Signs It's Time to Make That Next Move

Should I stay, or should I go now? 

As much as you love your home, there may come a time when you start thinking whether or not you should sell. It can be a tough decision to make whether to sell your home or stay put.  

Typically, if you are considering a move it’s often the result of something prompting you, whether it’s due to a career change, family circumstances, money, retirement or simply for a change of scenery. By taking into account a few key factors, it could help make your decision easier.

Anticipate any major changes  

 What is your current financial situation? If you are comfortable with your current mortgage payments and don’t anticipate any major changes in the near future, then selling may not be the best option. On the other hand, if you are struggling to make ends meet each month or are expecting a significant change in income, then selling may be the best way to free up some extra cash. 

 Think about what your budget is and do your homework – you want to end up with a home to suit your needs and that sits within your price range. Think about the additional costs that are involved when you move and make sure you account for all of these factors. 

 Save money in the long run  

 Moving to another location could save you money in the long run. For instance, you could be moving closer to your job, so you will reduce transport costs, or moving closer to family, who may be able to help with childcare. It all depends on your current and predicted future financial situation. 

 Is your home in an area you like? Do you value things such as being near to a town, a good school, family and friends? When thinking about your next move, these are things you should be considering.   

Motivated to move[1]  

Moving home is considered the most stressful thing you can do, according to 57% of people. 

 ‘Needing more space’ was the most frequently cited (by 42% of people) reason for moving. 

 Almost one in two movers (47%) said they experienced increased stress levels due to moving. 

 Money worries are a big deal for buyers – 40% said what they dread most about moving is not having enough money to cover unexpected expenses. 

 More than one in four (27%) of people aged 18-24 said they would not consider moving again – the highest of any age group. 

Motivation to move 

 Think of the things you currently have, or would like, and see whether they are a motivation to move, or are you content with the area you already live in? If there’s an area you’ve always dreamt of living in, hunt for properties in that area and see whether it’s possible for you. 

 Think about your lifestyle and how it would be affected by selling your home? If you love your neighbourhood and have developed strong ties to the community, then staying put may be the best option. However, if you’re feeling restless and are ready for a change of scenery, then selling your home and moving to a new neighbourhood may be the right choice. 

 Outgrown your current home 

 Does your current property give you the space you need? If it does, then appreciate it, use it wisely and think about what you could potentially risk if you do move. However, if you have outgrown your current home, then moving could be the answer.  

 If space is an issue but you really don’t want to move, you could consider other options. You could try getting rid of any unnecessary room accessories or, if appropriate, think about adding a loft conversion or extension. 

 Consider your future plans 

 Finally, consider your future plans and how they would be affected by selling your home. If you’re planning on starting a family or retiring soon, then staying in your current home may make the most sense. However, if you're considering moving to a new city or downsizing once your children have grown up, then selling your home may be the best way to make that happen. 

 Whichever decision you make, be sure to weigh all of your options carefully before making a final decision. Selling your home is a big decision and should not be taken lightly. However, if you take the time to consider all of the factors involved, you can make the best decision for your situation. 

Trying to figure out whether to sell or stay put?  

 Whether you’re moving on or staying put, when it comes to finding competitive rates and a mortgage deal that’s right for you, talk to us about your requirements – please contact The Surrey Mortgage Broker– telephone 01252 759233 – email richard@thesurreymortgagebroker.co.uk

Source date:  

[1] https://www.legalandgeneral.com/insurance/life-insurance/moving-house-stress-signs/#:~:text=We%20discovered%3A,moving%20%E2%80%93%2042%25%20of%20respondents

Boost Your Home's Value

What home improvements should you consider? 

 If you want to work your way up the property ladder to your dream home, you need to know how to boost the value of where you live now. So what renovations or extensions will add value to your property?  

 There is no one-size-fits-all answer to this question. The amount of value that a particular renovation or extension will add to your property will depend on a number of factors, including the location of your property, the current condition of your property, and the specific nature of the renovation or extension itself.  

 However, there are some general areas to consider to help boost your home’s value. 

 1. Focus on improving key future selling points 

 When carrying out renovations or extensions, it is important to focus on those areas of your property that are most likely to appeal to future prospective buyers. For example, if your property is located in an area with good schools, then investing in a home office or extra bedroom could make it more attractive to families with children. Similarly, if your property is located in a popular tourist destination, then adding features that would appeal to holidaymakers, such as a swimming pool or a self-contained annexe, could help to increase its value. 

 2. Don’t over-improve for the neighbourhood 

 Avoid carrying out renovations or extensions that would result in your property becoming significantly more valuable than those of your neighbours. This is because potential buyers are likely to be put off by the idea of living in a property that is much more expensive than those around it, and this could lead to your property taking longer to sell, or selling for less than you had hoped. 

 3. Get expert professional advice 

 When planning any major renovations or extensions, it is always a good idea to seek professional advice from an experienced architect or surveyor. They will be able to advise you on the best way to maximise the value of your property, taking into account its specific location and condition. 

 4. Use high-quality materials 

 Using high-quality materials for your renovation or extension project will not only make your property more attractive to prospective buyers, but it will also add to its long-term value. This is because properties built with inferior materials are more likely to experience problems such as dampness and structural defects, which can reduce their value and make them difficult to sell. 

 5. Add extra living space 

 Adding extra living space to your property is a proven way to add value, as it gives prospective buyers more options in terms of how they could use the property. For example, an extra bedroom could be used as a nursery, guest room or home office, while an extension to the kitchen or living room could create additional dining or relaxing space. 

 6. Improve energy efficiency 

 Making your property more energy efficient is another great way to add value, as it will make it more attractive to environmentally-conscious buyers and could help to reduce running costs. There are a number of ways to improve the energy efficiency of your property, including installing double-glazed windows, insulating walls and ceilings, and fitting low-energy lighting. 

 7. Create more outdoor space 

 If your property doesn’t have much outdoor space, then creating additional garden or patio area can be an effective way to add value. This is because buyers are often attracted to properties that offer the potential for outdoor living, and extra outside space can also be used to create additional parking or storage space. 

 8. Make cosmetic improvements 

 Making cosmetic improvements to your property, such as redecorating, refitting the kitchen or bathroom, or landscaping the garden, can also help to add value and make your property more attractive to prospective buyers and easier to sell. 

 9. Obtain planning permission before starting work 

 If you are planning to carry out any major renovations or extensions, you’ll need to obtain planning permission from your local authority before starting work. 

 10. Hire a professional contractor 

 When carrying out any major renovations or extensions, it is always best to hire a professional contractor to carry out the work. This is because they will have the experience and expertise necessary to ensure that the work is carried out to a high standard and that your property is not damaged during the process. 

Ready to apply for a remortgage? 

People generally remortgage when their current mortgage deal ends to save money, but you may want to remortgage to fund improving your home, which could add thousands to its value. To find out more about your options – speak to The Surrey Mortgage Broker – telephone 01252 759233 – email richard@thesurreymortgagebroker.co.uk

What Should I do if I'm Struggling to Pay My Mortgage?

Rising interest rates are bringing mortgage worries to the fore 

As the cost-of-living crisis continues to bite, household finances are being stretched with many struggling to meet the increased costs of essentials and having little or no savings to fall back on. This can lead to some families having problems making monthly mortgage repayments.   

 It is essential for households that find themselves in this situation to have access to the right advice and information. Rising interest rates are bringing mortgage worries to the fore for many homeowners, but the key thing to remember is you are not alone. 

 If you find yourself in this unfortunate position and can’t pay your mortgage, or think you might struggle to make your payments in the coming months, despite what some people believe, telling your lender you are having problems paying your mortgage does not mean they will start to repossess your home.  

 Lenders are very sensitive to the rising number of people facing a squeezed household budget, and if they know there is a problem they will do everything possible to help. The earlier your lender knows that you are facing financial difficulties, the greater the chance that you will be able to find a solution.  

 Options to help you through a difficult time 

 If you’re finding you can no longer afford your mortgage repayments, there are options that could help you through this difficult time. We’ve provided answers to some typical questions you may have. 

 Q: What should I do if I think I might miss a mortgage payment? 

 A: If you’re worried about missing a mortgage payment, the first thing you should do is contact your lender as soon as possible. They will try to work with you if you are experiencing financial difficulties and offer you help and support. Remember, you’re likely to have more options if you contact your lender before you’ve missed a payment. 

 Q: Will I lose my home? 

 A: Repossession is always a last resort. Your lender doesn’t want to evict you and will only take this step if there really is no other option – in fact, there are rules in place that mean lenders must attempt every other option available to them before they take legal action. 

 Instead, they will work with you to try to find a way to make your mortgage repayments affordable. 

 Q: What are my options if I can’t pay my mortgage? 

 A: There are three main options if you’re struggling to pay your mortgage and the best option for you will depend on your individual circumstances. 

 1: Extend the length of your mortgage term 

 If you’re experiencing financial difficulties, you may be able to extend the length of your mortgage term. Doing so will lower your monthly payments and give you more time to repay your mortgage. You should speak to your lender about this option as soon as possible. 

 Extending your mortgage term will increase the total amount of interest you pay over the life of your loan, so you should only consider this option if you’re certain you can’t afford your current monthly payments.  

 2: Change to an interest-only mortgage 

 Changing to an interest-only mortgage can be another way to reduce your monthly payments and give you some breathing room financially. However, there are some things you should keep in mind if you’re considering this option.  

 While an interest-only mortgage will lower your monthly payments, it will also mean that you’ll owe more money when the loan term is up. You’ll need to have a plan in place for how you intend to pay off the remaining balance. 

 Switching to an interest-only mortgage may impact your ability to refinance or sell your home in the future. If interest rates rise or property values fall, you could end up owing more than your home is worth. 

 Before making the switch to an interest-only mortgage, bear in mind that this is a big decision that shouldn’t be taken lightly. But if you’re confident that it’s the right move for you, an interest-only mortgage may give you some much-needed financial relief in the short term. 

 3: Request a payment holiday 

 If you’re experiencing financial difficulty, lenders will look to see if they are able to offer you a payment holiday, typically up to three months. This will hopefully give you some breathing space to get your finances back on track. 

 If you’re considering taking a mortgage payment holiday, speak to your lender first. They’ll be able to advise you on the best way to proceed, and will also be able to tell you if there are any fees or charges associated with taking a payment holiday. 

 It’s also worth bearing in mind that taking a mortgage payment holiday will extend the term of your mortgage, and so you’ll ultimately end up paying more interest over the life of the loan. However, if you’re in a difficult financial situation, a mortgage payment holiday may be the best option for you. 

 Q: Will it impact my credit score? 

 A: Taking out a mortgage payment holiday may impact your credit score. But it will depend on a number of factors, including the lender you are with and how they report missed payments to the credit agencies.  

 However, in general, taking a payment holiday is not likely to have a significant impact on your credit score as long as you make up the missed payments as soon as possible. If you do not make up the missed payments, or if you miss multiple payments, then your credit score could be negatively affected. 

 This may make it harder to borrow money over the short term. But there are steps you can take to improve your credit score once you get your finances back on track.  

It’s good to talk 

 If you are struggling financially you should not bury your head in the sand, you should contact your lender as soon as possible to discuss the options available to you. For further assistance, speak to The Surrey Mortgage Broker – telephone 01252 759233 – email richard@thesurreymortgagebroker.co.uk

Wealth Distribution - Bank of Mum and Dad

More older Britons helping younger generations become first-time buyers 

 There is a growing tendency among older Britons to use the wealth held in their property to help younger generations become first time buyers, new research suggests[1].  

 Homeowners, particularly those who are mortgage-free, are planning to use investments, as well as their property, to help other family members move onto the property ladder.  

 First-time buyers 

 The research findings show that the average age people pay their mortgage off is 51. After this, property and other wealth tends to start being spread through the generations. Of the respondents, 14% say they have already helped their children to become first-time buyers.  

 A further 19% say they will ‘definitely or probably’ do this. In 2016, more respondents (19%) said they had already helped their children to become first-time buyers, yet fewer (13%) were ‘definitely or probably intending to’ compared to now[2]. 

 Shifted upwards  

 The research also highlights an increase in the number of people ready to help other family members, not just their own children. In 2022, 5% say they have already helped their grandchildren become first-time buyers, with a further 20% saying they are definitely or probably going to. 

 This proportion has shifted upwards in the last six years. In 2016, 3% had already helped their grandchildren to get onto the property ladder and 14% intended to. The same pattern emerges when it comes to helping members of the wider family to buy a home. In 2022, 3% say they have already helped with this, and a further 9% intend to, compared with 2% and 3% respectively in 2016. 

 Property ladder  

 It’s no secret that many younger people tend to encounter difficulties when seeking to enter the property market for the first time. The degree to which existing homeowners are now prepared to use their own wealth to help their other family members onto the property ladder has increased notably over the last six years. 

 The amount of money older relatives are giving to younger generations has also increased, with the typical total amount given now standing at £31,398.63, 25% higher than in 2016. Increasingly, older homeowners are a source of funding for their children and their grandchildren, and are using a greater variety of means to help younger family members out. 

 Noticeable shift  

 There is also a noticeable shift towards using property wealth over other sources of income to provide help to other family members hoping to buy a home. In the research, the use of financial help sourced through property wealth has more than doubled compared with six years ago, with 40% using property assets in a number of ways, led by downsizing and equity release. 

 In 2016, most financial help was sourced through using savings and investments to provide money for a deposit (71%), or to buy a property outright (10%). A further 3% cashed in pensions or used pension savings to enable this. Property wealth was used to help other family members in 17% of cases, mostly by releasing capital through downsizing or equity release. 

 Property wealth  

 Clearly more and more people are willing to use their property wealth in a variety of ways, and this is starting to become the norm for those wanting access to cash to help other family members. Six years ago, fewer than one in five people used wealth held in their property to assist other family members and this has now grown to 40%. 

 It is becoming increasingly accepted that wealth held in property should be considered part of someone’s total assets and can be used for a variety of purposes, including to help younger family members buy a home like their parents and grandparents did.  

Are you ready to buy your first home? 

When it comes to choosing the right first-time mortgage, we understand that everyone’s circumstances are different. To discuss your mortgage options, please contact The Surrey Mortgage Broker – telephone 01252 759 233 – email richard@thesurreymortgagebroker.co.uk

Source Data 

 [1]  Aviva research conducted for Aviva byCensuswide April 2022. 1,507 general consumers aged 45+. 

 [2] Aviva Real Retirement Report conducted for Aviva by ICM Unlimited April 2016. 1,506 general consumers aged 45+

Getting a Mortgage when You Are Self Employed

It’s proving your financial stability that can take the extra time and effort 

 The mortgage market has come a long way in recent years and self-employed borrowers now have more choices available to them. However, getting a self-employed mortgage can still be tricky, as lenders often require proof of income and business finances. 

 There’s actually no such thing as a ‘self-employed mortgage’ – mortgage products are the same whether you are employed or self-employed, but lenders consider self-employed applicants to be higher risk and consequently subject them to more scrutiny than employed mortgage applicants. 

 Approval success 

 As with any mortgage applicant, the higher your deposit, the more borrowing options are likely to be available to you – and often at more competitive rates. When applying for a mortgage on a self-employed income, being able to put a bigger deposit down can be even more advantageous in increasing your odds of approval success. 

 As of July 2022, there were around 4.29 million self-employed workers in the United Kingdom. During this provided time-period, self-employment in the UK has grown steadily, from a low of just 3.2 million in December 2000 to a peak of over five million at the start of 2020[1]. 

 Financial stability  

It isn’t necessarily harder to obtain a mortgage if you are self-employed, but it tends to require more paperwork and screening to have your application approved. Depending on the lender, the lending criteria may differ slightly, although most now offer the same deals to eligible applicants regardless of whether they are employed or self-employed. Overall it’s the additional work in proving your financial stability that can take the extra time and effort. 

 Ultimately, all lending applications are underwritten to ensure that the applicant can afford to repay the debt. When you are self-employed, your income tends to fluctuate, and no one specific person can satisfactorily confirm your salary details. Consequently, lenders need to collate more information to determine that you are eligible for the loan you require.  

Did you know? 

 When applying for a mortgage, you are classed as self-employed if you 

• are a sole trader 

• are a partner of a business on a self-employed basis 

• earn your primary income from owning a 20% or more stake in a limited company 

• are a partner in a limited liability partnership 

One of the biggest challenges 

 Most lenders need to verify an applicant’s self-employed financials over the previous two or three years. This can be one of the biggest challenges facing self-employed people, with some having no choice but to wait it out until they have sufficient evidence to back their applications up. 

 To prove your self-employed income you will typically need to provide two or more years of accounts that clearly detail your income, as well as your business’s expenses and overheads. These accounts will preferably have been prepared by a chartered accountant. In addition to these accounts, lenders may request a copy of your Tax Calculation (used to be called SA302) form, and an HM Revenue & Customs (HMRC) tax year overview for the past two or more years. The Tax Calculation shows what you earned and the tax due and the Tax Year Overview confirms how much tax you have paid. The Tax due on the calculation needs to match the tax paid on the Overview. 

 Current earnings  

 The SA302 form is issued to individuals who derive income outside of the PAYE system to assist them in proving their income and any tax deductions. A lender will use these documents to verify your previous and current earnings, but they will also want to see some proof of future earning prospects. Depending on your business setup, lenders may request copies of current and upcoming contracts, expected commissions, etc. 

 When preparing your proof of self-employed earnings, you need to consider how lenders will perceive them. For example, if you have experienced some falls in income it’s vital that you can satisfactorily explain the reason for these fluctuations to minimise the lender’s doubt in your financial stability. Include any relevant proof to back up your explanations.  

 Taxable income 

 It’s quite possible that in the past, you and your accountant have used whatever legal methods available to reduce your taxable income. However, now that you want to apply for a loan, you need your income to be the largest figure possible. 

 If you are a director of a limited company, you may choose to retain some profits within the business, rather than withdraw them as dividends or salary. Some lenders will include a business’s retained profits when considering your application. However, not all do, so it would be prudent to find one that does before you begin your application process. 

 Financial circumstances 

 As a sole trader, the amount you will be eligible to borrow will be calculated by taking an average of your verified profits as stated on your self-assessment tax returns. If you are a limited company director, the calculation may be based on either salary plus your share of net profit, or your salary plus any dividends.  

 But, again, each lender’s process can differ, with some using the latest year’s figures and others using a two or three-year average. That is why it is vital to take the time to find the lender whose process best suits your financial circumstances. 

 Mortgage application 

 Lenders typically take an applicant’s general spending habits into consideration, too, and they will likely request copies of your bank statements. Most lenders will scrutinise all spending, including household bills, childcare and leisure outgoings to ensure that you will be able to afford the repayments. 

 As with any mortgage application, lenders will also need to conduct credit checks to ensure that you are a reliable borrower. Therefore, it’s prudent to get a copy of your credit score before lodging an application to see if there is anything that needs addressing first.   

Looking for a mortgage lender that best suits your circumstances? 

If you are self-employed we can assist in matching you with a lender that best suits your circumstances. We’ll advise on what you are likely to be eligible for and assist you with the application preparation. To find out more and discuss your options, contact The Surrey Mortgage Broker – telephone 01252 759233 – email richard@thesurreymortgagebroker.co.uk

Source data: 

[1] https://www.statista.com/statistics/318234/united-kingdom-self-employed/#:~:text=As%20of%20July%202022%2C%20there,at%20the%20start%20of%202020