This is something that we find ourselves being asked regularly by both homeowners and potential home buyers in Hull. The answer to this question depends on entirely on what sort of market we are in and how it is performing.
In order to stay more up-to-date with the mortgage market, including hot topics such as mortgage interest rates and government schemes, take a look at “Mortgage Market Update” playlist on YouTube. We regularly post these types of videos to ensure that all of our customers are “in-the-know”.
Mortgage rates are the level of interest that a mortgage lender will be charging you on your mortgage balance. This will determine the cost of your monthly mortgage payments, as you are paying, generally, a combination of interest and capital. Lower mortgage rates typically means lower payments.
There are a lot of different factors that can affect what your mortgage rates will be. One that you can absolutely have control over, is any personal factors that will determine if you qualify for a mortgage.
This will include things like your credit score or deposit. The lower the risk, generally, the better the rates. An open & honest mortgage broker in Hull will be able to take a look at your situation, helping you to find the best mortgage deal that is available to you, for what it is you are hoping to achieve.
Our dedicated mortgage advisors in Hull have the ability to search through 1000s of deals, including many different specialist mortgage deals, for customers who perhaps have more complex cases.
What it all comes down to really, at the end of the day, is the current market position, the state of the economy and the base rate of the Bank of England. If the economy is performing well, there will typically be a higher demand for both goods and services, which includes properties.
Higher demand will also usually mean that the Bank of England base rate will go up too, which sees mortgage rates following. The mortgage rates set by mortgage lenders are usually set at a percentage above what the Bank of England base rate is.
Whilst a stronger economy could mean that home buyers can afford more, mortgage lenders aren’t made of money. Because of this, when the base rate is up, the cost of borrowing for mortgage lenders will also rise, which also brings up mortgage rates to cover their borrowing costs.
When the economy isn’t necessarily doing so well, this works conversely to how we mentioned above, as consumers will not be able to afford as much. Because of this, you will typically see interest rates coming down as a why to encourage people on the property ladder with potentially lower payments.
As discussed above, one of the biggest factors for changes in mortgage rates, is changes to the Bank of England base rate. As a general rule, mortgage lenders will set their interest rates at a percentage above this. This means that depending on the base rate, this could fluctuate.
Something else that can have an effect on the Bank of England base rate, however, is any changes to inflation. The government ideally have a target in mind that they need to keep at, in order for the cost of living to remain affordable. Unfortunately, this has been known to go over the target.
In situation such as these, you may see the cost of living increase, though unlike the example of a strong economy meaning people may be able to afford more, this can be quite the negative and seeing people unable to afford as much as they would have done.
This of course isn’t exactly the best news for those with ending fixed-rates, as it means they may struggle to afford price increases that are set to take effect once their initial period has ended. In cases like this, a mortgage advisor in Hull can be incredibly beneficial.
The Bank of England base rate tends to have fluctuations anyway, although usually only very slightly. Tracker mortgages are a type of mortgage that will be following along with this base rate, sitting at a percentage above and moving as and when the base rate moves.
When the base rate is a little low, this can work out quite well, as your monthly mortgage payments will be lower. Unfortunately, if mortgage rates were to go up, you would also be paying more on your monthly mortgage payments, which can change fairly quickly.
An option that could be better for this, which is actually one of the most popular mortgage types you could choose from, is a fixed-rate mortgage. These allow you to lock-in to the interest rate at the time, keeping your payments the same for a set period.
These time periods tend to be between 2-5 years, though they don’t necessarily have to be. An example would be, if your interest rate was 4% and you were fixed-in for 5 years, you might see rates rise to 6% during that time, yet still be paying 4% until that 5 years is up, saving you money.
In times where the economy is a little uncertain, a fixed-rate can provide certainty and stability, giving homeowners one less thing to stress about at home. The downside is that if rates have indeed gone up during this time, when your fixed-period ends, you will move onto a higher rate anyway.
This sort of thing occurring can actually lead some homeowners to remortgage quite early, even being willing to fork out for an early repayment charge, in order to fix in for a longer period and protect themselves from future interest rate increases that could be on the horizon.
This really boils down to predictions, how do you see the interest rates changing, as well as your own personal situation changing. As said before, personal factors also can impact mortgage rates, so having a higher deposit will potentially open you up to much lower rates anyway.
If you find that you are in that situation, taking out a fixed-rate mortgage could be beneficial, to stick to those interest rates you have given yourself access to. So long as the economy performs well also, fixing in for 2, 5, maybe even 10 years could see you reaping the benefits of those rates.
Of course this entirely depends on circumstance, and 10 years is a long time to wait. During that time period, you could even see interest rates drop lower than you first fixed in for, meaning you are paying more per month than you could’ve been, if you’d only fixed in for say 2 years.
A trusted and experienced mortgage broker in Hull will be able to best help you prepare for your mortgage future, as well as help you make any decisions based on your plans. They will use their knowledge to help you every step of the way.
Interest rates can change without warning really, depending on the current state of the economy, the market and also, the Bank of England base rate. Match it up with your personal circumstances, and there can be much uncertainty.
By booking yourself in for free remortgage advice in Hull towards the end of your fixed-period, or first time buyer mortgage advice in Hull if this is a new experience for you, you can benefit from experts in the field helping you to find the best mortgage deal, with the most favourable mortgage rates.
Anyone in Hull who has been renting from a local council or housing association may find they are eligible to purchase the home they are renting, via the government Right to Buy Scheme.
Typically, you receive a discounted purchase price (often acceptable as a form of deposit) which allows this. To qualify for the Right to Buy Hull, you must have been a public sector tenant for at least three years, with the longer you have rented impacting the discount you receive.
Every applicant has different circumstances, and what could be a straightforward process for some can be a different story for others. You may find that although you are eligible, you have bad credit to your name. This can severely impact your ability to obtain a mortgage.
Luckily, for those who want to know if you can obtain a Right to Buy mortgage with bad credit, the answer is yes. Of course, personal circumstances and the discretion of mortgage lenders are always a factor, but with the help of a mortgage broker in Hull, you could still have options to obtain a right to buy mortgage.
What is defined as bad credit depends on the mortgage lender you are dealing with. Some lenders may deem it to be things like missed credit card payments, phone contract payments or loan installments. On the other hand, there are some who may not classify them as such and look past them.
However, if you have gone through withdrawal, bankruptcy or CCJ tied to your name, you will be classified as having bad credit. In all these cases, bad credit will lead to a decrease in your credit score, with this impacting your chances of obtaining a Right to Buy Mortgage in Hull.
Having a low credit score can impact your situation negatively. Lower credit scores can make getting a mortgage challenging. Even though we have a large panel of lenders, many being specialist in bad credit mortgages, you will still be considered a higher risk.
To a mortgage lender, there is every chance you cannot repay your mortgage payments each month, leading to eventual repossession and a loss of profit to the mortgage lender. Because of this, applicants who are accepted tend to face much higher costs.
To simplify any bad credit can have a negative impact on any mortgage not just a Right to Buy mortgage. Bad credit affects everything from first time buyer mortgages to remortgages and everything in between.
As mentioned above, bankruptcy can be a big issue. Typically, if at least 3-6 years have passed since you were discharged from your directorship, you will have a better chance of finding a specialist mortgage lender willing to let you borrow.
Debt Management Plans and Individual Voluntary Arrangements (DMPs and IVAs) can also have an impact on this. This is a fairly stricter circumstance than some of the others. If there have been at least 3 years, you have a much higher chance of success, though if not, you are limited.
Being subject to repossessions can also make getting a Right to Buy mortgage difficult. There are some mortgage lenders who are willing to let you borrow under these circumstances if it has been a few years since, although we tend to find the vast majority will probably reject your application.
Of course, some of the more commonly encountered instances include things like CCJs (County Court Judgements), defaults, arrears, missed or late payments and just generally having a low credit score. As you can imagine, the latter is the least serious of the ones mentioned.
Overdue payments or missed payments can vary and a mortgage lender’s perception may also vary. Arrears, defaults and CCJs are much more serious, with mortgage lenders wanting to see that at least three years have passed.
In either of the latter cases, a specialist mortgage lender will also review the exact circumstances surrounding the bad credit, as there could be options depending on whether you have satisfied payments and are a few years removed from the situation.
With all bad credit mortgage circumstances, the better chance you will have will depend on the further you are from your bad credit problems. Trying to repair your financial situation also looks good in the eyes of a mortgage lender.
Things like cleared CCJs, a tidy credit file, could help improve your chances. Of course, this still does not guarantee anything and obtaining a Right to Buy mortgage with bad credit will still be challenging, but it means you could have options.
The best way to see if you have a chance at obtaining a Right to Buy mortgage with bad credit is to speak with a dedicated mortgage broker in Hull. Many mortgage brokers, like us here at Hullmoneyman, have access to specialist mortgage lenders on the panel that offer complex case deals.
Whilst the process may be a challenge and you could face higher interest rates, with a mortgage broker in Hull finding you the most suitable deal, based on your individual circumstances, is part of our job.
Those applying to buy their local authority home using a Right to Buy mortgage, the amount of discount that will be applied can often be accepted as a deposit on the property by the mortgage lender. This is because you already purchasing at below its market value.
Your circumstances may be different, however, if you are purchasing and taking out a Right to Buy mortgage with bad credit. The reason is that you are at a higher risk to the mortgage lender because of your bad credit.
If your discount is equivalent to a smaller deposit and you have bad credit, a mortgage lender may require you to deposit your own funds to increase that percentage. In other cases, if this discount is equivalent to a deposit of 10-20%, they may be more lenient.
Ultimately, it depends on how long you’ve lived there, your personal situation, such as your bad credit and the mortgage lender. With all mortgage instances, the higher deposit you can put down, the better the mortgage deals you can access.
This applies to a Right to Buy Mortgage Hull as well, as whether you have bad credit or not, putting down more deposit can open you up to much better mortgage deals, lowering either your monthly payments or interest rates.
As could probably be predicted from us, we firmly believe that there are some great reasons for customers to use a mortgage broker in Hull.
As a fair counter argument though, whether it’s via a branch or online, it is still completely viable to go direct to the lender yourself. Luckily we find that most people prefer to make use of a mortgage broker.
Here we will take a look at the pros & cons to both sides.
When talking about the option of going directly to a bank or building society, the first thing that immediately springs to mind is that you’ll be free from any broker fees. This of course will save you money.
Whilst that may be a point for, an immediate point against comes to mind too. In previous years, you may have thought “the bank manager will know my finances inside and out”, though when credit scoring was introduced, this no longer became a factor in the process.
One reason why going direct could be preferable, is that some lenders offer exclusive mortgage products that are only available by going direct. This is done so to attract a good spread of business from consumers and brokers alike, switching these exclusive products as they see fit.
On the contrary to this, some products may only be available by going with a mortgage broker. In this case, you’re not only able to see potential exclusive deals from your bank, but other lenders as well. A bank can only offer their own products!
In 2014, the market changed and lenders were no longer allowed to sell mortgages on a non-advised basis to anyone who walked through their door.
Previously, it had been believed that non-advisors were trying to push actual advice on customers. This means they weren’t able to benefit from some of the consumer protection that comes with speaking to a professional mortgage advisor.
The changes meant lenders had to adjust. Heading towards the end of 2014, it was commonplace to be kept waiting over a month just to speak with an advisor. Sometimes today this situation still occurs, which is of course less than ideal when you have had an offer accepted and are ready to go!
Because of the issues that were occuring with these services, applications being made via mortgage brokers went on the rise. This is because many brokers out there, like ourselves, are able to offer customers a more flexible service, at times that best suit them.
When you book your free mortgage appointment with us online, you’ll be able to choose a timeslot that best suits your personal and work life. Oftentimes, your appointment can be booked in for the same day. There is no waiting around for somebody to get back in touch!
Affordability is definitely something that factors into people’s decisions to use a mortgage broker. No matter how good a lender’s deal might seem, you won’t get very far if they won’t lend you enough money!
Buying a house is so important to people, that many customers will opt to go with a trusted and dedicated mortgage broker for professional and personalised mortgage advice in Hull.
Nowadays we find that a lot of mortgage applications aren’t as simple as they once were. For one reason or another, there are a lot of contributing factors that can make the mortgage process a lot more challenging now.
Some examples of these are, but are not limited to:
In the past, it was a lot easier for lenders to stand out from the competition by simply offering a deal that was similar to, but better than another mortgage lender on the market. In modern times this is very different, with lending criteria being the big difference between one option and another.
An example of this is the differences in leniency towards those who are looking to obtain a Self-Employed Mortgage in Hull. Some lenders are willing to be a bit more sympathetic towards previous discrepancies on your credit report. Others, not so much.
Your situation is unique to you, it is very unlikely that someone will have the exact same circumstances as you. You could be looking for First-Time Buyer Mortgage Advice in Hull, ready to take the first step towards being a homeowner.
You might be in a tight spot and need some Remortgage Advice in Hull, ahead of consolidating some debts (something that definitely requires an expert opinion). When you explain your position to an experienced mortgage broker, they may have dealt with something that is at least similar in the past.
This allows them to personalise your mortgage advice service and guide you along each step. With a little luck and a lot of hard work, your mortgage advisor in Hull will hopefully be able to recommend the most suitable mortgage, at the lowest rate available to you.
Beyond that though, it’s about more than just getting a mortgage. Even if the application itself is pretty simple to run through, our clients rely on our expertise and industry experience for so much more.
We are able to run through how much the applicant is willing to offer on their potential new home. Our trusted team of mortgage advisors in Hull are able recommend other professional services such as solicitors and property surveys.
Another reason why using a mortgage broker in Hull could be preferable, is that we tend to be far more responsive than the lenders might be.
Our hard working team quite regularly work late into the evening, outside of normal hours, giving maximum effort on customer cases to ensure the service is prompt but also effective.
Something that is often overlooked when looking at why customers may prefer a broker, is that people’s day-to-day lives are so much busier. A mortgage might be important, but you may have no free time! A mortgage advisor in Hull will take the weight off your shoulders.
Professional applicants especially see the benefits of using a mortgage broker, as they have clients of their own that they charge out their services to and they appreciate having an expert to do the work for them whilst they keep busy.
Mayhap in the future we will see lenders wanting to take business back from the brokers. In the event of this, we may see a more technological approach from them. The world seems to be more focused on that these days.
That’s great news for customers who are fine with speaking to bots or using automated systems. Even more so when the case is straightforward.
For most of us though, there’s an element of “realness” when speaking to a real person. We are getting that “human touch” that only speak to a mortgage advisor in Hull can provide for you.
Book your free mortgage appointment online now using the “Get Started” button. Time slots are available every day, from early until late, at a time that best suits you (subject to availability).
Customers will always receive an Agreement in Principle from the lender before they can obtain a mortgage on a property. The reason for this is so that you know the lender will agree, in principle, to let you borrow from them.
This part of the process is carried out before the final checks and whilst even with this we cannot guarantee that you will get a mortgage, being given this is certainly a good sign that you’re on your way to mortgage success.
You’ll often see this online being called a Mortgage in Principle and a Decision in Principle. Sometimes it will be shortened to AIP and DIP. Though the collection of names can be confusing to home buyers, worry not as they’re all exactly the same thing.
Once you have gotten an Agreement in Principle, you will be ready for the next steps of the process, fully prepared to support any offers that you look to make as a First Time Buyer in Hull.
By having this document, you may also give yourself room to negotiate with the seller of the property on a lower price.
This is because it will showcase to the seller of the property in question, that you are a serious buyer and have the necessary funds to move on with the mortgage process.
We tend to find that a large amount of lenders these days are choosing to go with soft searches instead of doing hard searches. As a standard rule of thumb, a soft search will not affect your credit score, as they don’t usually leave a footprint.
Hard searches will leave a footprint behind, so having lots of them done can be quite damaging, especially if you fail it each time. That’s not to guarantee a soft search will have no effect, but it is very unlikely.
Soft searches offer less in-depth information than you would get from hard searches, though worry not as no matter which one the lender opts to use, they will be doing it for the right reasons.
If you are not getting hard searches taken out on you regularly, then having one done should be pretty harmless. The problem arises is if you start having multiple hard searches taken out on you in quick succession.
Always remember that if you fully know that you do have a good credit rating, there is no need to be put off by the idea of getting a hard search done, especially if it will be the best option for you to go with.
Though it would be nice for us to say yes and lift your spirits, unfortunately even with an Agreement in Principle to hand, a mortgage is not always a guarantee at the end of the process.
The mortgage lender still needs to take a look at all of your documents and only after their checks are complete will a mortgage underwriter be able to make their final decision.
Customers often get in touch with us after they have previously been declined at the point of application, as they have neglected to read the small print that is stated within their Agreement in Principle.
You are required to provide your mortgage lender with proof of identity, the last 3 months payslips and bank statements to demonstrate your financial capabilities, before a mortgage lender will offer your case.
The required documentation is a little bit different for Self-Employed Mortgage applicants in Hull.
Whilst yes, you would be able make an offer without an Agreement in Principle to hand, you would be much better off for getting one prior to making any property purchase offers.
Whether you take the document, a lender will always have to agree in principle before the mortgage itself can proceed.
Any estate agent with credibility will want to see an AIP before they do business with you, as they need concrete confirmation that you have the funds to proceed and won’t be wasting anyone’s time.
A trusted mortgage advisor in Hull will usually be able to obtain an Agreement in Principle within 24 hours of your free mortgage appointment.
An Agreement in Principle tends to expire somewhere between 30-90 days. Always be mindful though that you don’t just have to make an offer on the first house you encounter within your price range. Take as much time as you need.
If your Agreement in Principle expires, your mortgage advisor in Hull will easily be able to get you a new one, in order to help you make offers when you are ready to.
Finding the home of your dreams, only for a lender to decline you, can be both frustrating and crushing. To counteract this feeling, we would highly suggest that you get an Agreement in Principle as soon as you can, to make sure you’re wholly prepared for the mortgage process.
To gain a better understanding about what an Agreement in Principle is and how they can be useful, take a look at our helpful YouTube video guide.
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.
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.
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?”
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.
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.
When a lender is assessing your bank statements, you can expect them to look for a variety of things. Their primary goal is to determine 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, applicants are asking one question quite a lot: “do gambling transactions look bad on my bank statements?”.
There is nothing illegal about properly licensed gambling, do not panic if you’ve had an annual flutter on the grand national or extensively used internet betting sites. After all, a lot of people see gambling simply as a mainstream hobby or pastime like many others.
That said, as the advertising urges customers to “please gamble responsibly” this is a key point to bear in mind when applying for a mortgage. 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. But they do have a duty (underscored by mortgage regulation) to lend responsibly.
If lenders need to prove to the regulators that they are making sensible lending decisions, it is not entirely unreasonable of them to expect the people to whom they lend to adopt a similar approach when it comes to their personal finances. Look at it from this perspective, if you were lending your own money would you lend it to someone with a serious gambling addiction?
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 and the size of the transactions in relation to the person’s income.
As stated above, it is not illegal to have gambling transactions on your bank statements and it does not mean you will be declined straightaway for a mortgage. The lender will examine whether these transactions are justified and responsible.
They will do so by looking at the frequency of these transactions, the size of the transactions in relation to the person’s income, and the impact on the account balance.
So, if your transactions are infrequent tiny amounts that make no significant impact on a regular credit bank balance, then they are not likely to be a red flag. However, if you bet most days or are constantly overdrawn, the lender is therefore likely to see that as being irresponsible and decline your application.
Lenders look at your bank statements to see how you manage your money, to help them establish whether this gives them either the confidence that you are financially prudent or the evidence that you are not.
For example, having an overdraft facility and occasionally using it, is not inherently a bad thing; regularly exceeding the overdraft limit – not so good. This is why lenders will look for excess overdraft fees or boucned 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, for example, if you only just go into credit on payday and for the rest of the month are overdrawn, how sustainable is this mortgage?
Remember to 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.
Therefore, 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 way.
If you are a First Time Buyer in Hull who may find the entire process a little bit daunting, or you have a complex case and need to speak with a Specialist Mortgage Advisor in Hull, our team can guide you through the whole mortgage process and help you with your application and get you on track.
We are here to provide mortgage advice 7 days a week, always on hand to answer your mortgage questions. We can’t wait to help you out with your mortgage journey. Get in touch with us and book yourself in for a free mortgage appointment to speak with one of our Mortgage Advisors in Hull today.
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;
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.
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.
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.
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.
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.
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.
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.
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.
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.
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!
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.
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.
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.
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.
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.
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%.
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.
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.
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.
During your mortgage process, you will have to pass your mortgage lenders affordability checks, credit searches and prove your income. Once you have done this, you will obtain an agreement in principle (also known as an AIP).
Having an agreement in principle will not only demonstrate that a mortgage lender is willing, in principle, to let you borrow the funds, but it can also be incredibly useful when negotiating on the asking price of a property, as the seller now knows that you are a serious buyer and ready to go.
The way in which an agreement in principle could affect your credit score, depends on the type of credit search that the mortgage lender takes out. There are two main types of credit search that they will use; Hard Searches and Soft Searches.
Nowadays, mortgage lenders will much more frequently carry out a soft credit search over a hard credit search. Soft credit searches will generally be less detailed than a hard search, though they are still typically a good indication that your application could be accepted, if you do obtain an AIP from this.
Typically speaking, a soft credit search will not leave a credit footprint, meaning your credit score should not be affected by having these taken out.
Hard credit searches will be a lot more in-depth than soft searches. The main difference between hard and soft searches is that a hard credit search can affect your credit score, as it will leave a footprint. Anyone looking at your credit file will be able to see if you have one.
If you have a good credit score, you will generally be unaffected, though if you have a lower credit score, you could have problems. The reason for this, is that if you have a poor credit score and have multiple hard searches on file, it can look like you are trying to apply for lots of credit at once.
This is more than likely going to put off a mortgage lender.
You will never be guaranteed to obtain a mortgage. That being said, 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 will typically include lots of small print that home buyers, especially first time buyers in Hull, can easily miss. It’s reasons like this why you would benefit from speaking to an open and honest mortgage broker in Hull.
When customers get in touch with 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 that a customer will require include, but are not limited to, your ID, payslips and bank statements. As a fast & friendly mortgage broker in Hull, we take pride in helping you to prepare for your journey ahead.
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 your property purchase.
Normally, your agreement in principle will need to be renewed after around 30-90 days. As an experienced mortgage broker in Hull, we still recommend getting one as early as you can.
The reason why we would suggest this, is so that you can avoid disappointment if you were to find a dream property, only to not have this in place and potentially fall behind another home buyer who has their offer accepted instead.
Always remember, 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 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 appointment with one of our expert mortgage advisors, so feel free to book online today and we will see how we can help you!
Regardless of if you are a first time buyer in Hull looking to take your first steps towards climbing the property ladder, or are going through the process of moving home in Hull, it will become apparent during your research that there or lots of potential mortgage options.
Some of these are more frequently found that others. We have put together a helpful list of the options we deal with the most. Each section s accompanied by a helpful mortgage video from our YouTube channel, MoneymanTV.
You can find more Helpful Mortgage Guides on MoneymanTV here or visit our “Mortgages Explained” playlist directly here.
A fixed-rate mortgage will mean that your monthly mortgage payments will stay the same for a personally specified period of time, as you’ll be fixing your interest rate to a set amount.
It is entirely your decision when looking at how long you choose to fix your payments for, with common fixed-period lengths typically being between 2 to 5 years.
You are able to go higher than this, though many opt for shorter, as you don’t want to fix in for too long and then see rates drop, leaving you on a higher rate of interest when you otherwise wouldn’t want to be.
Regardless of any changes to inflation, interest rates or the economy you’ll be able to stay confident and happy, knowing that you are not only on the best deal, but your biggest outgoing, your mortgage, will stay the same.
A tracker mortgage will mean that the interest rate of your mortgage will track alongside the Bank of England’s base rate; the base rate that dictates things like inflation.
To explain this in much simpler terms, this will mean that the mortgage lender that you end up going with will not be the one to set your interest rate. Additionally, you will not be setting your own interest rate either by fixing in.
Instead, you will be paying a percentage above the Bank of England base rate. To give an example of this, 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%.
Often seen as the standard mortgage you will come across, taking out a repayment mortgage will see you paying back both capital and interest combined each month.
Providing that you are able to keep up your payments for the entire duration of the mortgage term, you will be guaranteed to have your mortgage balance paid off once your term ends, with your home becoming 100% yours.
It is widely believed to be the most risk-free way to pay your capital back to the mortgage lender. Early on into your mortgage term, you will mostly be paying back interest and your balance will go down quite slowly, especially if you have say a 25+ year term.
This will work the other way when it comes to the final 10 years or so of your mortgage, as it will be more capital than interest that you are paying off, making the balance go down much quicker.
Whilst you will find that the vast majority of modern buy to let mortgages are set up on an interest only basis, it is much less likely for a mortgage lender to offer this type of product to a residential customer.
With a buy to let mortgage, you will typically have some form of investment vehicle (most likely the property itself) to be able to repay the capital at the end of the mortgage, as this type of mortgage will see you only paying the interest during your term.
This is not always the case for residential purchases. It may be applicable, however, if you are downsizing at an older age or have other investments that you can use to pay the capital back.
Mortgage lenders tend to have pretty strict rules when looking at offering interest only products to customers, and the loan to values are a lot lower than they once were, meaning you’ll likely have to put down quite a substantial deposit to cover the risk.
If you are taking out an offset mortgage, your mortgage lender will set you up a savings account to run alongside your mortgage account, helping to offset the interest, in order to save you money.
This means that, let’s say you had a £100,000 mortgage balance and deposited £20,000 into your savings account. You would still have £100,000 to pay back, but you’d only be paying interest on £80,000 of that balance.
You have the flexibility to deposit and withdraw funds as you see fit, though for it to be beneficial you’ll need to be making substantial contributions into your savings. It can be very efficient for higher rate taxpayers.