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.
The happy days of 100% and even 125% mortgages seem a long time ago. Now the credit crunch is behind us, and lenders tend to be more confident again to offer 95% mortgages to first time buyers in Middlesbrough.
It’s reasonable that you should show you can save each month. It also gives lenders comfort that you have something to invest in the process showing you have something to lose should it start to become more challenging to keep up your mortgage repayments.
We know it’s challenging to save up a deposit for many people, and this is their primary barrier to entry into the property market. It is daunting if you have a family or are in rented accommodation.
The higher the deposit the lower interest rate you will receive and this usually is more cost-effective and helps you in the long-term. The reasons for this is that you appear more reliable to them. Bands differ in price depending on various factors such as your deposit.
The percentage of your mortgage provides lenders with an idea of how invested you are to your mortgage, although considering – the higher the interest rate, the more expensive. This means that the higher your deposit, the more secure you will be when it comes to purchasing your dream home meaning you will be happier in the long term.
In a limited number of circumstances, it can be successfully achieved. The Lender will make the monthly payment as an additional credit commitment, therefore, grant you a smaller mortgage.
As a result, one will qualify if you hadn’t borrowed the deposit. Most lenders oppose this as you are essentially borrowing 100% of the purchase price.
Yes, most accept gifted deposits from family members and friends can be acceptable too. The sender of the gift will need to confirm it’s a gift, rather than a loan, and need to produce ID and proof of funds for anti-money laundering purposes.
Others have turned to the Bank of Mum and Dad, gifting their children funds towards a deposit.
For Anti-Money Laundering purposes, providing bank statements help to evidence funds. Lenders like to see how the money is being built up as this provides more of genuine insight.
If you have deposited a large amount into your account, you may need evidence to support this.
For example, if you have sold a car, then you’ll need a receipt and the amount you have sold the asset for would match the amount paid into your bank account. This will highlight reliable sources backing up your finances.
If you are selling a property, then the Memorandum of Sale provided by the Estate Agent is your proof.
Usually. If it is a genuine discounted purchase, i.e. the house is worth £100,000, and you have been offered it, for example £90,000, then some Lenders will accept this as your guaranteed deposit.
This works well if you are eligible for a Right to Buy from the Local Authority or other Social Landlord, our mortgage advisors in Middlesbrough can help you find the most suitable right to buy mortgage in Middlesbrough.
A 95% mortgage is as simple as the name would suggest; you are borrowing against 95% of the price of a property, and then you are covering the remaining 5% with your deposit. An example of this is if you are a first time buyer in Middlesbrough who looked at buying a property that was worth £150,000 with a 95% mortgage, you would be putting down £7,500 as your deposit and borrow the remaining £142,500 from the lender.
Off the back of the March 2021 Budget, Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, making 95% mortgages more readily available from the bigger high street banks.
This is fantastic news for first time buyers in Middlesbrough and people moving home in Middlesbrough alike, as this scheme will continue running until December 2022. Certain terms and conditions will apply though, which is something your Mortgage Advisor in Middlesbrough will be able to look at, to see if you qualify.
All our customers who opt to get in touch will receive a free, no-obligation mortgage consultation where one of our dedicated mortgage advisors will be able to make a recommendation on the best possible route for you to take.
95% mortgages are usually accessible by both first time buyers in Middlesbrough & those who are moving home in Middlesbrough. Whilst saving for a 5% deposit sounds like a pretty straightforward concept, you’ll still need to have an acceptable credit score and prove that you are able to afford your monthly mortgage repayments, in order to access a 95% mortgage.
A good credit score is essential in the process of obtaining any mortgage, especially a 95% mortgage. Things like paying any current credit commitments on time, ensuring your addresses are updated and checking that you’re on the voters roll, can all help with your credit score.
Affordability is another one that is important to take note of. By giving the lender details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments, your lender will be able to get a general overview of whether or not you are able to afford this type of mortgage.
Nowadays we see lots of family members helping each other get onto the property ladder, especially parents looking to further their children’s lives. The way this usually happens is by gifting the person looking to find their home, the deposit required. Known through the industry as the “Bank of Mum & Dad, Gifted Deposits are only intended to be a gift, and not as a loan. The lender will need proof that this has been agreed, before it can be used towards your mortgage.
When looking for a 95% mortgage, you want to make sure you have the right type of mortgage. Each mortgage type works differently, with that choice allowing you to find one that is most appropriate for your personal and financial situation.
Some homeowners and home buyers prefer Fixed Rate or Tracker Mortgages, mortgage types which mean you either keep interest rates at a set amount for the term given or have your interest rates tracking the Bank of England base rates.
Alternatively, you might find that Interest-Only or a Repayment Mortgages are more your style. Interest-Only allows cheaper payments until you need to pay a lump sum at the end (mostly now used for Buy-to-Lets), whereas a Repayment mortgage (a normal mortgage if you’d like) means you’ll be paying interest and capital combined per month.
Seeing as a mortgage is such a large financial outgoing, you need to be prepared and need to be aware. You might find things like higher interest rates, remortgaging difficulties due to less equity and then negative equity all cropping up if you’re not.
There is no need to worry though, as all these can be avoided if you’re savvy enough with your process to begin with. The more deposit you put down for a property, the less risk the lender will see you as.
A larger deposit, of say 10-15%, would not only reduce the rates of interest by a noticeable amount, but would also give the property more equity and reduce the risk of negative equity, thanks in part to you borrowing less against the property.
So, whilst the risks may seem intimidating, planning ahead and saving for a bigger deposit to access something like a 90% or even an 85% mortgage will be a massive help in your mortgage journey and something you’ll be able to reap the rewards from in the future.
In the beginning of the mortgage process, first time buyers in Middlesbrough will very quickly realise that there are lots of different options available to you as a customer. Below we have put together a list of the most popular types of mortgages available on the market, hopefully answering any questions that you may have. If you would like to speak further with a mortgage advisor in Middlesbrough regarding any of these, please do not hesitate to get in touch.
A fixed-rate mortgage is a simple form of mortgage wherein your monthly payments are going to stay the same for a set period of time. You are able to set the length of which you want to fix your payments for yourself, with standard choices being 2, 3 or 5 years or sometimes longer. Even if there happen to be any major changes to inflation, interest rates or the economy, you know that your mortgage payment, usually your biggest outgoing, will stay consistent.
A tracker mortgage will follow the Bank of England’s base rate. What this means is that the lender that you are with does not actually set the interest rate themselves, thus making it potentially unpredictable due to the potential for it to change. You will likely be paying a percentage above the Bank of England base rate. An example of this would be if the base rate is 1% and you are tracking at 1% above base rate, that means that you will be paying a rate of 2%.
By taking out a repayment mortgage, this means that each month you will be paying back a total combination of capital and interest. Providing that you keep your payments going for the full length of the mortgage term, the mortgage balance is almost certainly going to be paid off at the end and the property will become yours.
This is widely considered to be the most risk-free way to pay your capital back to the lender, especially as in the early years it is mainly the interest that you are paying and your balance will reduce at a slightly slower pace, especially if you have taken out a term over 25, 30 or 35 years. Your circumstances will change within the last ten years or so of your mortgage, as your payments will be paying off more capital than interest and the balance will come down at a quicker pace.
Whilst many look into buy to let mortgage advice in Middlesbrough are set up on an interest-only basis, taking out a regular residential mortgage in the form of interest-only is a lot more difficult and not seen as often.
It is a lot less likely for lenders to offer an interest-only product to applicants these days. That being said, there are very particular circumstances where this can be an option. These options can include downsizing later in life or to use the capital to pay off other investments. Lenders are very strict when it comes to offering these products now and the loan to values are a lot lower than they used to be.
With an offset mortgage, the lender will set you up a savings account to run in tandem with your mortgage account. This is quite in an interesting one in how it works. Let’s say you have a mortgage balance of £100,000 and £20,000 is transfered into your savings account; you would only be paying interest on the difference between the two amounts, so in this case it would be £80,000. This can be a very efficient and financially savvy way of managing your money, especially if you are a taxpayer with higher rates.
Regardless of your mortgage scenario, if you are a first time buyer in Middlesbrough and have had your offer accepted on a property, the next step is to arrange a property survey to confirm your property’s condition and find out whether or not it’s worth what you’re paying for it.
Our qualified mortgage and protection advisors will help you choose the right survey for your situation and the type of property you are purchasing. Please feel free to get in touch, and we will be happy to help.
A property survey is a comprehensive review of a property’s condition. It’s a property surveyor job to go out to the property and examine its suitability for the homeowner to live in; they will produce a report highlighting any dilemmas with the property. These problems vary from internal to external.
The issues could be severe or easily rectified with a potential small fee, but you will need to get a property survey either way. The surveyor report will also feature expert commentary on the property, from the type of wall to the kind of window glazing.
A mortgage valuation takes a brief looks at your property to assess how much the property is worth to your mortgage lender. Your mortgage lender will usually insist on using a company they trust, and you will have to pay for it.
The cost of a mortgage valuation varies depending on the size of the property. We tend to find; some mortgage lenders offer free valuations as part of a deal.
This survey will cover structural safety and highlights problems, including damp and anything that doesn’t meet current building regulations.
You will receive an independent report of your property by an expert. It is advisable to ask the mortgage companies surveyor to carry out this report for you, and it will take a couple of hours to complete depending on property size and condition.
This survey is advisable for older properties and those of non-standard construction. Depending on the property size and type – a full structural survey can take as long as a day to complete.
A full structural survey provides a detailed report on the condition of the property and highlights issues that the homebuyer should investigate further before going ahead with the purchase, providing you with peace of mind about the state of your property.
A survey carried out by the Nottingham Building Society showed there was a rise in declined mortgage applications from clients in and over their 40s. When asking customers directly, who had been declined during the last two years, they had stated about how it was due to their age. However, it’s still possible to obtain a mortgage at a later age.
To understand the clients that feel like they are being hard done by, we’d need to look at how the mortgage application process was carried out before computerised credit scoring and increased regulation – when a branch manager or mortgage advisor in Middlesbrough would individually assess personal details and decide whether the application was approved.
If by chance that the application was approved, then there would be the matter of looking at how much was allowed to be borrowed and this would have been expressed quite simply as a multiple of the individual’s gross salary. For example, if you were earning £20,000pa and the Lender’s income multiple was 3.5x then you would be allowed a mortgage of £70,000.
However, what the method didn’t account for was age so it did not matter what age a person was, they could all be allowed to borrow the same amount of money. But this isn’t as fair as it may seem. If we look at two types of cases and compare, we can understand why.
If two applicants were both due to retire at the age of 65 then applicant one would be granted a mortgage term of up to 35 years whereas applicant two only 15 years making their monthly payments much higher. Let’s take the above £70,000 (capital and interest) mortgage and use that as an example, using a notional interest rate of 5%:
So, in this situation we have two identical earners with the same mortgage debt, but applicant two’s monthly payment is quite higher by a considerable amount. But if interest rates were to suddenly shoot up, then the risk of an arrears situation occurring is greater for applicant two than applicant one.
Therefore, modern mortgage calculators now consider the maximum term of the mortgage, e.g. your age as well as your income and expenditure.
It’s not so much that older first time buyers in Middlesbrough customers are being turned down as such, but that they are being told that they are able to borrow less than what they had in mind. Of course, the irony of this situation is that we are constantly being reminded that we are going to have to work until a later age by the Government before qualifying for a State Pension. Although Banks don’t seem to be taking this into account when granting mortgages, this is something we’re able to explore further.
Firstly, there are some occupations with manual work involved where a person is unable to physically able to work up until a certain age.
Also, the Lenders are closely monitored by the Regulator in terms of repossessions and arrears cases and it can have an adverse effect on them when these occur. Taking a property into possession is a very expensive process which could also lead to bad press that Lenders don’t want or need. They won’t want to be seen kicking an elderly applicant out of their home.
The good news is that Lenders will consider granting mortgages past normal retirement ages if the person is able to demonstrate affordability after they’ve retired. This would normally consist of a letter from their Pension provider with a projection of their future income. An issue here can crop up is that virtually everyone reading this will likely take a reduction in income at retirement.
Therefore, the Lenders will need the applicant to prove that they can afford their mortgage from that reduced income. In practice this hardly ever works unless they require only a very small mortgage – if this is the case, it probably wouldn’t need to be extended past retirement age anyway.
In 2011, the default retirement age was scrapped which led to it that an Employer can’t force a person to retire. Whilst some lenders use the State Retirement age as the age that you must have your mortgage paid off, it has become more normal for them to let you self-declare the age that retirement is intended. Though there will be a plausibility check, so if you are a fire-fighter declaring an intended retirement age of 72 that would likely be knocked back.
If you find yourself in this position, there are things you’re able to do. You must prepare to be questioned on the matter of affordability. The consumer protections and regulations are in place to protect consumers and encourage prudent lending. If you need the mortgage term to run past your normal state retirement age you will need to demonstrate how you will sustain payments and provide evidence if requested.
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UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.
Authorised and Regulated by the Financial Conduct Authority.
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Middlesbroughmoneyman.com & Middlesbroughmoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.
Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk
