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The Pros and Cons of Using a Mortgage Broker in Hull

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.

Pros & Cons of Going Direct

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!

Mortgage Market Changes in 2014

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.

Handling More Complex Cases

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:

  • Poor Credit History.
  • Self-Employed Income.
  • Mixed Source of Deposit (Savings/Gift).
  • Let-to-Buy (Renting Out Your Property to Buy Another).
  • Contract Workers/Zero Hour Contracts.
  • Affordability.

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.

A Tailored Process

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.

Responsive Service

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).

Agreement in Principle: Frequently Asked Questions

A Brief Summary of an Agreement in Principle

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.

Frequently Asked Agreement in Principle Questions:

Will obtaining an agreement in principle affect credit score? 

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.

Should I avoid hard credit checks? 

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.

Is an Agreement in Principle a guarantee that I will get the mortgage? 

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.

Can I make an offer without an Agreement in Principle? 

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.

How long does it take to get an Agreement in Principle? 

A trusted mortgage advisor in Hull will usually be able to obtain an Agreement in Principle within 24 hours of your free mortgage appointment.

How long does an Agreement in Principle last for?

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.

Agreement in Principle Mortgage Advice in Hull

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.

What is an Agreement in Principle? | MoneymanTV

Reasons Your Mortgage Application in Hull Might Been Declined

Specialist Mortgage Advice in Hull

As a Mortgage Broker in Hull, it’s not unusual for us to receive enquiries from First-Time Buyers in Hull like yourself who have recently got turned down for a mortgage from the bank. Going directly to a bank/building society for a mortgage should seem straightforward, but it can be more complicated than it looks.

You may have heard of the term ‘mortgage maze’, where every lender seems to be a dead-end, and you can’t quite find the one that will get you out the exit.

The good news is, this is where we step in, our job as a Mortgage Broker in Hull is to get you out of this maze. We’ve been in this maze before, and we know the challenges that come with trying to find the right lender.

Our team will help you find the right lender for you with a tailored product to match your financial circumstances. Here we will cover with you why you could be struggling to get accepted for a mortgage and how we may help.

Going directly to a lender

Failing a credit score for a mortgage

To get accepted by a lender, you will first have to pass their credit score criteria. Each lender will always have its own unique credit scoring method, and some will be more complicated and harder to pass than others. Some lenders have even built their niche audience, so they may only offer specialist deals targeted at applicants with lower credit.

Lenders with the lowest interest rates will likely have the most arduous lending criteria, and usually vice versa. A lender will offer a better product to someone with a high credit score and carry a trustworthy credit history behind them over an applicant with a low credit score with a CCJ(s) or Default(s).

If you go directly to a lender without doing your research, you may be far off their lending criteria, and you could end up being declined. This can harm your credit file when you apply again through another lender, and they will see that you were denied. This is why we always advise that you don’t keep using lots of different lenders, as the more you are rejected, the higher the negative impact you are putting on your credit file.

Your Mortgage Broker in Hull is here to help

Before submitting your mortgage application to a lender, we will first check that you match the lender’s criteria and are likely to pass their credit scoring. We aim to get it right the first time!

Our job is to find you a deal that we know you will love and match perfectly. This applies to everyone regardless of their situation. Bad credit or good credit, we will try our hardest to pair you with a great mortgage deal through a lender that will accept your mortgage application.

Economy’s effect on the mortgage market

We’ve seen applicants struggle to get accepted for a mortgage due to the economy. For example, during the credit crunch in 2008, it was tough to obtain a mortgage no matter your credit history. Lenders lost all of their confidence in the market. They show that your chances of struggling to get a mortgage are likely to increase if the economy is suffering.

If you are struggling to get a mortgage because of the economy and the mortgage market, you may have to hold back your mortgage application at the moment. Sometimes, it may be better to keep building up your deposit so that when the market eventually bounces back, you have even more funds to aid your mortgage deposit. Furthermore, this may even increase your chances of being accepted too.

During times of economic crisis, in the UK, we’ve seen deposit requirements go as high as 25% of the property’s value. On the contrary, if you were looking to Remortgage in Hull in the middle of this period, you will have access to better rates and products. 

Whether you’re remortgaging or carrying out a product transfer, you won’t need to provide a deposit as you are simply switching products and will still have the equity from your original deposit. You are likely to have more equity if you have been on a repayment mortgage.

Improving your credit score in Hull

If you are being declined for a mortgage due to your credit score, you need to start looking at ways to improve it. There are lots of methods you can do to try and improve your credit score. Here are some of the ones that we recommend:

???? Check whether you’re registered for the voter’s/electroral roll; if you aren’t, get registered! It’s friendly and easy to do and can boost your credit score.

???? Avoid unnecessary credit searches as they can show up on your credit file and sometimes reduce your score.

???? Don’t run too close to your maximum limits. Running into overdrafts and not paying off credit cards each month can reflect poorly on your credit score.

???? Validate that your address is up-to-date across all of your accounts. This includes credit cards and store cards.

???? Close unused credit accounts. This can also reduce your chances of falling victim to fraud.

???? Remove financial links to others. If you unknowingly have a financial connection with someone else’s name, it could be doing more harm than good.

There are more ways than you realise. So if you have a low credit score and need credit score Mortgage Advice in Hull, make sure you get in touch with our responsive team, and we will see how we can help.

Get help from a Mortgage Broker in Hull

If you are struggling to get accepted for a mortgage in Hull, it may be time to get in touch with a Mortgage Broker in Hull like us for help.

Being an expert Mortgage Broker in Hull has allowed us to gain valuable experience and deep insights into what lenders are looking for in mortgage applicants. We know all about lender’s credit scoring systems and their lending criteria, allowing us to search for a deal that we know will suit you and you’re likely to match with.

Once you get in touch with us, we will pass you onto a Mortgage Advisor in Hull, who’ll undergo your free mortgage consultation. At this stage, your advisor will learn a little more about your personal and financial mortgage situation so that they can begin searching through mortgage deals for you.

To learn more about our service, get in touch with us today. Hullmoneyman is your new home for Specialist Mortgage Advice in Hull; we have been helping struggling applicants over the last two decades. You could be next!

Mortgage Advice in Hull

Self-Employed Mortgage Criteria Advice in Hull

Self-Employed Mortgage Advice in Hull

Many can see the concept of being self-employed as a barrier when it comes to credit, especially when it’s getting a mortgage. With the help of an experienced mortgage broker in Hull working by your side, that doesn’t have to be the case.

The first thing that you should be aware of is that there isn’t a specific uniformed style of lending criteria for sole traders and limited company directors. Each individual lender has their own policy that is unique to them and the amount they will allow you to borrow can largely differ to that of another lender.

Sole Traders or Partners

Looking at sole traders (also known as partners), the amount that you will be able to borrow for a mortgage will be an amount based on your net profit.

You’ll find that the majority of lenders average your last 2 or 3 years’ net profit but there are lenders out there that can consider using your latest year. If your net profit has decreased the lender will usually go off the latest year and will require you to provide them of an explanation as to why this has happened.

Limited Company Director (20% or more shareholder)

If you are a limited company director who is in ownership of 20% or more in company shares, then in the eyes of mortgage lenders, you will be classified as self-employed and similar rules will apply as above in terms of averaging. The figure that they tend to average will be your salary (typically this can be equivalent to the tax-free allowance) plus declared dividends.

You’ll find that there are different circumstances where a limited company may be performing well in terms of net profit, but the directors are not drawing their dividend. These type of applications can often face hurdles when it comes to the maximum borrowing capacity, as there is not as much income that can be declared by the applicant.

It’s not the end of the road, however, because there are lenders out there that will consider using your share of the net profit, rather than salary plus dividends.

Minimum Trading Period

The minimum trading period for people who are self-employed in Hull or limited company directors is one year, though in some cases there are mortgage lenders who will want to see more than that. If you have recently formed a limited company after a period as a sole trader, under the advice of your accountant, then there are lenders who can look at this as long as it is within the same field of work.

As you can see from the information listed, obtaining mortgages for the self-employed can easily be seen as difficult business, though the hardest part is simply evidencing your income. If you would like to talk about your situation please feel free to Get in Touch and we’ll talk you through your options, as well as send you a form for your accountant to complete. This will help us tailor-make a recommendation designed to meet your exact circumstances.

Getting Prepared for a Mortgage in Hull

Once you’ve saved enough for mortgage deposit, the next step is preparation. Before you are ready to start your process, make sure your mortgage application is in the best position. If you are a First Time Buyer in Hull, you will find this guide very beneficial to aid you with your mortgage application. Also, this article will feature helpful tips to speed up your mortgage application for those looking to Remortgaging or Moving Home in Hull.

Get Mortgage Ready in Hull

Up-to-date credit report

The first thing you should do is obtain an up-to-date credit report. Having an up-to-date credit report is essential for you to provide during mortgage application; ideally, you should try and get yours arranged prior to speaking with a Mortgage Broker in Hull. Your report will be reviewed by one of our Mortgage Advisor in Hull before forwarding you to a suitable lender. 

Agreement in principle 

Another thing that you should do before making an offer on a property is obtain an agreement in principle. The good news is getting in touch with an expert Mortgage Broker in Hull like ourselves, we can often turn around an agreement in Principle within 24 hours of your initial appointment.

Proof of ID 

Make sure to produce a photo ID, the required documents will have to be photo identification such as a Driving License or Passport – though if you’re using one for proof of ID then it can’t be used as proof of address. If you are a non-UK national working in England on a Visa then this will also need to be presented. 

Proof of Address 

You will also be required to prove where you live. This is usually in the form of a utility bill or bank statement within the last 3 months.

Last 3 months’ bank statements 

Your bank statements should reflect your income and regular expenditures. It will be a displeasure to Lenders if they see gambling transactions on your account and they will also not be happy if you are seen to have surpassed an agreed overdraft limit or your direct debits have bounced regularly. The key factor is to get ahead of the game and get prepared as best as you can.

Not all lenders will ask to see your Bank Statements but it is an option that is available to them if they choose to utilize it – regardless of whether they do ask for your bank statements, they want to be confident that you take your finances seriously. The bank statements which you produce should consist if your salary going in and your bills going out.   

Evidence of deposit 

A vital step in the mortgage application is evidencing your deposit for Anti-Money Laundering purposes. To help the process it is best not to move finances around your accounts too much as this will make it a lot more difficult and may delay the process.

Lenders like to see that you are saving your money responsibly, but that doesn’t exempt you from having to account for any large recent deposits into your accounts.

If you have been gifted a deposit, then there will need to be written confirmation stating it’s a non-refundable gift. 

Proof of income 

The most pivotal point of the application is proving your income. If you’re in employment then sufficient evidence would be your last 3 months’ payslips, though some lenders will also ask for your most recent P60. Lenders will take into account regular overtime, commission, shift allowance and bonuses. Additionally, extra earnings may also be considered with some lenders such as part-time jobs or self-employment.

Many applicants are Self Employed in Hull nowadays – if you are a self-employed applicant then you may mean you will need to acquire your Accounts’ help to request your last two or three years’ proof of earnings from the Revenue. If you submit your own accounts then feel free to get in touch and we will be happy to advise you on how to go about downloading from the Government Gateway. 

Budget planner 

By working out an estimate of your expected outgoings after you move house means you can gain an idea of how much disposable income will be available to you to pay your mortgage after such things as regular expenditures, council tax, and utility bills have been paid out from your account. To help you with this, we are happy to send you our version of a Budget Planner to get you started.

As seen, there are many steps you must take in order to prepare fully for your mortgage application deeming it not an easy feat but it doesn’t mean you should worry. If you approach the mortgage application with due timing and an organized matter along with a Mortgage Broker in Hull, you will be in safe hands. 

Moving House Mortgage Advice in Hull 

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.

Self-Employed Mortgages in Hull

Mortgage Advice in Hull For Self-Employed Applicants

Self-Employment is always on the rise, which in turn brings a rise in Self-Employed Mortgage Applicants in Hull. This is down to changes in work life in Hull and the world around us. There are now more opportunities than ever before to work from work, to start a business and more. As a dedicated and knowledgeable Mortgage Broker in Hull, we rarely see people planning to stay with their first employer from their first year, all the way through to retirement. They want to change their jobs to improve their personal development and financial situation.

There are lots of opportunities for the self-employed and freelancers within the Digital and Engineering sector. This is down to the world becoming more and more interconnected. We are constantly learning which opens more and more opportunities for the self-employed within these industries.

It used to be difficult for Self-Employed applicants to obtain a mortgage. However, with Self-Employment now becoming a lot more common and a lot more gaps opening up in the market, lenders have become more relaxed and lenient with self-employed applicants. The process of applying for and obtaining a mortgage as a Self-Employed applicant is now a lot easier than it ever was in the past.

Self-Employed Mortgage Hints and Tips in Hull

To get you ahead of the curve when it comes to your mortgage, we have put together a small collection of some helpful mortgage guides, to support anyone from Self-Employed mortgage applicants to those thinking of Moving Home in Hull. Whether you have been in this game before or you are First-Time Buyer in Hull, we are sure that you will find the assistance of a trusted mortgage broker in Hull beneficial.

How many years’ books do I need?

The minimum you will need in order to obtain a mortgage is one year’s accounts. If you go with a self-employed specialist lender, you will find that they often work off a single year. High street lenders tend to be a little stricter and will want two year’s accounts from you.

Unfortunately, statistics show that most new attempts at running a business end up being unsuccessful and this is why lenders always need you to evidence your track record, to prove you are reliable and have ‘staying power’.

How will a lender assess my income?

Most lenders will look at the average of your last two years’ worth of income. Although, if your business has grown over the past year and the lenders can see that you will be able to afford a mortgage and run your company, they will go off the latest year and ignore anything that has happened previously.

I’m a director of my own limited company

If you are a director of your own limited company, then technically you are an employee of your own business. Lenders will not view it this way, however, and will only assess you as an employee if you own less than 25% of company shares.

Lenders often add the dividend you have drawn to your annual salary as a way to work out your earnings for the year. The amount that you can borrow for your mortgage will be based on a multiple of this particular figure.

You will find that from time to time, some lenders will work from your net profit rather than your salary/dividend. This works in the favour of company directors who like keeping their drawings low.

My accounts don’t reflect the true success of my business – what can I do?

As a trusted and hardworking Mortgage Broker in Hull, this is a question that we find ourselves being asked all the time. During the meeting you have with your accountant each year, you will talk about how to minimise your tax liability. This works the other way when it comes to taking out a mortgage as a Self-Employed Mortgage applicant, wherein the more income you have declared, the bigger the mortgage you may find yourself able to obtain.

How much deposit do I need to put down?

Whether it’s a Self-Employed Mortgage or not, a minimum of a 5% deposit is still required. It’s exactly the same as employees. If you only have one years’ accounts, you might find it more beneficial to put down a bit more deposit than what you initially would’ve, in order to increase your chances of succeeding. See our article to find out more on How Much You Need For a Deposit in Hull.

Contractor mortgages

When it comes to looking at mortgage options for contractors, there are lots available. Nowadays, it’s a more common occurrence to find people working from short-term contracts. If you are able to evidence that your company has a good track record, your lender can consider taking your ‘daily rate’ rather than going by your net profit. This will benefit contractors greatly, as lenders will consider treating you as if it’s more likely to work in your favour doing so, they’ll treat your case as self-employed instead.

Lenders will need you to provide information on how long is left on your current contract, as this can influence their decision. They need to be absolutely certain that your income will continue as it is, in order to get a true indication as to whether or not you will be able to afford your mortgage. Even when you’re on your very first contract, it may still be possible to obtain a mortgage, though this all depends on your specific circumstances.

Can I still get a self-cert mortgage?

It is no longer possible to get a self-cert mortgage. These were heavily abused and caused major problems for both the mortgage market and the economy as a whole. There are zero plans for these to make a return in the future.

Self-Employed Mortgage Advice in Hull

We know that trying to get a mortgage as a sole trader, partner or company director can be a tricky process, mostly down to trying to evidence your income. Whilst it can be much easier for an employed applicant, know that you have the same chance of getting a mortgage as anyone else with a similar income and credit score. Depending on the lender that you take out a mortgage with, some may have stricter criteria than the standard lender. This is why approaching a dependable Mortgage Broker in Hull, could be truly beneficial to you and your goals.

We are able to give you a realistic expectation from the start, guiding you through the self-employed mortgage process and providing support even beyond. Our reliable and determined mortgage advisors in Hull are able to search through thousands of mortgage deals on your behalf. Every customer has access to a free initial Mortgage Consultation, so make sure that you Get in Touch with one of our Mortgage Advisors in Hull today. We will talk you through the most appropriate route for you to take based on your self-employment history.

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!

Why isn’t it easier to get a Mortgage in Hull?

Getting a Mortgage in Hull

As a mortgage broker in Hull with a lot of experience in the industry, we have learnt how to help you get through almost every mortgage situation. You could be a First Time Buyer, looking to Remortgage or even Self Employed in Hull. No matter where you are in life and what you’re looking to do, our team may be able to help.

The process of obtaining a mortgage can quickly change, going from simple to very complicated in no time at all. This is down to the variety of lenders available and the unique lending criteria from each you would be matched against. Going with a Mortgage Broker in Hull like us could be just what you need to stop the process from getting too difficult to deal with.

Going to a lender for a Mortgage in Hull

You may find the credit scores of some lenders easier to pass than others. Different lenders have their own niche products and will target specific parts of the market. You will find that lenders with the lowest rates also tend to have the strictest criteria and it is pretty standard for a customer to not match against all criteria.

Lenders who offer competitive deals will always be the hardest to fit into. Firstly, they need to make sure that the customer will be able to afford their monthly payments over the term. Realistically, lenders want a profit. If you can’t pay, they’re out of pocket which is not what they want. Unfortunately, this can make it difficult to obtain a mortgage from certain lenders.

Lenders with lowest rates

High street lenders with the cheapest deals will try and find other ways make the most out of their profits when it comes to borrowers. Once your mortgage has been accepted, they generally try to sell more products, as they will be working on a commission basis. These products usually include things like Bank Accounts, unsecured loans, credit cards and Insurance.

Nothing is ever simple though and there is a catch with these, as mortgages with lowest rates of interest tend to come with higher set up fees. That’s why a lot of people tend to ignore their products. Lenders are only in this game for themselves, whereas a local mortgage broker in Hull will only ever want to do right by you. We are able to save both your time and money, finding the most appropriate deal for you, by matching you against multiple lenders’ criteria, rather than just one standalone lender.

You will find that not everyone can just remortgage elsewhere and this is down to a variety of reasons:

  • A relationship breakdown
  • The value of the home has dropped since purchase
  • Less household income than there was at the point of application
  • The applicant has had a default or CCJ since they took out a mortgage

Lending criteria and the economy

The economy can have a direct effect on how difficult it may be to match lender criteria and obtain a mortgage, depending on how it is performing. If the economy is not doing well, mortgage lenders will make their criteria stricter and allow less people to match. If the economy is doing well, things may be relaxed and allow more people to match. It’s all dependant on time frame, as it can sometimes be quite difficult to obtain a mortgage. In the mid-2000’s this was different, just before the credit crunch. Lenders gave mortgages to everyone, and we all know how that turned out…

Once the credit crunch was over, lenders rightfully took a completely different view and tightened their criteria. You needed a 25% deposit which meant that getting on the property ladder was near impossible for most people. Interest-rates began to rise, tempting customers to continue renting instead of buying.

Mortgage Broker in Hull | Hullmoneyman

Being an experienced and dedicated mortgage broker in Hull has allowed us to gain valuable knowledge regarding lender criteria and credit scoring, something that gives us an advantage when trying to give customers the best possible chance of obtaining a mortgage.

If you’re finding it hard to match with lenders criteria it may be time to approach a mortgage broker in Hull. With trusted mortgage advisors on hand, our team can share simple steps with you on how to improve your chances of your mortgage application being successful.

These steps are very easy and just by giving us a call, you could end up a step closer to securing a mortgage deal. Get in Touch and we’ll get the ball rolling, moving you one step closer to achieving your goals.

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

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The information contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.
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