Every lender has their way of calculating your credit score. You won’t qualify with every lender as they all require a different credit score criteria. At times, they may be easy to pass, other times they may have stringent policies and you might find it difficult to pass. If a lender has declined your application, you may not have been told why you failed it. In some cases, they might have justified reasoning for failing you, however, some may not have and you won’t be able to find out why.
It’s at this point where you should realise the benefits of a Mortgage Broker in Middlesbrough. We are here to help you and guide you throughout the process starting from the early stages, right through to the end of your mortgage journey. We will never put you forward for a deal when you are going to be declined.
Before meeting a Mortgage Advisor in Middlesbrough, it is recommended that you obtain a copy of your credit report to show to them. They will be able to go through it with you and try to match you with the most appropriate lender according to your case. The more deposit you have available to put down, the easier your chances will be to secure a mortgage.
Your credit score is one of the most important aspects of your financial situation. It tells lenders how responsible you are. The better your score, the easier it will be to get approval for new loans or lines of credit. A higher credit score can also open the door to the lowest available interest rates when you borrow. There are several things you can do to improve your credit score in Middlesbrough. A few of the important things that you need to focus on are:
If you fail one lender’s credit score, it is not the end of the road, don’t give up! Many lenders prefer to lend to a specific demographic, so just because you didn’t match one lender’s criteria, doesn’t mean that you won’t match another. Although, don’t keep applying to lots of different lenders, as lots of hard credit searches on your file can negatively impact your credit score.
Every lender has their mortgage affordability calculator to work out how much you can afford to borrow. Some lenders will be more lenient and accommodating, whilst others are more strict and rigorous in their approvals, but that varies from lender to lender.
An ideal example of this is if you are Self Employed in Middlesbrough, the lender may be more lenient and merciful with you and your application. Some lenders may only look at your base income, overtime and bonuses whereas others may also accept “unearned” income, such as tax credits, child benefits, and maintenance benefits.
As an experienced Mortgage Broker in Middlesbrough, our advisors have access to over 40 different lenders whom we can approach without the need for a credit check, to perform an affordability assessment. If you are looking to buy a house then we would recommend that you have an affordability assessment carried out before you start looking for properties to avoid any future possible disappointments. Get in touch for more information.
Meeting your monthly mortgage or rent payments helps provide evidence about your credit history but again that does not guarantee that the lenders will pass you in your affordability test.
As we have mentioned before, each lender will have their own lending criteria. Lenders also aim to carve out a niche of their own, so that good quality mortgage borrowers approach them. Here are some examples of why your mortgage application could be denied or has been denied for being outside of policy:
As a devoted Mortgage Broker in Middlesbrough, we will use our knowledge and expertise extensively to find the best lender based on your situation. It does not matter if your situation is a little bit more difficult, we will still try our best to help you through your process.
We have been in the mortgage business for quite a long time now and we know exactly how to get over the majority of mortgage hurdles. Feel free to get in touch with a Mortgage Advisor in Middlesbrough and enjoy your free initial mortgage consultation.
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 has at hand, the better.
Moving Home in Middlesbrough can be tricky for some as it often comes with a considerable amount of pressure and expenses. There are numerous reasons people may choose to do this despite the doubts that surround it. These could range from needing more space or perhaps you are transferring to a new job.
Below are some of the primary reasons why people may find it suitable to move home:
Nowadays most would instead buy than rent in Middlesbrough, primarily due to the monthly expenses likely being a lot less than rental costs.
Moving home can prove to be a reasonably tricky choice for some due to the emotional bond and the advantages and disadvantages of moving home against staying in your home for longer and making home improvements.
If the latter applies to you, then getting in touch for a Free Mortgage Consultation can be beneficial to you. We’ll book you in when you’re free to speak with one of our Specialist Mortgage Advisors in Middlesbrough.
They’ll help you compare the costs of raising money to improve your home versus the costs of moving, as well as help calculate the approximate maximum borrowing capacity. You’ll also receive a quote on your monthly payments so that you can start thinking about your next step.
Speaking with an experienced Mortgage Advisor in Middlesbrough may be a popular choice, as your Advisor may have a good understanding of the area. They may be able to share with you what kind of options their other clients have been taking recently.
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.
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 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.
A great mortgage option for many that is often one that most consider – Offset Mortgages. These were one of the most popular options available in the 1990s. The reason for this is because people aren’t as good as savings as they used to be. However, if saving is something that is able to be accomplished each month then this type of mortgage may be a good option to look into.
When looking into how offset mortgages work, when you choose to set one up with a Lender, you are given a savings account as well. The Savings account which is set up is one linked to your mortgage. The account may not offer you any interest on your savings but is instead put into place to ‘offset’ against your mortgage balance. For example, if you owe £100,000 on your mortgage and your Savings Account holds £18,000 then you only pay interest on £82,000.
Offset mortgages are one of the most flexible arrangements in terms of Mortgage options. You are able to deposit as much money as you wish until the mortgage is completely ‘offset’, whilst you still have instant access to use whenever you wish.
Due to the fact that the Savings Account doesn’t collect interest as it is connected to your mortgage, also means that there is no tax to pay on anything that is held within it. Which can be handy if you’re a Higher Rate Taxpayer.
There are negative factors involved, as there are with all mortgage options. Offset Mortgages do tend to have slightly interest rates and fees than other alternative options. So, if you aren’t going to make use of the flexible features then a standard mortgage may be a more suitable option.
If you think that you are receiving a lump sum for a particular reason in the upcoming future such as an inheritance, an offset saver would be an appropriate place to deposit the money until you decide on what you will do with it. The same can be said for if you receive annual or quarterly bonuses in your job that you do not rely on.
Consumers who choose to go with Offset Mortgages tend to stick with them and are less likely to go through with Remortgaging. These can be tricky to understand sometimes so when you speak with a Mortgage Advisor make sure to consider all options available before making a choice, as they will go through how an Offset Mortgage may help you in the long run.
A lot of First Time Buyers in Middlesbrough who obtain a mortgage plan to overpay their mortgages but never get around to doing it. This is sometimes because they are nervous about paying too much off their mortgage which could have an adverse effect on their future capital requirements. Once more, Offsets are a great solution for this type of borrower as you’re able to access the money at anytime but each day the savings remain in your account – it’s working in your favour.
A Mortgage Agreement in Principle (AIP) is essentially a document to prove you have a mortgage in place. To the Estate Agent, it proves you are creditworthy as you have passed the lenders credit score. However, it is not a guarantee that you will definitely get a mortgage as a full application will require further background checks.
How having your mortgage agreed at the outset can help you negotiate on an asking price. A Mortgage Agreement in Principle in Middlesbrough is essentially a document to prove you have a mortgage in place. It is something we obtain for all of our clients and almost all Lenders offer them.
A Mortgage Agreement in Principle is not a guarantee that you will definitely get a mortgage as your full application will require further background checks (such as evidence of income) and a satisfactory valuation of the property itself.
However, it is a good idea to get one done at the earliest opportunity for the following reasons:
When you are ready to make an offer on a new home most Estate Agents will undertake due diligence and ask you to produce evidence that you have funds available to complete the purchase. This will take the form of bank statements and also an Agreement in Principle certificate that we can provide for you. Once you have provided them with all this documentation the Estate Agent will then normally stop marketing the property and put a “Sold” or “Sale Agreed” board up.
If you already have a Mortgage agreed before you make an offer you are making yourself appear as an attractive proposition as this proves you are not making an offer on a “whim”, you’ve thought about how you’re going to fund the purchase and do something about it. This might persuade a seller to accept an offer you put forward on their property underneath the asking price.
When it comes to buying a house some clients have always “put the cart before the horse”. They go full steam ahead and make an offer on a property without first checking that they can actually proceed. This can lead to terrible disappointment if the mortgage application fails. By that time they have really got their heart set on their new family home. This disappointment can be avoided by contacting us at an early stage. Sometimes there are things that are causing a mortgage to decline that can be overcome given a little time.
For example, there may be a niggling issue on your credit report, perhaps a disputed mobile phone bill which can be easily rectified. Maybe you thought you were on the Voter’s roll and you’re not – once again that can be sorted out given a few weeks.
Or maybe you can’t get a mortgage at all! But if that’s the case it’s better than you know now rather than mess people about and we’ll be able to tell you what you need to do to improve your credit-worthiness for the future.
Ok, so you know you’ve got a good credit rating because you’ve never been turned down for credit, you’re registered on the Voter’s role and you’ve always made your credit card payments on time – so what can go wrong?!
Well, you could approach 10 different Lenders these days and get 10 different maximum mortgage amounts! They all calculate affordability in their own unique ways. If you’re self-employed it really is a minefield: some Lenders take your net profit, others your salary and divided. Some use your latest year, others an average over 3 years.
Knowing your borrowing limits is important as then you know for sure what your price range is. We’ll be able to advise you of the maximum mortgage available to you. Also, more importantly, together we’ll work out how much you can afford to pay back each month, we’ve found this is especially popular with the first time buyers in Middlesbrough that approach us.
The majority of High Street mortgages which are on the market are portable. A portable mortgage is simply a mortgage that you are able to move from one property to another without paying a penalty. This works out well if you are considering moving to a new house and are currently in the middle of a fixed rate deal because you can potentially avoid an early repayment charge.
It’s important to remember that not all mortgages are portable. If you are looking for a Specialist Mortgage in Middlesbrough then a Lender might not have the opportunity to port your mortgage. The best way to find this out is to drop a quick call to your Lender to confirm whether or not this is allowable.
Even with the availability of porting being available, not all customers choose to do so. Some reasons as to why customers don’t port could be due to factors including Lenders not lending the extra money that a person needs to move or that the additional funds will be on a different rate to the one you have on your current deal. Depending on what new new deal you are offered you might decide to overlook the repayment charge and swap to a different lender.
A sub-account will be created onto your mortgage when you port your mortgage and the additional monies end up being on a different deal to the original one. This means that although you only have one mortgage and one direct debit, two different rates of interest apply.
Down the line having sub accounts will lead to the different products overlapping which could get annoying. To get them back aligned at some point will mean one of the sub-accounts having to go onto the lenders’ standard variable rate for a period of time.
At the start of the Coronavirus pandemic, the Government promised that all borrowers would be allowed a three-month mortgage payment holiday if they needed it. Most lenders followed the Government’s given guidelines and did their best to help their borrowers during the tough anticipated months ahead.
Middlesbroughmoneyman has thought carefully about the possibilities of what could happen to your mortgage over the next few months and is working very closely with all of our lenders to ensure that if anything changes, we can let you know you right away and recommend the best option for you to take so that you still feel secure, comfortable and happy with your mortgage.
Mortgage Payment Holidays are agreements entered with establishments such as Banks, Building Societies, or Mortgage Lender depending on who your mortgage is set up with. The agreement will allow you to defer your monthly mortgage payments for a set amount of time.
However, this will not mean that you do not have to pay the amount back. The interest that is deferred will be added back onto your loan amount whilst the capital balance stays the same. In other words, the overall mortgage amount will increase by a small percentage which will attract interest on the whole amount.
When you are in a stable position to continue your payments, there are methods where your monthly payments may be recalculated at a slightly higher level or your mortgage term is extended a bit further. Most lenders will have an option that they will prefer which will be to recalculate your payments for the reason that if some borrowers extend their mortgage term, it could mean that it could take them over standard retirement age and they could then be perceived as a risk to lenders.
Depending on the mortgage deal that you acquired, you may be able to pay off a lump sum later on to bring your mortgage back to where it would originally have been.
Mortgage payments are available to both types of borrowers who hold residential or buy-to-let mortgages, which means landlords also have assistance of rental payments are affected.
The full proposal is in detail below:
When it comes to Mortgage Payment Holidays, we recommend speaking to one of our Mortgage Advisors in Middlesbrough rather than going directly applying for a Mortgage Payment Holiday straight away if the situation is critical so you can make sure you’re making the right approach. Lenders will be overloaded with calls and will be adhering to making sure the most urgent cases are prioritized.
Our Mortgage Advisors in Middlesbrough will talk with you and offer the correct Mortgage Advice in Middlesbrough fitted to your situation and see all the alternative options available to you.
For a customer, up to date with payments, not in arrears and impacted by COVID-19, the process will be as follows:
Normally, a Mortgage Payment Holiday can leave a negative print on your credit score but lenders are making sure this will not happen in these types of cases. When asking about the payment holidays, it is important that you ask the lender directly and make a record of the response you receive, whilst including the date and name of the person that you are speaking to which will save confusion down the line as different lenders are doing different things.
Remortgaging and Product Transfers at this moment in time have become quite controversial. Lenders have been asking borrowers not to make any unnecessary changes to their mortgages within the holiday period. Therefore, product transfers and Remortgage in Middlesbrough are not allowed at this time.
This would mean that borrowers who are close to finishing their existing product may be forced to move on to the higher lenders variable rate.
However, if many borrowers act too early, there’s a possibility that they might find themselves on a mortgage payment holiday that accrues interest on a more expensive variable rate.
To avoid this, we recommend you seek Mortgage Advice in Middlesbrough from our Mortgage Advisors in Middlesbrough to determine the best course of action. If possible, if you arrange your mortgage transfer first then ask for a holiday then this will be the most sensible way to proceed.
Whilst the Government has advised people to not move house unless absolutely necessary, if contracts have already been exchanged and the process is at the end with all in agreement, then going ahead and completing the purchase will be fine.
You should not pull out of your purchase unless for example, you are worried about losing your job as a result of Coronavirus. We are advising everyone to proceed as normal for now and “wait and see” – you are not committed to completing your purchase until contracts are exchanged.
There are alternative options available to borrowers, with some lenders offering the option of an interest-only to help reduce monthly payments drastically but not adding any further to the loan amount by appeasing the interest payments each month. It may be that you won’t need to convert all your mortgage to interest only and that just putting part of the mortgage on this basis could offer you some form of comfort.
For the borrowers who hold savings, remortgaging into an offset basic could be of some support as this would reduce monthly payments whilst also keeping their savings intact.
An example of offset would be: someone with a £400,000 loan and £100,000 in savings would only pay interest on £300,000 reducing their payments accordingly.
For other borrowers, a straight remortgage to another lender, making note of any early repayment charges, may ease the burden enough financially, or simply extend your mortgage term.
To discuss these options further or gain Mortgage Advice in Middlesbrough for your situation, feel free to get in touch with one of our Mortgage Advisors in Middlesbrough.
In the past week the Mortgage Market has seen adverse effects due to the coronavirus. Our Mortgage Broker in Middlesbrough hopes to keep all out customers upto date with what is going on in the Mortgage Market as a safe heads up. Recently, a few things have changed so if you’re having financial worries or doubious thoughts about your mortgage, then we hope you’ll find our Mortgage Advice in Middlesbrough useful.
One of the main problems in the mortgage market, mostly impacting First Time buyers in Middlesbrough is that surveyors and mortgage valuers are not able to carry out proper valuations on properties. This has led to the majority of the market to be put on hold at this moment in time because lenders want to be sure about what they are lending against. Without a proper form of valuation, they are unable to accept many applications.
One of the biggest challenges that the mortgage market is facing is that surveyors and mortgage valuers aren’t able to carry out tasks such as property valuations due to the lockdown. This has led to the majority of the market being put on hold. Thus causing lenders to not accept many further mortgage applications.
However, some lenders rely on an Automated Valuation Model (AVM) for a valuation on a property, meaning some applications can go forward, as these valuations are based on data that the lenders receive. Although, these types of mortgages are restricted to lower loan-to-values only.
As of March 28th, some lenders have restricted their maximum loan to values down to 60% and are expected to go even lower at some point. So, these types of applications will stay ongoing but it is unlikely higher ones are being continued until further notice.
Each lender is taking a different approach in regard to what action they take. So far, no mortgages have been withdrawn with everything put on hold at the moment. On the other hand, there are lenders however, who have extended their mortgage offers from six months up to nine months as to allow time for the economy and the mortgage market to get back to normal.
The important thing to keep in mind when it comes to Mortgage Payment Holidays is that you should only take one if you really need to. By approaching a Mortgage Broker in Middlesbrough, you can obtain Mortgage Advice in Middlesbrough to see what options are best for your situation.
There are two outcomes which will be more likely than others which include:
If you do decide to get in touch with your lender about your monthly payments, then it’s best to get in touch online due to the number of calls in which they are receiving.
It’s also a good to double-check that a payment holiday won’t affect your credit rating or mark any arrears against your account. Additionally, it’s advisable to not cancel your direct debit, and in order to take a payment holiday, you will need to seek permission from your lender.
The main thing is to not panic. Our Mortgage Advisors in Middlesbrough are here to help you with any mortgage enquiries you may have and will be here to get you and your mortgage through the next couple of months.
At some point in the coming weeks or months, we will be back to normal again but for now, you can still get in touch with a Mortgage Advisor in Middlesbrough as we are doing business as usual to be there for you.