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What do Lenders Look for When Assessing my Bank Statements?

What Do Lenders Look For On My Bank Statements? | MoneymanTV

Why does the lender need my bank statements and how do I obtain them? 

The reason a lender will need to see your bank statements is to learn more about you as a person and what your spending habits are like. How you have acted lately and the presentation of this on your bank statements can be the difference in how much a lender will let you borrow, if anything at all.

This is down to risk. A lender needs to know you’re responsible with your money and can be trusted to handle finances appropriately. After all, a mortgage is likely the biggest financial commitment you will ever make in your life and is not something to be taken lightly.

Your bank statements are easily obtained either in the post from your bank, over the counter from your local bank, or as often seen these days, as a printable version from your bank’s online platform. 

What will lenders be looking for on my bank statement? 

So down to the main question now. What will they actually be looking for? What might flag up in their eyes?

Well as mentioned above, they need to know you’re being responsible with your finances. One of the things they’ll be looking at is if there are any overdrafts. Using this every so often is not necessarily a bad thing, but if you are exceeding your limit on a regular basis, this is going to put your level of trust into question.

More factors to be careful with are potential returned Direct Debits, which could show a lender you are not consistently reliable, and not disclosing loans at application stage, as it won’t look good if the lender finds outgoings on your bank statements that you failed to mention. Once again, this is a process of trust.

Other things to be aware of are missed payments for personal loans and things such as credit cards.  If you can prove you handle your money well and are able to meet monthly payment deadlines, a lender will be more likely to lend you an amount closer to that which you would like to borrow. 

Will gambling affect my chances of getting a mortgage? 

This is a question we find ourselves being asked on a regular basis. All too often do customers find themselves stuck when they have a history of gambling behind them. The occasional bit of fun is harmless, but if you are frequently betting large amounts of money, whether you’re making it back or not, a lender will not look at your situation favourably at all.

To learn more, please see our article on “Do Gambling Transactions Look Bad on My Bank Statements? 

What can I do to show the lender I am reliable? 

From our experience in working with many First-Time Buyers in Hull & Home Movers in Hull, we have found that most mortgage lenders will want at least three months bank statements from an applicant.

With that in mind, it’s time for you to forget the past and think about the future. You have at least three months to work on your finances. The first thing we’d suggest is if you are a frequenter of the local bookmakers or online gambling scene, you take a break for some time. This not only benefits your financial state but can also benefit your mental health too.

The next steps we would recommend taking are to trying to save money. For example, cooking in as opposed to eating out, treating yourself to unnecessary purchases and cancelling unneeded subscriptions are great ways of freeing up additional cash to ensure bills can be paid on time.

What this boils down to is simply being sensible and planning with plenty of time ahead of what you’re looking to do. The further away you find yourself from bouts of debt and financial uncertainty, the better your chances will be with a lender. 

Speak to a Dedicated Mortgage Advisor in Hull 

Whether you’re a First-Time Buyer, Moving Home or Self-Employed, it’s always important to keep on top of your finances. If you have a bad credit history and are unsure of what to do, you can always enquire for Specialist Mortgage Advice in Hull by Getting in Touch with us today. We’ll advise as best as we can, to further you through your mortgage journey.

Do Gambling Transactions Look Bad on My Bank Statements?

When lenders ask for your bank statements you can expect them to look for a variety of things. However, their main objective is to assess whether you are the sort of person who manages money responsibly and is likely to keep up to date with their mortgage payments. In recent months, one question is being asked by applicants quite a lot: “do gambling transactions look bad on my bank statements”.

What Do Lenders Look For On My Bank Statements? | MoneymanTV

Mortgage Questions to Consider

What has it got to do with the lender whether I gamble or not?

Whether you have an annual flutter on the grand national or regularly use internet betting sites, clearly there is nothing illegal about properly licensed gambling. Many of the bookmakers advertise on mainstream TV and radio. A lot of people see gambling simply as a mainstream hobby or pastime similar to many others. However, it shouldn’t be forgotten that even the gambling advertisers urge customers to “please gamble responsibly” and this is the key to bear in mind when applying for a mortgage. Thus, whilst it is not a lender’s job to tell you how to live your life, how to spend your money or indeed to moralise on the ethical rights and wrongs of gambling, they do have a duty (underscored by mortgage regulation) to lend responsibly.

If lenders need to prove to the regulators that they are making prudent lending decisions, it isn’t entirely unreasonable of them therefore to expect the people to whom they lend to adopt a similar approach when it comes to their personal finances. Think about it. If you were lending your own money would you lend it to the applicant who gambles or the one who doesn’t?

Is it still possible to get a mortgage if I’ve got gambling transactions on my recent bank statements?

As mentioned above, it is not illegal to gamble so just because you have the odd gambling transaction on your bank statements it doesn’t automatically mean you will be declined for a mortgage. However, the lender will consider whether these transactions are reasonable and responsible. Thus they will particularly look at the frequency of these transactions, the size of the transactions in relation to the person’s income and the impact upon the account balance.

If these transactions are infrequent small amounts that make no significant impact on a regular credit bank balance, then they are not likely to be regarded as important. However, if you bet most weeks or you are constantly overdrawn, the lender is therefore likely to see that as being irresponsible and decline your application.

Is there anything else lenders wouldn’t want to see on my bank statements?

As we’ve seen, basically lenders are looking at your bank statements to show how you manage your money and to help them establish whether this gives them either the confidence that you are financially prudent or the evidence that you are not.

Remember, lenders are financial institutions that, either directly or as part of a wider group, often sell current accounts, overdraft facilities credit cards and personal loans, so understand that these things can all play a part in prudent financial planning. The key for a mortgage applicant is how these facilities are managed. For example, having an overdraft facility and occasionally using it, is not inherently a bad thing; regularly exceeding the overdraft limit – not so good. Thus, lenders will look for excess overdraft fees or returned direct debits because these would normally show that the account is not being well conducted.

Other things to look out for include credit transactions from pay-day loan companies; “undisclosed” loan repayments (i.e. if you said on the application that you have no other loans but there appear to be regular loan payments, this could be a problem); they would look out for any obvious missed payments; finally, they might also consider how much of a typical month is spent overdrawn – i.e. if you only just go into credit on payday and for the rest of the month are overdrawn, how sustainable is this mortgage?

What can I do to improve things?

The simple answer is – be sensible and, if possible, plan ahead. Typically, a bank would ask for up to three months of your most recent bank statements. These will show your salary credits and all your regular bill payments. Thus, if you know you’re likely to want to apply for a mortgage in the not-too-distant future, try to make sure that you avoid any of the above pitfalls. Take a break from gambling for a short while and work on presenting your bank account in the best possible light.

Your mortgage broker can help you as there are some lenders who may ask for fewer bank statements than others or indeed some may not even ask for them at all. However even these lenders would reserve the right to request bank statements in certain circumstances, so your best bet (no pun intended) is to be as prudent as possible in the run-up to any mortgage application. Remember, if you do gamble, please gamble responsibly!

Get in Touch With a Mortgage Broker in Hull

If you are a First Time Buyer in Hull who doesn’t know a lot about mortgages, you should definitely get some specialist advice from a Mortgage Advisor in Hull. They will guide you through the whole mortgage process and help you with your application and get you on track so that lenders will be impressed.

Our 10 Step Mortgage & Home Buying Guide for First-Time Buyers

Below we have compiled a list of the 10 steps involved in the mortgage process for First-Time Buyers in Hull, so that you can be as prepared as possible heading into your oncoming mortgage journey. 

The 10 steps to the process of home buying and obtaining a mortgage are as follows;

First Step: Get in Touch for Your Free Mortgage Consultation 

So, you’ve decided to purchase a home and take out a mortgage as a First-Time Buyer in Hull. This is no doubt going to be one of the biggest financial decisions you ever make in your life, a thought that once realised, can be a little jarring when you have no experience in this field.

It’s at this point that a dedicated mortgage broker in Hull is able to step in and help you along the process. Our goal is to take the stress away from you and work hard to ensure you come out the other side with a mortgage and your first home, happy and with a favourable deal.

When you Get in Touch with us, we’ll book you in for a free initial mortgage consultation with an experienced mortgage advisor in Hull. Here we’ll take your details and look at what you’re planning to do, before starting your process.  

Second Step: Mortgage Affordability Assessment – How are you doing Financially? 

One of the things they’ll be able to run through in your free mortgage consultation is a Mortgage Affordability Assessment. This is where your dedicated mortgage advisor will run through your monthly income and regular expenditures (what you spend your money on), to determine whether or not you are able to afford the monthly repayments of the mortgage amount you’re looking to borrow.

The reason this is so important is that before putting you forward with a lender, we need to be confident that you can afford your repayments, as to avoid the risk of arrears and potential future repossession, something the lender will desperately try to avoid.

A Mortgage Affordability Assessment is something the lender will usually check themselves, so our initial check will help save the time of the lender, ourselves and more importantly you, from an application that may be declined due to failing on affordability. 

Third Step: Obtaining a Mortgage Agreement in Principle

The next step in your consultation will be to obtain a Mortgage Agreement in Principle. If you’ve been reading up on mortgages prior to receiving First-Time Buyer Mortgage Advice in Hull, you may have seen this under a few different, but similar names. These include ‘Decision in Principle’, ‘Mortgage in Principle’, as well as the abbreviations ‘DIP’ & ‘AIP’. There is no difference between these, other than the name.

The purpose of a Mortgage Agreement in Principle is to document that you have passed a lender’s initial credit scoring system, either via a hard credit search (which leaves a credit footprint) or a soft search (which does not leave a credit footprint).

This does not guarantee you will be accepted on a mortgage but is a necessary step en route to the final goal. Another perk is that having this document will show the seller of a property that you are in fact serious, possibly creating room for price negotiations.

Your AIP will usually last anywhere between 30-90 days, and can easily be renewed once expired. Our team can usually get one of these turned around for you within 24 hours of your initial appointment.

Fourth Step: Finding the Right Solicitor 

Following your Agreement in Principle, you will need to find yourself a Conveyancing Solicitor (also known simply as a Conveyancer) to help you with the legal proceedings of the homebuying process. The term Conveyancing is used to describe the transfer of legal ownership of property between parties, no matter if you’re the buyer or seller.

Your Conveyancing Solicitor will be able to handle contracts, give any legal advice should you require it, conduct local council/authority searches, deal with Land Registry and lastly transfer the funds you have acquired in order to pay for your property. As you can imagine, this is a vital role in your process, so you must make sure you can choose carefully.

It’s also important to note that Licensed Conveyancers are property specialists who can’t deal with complicated legal issues, whereas more general Solicitors offer a full range of services so can often seem more expensive. Whilst we do not offer these services ourselves in-house, we have a list of trusted companies that your dedicated Mortgage Advisor in Hull is able to refer you out to. 

Fifth Step: Making an Offer on a Property 

Now you’ve spoken to a Mortgage Broker in Hull, passed the Mortgage Affordability Assessment, obtained an Agreement in Principle and found yourself a Conveyancing Solicitor to handle the legal side of things. You’re halfway there now and your next course of action is to make an offer on the property you wish to purchase.

As mentioned earlier, with an Agreement in Principle in tow you will be in a much better place to negotiate on price. Make sure not to go too low as to offend the seller and create tensions, but don’t be afraid to ask for a lower price. Knowing you have an AIP with you, the seller will be more likely to sell to you than someone who is willing to pay the asking price but is unprepared.

The worst-case scenario is that the seller will say no, but it’s at that point you can work out a more reasonable offer for both of you or walk away and find yourself another property. Once you’ve had an offer accepted, it’s back to your mortgage advisor and onto the final stretch of your mortgage journey. 

Sixth Step: Submit Your Documents 

Now we’re back to the mortgage side of things and an important step, in submitting the required documents. As you would expect when such a large amount of money is involved, a mortgage lender will not just lend to anyone.

They will need you to provide various documentation to prove that you are the person you claim to be, the amount you earn from your job, where you live and how well you conduct your finances. If you’re obtaining a joint mortgage, they will require this documentation from both parties involved.

The types of documents you will need to submit, include; proof of ID, proof of address, the last 3 months’ payslips and latest P60 (employed), the last 3 years’ proof of earnings and Tax Year Overviews (self-employed in Hull), proof of any income such as state benefits or maintenance, proof of deposit and the last 90 days bank statements. 

Seventh Step: We’ll Progress Your Mortgage Application 

With your mortgage agreed in principle, and your offer accepted, we can now proceed to submit your full mortgage application. With everything ready and checked by your dedicated Mortgage Advisor in Hull & their team of Mortgage Administrators, we are ready to submit an application to the lender for a mortgage.

Your advisor will send off all the collected evidential documentation for this, and then it’s just a matter of waiting for them to respond with whether or not the application has been accepted or declined. Whilst there is no given time frame, our Mortgage Administration team will be able to chase the lender for an answer on this for you. 

Eighth Step: Property Valuation / Survey 

In-between your mortgage application and being offered a mortgage, the lender will require a valuation survey of your property to be undertaken. These are usually carried out by accredited companies nominated by the lender (someone who they trust).

The purpose of such a task is to understand the true value of the property, versus what you’ve agreed to pay for it. If you’re paying above its actual market value, the lender may be less willing to accept your offer, as in the event of arrears, they will most likely be out of pocket and unable to make back the full borrowed amount. This is usually known as a ‘Down Valuation’.

There are various types available when it comes to surveys, with each varying in price. Some will just want to check the property’s worth, whereas some will also provide information on any structural concerns as well as possible repairs that may be necessary for the future. Your Mortgage Advisor in Hull will be able to help you choose the right survey for you.  

Ninth Step: Receiving Your Mortgage Offer 

Now the moment you’ve been waiting for. Once your lender has checked over your case and assessed all the evidencing documentation, they will present you with your Mortgage Offer.

It’s at this point that our team of friendly Mortgage Advisors and Administrators in Hull, that you’ve gotten to know over the course of your process, will check over the offer for you to ensure everything is correct. Once your mortgage offer has been received, it’s then down to your Conveyancing Solicitor to take your purchase through to completion. 

Tenth Step: Completing The Process 

Congratulations, you’ve now officially gone from First-Time Buyer in Hull to a First-Time Homeowner in Hull. With any lingering stress now on the backburner, we hope you’re happy and ready to begin your new life, in your new home.

All you need to do is go get the keys and move in! We hope you enjoyed speaking with our team and received a fast & friendly Mortgage Advice service in Hull. If you have chosen a fixed-rate mortgage, at the end of your term, we will be in touch to help out once again with your Remortgage! 

Leasehold Houses in Hull

What is a Leasehold House?

After the government introduced the Help-to-Buy Scheme, a large number of home builders opted to start selling their newly built houses on a leasehold basis, as opposed to a freehold one. You may be wondering though, what exactly is a leasehold house?

In simple terms, you own the property, but the land on which your property is on, is owned by the freeholder. These leases tend to span hundreds of years, usually beyond the lifetime of the original holder of the lease.

What’s The Catch With Leasehold Houses?

The catch with Leaseholds, is that you only own the property, and not the land it is built on. This means you may have to pay ground rent, various service fees and at the end of your term, if the lease has not been extended, the freeholder can choose to back control of the property, if left unchallenged.

Regarding the end of the lease and the service charges, you should always have the right to extend your lease if that’s what you would like to do and challenge any fee changes, though for more clarity it’s always recommend that you speak to a Conveyancing Solicitor, as it’s their job to cover the legalities of properties.

Some of the fees can fluctuate too, as and when the leasehold management company wants to change it, so it’s always worth making sure a Conveyancing Solicitor reads over your agreement carefully and precisely, to ensure it is fair and not too much.

Do I Really Own The Property? Can I Still Obtain a Mortgage On It?

You own the property for the length of your lease term. As explained before, the freeholder may be able to take their property back at the end of a term if you don’t renew, but if your term is taken out over the course of a few hundred years, that property is pretty much yours for the rest of your life, unless of course you sell it.

One area that may require some consideration ahead of time, is if you were planning to make any home extensions or improvements. Whilst this may not always be the case with every freeholder, the majority will want you to seek permission for any changes that take place on the land that they own.

The process of obtaining a mortgage on a leasehold is an interesting one. You will find that not all lenders will accept this kind of deal, however those who do usually will only accept it if your term is at least 60 years. The reason for this is down to their ability to resale in the event of repossession.

If your term is shorter than 60 years, you most likely will have to discuss the possibilities of renewing the lease on the property with the freeholder, along with a legal representative.

Land-Banking Freeholders

There has been a particular issue with freeholding for some time and still ongoing, a practice known in the industry as “land-banking”. This refers to some freeholders who are holding onto land, whether they have a finished property or not and despite the need for more homes in the UK, purely because the market has changed and they’re waiting for a chance to make more money on it.

As you would expect, this kind of practice is not exactly well received across the nation, many seeing it as unfair and leading for people to request that the government abolish leasehold altogether, as a means of future proofing against such a thing.

Along with the service fees involved, the need for renovation permissions and ground rent, it’s no surprise that leasehold housing can often seem like a bad deal, however if handled correctly, it could still be an option that works out for you and your circumstances.

Get in Touch For Leasehold Mortgage Advice

If you are looking at leasehold houses and debating whether to buy one, you should prioritise speaking to your Conveyancing Solicitor in regards to the lease and other legalities involved.

It’s very easy to get carried away with the joys you may feel when buying a home but you need to also realise that this is a major investment decision that you need to put a lot of time into thinking about.

If you would like to get started on a leasehold house mortgage, please Get in Touch.

Help to Buy Mortgage Schemes

Help to Buy Mortgage Advice in Hull

After the disastrous credit crunch in 2008, the government brought in some backup to try and kickstart the mortgage market. They introduced ways to help First Time Buyers get onto the property ladder, these were called Help to Buy schemes.

There are a number of different Help to Buy schemes available, you may match with some of them and you may not match with others. Here is a list of the Help to Buy schemes and a couple of other similar schemes that you can access.

Help to Buy Equity Loan

The Help to Buy Equity Loan is the most popular scheme. If you are a First Time Buyer in Hull and want to get your mortgage process rolling then this scheme could be for you.

Help to Buy Equity Loan Mortgage Advice UK | MoneymanTV

Firstly, you have to be First Time Buyer to access this scheme and have to be purchasing a new-build property too. A minimum of a 5% deposit is also required.

The way this scheme works is that you put down a deposit of 5% or more and then the government loan you rest to make up a total of a 25% deposit. So if you have a 5% deposit they will loan you 20%; if you have a 10% deposit, they will loan you 15%, and so on…

This will leave you with a 75% mortgage and the government equity loan to pay off. You get 5 years to pay off this equity loan interest-free; if you can’t meet the 5-year cut off point, you will start receiving interest on the amount of the loan that is remaining. This interest rate starts at 1.75%.

Help To Buy Equity Loan Hull Graphic

As a Mortgage Broker in Hull, we know that it can be hard to balance your mortgage payments and the equity loan repayment at the same time. There are ways around this, for example, you can sometimes remortgage to raise capital for this loan, however, doing this will increase your mortgage payments.

Help to Buy Equity Loan Banner Hull

Help to Buy Shared Ownership Scheme

The Help to Buy Shared Ownership scheme was introduced to allow applicants to purchase a percentage of a property and then pay the rest back on rent.

Help to Buy Shared Ownership Mortgage Advice UK | MoneymanTV

The percentage of the property that you own is usually between 25-75%, though not always. The remaining percentage is likely to be owned by the housing association. This share can possibly be increased at a later date, perhaps when you have more money.

The way that your payments work is that you have to pay your mortgage plus your rent. So essentially you are paying 100% of the ground rent and service charge on the property. This is still the case, even if your share is the minimum amount.

Help to Buy Armed Forces Scheme

The Armed Forces Help to Buy scheme was introduced in 2014 following the success of the Help to Buy Equity Loan scheme. This scheme had the same concept as its predecessor, however, this one targeted members of the armed forces.

Help to Buy Armed Forces Mortgage Advice | MoneymanTV

If you are you fit into the criteria of the scheme, it could be a great option for you. The government has now extended the deadline/review date of the scheme to December 2022; we are hoping that it stays around as the scheme is a massive help to existing armed forces members who really need that extra help with getting onto the property ladder.

Help to Buy Armed Forces Banner Hull

Bonus: Lifetime ISA

The Lifetime ISA is often a scheme that gets missed. It’s not a go-to scheme, however, it’s still very useful to be aware of it, it can help you secure a property as a First Time Buyer in Hull.

Lifetime ISA Mortgage Advice UK | MoneymanTV

It’s essentially a savings account where your money grows tax-free. The government will also top up your savings by an extra 25%, so if you meet the £4,000 maximum amount, you will receive a nice £1,000 bonus.

You have to pass certain criteria in order to gain access to this scheme, you find all of these details on the Lifetime ISA website.

How Much Deposit Do I Need To Buy A House in Hull?

Deposit Mortgage Advice in Hull

It is your circumstances that will dictate the amount of deposit you will need for a property and the process of what you are trying to do. Here we explore how much deposit may be required, given your personal situation.

Why do I need a deposit for a mortgage in Hull?

In the past, it was commonplace to find 100% mortgages. Before they went under, even Northern Rock was offering 125% loan to value mortgages. What that means, is if you were buying a property valued at £100,000 they would lend you up to £125,000. Yet they wondered why it all went wrong…

The reason that lenders need you to put down a deposit, is to reduce their lending risk. If they lend you 100% of the purchase price and you happened to fall into arrears, they would then have to take possession of the property. All it takes then is a small dip in house prices for them to be at a loss, which they naturally don’t like.

It’s also believed that if you haven’t invested some of your own or your family’s money into your home, then you might find it a bit too easy to call it quits if things get tough and you can’t afford your repayments. It could also be argued that if you can’t save up for or with help, make up at least a 5% deposit for a property, then you probably aren’t quite ready to take that step onto the property ladder.

Can the government pay the deposit for me?

Directly, no they can’t. That being said, if you can find 5% of the deposit from your own funds, then you could qualify for the government’s Help to Buy Equity Loan Scheme. Applying only to new build properties, the idea is that you put in 5% and the Government loans you up to 20%, making up a 25% deposit. After 5 years you need to look at paying the equity loan back possibly by way of a remortgage or from savings you have been able to make over that time period.

Is a 5% deposit enough?

Generally speaking, yes, 5% is enough for most mortgage types. It does vary between lender though and some will accept only a 5% deposit, limiting your options. To combat this, you will normally need a reasonable credit score to qualify. There are lenders out there that may consider you for a 95% mortgage with an average credit score, but the rate of interest would also be higher.

How much do I need to put down if I have a poor credit history?

The majority of the specialist lenders will require at least 15% deposit if you have a poor credit history. As touched upon earlier in this article, this is simply to reduce their risk in case a repossession occurs. It is a lot harder to obtain this type of mortgage than it was in the mid-2000s but, not entirely impossible.

How much deposit do I need for a Buy-to-Let property?

It has always been necessary to put down a larger deposit for Buy-to-Let Mortgages and most lenders at the moment are looking for at least 25%.

Can I take out a loan for the deposit?

In theory this could be possible, but almost all lenders won’t let you do this, as essentially this would still be 100% lending, which no longer exists due to the aforementioned risk involved with such a venture.

Can someone gift me a deposit?

Yes, this happens constantly. Generally, it’s what the industry affectionately dubs the “Bank of Mum and Dad” (both birth and adopted parents, as well as carers & legal guardians) gifting the deposit, or other family members such as Aunties & Uncles. We have even seen instances where family friends can gift you money. These are all valid options, as long as they can evidence the funds, prove who they are and confirm they are not expecting repayment of the gift at any point in time. We have written an entire article all about Gifted Deposits in Hull.

Are there any circumstances where I don’t need a deposit?

If you are buying as a sitting tenant and your landlord or family member has given you a discount from the open market value, or if you qualify for a discount under the Right to Buy scheme, then normally you don’t need to put any of your own money in as deposit. This is due to the equity being already “built-in” to the deal.

Please note that the above information is for reference purposes only and is not to be viewed as personal financial or mortgage advice.

Agreement in Principle and Soft Credit Searches

Agreement in Principle Mortgage Advice in Hull

What is an Agreement in Principle? | MoneymanTV

When you pass the lenders credit score to qualify for a mortgage, you will obtain an agreement in principle – commonly known as an AIP for short. Having an agreement in principle in place allows you to make an offer on a property. It also can be very useful when negotiating on the asking price, as the seller now knows that you are serious and ready to start.

How does your Agreement in Principle affect your credit score?

This depends on the type of credit search the lender decides to undertake. They will either perform a soft credit search or a hard credit search on your file:

Soft credit searches

Nowadays, it’s more common for a lender to carry out a soft credit search over a hard credit search. They usually choose to perform a soft credit search because they require less information out of it and there is a lot less chance of your credit score being affected by this one.

Whilst the financial institution doing a soft search obtains less information about you than if they had done a hard search, an agreement in principle from one of these lenders is usually still a very strong indication that your application could be accepted.

Hard credit searches

Hard credit searches go a lot more in-depth than soft searches. The main difference between hard and soft searches is that hard credit searches can affect your credit score, by leaving a footprint. Anyone who looks at your file in the future will be able to see that lenders have hard searched your credit score.

This won’t really affect you if you have a good credit score. The problems can come if your score is lower and you have had more than one hard search on your file, as it could look like you are trying to apply for lots of credit at the same time. This is likely to put off a lender.

Does an AIP guarantee a mortgage in Hull?

You will never be guaranteed a mortgage, but having an agreement in principle in place ahead of time will certainly work in your favour. Once you provide the lender with all your documents, an Underwriter will review everything and make a final decision. Agreements in principle usually include small print that can easily be missed, which is why speaking to a Mortgage Broker in Hull can be useful.

When customers reach out to us for help about their agreement in principle, we find that in some cases they’ve been turned away at full mortgage application stage.

The documents required include, but are not limited to, things like ID, payslips and bank statements. As your expert Mortgage Broker in Hull, we take pride in helping you be prepared for all this. If you are looking at starting your mortgage process, you may need to look at how to get prepared for a mortgage in Hull.

It’s necessary to have your agreement in principle in place when making an offer. Most credible estate agents will want you to provide evidence that you are able to proceed with the purchase.

How long will my Agreement in Principle last for?

Normally, your agreement in principle needs renewing after around 30-90 days. As an experienced Mortgage Broker in Hull, we still recommend getting one as early as you can, in order to avoid finding your dream home only to be told you aren’t eligible for a mortgage.

You don’t always need to buy the first house you see after you get your agreement in principle. It’s a simple process, so if it does happen to expire, you can just obtain another.

You may be a First Time Buyer in Hull or you might be thinking of Moving Home in Hull and are looking for great Mortgage Advice in Hull. If so, we think that you will benefit from our dedicated mortgage advice services in Hull.

We offer a free initial mortgage consultation with one of our expert Mortgage Advisors, so feel free to get in touch today and we will see how we can help!

The Different Types of Mortgages Explained

Mortgage Advice Covering The Different Types of Mortgages

No matter whether you are a First Time Buyer looking to make that initial jump onto the property ladder, or are going through the process of Moving House in Hull, you will soon come to realise that there are many different types of mortgages available for customers.

Some options tend to be more popular than others and some are a little harder to come across. We have compiled a list of mortgage types we find that we encounter the most and that you will likely come across. You will also see each section accompanied by one of our MoneymanTV episodes, we hope you find them useful!

You can find more Helpful Mortgage Guides on moneymanTV here or go directly to our “Mortgages Explained” playlist here.

What is a Fixed-Rate Mortgage?

A fixed-rate mortgage means that your mortgage payments are going to remain consistent for a specific period of time. You are in control of how long you choose to fix your payments for, with common lengths generally being 2, 3 or 5 years or longer. Regardless of any changes to inflation, interest rates or the economy you can rest easy knowing that your mortgage payment, often your single biggest outgoing, will remain the same.

What is a Fixed-Rate Mortgage? | MoneymanTV

What is a Tracker Mortgage?

A tracker mortgage means that the interest-rate of your mortgage will follow, or track if you will, the Bank of England’s base rate. In simpler terms, this means that the lender that you are with are not the ones that will be choosing your interest-rate and neither will you. Instead, you will be paying a percentage above the Bank of England base rate. In an example, if the base rate is 1% and you are tracking at 1% above base rate, that means you will be paying a rate of 2%.

What is a Tracker Mortgage? | MoneymanTV

What is a Repayment Mortgage?

When you take out a repayment mortgage you will be paying back capital and interest combined each month. Providing that you keep your payments going for the full length of the mortgage term, you will be guaranteed to have your mortgage balance paid off at the end of the term and the property will become yours to own.

In regards to mortgage payments, this is the most risk-free way to pay your capital back to the lender. Early on into your mortgage term, it is mainly the interest that you are paying and your balance will start to go down really slowly, especially if you have taken out a longer term of around 25, 30 or more. Things take a turn when it comes to the last ten years or so of your mortgage, where your payments are paying off more capital than interest and the balance will come down much faster.

What is Repayment Mortgage? | MoneymanTV

What is an Interest-Only Mortgage?

Whilst a lot of modern buy-to-let mortgages are set up on an interest-only basis, you’ll find it a harder task trying to get a residential property on an interest-only basis. It is much less likely for a mortgage lender to offer an interest-only product to customers these days, though in some cases it is possible.

Situations where this might be relevant include downsizing when you are older or have other investments that can be used to pay the capital back. Lenders have strict rules when it comes to offering these products now and the loan to values are a lot lower than back in the day.

What is an Interest-Only Mortgage? | MoneymanTV

What is an Offset Mortgage?

With an offset mortgage, the lender will set you up a savings account to go alongside your mortgage account. How this works is that let’s say you have a mortgage balance of £100,000 and £20,000 is deposited into your savings account, you only pay interest on the difference, so in this case, £80,000. This can be a very efficient way of managing your money, especially if you are a higher rate taxpayer.

What is an Offset Mortgage? | MoneymanTV

Forces Help to Buy Scheme | Helping Armed Forces

Mortgage Advice in Hull For Military Personnel

The Forces Help to Buy scheme was introduced in 2014 off the back of the Help to Buy Equity Loan scheme. The scheme undertook a 3 year pilot to determine whether or not it would be worth keeping in place. These first 3 years were successful, so the Government extended the deadline/review date to December 2022.

The scheme was introduced to help regular armed forces personnel get onto the property ladder. If you fit within the criteria of the scheme, it could be a great mortgage option for you to consider.

Here’s an insight from Malcolm who is an experienced Mortgage Advisor in Hull and the actual “moneyman” himself:

Armed Forces Mortgage Advice | MoneymanTV

What is the Armed Forces Help to Buy scheme?

The Forces Help to Buy scheme enables servicemen and servicewomen to borrow up to 50% percentage of their salary, interest-free, to buy their first home or move to another property on assignment or as their families need change. The scheme aims to address the low rate of homeownership in the armed forces.

Who can use the scheme?

You can access the Armed Forces Help to Buy scheme:

  • If you have completed the prerequisite length of service
  • If you have more than 6 months remaining of service at the application point
  • If you meet the right medical categories

As a Mortgage Broker in Hull, we are aware that there may be some circumstances where you will have to make some exceptions to these rules. Medical matters and personal circumstances should always be taken into consideration.

How much can be borrowed under the scheme?

The Armed Forces Help to Buy scheme allows you to borrow up to 50% of your annual salary, this is capped at £25,000. This sum will ususally make up the majority of your depsoit, however, you can also put it towards other costs such as solicitor and estate agent fees.

How to get it?

To apply for the Armed Forces Help to Buy scheme, you will need to use the Joint Personnel Administration system and there you can seek advice on your application through your Chain of Command and personnel agency.

If you are considering buying a home in Hull, feel free to check out our free, helpful mortgage guides. These guides could help you understand the home buying process and how things work.

You can also speak to one of our Help to Buy Mortgage Advisors in Hull if you want the process explained to you by a professional, it’s completely up to you! We hope to hear from you soon.

Mortgage Market Update: Biggest Lending Surge Since 2007

Mortgage Advice in Hull for 2021

In light of the recent announcement from the British Prime Minister Boris Johnson, we want some share the positive news that came with the new lockdown rules.

Similar to the November 2020 lockdown, the property market is still open for business. You can take up house viewings, continue your purchase and still put your home up for sale.

Here is a mortgage market update from Malcolm the ‘moneyman’ himself:

Mortgage Market Update UK – 04th January 2021 | MoneymanTV

Lockdown 2020 and getting a mortgage in Hull

During the last lockdown in November 2020, there was a huge increase in mortgage enquiries. The boom in home purchase approvals reached a massive 105,000 in November, which is the highest since August 2007.

Graphic: UK Moneyman | Source: Bank of England

In October 2020, purchase approvals were at 98,300. This increase of 6,700 is impressive considering we were in the middle of a national lockdown.

Lockdown 2021 and getting a mortgage in Hull

In terms of the property market, the January 2021 lockdown is very similar to the previous November 2020 lockdown. You can still begin your mortgage journey in 2021. It’s up to you how you start this, it could be by yourself or through a Mortgage Broker in Hull.

January is a popular time of year for First Time Buyers, Home Movers, landlords etc., and as time progresses we are seeing more mortgage products becoming available again, allowing for more mortgage options to those investing in the property market.

90% mortgages are still available

Yes, 90% mortgages are still available and lenders are getting more and more confident in the market. They know that the demand is there and that people will only start coming back when they know that they can get a deal with a 5-10% deposit.

There are also other ways to access a 90% mortgage, for example, this could be through the Help to Buy Equity Loan scheme or the Help to Buy Shared Ownership scheme. If you want a Help to Buy Specialist to talk you through how using these methods could help you obtain a mortgage with only a 5-10% deposit, make sure to get in touch right away.

Open as usual

The property market is still open and so are we! We have Mortgage Advisors in Hull available from 8am – 10pm, 7 days a week throughout the year to help you through your mortgage journey.

Don’t worry, our free mortgage consultation still applies to every customer in every mortgage situation. Start your 2021 mortgage journey with Hullmoneyman today.

Hullmoneyman.com & Hullmoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited registered in England, registered number 6789312 and registered office 10 Consort Court, Hull, HU9 1PU.

© 2021 Hullmoneyman

Hullmoneyman, 410 Wincolmlee, Hull, HU2 0QL.

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