when the train stops at Woking, I’m envious of the commute! There are direct trains into Waterloo (approximately 25 minutes), trains also stop at Clapham Junction and there are plenty of stopping services for other destinations.

1. Green spaces and countryside

Woking is surrounded by countryside including the Surrey Hills – an area of outstanding natural beauty – but it also has plenty of green spaces within it’s town borders. If you want water as well as green space, the Basingstoke Canal passes through the town, providing somewhere to walk, cycle or boat along.

1. Great pantos and culture

The New Victoria Theatre attracts West End shows and also has a great panto every year. As well as this theatre, Woking boasts other cultural venues including the Phoenix Cultural Centre, The Lightbox and the Rhoda McGaw Theatre.

1. Village life on the doorstep

If you don’t fancy living in Woking itself, there are plenty of villages a short distance away that give you the best of both worlds. Consider Knaphill, Sheerwater, West Byfleet, Pryford, and Mayford; all are large enough for your basic needs (shops, schools, doctor surgeries etc.) and are just a few miles out of Woking town centre.

You may also like to read my post on Where To Buy In Surrey If You Commute To London.

If you want to move to Woking and need a mortgage that makes you happy, give me a call!

Call 01252 759233 or email info@thesurreymortgagebroker.co.uk.

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. 

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.