A common query that frequently comes our way, especially from first time buyers in Middlesbrough and home movers in Middlesbrough, revolves around the intriguing question, “How Much Can I Borrow?”
In this context, we’ll delve into this, as well as the world of affordability assessments, shedding light on how they’ve evolved in the post-2014 era.
The amount you can borrow for a mortgage in Middlesbrough is determined by a complex interplay of factors. Lenders conduct affordability assessments to gauge your financial capacity, which involves examining your income, regular expenditures, outstanding debts, and credit history.
These assessments aim to ensure that your mortgage repayments are manageable within your budget. Additionally, lenders adhere to specific lending criteria and often apply a maximum cap on the amount they are willing to lend to mitigate risk.
Therefore, the exact figure you can borrow varies from one lender to another and is highly dependent on your unique financial circumstances.
It’s advisable to seek guidance from a mortgage advisor in Middlesbrough who can provide tailored advice based on your individual situation and help in finding a suitable lender.
In the bygone era of credit assessment, the fate of your mortgage application rested in the hands of your local Building Society Manager, who meticulously analysed every detail. As the 1990s dawned, lenders embarked on a journey towards more standardised income evaluations, striving for consistency.
To prevent overborrowing, lending “caps” were instituted, typically restricting customers to borrowing no more than three or four times their annual earnings. However, as the 2000s loomed, these income multipliers took a seemingly more lenient turn.
Some lenders, in a surprising twist, allowed customers to “self-certify” their incomes, sidestepping the need for background checks like payslips. But, as fate would have it, the jubilant days of carefree lending were short-lived.
The credit crunch of the 2000s struck, and with it, the reckoning. In the aftermath of the financial crisis, lenders, stung by past generosity, swung the pendulum in the opposite direction. Obtaining a mortgage suddenly became a formidable challenge for many.
In the wake of the market’s recovery post-credit crunch, 2014 heralded a significant regulatory milestone known as the Mortgage Market Review (MMR).
This ushered in a new era for lenders, bidding farewell to the antiquated income multipliers that, prior to 2014, paid scant attention to a household’s actual expenses. In those days, two applicants with similar earnings could secure nearly identical mortgages, regardless of their individual monthly outflows.
However, winds of change swept in with the MMR, ushering in a more meticulous approach to assessing affordability.
Lenders now took a closer, more forensic look at how mortgage applicants managed their finances on a month-to-month basis. While a lending “cap” still prevails, with most lenders reluctant to exceed 4.75 times an applicant’s annual income, your spending habits now come under scrutiny.
For instance, if you shoulder hefty childcare expenses, grapple with multiple credit commitments, or carry a burdensome student loan, your lending offer may differ markedly from a colleague with a less encumbered financial profile.
One of the intriguing aspects of this revamped lending landscape is the wide chasm in lending policies from one lender to another. Some appear to penalise lower earners, possibly not aligning with that particular demographic.
Meanwhile, certain lenders treat pension contributions as a fixed financial commitment, often resulting in a more conservative lending stance for applicants with substantial pension deductions, such as public sector workers. This underscores the sheer diversity and nuance in today’s mortgage lending landscape.
As the property market rebounded, so did the regulations governing mortgage lending. The Mortgage Market Review emerged as a pivotal moment, ushering in a fresh set of guidelines for lenders to follow.
This transformation marked the end of the conventional income multiplier approach and ushered in a more advanced era of affordability assessment.
The new wave of affordability calculators delved deeper into the intricacies of an applicant’s financial profile, going beyond the surface figures to review spending habits and net disposable income. This shift brought about a more comprehensive evaluation of mortgage applicants’ financial health.
Bank statements took on a heightened significance, undergoing closer examination to ensure the responsible and sustainable granting of mortgages. The days of imprudent lending practices were firmly behind us.
Instead, these revamped assessments considered important factors such as childcare costs, adding a layer of prudence to the lending process.
Lenders engage in fierce competition not only in terms of pricing but also in defining their lending criteria. This approach prevents a detrimental race to the bottom and ensures that they focus on specific niches within the market.
Consequently, the landscape is filled with striking variations in maximum borrowing capacity from one lender to another. It’s key to recognise that different lenders have distinct customers in mind. Thus, a rejection from one lender doesn’t signal the end of your mortgage journey.
Each lender operates within a unique framework, considering various factors that can work to your advantage. Some lenders, for instance, are open to considering state benefits such as tax credits when assessing your mortgage application.
Others may exhibit greater flexibility in accommodating self-employed individuals. Additionally, extending the mortgage term to its maximum allowable length can also enhance the amount a lender is willing to offer.
As the 2000s progressed, lenders became increasingly generous in their lending practices, with some even offering self-certified mortgages that bypassed rigorous income verification checks. However, this lax approach eventually led to a market crash.
The aftermath of the financial crisis, particularly during the years spanning 2008 to 2010, witnessed a challenging environment for aspiring homeowners. Lenders responded by adopting a cautious, over-corrected approach that limited lending opportunities.
The mortgage landscape is indeed a varied one, and the right strategy depends on your unique circumstances. If your goal is to maximise your borrowing capacity, particularly to secure that dream home, having a dedicated mortgage broker in Middlesbrough in your corner is invaluable.
A proficient mortgage broker in Middlesbrough can delve into the intricacies of the market on your behalf. They’ll explore the lending landscape to determine if there are willing lenders who can accommodate the specific amount you require to make your property purchase a reality.
However, securing a mortgage is not just about the numbers. It’s also about ensuring that your financial commitments align comfortably with your budget. This is where a seasoned mortgage advisor in Middlesbrough comes into play.
Collaborating with a mortgage advisor in Middlesbrough, you can thoroughly assess your financial situation.
Together, you’ll gauge whether the proposed mortgage repayments fit seamlessly into your financial framework, providing you with peace of mind and financial stability as you embark on your homeownership journey.
Now that the Help to Buy Equity Loan Scheme has been retired, as a first time buyer in Middlesbrough, you may be wondering what other government schemes are available to help you get onto the property ladder. In fact, there are many different mortgage schemes out there that can help you with this!
Recent scheme introductions include the Shared Ownership Scheme, Mortgage Guarantee Scheme and the Lifetime ISA, just to name a few. In this article, we are going to focus on the Lifetime ISA, looking at how it can help you get a mortgage in Middlesbrough.
The Lifetime ISA is not technically a scheme. ISA stands for independent savings account and you will be using this account to help you save for your mortgage deposit. The funds within the savings account can only be used for two things: purchasing your first home or saving for later in life. As a mortgage broker in Middlesbrough, we can only assist you with purchasing your first home.
Each week, month or year you can deposit money into this account, with the maximum total that you can save per year being £4,000 (£333 per month). Once you have saved for a year, the government will top up the total you have saved by 25%. This means that if you managed to deposit the maximum, the government will add £1,000 to your ISA. If you do not manage to save up £4,000 in the year, don’t worry, the government will still top up your ISA with 25% of what you have saved.
Once you are ready to start looking for properties and have reached your deposit target, make sure to keep the funds in your account. Your mortgage lender will need the funds to remain inside of the Lifetime ISA when processing your mortgage application.
The funds will first be used to cover conveyancer and solicitor fees, then the remaining amount will contribute towards your mortgage deposit. We have seen many first time buyers in Middlesbrough save up for a few years before making a move onto the property ladder to get the most out of their deposits and Lifetime ISA.
If you are planning to purchase a property in Middlesbrough with a friend or family member, you may be able to combine Lifetime ISAs to create a higher initial deposit. If the person you are buying with already owns or has legal interest in another property, they will face a 25% withdrawal charge to use their Lifetime ISA savings.
When it comes to government schemes, you will need to meet their requirements before you are able to access them. When opening a Lifetime ISA with the means to purchase your first property, there are a few that you need to meet in order to qualify:
The Lifetime ISA is tax-free, therefore, your money grows at no cost to you. However, if you decide to stop depositing into your account and want to take some of it out, unfortunately, it will cost you.
You will receive a 25% withdrawal fee on the money that you withdraw from your Lifetime ISA. This fee will only affect the money that you have added to the ISA. For example, if you managed to save £4,000 in a year and you receive £1,000 from the government if you later want to remove £5,000 from the account you will be charged £1,250 to withdraw this amount. Remember that £1000 of this £5,000 was gifted to you by the government bonus, so you’re losing out on £250, not £1,250. You would be left with £3,750 and lose the bonus from the account you had built up over a year.
As a mortgage broker in Middlesbrough, we would recommend that you only put what you can afford to put into your ISA. In the scenario above, the account holder has just lost out on £1,250 towards their mortgage deposit, which can be a lot of money these days!
The Lifetime ISA is all about saving for a mortgage deposit. Whether you are planning to buy a property for yourself or with a partner, it is a great approach to getting a mortgage as a first time buyer in Middlesbrough.
You should remember that you will still need to find a mortgage product to go hand-in-hand with your new home, and using a mortgage broker in Middlesbrough like us can help you do just that. Simply reach out to our team and let them know your Lifetime ISA situation and when you are planning to begin your mortgage journey.
Our mortgage advisors in Middlesbrough would be more than happy to talk you through the process and get you started on your first time buyer mortgage journey!
The credit scoring system often raises concerns among first time buyers in Middlesbrough and home movers in Middlesbrough, who may perceive it as an unfair method employed by mortgage lenders to assess applications.
It’s essential to understand that mortgage lenders have their own perspective on this matter. Credit scoring enables them to minimise risk and ensure more consistent outcomes at a lower cost.
If you find yourself worrying about the credit scoring system’s impact on your mortgage application, there’s no need to panic. It’s important to remember that numerous mortgage lenders exist, each with their own unique scoring systems and criteria.
To navigate this process effectively, obtaining a copy of your credit report can prove highly beneficial when applying for a mortgage.
By providing an up-to-date copy of your credit report to your mortgage advisor in Middlesbrough at the outset, you significantly enhance your chances of being accepted on your first attempt.
This proactive approach allows your mortgage advisor in Middlesbrough to have a comprehensive understanding of your financial history and can help tailor their recommendations accordingly.
It’s worth noting that credit reports are not static and can be influenced by various factors. Therefore, taking the initiative to review and address any potential issues or discrepancies on your credit report in advance can greatly improve your overall mortgage application experience.
Rest assured that your mortgage advisor in Middlesbrough is well-versed in navigating the complexities of credit scoring systems and can guide you towards suitable lenders whose criteria align with your financial circumstances.
Their expertise and access to multiple lenders give you the best chance of finding a mortgage that meets your needs while minimising any potential hurdles that you could be faced with.
There are several credit reference agencies available, including well-known ones like Experian and Equifax. We recommend using CheckMyFile as it offers a comprehensive overview by combining information from multiple agencies.
CheckMyFile provides a convenient platform for obtaining your credit report, giving you a holistic view of your credit history and financial standing. It offers a 30-day free trial period, which can be cancelled at any time to ensure flexibility and convenience.
By using the link provided below, you can access a special offer to receive a free, instant PDF download of your credit report. This allows you to quickly and easily review your credit information and address any potential issues or discrepancies.
It’s a valuable resource that can empower you with the knowledge needed to make informed decisions when applying for a mortgage or engaging in any financial transactions.
Taking the time to review your credit report can greatly improve your chances of a successful mortgage application and help you understand the factors influencing your creditworthiness.
When aiming to improve your credit score, it’s important to be mindful of certain factors that can have an impact. Here are some key considerations:
Remember, providing comprehensive information to your trusted mortgage advisor in Middlesbrough is crucial. It allows them to offer tailored guidance and support that aligns with your specific needs.
By fostering open and transparent communication, you increase the likelihood of receiving optimal help throughout your mortgage process.
The Shared Ownership Scheme is a government-backed mortgage initiative in the UK designed to help individuals in stepping onto the property ladder. It is open to permanent UK residents who are either first time buyers or former homeowners facing challenges in purchasing a new home.
To be eligible for the scheme, your household income should not exceed £80,000 and the property you intend to purchase is typically a leasehold property, which means you will have ownership for a specified period of time.
Through the Shared Ownership Scheme, you have the opportunity to buy a portion of the property (usually between 25-75%) using a mortgage, while the remaining portion is paid as rent.
The rent, which may include service charges and ground rent, is generally set at a lower rate compared to market value and is paid to a housing association.
The Shared Ownership Scheme underwent significant changes starting from April 2021 as part of the government’s Affordable Homes Programme. These updates brought about important modifications to how the scheme operates.
Previously, the minimum property share purchase was set at 25%. However, under the new rules, it is now possible to purchase a minimum share of 10% in certain cases. Furthermore, the process of buying additional shares has been adjusted.
Instead of the previous requirement of purchasing shares in 5-10% increments, you can now acquire shares in 1% instalments. Another noteworthy change is the reduction in fees associated with buying additional shares. Additionally, the responsibility for maintenance and repair costs has shifted.
In the first 10 years of ownership, these costs will be covered by the landlord, relieving the shared owner of these financial obligations.
If you obtained a Shared Ownership Mortgage in Middlesbrough before the specified time period, these updated rules may apply to you moving forward. It is always advisable to consult with your provider to confirm the specifics, as the application of these changes can vary on a case-by-case basis.
Before diving into the mortgage aspect of the process, it’s essential to determine your eligibility for the Shared Ownership Scheme. To do this, reach out to your local Help to Buy agent in the desired area of purchase.
During your conversation with the agent, you’ll typically be asked for specific information, including your income, available budget, preferred location, and credit history. Once your eligibility is confirmed, you can proceed with applying for your mortgage.
When it comes to this step, it’s advisable to consult with a mortgage broker in Middlesbrough. Not all mortgage lenders offer loans for individuals utilising the Shared Ownership Scheme, and a mortgage broker in Middlesbrough can help you navigate the available options.
The amount you can borrow will generally depend on factors such as your income and other fees involved, such as rent.
Naturally, there are advantages and disadvantages to having a Shared Ownership Mortgage in Middlesbrough. It’s important to consider that not all mortgage lenders offer loans to applicants utilizing the Shared Ownership Scheme.
There are still numerous lenders, including those on our panel, who do provide mortgages for this scheme. Furthermore, Shared Ownership Mortgages in Middlesbrough offer long-term stability, as you become both an owner and occupier simultaneously.
One of the concerns for many homebuyers is the deposit, as saving for it can be challenging. Fortunately, deposits for Shared Ownership Mortgages in Middlesbrough are typically lower compared to open market purchases.
These types of mortgages also make homeownership more accessible for individuals with lower incomes.
While these benefits are significant, it’s important to note that you’ll be responsible for 100% of the ground rent and service charges on your property, regardless of the share you’ve purchased.
You can participate in “staircasing,” which allows you to buy additional shares over time until you reach 100%. Once you’ve reached this point, you’ll no longer have to pay rent, but your mortgage, ground rent, and service charges will still apply.
It’s worth mentioning that when your owned share exceeds 80%, you’ll be liable for Stamp Duty on the entire property value. In some cases, however, this land tax may not apply to first-time purchases.
Despite the potential costs of Stamp Duty, your monthly mortgage payments can still be more affordable than a conventional mortgage and even cheaper than private renting.
Speaking of tenure, Shared Ownership Mortgages provide security unlike private rentals. As long as you meet your monthly mortgage obligations, you’ll be able to stay in your home for the duration of your lease, typically ranging from 99 to 125 years.
As your home is partially owned by someone else, you’ll need to obtain permission from the relevant housing provider before making any structural changes. This may limit the sense of freedom you would have if you owned the property outright.
When it comes to selling your home with a Shared Ownership Mortgage in Middlesbrough, there are a few differences compared to other mortgage types.
While selling a property with a conventional mortgage is typically straightforward after the fixed period ends, there are some additional considerations with Shared Ownership.
The ability to sell your home with a Shared Ownership Mortgage in Middlesbrough depends on the percentage of the property you own in shares. In most cases, you’ll need to own 100% of the property before you can proceed with selling.
It’s important to be aware that the housing association generally holds “first refusal” rights for the first 21 years after you purchased the home. This means they have the legal right to make an offer to purchase the property themselves before you put it on the open market.
If you don’t currently own 100% of the property, you’ll need to explore purchasing the remaining shares in order to have the option to sell it.
A Shared Ownership Mortgage in Middlesbrough is a great option for first time buyers in Middlesbrough who have a smaller deposit but dream of owning a home. This mortgage scheme can help you achieve your homeownership goals and get onto the property ladder.
It’s important to acknowledge that navigating a Shared Ownership Mortgage in Middlesbrough can be a complex journey, especially when considering the various fees involved. It’s crucial to be fully prepared and informed about the contract details before proceeding.
Ultimately, the decision comes down to personal preference. To ensure you’re well-prepared and have a clear understanding of your options, it’s recommended to book a free mortgage appointment with a trusted mortgage broker in Middlesbrough.
They will provide guidance and help you in preparing for this process. For further information on Shared Ownership Mortgages in Middlesbrough, you can visit the government’s OwnYourHome website.
Are you looking on the internet for mortgage tips and advice? We understand the variety of questions and concerns that can come up when you begin your homeownership journey.
Whether you’re a first time buyer in Middlesbrough or a seasoned homeowner looking to make a move, navigating the mortgage landscape can be daunting. By the end of this article, you’ll have more in-depth knowledge to confidently navigate the mortgage process.
Understanding your borrowing capacity is an important step in the mortgage process. It involves assessing your financial situation, including factors such as income, expenses, and existing debts, to determine how much you can comfortably borrow.
To get an initial estimate, you can make use of online mortgage calculators. These tools allow you to input your financial details and generate an approximate borrowing amount based on interest rates and loan terms.
Whilst online calculators can provide a rough estimate, it’s important to keep in mind that they may not consider all aspects of your financial situation. For a more accurate assessment tailored to your specific circumstances, it’s highly recommended to speak to a mortgage advisor in Middlesbrough.
By keeping an eye on financial news sources and reliable websites, you can stay on top of market trends and changes in interest rates. Additionally, our YouTube channel, MoneymanTV, offers monthly market updates, providing you with valuable insights into this topic.
When searching for the perfect mortgage, it’s essential to explore various mortgage types to find the one that suits your needs.
There are different options available, including fixed-rate mortgages, adjustable-rate mortgages, and interest only mortgages in Middlesbrough, each with its own set of features, benefits, and considerations.
Take the time to conduct thorough research and consult with mortgage experts who can provide valuable insights and guidance.
By gathering information and seeking professional mortgage advice in Middlesbrough, you can make an informed decision and choose the mortgage type that aligns best with your financial goals and circumstances.
Establishing a solid credit score is crucial to securing favourable mortgage terms. To improve your creditworthiness, make sure to consistently pay your bills on time and keep your credit utilisation low.
It’s also important to regularly review your credit report for any errors or discrepancies and take steps to rectify them. If you encounter challenges with your credit, there are reputable credit agencies available that can provide assistance and guidance to help you address and overcome these issues.
When applying for a mortgage, it’s important to gather the necessary documentation to support your application.
Typical documents include proof of income, such as pay stubs or tax returns, identification documents like a passport or driver’s license, recent bank statements to verify your financial stability, and a record of your employment history.
The specific documentation required may vary depending on your individual circumstances. To ensure you have a comprehensive list tailored to your situation, it’s recommended that you consult with mortgage lenders or experienced mortgage advisors in Middlesbrough.
They can guide you through the documentation requirements and help you prepare a complete and accurate application.
Both options, either using a mortgage broker in Middlesbrough or approaching a mortgage lender directly, have their own advantages.
As a mortgage broker in Middlesbrough, we have access to a wide network of lenders, allowing us to compare multiple offers on your behalf. This can save you time and effort in researching individual lenders.
On the other hand, going directly to a mortgage lender can provide you with a more direct relationship. If you prefer a more hands-on approach or have a specific mortgage lender in mind, approaching them directly may be a suitable option.
To make an informed choice, consider your personal preferences, do thorough research on both options, and seek recommendations from trusted sources such as friends or family.
It’s important to be aware that there are additional costs associated with a mortgage beyond the loan amount itself.
These costs can include arrangement fees, valuation fees, legal fees, and potential early repayment charges. To ensure a comprehensive understanding of these costs, it’s advisable to review the fee schedules provided by mortgage lenders.
Consulting with professionals, such as mortgage advisors in Middlesbrough or solicitors, can also help you navigate and fully comprehend these expenses. They can provide guidance on the specific fees involved in the mortgage process, enabling you to make informed financial decisions.
By considering all the costs associated with a mortgage, you can better plan and budget for your homeownership journey.
Saving for a deposit requires discipline and careful planning. To start with, it’s important to set a budget that outlines your income and expenses, allowing you to identify areas where you can reduce unnecessary spending and redirect those funds toward your savings goals.
Exploring government schemes like Help to Buy in Middlesbrough or Right to Buy in Middlesbrough can also be beneficial, but it’s important to familiarise yourself with their specific eligibility criteria to determine if you qualify. These schemes can provide valuable assistance in accumulating your deposit.
Additionally, consider opening high-interest savings accounts or ISAs designed specifically for first time buyers in Middlesbrough. These accounts often offer competitive interest rates and can help your savings grow faster.
An agreement in principle serves as an initial indication of the potential mortgage amount a lender may be willing to offer based on basic information provided by the borrower. It is not a legally binding document but provides an estimate of the borrowing capacity.
On the other hand, a formal mortgage offer is a legally binding document issued by the mortgage lender. It signifies their commitment to providing the loan, subject to certain conditions being met.
This offer outlines the specific terms and conditions of the mortgage, including the loan amount, interest rate, repayment terms, and any additional requirements or stipulations.
While an agreement in principle provides an early indication, a formal mortgage offer is the final step in the process, providing the borrower with the assurance and confidence to proceed with their property purchase.
The timeline for processing a mortgage application can vary depending on several factors. On average, it takes several weeks to complete the process.
The specific timeline can be influenced by factors such as the type of property being financed, the applicant’s credit history, and the efficiency of document submission.
To ensure a smooth and timely process, it is important to work closely with your mortgage advisor in Middlesbrough. They will guide you through the application process, help gather the necessary documents, and provide assistance in submitting them accurately and promptly.
It’s also advisable to be prepared for potential delays that may arise due to unforeseen circumstances or additional requirements from the mortgage lender.
By keeping up open communication with your mortgage advisor in Middlesbrough and being proactive in providing any requested information or documentation, you can help speed up the process and increase the chances of a timely approval of your mortgage application.
Gain confidence in navigating the mortgage journey with these answers to your top questions.
Seek out expert guidance from trusted mortgage advisors in Middlesbrough today, conduct thorough research, and stay proactive to make informed decisions.
Start your homeownership journey with assurance and take the necessary steps towards achieving your dream home.
It’s crucial to any first time buyers in Middlesbrough when applying for a mortgage. Having a high credit score is a helpful factor. It ideally means a higher chance of you getting accepted and being successful with your application.
Although this doesn’t mean you’ll be guaranteed acceptance, though, each lender has their internal scoring systems.
Each lender has their criteria that they have developed over the years. Suppose you’ve failed with one lender not to worry. Mortgage lenders may be inclined to be more lenient, and it is down to your Mortgage Advisor in Middlesbrough to match you with the lender that’s right for you.
There are multiple credit reference agencies in the UK; we recommend Experian and Equifax. It is a good idea to look into many of these agencies as possible in advance, to give you a more specific idea of your credit score.
Furthermore, it is also plausible that some of these agencies hold inaccurate information. So, by checking with multiple agencies, you can be sure that this information gets appropriately amended.
Multiple credit searches can have adverse effects on your credit score. Be on guard of using price comparison websites which are known to be significant credit culprits searching on individuals.
If you are applying for a mortgage soon, it may be wise to apply for additional credit afterward. Whilst having some credit and paying it back is a good thing for your score in the long run.
Lenders prefer to see you leverage your borrowings right before setting up a mortgage application.
Making sure you’re registered on the electoral roll increases your credit score. It indicates stability which lenders like. Ensure your name gets spelt correctly and that it’s your current address which is registered online.
If you aren’t registered, it’s simple and easy enough to do this online.
If you max out your card each month, your credit score will get lowered. Utilizing a credit card to keep on top of your payments each month is a preferred method. It’s a good indicator of your lender that you are good at managing your money.
The main red flag in a lender’s eyes is if you exceed an agreed card limit or overdraft. The reason lenders watch over this is because they want to know you’re able to take your finances responsibly.
Sometimes it can get perceived on your credit report that you are living in two places at the same time if providers have yet to get told that you have moved houses.
It is pivotal that the addresses which you’re updating get spelled correctly; If you have been residing in a flat, this can be a bit more complex as the address can get formatted in different ways.
If you no longer use individual store/credit cards, you should get into contact with the providers to close the account for extra security. In the short term.
This could get seen as having a brief impact on your score as the lender can’t tell who’s closing the account, e.g. you or the provider, but this will be for the better and an advantage to you in the long run.
It’s a great thing to do to reduce your chance of becoming a victim of fraud if you don’t notice you have a lost a card which you may use regularly.
Many consumers feel that credit scoring is an unfair way of applications getting assessed through lenders themselves are indifferent to this idea as it makes their overall job more manageable.
It is more cost-efficient for them to operate this way and computers give more consistent outcomes. On the other hand, some lenders do still do it the old-fashioned way but still apply the same rules about the number of defaults and CCJ’s they will allow.
When setting up your application, be sure your report is up to date to increase your chances of being accepted the first time. The more in-depth information which your specialist mortgage advisor in Middlesbrough has at hand, the better.
When it comes to savings and avoiding extra expenses, people often get confused about whether they should buy a house or whether they should rent one, especially first time buyers in Middlesbrough. This is a very complex and complicated issue for many people. There are lots of people who consider renting a house as a total waste of money but then there are also people who consider it a wiser option.
If you are a young person and your parents are owners of a home, you will most likely be encouraged by them to save and buy a house of your own. But time changes everything and now, a lot more people rent houses as compared to the number of renters in the past. Today, we will take a look at all the pros and cons of buying a home so that you can make a wise decision.
There is one fact about the property market that you should know: you never know what cycle it is in. You never know whether it is going to crash or if it is going to boom in the near future. What’s really disappointing is when you purchase a property and the next thing you know, it has gone down a lot in value.
History does suggest that even if you buy a home when the market is at the top, it’s value could go down at some point. However, as long as you can afford to keep the property, you should be aware that its value will surely go up again sooner or later.
If you take a look at the sold values from the period of the Credit Crunch, you will see that it was one of the worst economic times that we have faced and yet less than just a decade later, the UK property values reached to a point that is an all time high!
You can also lose a lot of money if you are forced to sell your property at the wrong time which could be due to a reduction in the overall income or maybe even a relationship breakdown.
You must discuss all the possible outcomes with your Mortgage Advisor in Middlesbrough and also your family before you decide to make a purchase. This will make sure that you are well protected from things like being unable to work because of illness and other things. That being considered, we are talking about a home and not just an investment in property.
A lot of the times, the mortgage payments that you’ll be making will be a lot cheaper than rent payments. Interest rates always go up and down all the time which means that your mortgage payments will surely fluctuate as well. If you are worried about that fact, then what you should look at are fixed-rate mortgages so that your payments will always remain the same over your mortgage term. On the other hand, rents will either remain the same or they will go up. It is very unusual for your landlord to reduce your rent.
Most people feel that owning their own home will create a very stable situation in many regards for them and their family. This is because nobody can ask you or force you to move from your house unless you want to yourself or you fail to meet your mortgage payments.
While you will surely have some protection as a tenant in terms of how much notice your landlord will have to give you, if they want their house back to themselves, sadly, there isn’t much that you can do in such a case. This is not very ideal, especially if you have a family and have your children in a local nearby school or if you work nearby.
Regarding flexibility, renting can be a lot more flexible than owning a home. For example, there is absolutely nothing to stop you from giving your landlord a notice to leave if you get another job in another area. This is not as easy if you are a homeowner though. You will have to decide whether or not if you want to sell your home or sell it out as a buy to let in Middlesbrough. The process of selling a home and then purchasing a new one is very complicated, difficult, and expensive and time-consuming.
If you are aware that you will not be living somewhere for a long period of time, you should surely think a lot about whether it is worth buying a home or not. Buying a home should mostly be considered as a long term investment for everyone.
Being a tenant, your landlord is going to be responsible for all the repairs. Some of the letting agents and landlords are a lot better than others when it is a matter of repairs and even if you are renting, you will surely end up doing some of the minor maintenance of the property yourself.
If you are a homeowner then all of this will be on you along with insuring the property as well, which will surely be a condition of any of the mortgage that you take out.
As opposed to what many people might say, having your own home is not for everyone. If you are someone who is young and moving in with a partner of yours for the first time there is nothing wrong with renting for a while. Things will not always work out the way that we plan and it can be a very difficult to get removed from mortgage.
Buying a home is a very major financial commitment and all the people should consider each and every option before they dive into it. If you plan on renting, it will surely take you a longer time to save up enough for a deposit.
In the end, a lot of people end up deciding that they prefer to buy a house as opposed to renting one. Whether you are going to rent or will be paying a mortgage, you will be making monthly payments to live somewhere and a lot of people would rather see this go towards their own benefit as opposed to someone else’s.
It is mostly just a situation of getting your timing right and also being in the correct financial state to be able to proceed with all this. For a free mortgage consultation and an accurate affordability measure, get in touch with your mortgage broker in Middlesbrough today.
Property inflation has outstripped wage increases over the years. In order to be able to afford a suitable property many people feel the need to buy with another person.
This is because two incomes are then contributing to the payments so the costs are shared and lenders can also take the two incomes into account when calculating your maximum mortgage amount. Although, there are risks to be considered which will be answered throughout this article.
Some lenders often allow up to four people to jointly co-own a property. If, for any reason, a borrower stops their contributions towards the mortgage payments then any joint owners have a legal right to stay in their home unless a court rules otherwise. Because of this, it’s best to be very aware of who the property is bought with.
If the borrowers wish to increase the mortgage later down the line then all borrowers will need to consent. So this will mean it’s important that long term plans are made should circumstances change or the borrowers end up wanting different things.
Most married couples tend to opt for joint tenancy. If either applicant were to die then the property passes to the other owner. If mortgage life insurance has been taken out then the mortgage would be repaid at that point also. Consent will be needed from the other applicant if there is thoughts of selling or remortgaging the property in the future.
Tenants in common is sometimes chosen by relatives or friends that buy together. They will still jointly own the property but are not forced to do so in equal shares. This makes sense more if one party is contributing a bigger financial input than the other.
An applicant can act individually if they are a tenant in common. For example, the share of the property is able to be sold or given away.
All mortgage borrowers are jointly and severally liable for mortgage payments. If one of the parties stops paying then the other(s) will have to make up for the shortfall to prevent the mortgage from falling into arrears. Any arrears that appear may stop you from getting a mortgage in the future.
Whether you are a first time buyer in Middlesbrough actively viewing properties or a home mover in Middlesbrough with your house on the market, you may have noticed that some of the larger estate agents and builders are very keen for you to use their in-house mortgage advisor and conveyancing services.
Being part of a stand-alone mortgage business we receive lots of feedback as to what sales tactics can be used, examples of this are;
Research gathered from Legal & General; parents are gifting deposits for their children now more than ever before. The gift so much now that it the “Bank of Mum & Dad” was a bank it would be one of the top 10 biggest lenders in the UK.
The average parental gifted deposit in the UK is now up to £24,000. Gifts also come from other family members, including grandparents, as their wealth sometimes skips a generation. Thousands of first time buyers in Middlesbrough every year are reliant on their families to either get onto the housing ladder in the first place or upgrade to a larger, more beneficial home.
Gifts are vital to the workings of the market and make a significant difference. If they were not accessible; the property market could be very different from how we know it and not for the better.
According to the research gathered, almost 20% of parents who had helped their children buy, did so because they felt it was their responsibility as a parent to help.
Property price rises have outstripped wage increases over the years, putting purchasing a first home out of reach for many, especially if there is only one income bringing in a level of financial stability into the household. It can be a challenge saving for a deposit and having to cover the costs of bills and rent. Some end up moving home in Middlesbrough and back in with their parents for a while in the run-up to moving to help with savings.
Of the back of the survey, Legal and General warned that parents’ generosity could impact their standard of living in retirement. Based on their survey of 1600 parents who had helped their children, most were gifting from their savings. Slightly more worrying, though was that many were withdrawing from their pension schemes or their equity.
Effectively this is them “fast-forwarding” their child’s inheritance.