Moving In Checklist

Moving house is a stressful time for anyone.

With so much to do, it is easy to overlook some of the admin that comes with moving home!

We have created this ‘Moving In Checklist’ for anybody who moving home or has recently moved home.

Please feel free to share this with anybody you feel may benefit from it.

You can download the file, here:

Help Is At Hand For Property Leaseholders

Are you aware of the differences between owning the freehold of your home and being a leaseholder?

Someone who owns a property outright, including the land it is built on, is a freeholder.

With a leasehold, the person owns a lease, which gives them the right to use the property for a set period via an agreement with the person or company which owns the freehold.

While it is common to buy a flat on a leasehold basis, the practice of selling houses in this way has mushroomed in the last few years, as developers and builders realised that, in addition to achieving the sale price on a property, they could charge an annual rental payment (ground rent) with the potential to double the cost of this ground rent every 10 to 15 years. Developers can also sell freeholds to outside investors, who can (and do) ramp up ground rents. Attempting to buy your own freehold from a developer after the sale has gone through on a leasehold basis is allowed, but the developer or investor can demand whatever price they wish.

In addition, the leaseholder buying a new property will normally be offered a lease over a fixed period of between 99 and 125 years. Although there is a right to extend leases, it can be expensive and under current rules leaseholders of houses can extend their lease only once, for 50 years, with a ground rent.

However, help is now at hand. The Competition and Markets Authority has ruled that doubling ground rent every 10 or 15 years is unfair because, apart from the increasing cost for no extra benefit, it makes it more difficult to sell the property.

Campaigners calling for leaseholds to be banned on new builds now have backing from the government with the Housing Minister, Robert Jenrick, saying that unfair practices like those described “have no place in our housing market”.

As the government has announced the biggest changes to property law in 40 years, this means that homeowners caught in this trap will gain greater control of their properties and free themselves from ground rents which have been costing them so much.

When the legislation is passed, leaseholders will be able to extend their leases to 999 years with no ground rent. Whilst the cost of extending a lease, which has been known to go into tens of thousands of pounds, will also come down under the plans. The reforms mean both house and flat leaseholders will now be able to extend their leases to 999 years with a ground rent set at zero.

Even when the legislation is passed, it is important that when it comes to buying a new property, you have a clear understanding of your rights and obligations as a freeholder or leaseholder. Our advice is always to make sure that your solicitor or conveyancer gives you full explanations and takes you through the terms and conditions.

Life Protection in the UK

Protection in the UK –

Life insurance has become a big talking point over the last year with the Covid-19 Pandemic causing many to think more about the fact that the unthinkable can happen and very unexpectedly at that.

The UK appears to now be past the ‘second wave’ that came over the country but many are still largely affected by the 127 thousand deaths that have occurred domestically due to Covid-19.

As such, many have begun to think more about what would happen in the unfortunate event that something was to happen to them and how those left behind would be affected.

According to the UK’s largest insurer, Aviva, only 3 in 10 adults in the UK have any form of protection policy, while 1 in 8 have no cash savings to their name and 43% find it hard to make their income last payday to payday.

These figures show that a large percentage of the population is likely to face a very difficult time in the event of serious illness or death within their family.

Statistics conducted by financial services provider OneFamily state that 13% of over-50s believe they would struggle to afford the expense of life insurance. However, data provided by Forbes suggest that there are major misconceptions about the cost of insurance, while Aviva offers plans starting from just £5 a month.

How does this relate to Mortgages?
The value of protection is clear to see concerning the mortgage side of things which is why it has become very common for those taking out a mortgage to also take out a policy that covers them for the entire mortgage term.

For instance, in the unfortunate event of death, mortgage payments must still be paid for a home to remain in the hands of the inheritors, something many do not plan for.

Further, according to Aviva, nearly ½ of UK households would struggle financially if the main earner was unable to work for 6 months due to illness or disability- after all, your outgoings wouldn’t stop if your income did.

The added ‘cost’ of a policy ensures that your home remains your home.

What can you do?
When deciding what type of protection you need, it is important to consider how you and your loved ones would be affected due to you being unable to work, developing a critical illness, or passing away.

Our advisers can use this information to recommend you an appropriate cover with our chosen provider, Aviva, building you your own ‘shield of protection’.

Unfortunately, although Covid-19 is responsible for many now seeking out life insurance, the unknown nature of the illness, especially its long terms effects, means it is not covered on many insurers’ terms including Aviva.

Nonetheless, the range Aviva does cover is immense. They are the UK’s largest insurer and in 2019 paid out 98.6% of life insurance claims, helping 16,000 families, with payouts totalling £582 million.

Further, by taking out a policy with Aviva you receive access to Aviva Digicare+ that provides free access to mental health support, Bupa Anytime Healthline, an annual health check, nutritional support, gym discounts, and more.

If you are looking to take out a mortgage, already have a mortgage, or are just looking for personal protection, we can help set you up an appropriate cover plan for you.

Survey Shows Plans To Buy Life Insurance But False Perceptions Of High Cost – Forbes Advisor

Only a third of over 50s had life insurance in the past year (actuarialpost.co.uk)

GitHub – CSSEGISandData/COVID-19: Novel Coronavirus (COVID-19) Cases, provided by JHU CSSE

Life insurance quotes from £5 per month – Aviva

Insurance, Savings & Investments – Aviva

Mortgage Lending Highest in Five Years

According to data collected by the Bank of England, gross mortgage lending in February was higher than any month in the last 5 years.

The gross mortgage lending for February reached £27.7 billion which is 19% higher than this time last year and 13% higher than the £24.5 billion figure for January.

Buyers sought not to miss out on the stamp duty holiday that was supposed to come to an end on 31 March, although this has now been extended as Chancellor Rishi Sunak announced in the yearly budget.

There was an 11% drop since January in the number of mortgage approvals for house purchases to 87,700, a figure which has gradually dropped month by month since its peak in November 2020 in which it hit 103,700.

However, this is said to be understandable as by February many believed they had missed the opportunity to capitalise on the stamp duty holiday.

Furthermore, the number of mortgage approvals is still remarkably higher than the 67,300 in February 2020.

In delivering the yearly budget, Chancellor Rishi Sunak explained that the stamp duty holiday on properties valued under £500,000 is being extended until June 30th. It will then drop to £250,000 from June 30th to the end of September and then return to its usual level of £125,000 from October onwards.

It will be interesting to see how these figures change over the coming months with the stamp duty holiday having been extended, especially with 95% LTV products having come back on the market.

References
Lending reaches five-year high in February: BoE | Mortgage Strategy
Mortgage lending spikes on stamp duty effect | News | Housing Today

Meet The Team – Rachel

Rachel Lummis is the Business Owner and Lead Adviser at Xpress Mortgages. She is is CeCM, CeRGI and CeMAP qualified and is very well known in the industry and respected for her work. She is a regular contributor to industry publications Mortgage Solutions, Mortgage Strategy & FT Advisor and has been recognised in her local community for the charity work she has completed. We spoke to Rachel to find out more about her…

Describe your firm in three sentences.

Xpress Mortgages is a whole-of-market mortgage adviser that first opened its doors on 14th February 2006. We are a small but energetic firm, advising on and arranging residential and buy-to-let mortgages along with mortgage protection. We cover the whole of the UK but most of our clients tend to be in Surrey and London.

What led you to become a mortgage broker?
I had previously worked as an estate agent, with a brief spell as cabin crew. When I went on maternity leave with my second child I decided to retrain and study CeMAP. As soon as my son was at nursery, I joined a busy brokerage in East Croydon, but after just a few months with them decided to go it alone and open Xpress Mortgages and never looked back.

What do you like most about your job?
I think the main one must be helping my clients to achieve their goals. I have so many wonderful clients, some that I have been assisting time and time again for over 14 years.

My very first client was a first-time buyer. I remember going to her parents’ house and having a cup of tea with the family and helping with their plans, my client then met her husband and I arranged the mortgage for their first home together. When their first child came along, I arranged the next mortgage for their move, and more recently a remortgage to build a loft extension for the growing family.

To be part of our clients’ journey is amazing, it’s almost like they become part of the Xpress Mortgages family. That’s what it’s all about at the end of the day – support.

What is the best day you have ever had?
It has to be becoming a mother, you can’t beat that. Mortgage-wise, opening Xpress Mortgages.

You are going out for a meal, what would be your cuisine and drink of choice?
My favourite food is Italian, and my favourite tipple is Pink Gin!

What are some of your favourite hobbies?
I like to start my weekdays with an early morning run to get me going for the day ahead, and on weekends long country walks to clear my mind after what is always a very busy week!

Contact Rachel

Meet The Team – Emily

Emily joined Xpress Mortgages at the start of 2020 with a wealth of experience having progressed from mortgage advice and protection to wealth management and financial planning whilst at HSBC. After a career break, Emily returned to the financial services industry as a Mortgage Paraplanner, joining Xpress for a better work-life balance.

What role do you play at Xpress?
I provide a full paraplanner service to the team including the processing of mortgage and insurance applications to various financial institutions and administering new business cases from application through to completion.

What do you like most about working for Xpress?
Our boss, Rachel, is easygoing and supportive, and my colleagues are lovely. We have a great team spirit at Xpress.

What do you like about working in the industry?
I like helping clients to understand the biggest liability they will probably ever have in their lives- they need to understand what they are getting themselves into. It gives me satisfaction helping people to own their own homes and not having to pay rent.

What is your passion outside of work?
Cars! My dream car would be to have an all-black Dodge Challenger Demon with tinted black windows.

If you could trade places with anyone for a day, who would you choose?
Gordon Ramsey, so I can see what he gets up to in a day and watch up-close how he cooks such amazing food!

What would you say are your greatest attributes?
I am very meticulous which is necessary when handling mortgage administration. I am also very passionate about my job!

Will I Be Accepted For A Mortgage?

At Xpress Mortgages, we are pleased to say we have helped many homeowners step onto the property ladder. One of the most common questions prospective property buyers ask us is “will I be accepted for a mortgage?”

It is a reasonable question, as lenders vet applicants closely, and many people find they are unable to arrange an affordable mortgage.

However, we aim to help you improve your chances of being accepted for a mortgage, and at Xpress Mortgages, we are always here to help you, so please feel free to get in touch.

Below, you can access our free guide, which will help you enhance your chances of applying for a mortgage.

Meet The Team – Angela

Xpress Mortgages celebrated their 15th Birthday last week, as well as passing 150 5-Star Google Reviews!

In order to mark the occasion, we will be reintroducing our team one by one so that we can help our clients put a face behind the name during these unprecedented times in which very few come to the office.

To begin with, we have one of our two wonderful mortgage administrators, Angela!

Angela has spent 17 years in the finance industry working across various roles at Nationwide Building Society. Discovering her passion for providing mortgage advice, Angela joined Xpress Mortgages in 2019 to develop and broaden her skills by working as a Mortgage Administrator.

What role do you play at Xpress?
I am a Mortgage Administrator.

What do you like most about working for Xpress?
The team I work with.

What is your passion outside of work?
I love the outdoors and taking my 2 gorgeous boys out into the countryside is my favourite thing, whatever the weather!

If you could trade places with anyone for a day, who would you choose?
Tom Hardy’s wife! My cat! Seriously, it would be Virginia McKenna (Actress and wildlife campaigner).

What would you say are your greatest attributes?
Positive & Outgoing.

The Best Small Broker At 2020 Mortgage Strategy Awards

We are absolutely thrilled to share with you, that we won The Best Small Broker Award at the 2020 Mortgage Strategy Awards. This is one of the leading events in the mortgage sector, and it isn’t an exaggeration to say this is the Oscars of Mortgages!

In explaining our victory, we were described as: “The winner of this category was described as being “inspiring”, “tenacious”, “authentic”, and
many other superlatives besides. Its growth story, with the owner taking it from the living room to the next level on a consistent basis each year, was praised for its ambition.”

The 2020 Mortgage Strategy Awards was hosted by Sally Phillips. Sally is a very familiar face of UK TV and film over the past three decades. Sally has starred in shows and films such as I’m Alan Partridge, Hippies, Smack the Pony, Green Wing, Jam & Jerusalem, Parents, and all three Bridget Jones films.

As you can imagine, it was quite surreal seeing such a popular figure present an award to us!

The Voting Process

There was a four-stage voting process to the Award, and this makes our achievement all the more humbling. We are thrilled so many people supported us during the Public Vote, and that the judges deemed us to be a worthy winner.

The four stages were:

• Stage One – The Self-Nomination Process
• Stage Two – The Public Vote
• Stage Three – The Entry Process
• Stage Four – Judging

The process was explained on the Awards site as follows:

“All votes were thoroughly reviewed by the Mortgage Strategy editorial team, and the firms with the highest number of votes in each category became our longlist. Longlisted firms were invited to submit entry forms, which were then sent to our expert panel of industry judges for review – their scores and comments created our shortlist. Shortlisted brokers and distributors were invited to attend an interview with our judges, while shortlisted lender and provider entries were debated by a second industry panel to decide the winners.”

Thank You!

The entire team at Xpress Mortgages would like to thank anyone who voted for us or who wished us well. In some ways, it is a shame that we couldn’t attend in person, the event was due to take place at the prestigious Grosvenor Hotel, Park Lane London , but given the challenges we all face in 2020, that is not something to overly worry about!

Having been finalists on three occasions, we really appreciate winning this award, and you can rest assured we will do everything we can to ensure our clients receive the best standard of service.

The interview process, in front of six judges was a stressful day. This happened in January of this year, and the ceremony was initially postponed in March, rescheduled for September, and then it was decided to announce the winners online on 15th October.

Most UK Mortgage Approvals In 13 Years

Bank of England figures indicate that lenders in Britain approved more mortgages in October 2020 than they had in 13 years. This is further positive news that the UK mortgage and housing market is set to end on a high.

Mortgage approvals for property purchases reached 97,532, which was higher than the 92,091 which was reached in September. This figure was also higher than the predictions from most economists.

Another indicator that the housing market is busy right now comes in Google Trends figures. This date shows that visits to the leading property portals, Rightmove, Zoopla and OnTheMarket were 30% up on the year on year figures at the week ending 22^nd of November.

Sam Tombs is a UK economist at Pantheon who said; “The housing market, however, remains set to weaken sharply after the threshold for stamp duty is returned to £125,000 from £500,000 at the end of March.”

But while the mortgage market remained resilient as all parts of the UK tightened social distancing rules in response to a second wave of infections, the Bank found that consumers remained cautious about borrowing using credit cards or other forms of lending.

Mortgage market faring better than the economy in general

It is fair to say the recovery in the housing market stands apart from how the economy is faring. There has also been an increase in unemployment numbers which are expected to increase in 2021.

The wariness that is felt by many people can be seen with the Bank of England data which indicates net consumer lending dropped by £590 million on the monthly figures. Most of this is down to people repaying credit card debt.

Lending also fell 5.6% compared to the 2019 figures. This drop was significant and represents the largest fall since monthly records started being collected in 1994.

There was also an increase in household savings, of £12.3 billion pounds. This was the largest increase since May of this year.

Alistair McQueen, the head of savings and retirement at insurer Aviva, said; “A reduction in the use of consumer credit and another increase in savings suggests many are bracing themselves for further economic uncertainty.”

Will there be less uncertainty in 2021?

While there are concerns as to what 2021 has in store, with COVID-19 and Brexit, positive news about the vaccine is likely to help people feel slightly more optimistic as to what is coming next.

No matter an individual’s personal thoughts regarding the vaccine, anything which removes much of the uncertainty which we are experiencing today has to be of benefit to the economy and country.

Thomas Pugh, a British economist at Capital Economics said; “The good news on vaccines means that businesses and consumers’ purses could be pretty full when regulations are loosened early next year, leading to a sharp rebound in consumption and growth.” While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Expert Suggests UK Mortgage Market Primed For Brexit

News that a vaccine for the COVID-19 pandemic will hopefully be ready for use is positive news for people looking ahead to 2021. Of course, there are many challenges in the months which lie ahead, and it is impossible to overlook Brexit.

The housing market, as well as the mortgage sector, will be affected like every other part, but one leading name in the UK market believes the sector is in a strong position to cope with the Brexit transition phase.

Richard Hayes is a well-known name in the UK mortgage market, and he said; “There is unlikely to be a massive impact there when it comes to Brexit. We’ve got two things to look back on, the recession we’re in right now and the little impact it’s had on the property sector. But the property market in the UK also acts in isolation – it is such a strong market, the largest in Europe, and it is exceptionally resilient. This is even more the case after the 2008 financial crisis and the reforms which came off the back of that – stress testing around affordability has been far more robust, for example. The financial crisis in 2008/9 set the mortgage market up to really not go through issues again.”

Lessons must be learned

It is vital that lessons have been learned, and that the mortgage market is in a position to manage challenges that are likely to come.

Mr Hayes added: “History suggests the mortgage market should be in a better place due to the first financial crisis and the outcomes and actions which were taken off the back of that to make it a securer sector. When big things are going on, the mortgage market has learnt its lessons to remain strong – and we can immediately say this is the case and has definitely happened since COVID and the national lockdown.”

Mr Hayes also said; “Although the market has been buoyed by the Stamp Duty holiday, it was in a good place even before this measure was announced – property prices were up and we were busy. We don’t expect to see anything have a crazy impact on the market itself once the Brexit transition period occurs. We were forced to be put into a different and more resilient mindset off the back of the credit crunch.”

Would a no-deal Brexit affect matters?

Of course, Brexit still looms large, and there are concerns what will happen to the economy if a no-deal Brexit occurs.

Mr Hayes concluded: “What would a no-deal do? It may affect importers and exporters, and their income, it may affect prices. There are so many things which could change. But in the same instance, there are so many things COVID-19 has had an impact on – particularly on a day to day basis. The main takeaway is that we are still processing record numbers of applications. People can breathe a sigh of relief.” While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Mortgage Options Expanding For December 2020

As we head towards the end of 2020, it appears as though mortgage products are returning to what many people would regard as normal. This has been an extremely challenging year for the mortgage sector, so the return of more mortgage products to the market is very welcome.

YBS is offering a greater range of options

The Yorkshire Building Society has launched a selection of 90% LTV mortgages which are available to first-time buyers, homeowners looking to move, and remortgage customers. The organisation is looking to offer greater choice in a limited market.

The new mortgage products include a two-year fixed rate mortgage at 3.69% and a five-year fixed-rate mortgage at 3.79%. Both these products carry a £995 product fee for home purchasers and remortgage clients.

Ben Merritt, senior mortgage manager at Yorkshire Building Society, said: “We know it’s been a really tough few months for borrowers with smaller deposits but hope returning 90 per cent LTV mortgages to our core range will provide a welcome boost to people wanting to get on to, or move up, the property ladder.”

Ben also said; “We’ve consciously designed the new range to include something for homebuyers, movers and people remortgaging to make sure our options meet the varying needs of those borrowing more money against the value of their house.”

The Co-op is proactive in the mortgage sector

The Co-operative Bank, via their intermediary mortgage brand Platform, is relaunching a range of mortgages which are between the 80% and 90% LTV. They are also set to reduce existing rates by up to 0.49% and are offering £1,000 cashback.

These offers have been made available from Monday 30thn November, with the two-year fixed-rate mortgage available at 90% LTV at 3.74% and the five-year fixed-rate mortgage starts at 3.79%.

Platform is also changing its criteria for first-time buyers, removing the following clauses:

• First-time buyers must have been employed for at least six months before applying for a mortgage
• Gifted deposits are note allowed when the loan amount exceeds £500,000

The standard criteria, such as first-time buyers need to be in permanent employment, will now apply.

Carolyne Gregory, director of retail lending at The Co-operative Bank, said: “We have been really keen to offer as many mortgage options as we can to potential customers and now we are not only reintroducing more products but also making some of our mortgages available with a £1,000 cashback option, the highest cashback amount we’ve offered in recent years. £1,000 back in the pockets of borrowers could be put towards the cost of moving, or for some it’s a chance to splash out on something they really want to buy for their new home. We know it’s a tough economic climate out there and this cashback could be a much-needed boost for our borrowers, and unlike the Black Friday and Cyber Monday promotions up for grabs over the next few days, our offer will be around to support customers for a much longer term.”

Carolyne also said; “This latest launch is the most competitively priced product change we’ve made this year and we want to support as many customers as we can to find an affordable mortgage product to help them realise their aspirations of owning their own home. This is also why we have made a fundamental change to our mortgage application criteria for first time buyers to make our range of mortgages even more accessible to them.”

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Nationwide Expanding Access To 90% LTV Mortgage

Anyone looking for assistance in arranging a mortgage will be pleased to learn the Nationwide Building Society is looking to increase access to their range of higher loan-to-value mortgage lending.

The company will implement these changes from the second week of December. The Nationwide is set to provide the same range of 90% LTV loans to first-time buyers as they do for existing home owners looking to move house.

Buyers need support in the housing market

The Nationwide is looking to play its part in keeping the property market moving, and to provide support to buyers who need additional help in stepping onto the property ladder.

Borrowers will be able to access loans up to £500,000 over a maximum of 25 years. Rates will be aligned to those provided to first-time buyers at the 90% level. This will include a rate of 3.49% for a two-year fixed mortgage, and this will be made available at a product fee of £999.

People who already hold a mortgage will be able to borrow up to 95%, and this will be made available on a like-for-like basis. There will be no LTV restrictions on people looking to switch deals. Also, rates will be priced at the same or better than new business equivalents.

This is a positive outcome for people who feel that the best rates are offered to new customers while existing customers miss out.

It is fair to say Nationwide has been active in supporting prospective homeowners for some time during these difficult circumstances. The organisation re-entered the mortgage market in July, with temporary criteria in place. Nationwide has been recognised as the only significant lender to provide 90% LTV mortgages without any restriction.

Mortgage brokers can help you find your perfect deal

All of the Nationwide’s 90% LTV mortgages are available directly from them, but they can also be accessed via mortgage brokers. It is easy to see why many people will feel comfortable arranging this style of mortgage after speaking with a mortgage broker.

It is helpful to gain advice from experts, but if you speak to only one company or organisation, you cannot be sure you will receive the best advice. However, when you speak with a broker, you stand a better chance of finding the mortgage that is best suited to your needs.

Henry Jordan is the director of mortgages at Nationwide Building Society, and he said: “Nationwide was founded to help people into homes of their own and that remains the case as much today as it did 135 years ago. As a mutual, owned by our members, we aim to balance supporting first-time buyers into a home of their own with the need to lend responsibly. Given the uncertainty created by the pandemic, our re-entry into 90% LTV lending back in July was deliberately cautious and included enhanced criteria.”

Henry also said; “Four months on, we are increasingly confident in our approach and so are delighted to be able to expand our support for the market to include home movers whilst removing some of the temporary criteria for first-time buyers, making it easier for parents to help them take their first step onto the housing ladder.”

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Tips For A Faster Mortgage Approval

The stamp duty holiday has encouraged many people to be active in the property market, and this means many people are applying for a mortgage right now. The significant increase in mortgage applications, and the pressure the mortgage sector is under right now due to Covid-19 related issues, means there is likely to be a backlog.

In normal circumstances, the mortgage application process can take between 18 and 40 days. However, due to the increase in applications, delays are inevitable, and this might delay the process considerably.

There is the possibility some applicants will miss out on the stamp duty holiday day to delays, and if there is no extension to the holiday.

Therefore, it is always useful for applicants to consider ways to speed up the mortgage application process, but right now; it is essential. Thankfully, there are steps you can take which enhance your chances of a swift resolution.

Using a mortgage broker speeds up the process

One of the most effective steps you can take to speed up the mortgage process is to enlist the services of a mortgage broker. A broker is a professional with considerable experience in assisting people apply for mortgages.

Their expertise will help you find the most suitable mortgage, and to make the most effective application in a shorter period of time. If you are looking to improve your chances of success when applying for a mortgage, without compromising the quality of your application, using a mortgage broker makes sense.

Your credit score is essential

One of the most important factors lenders consider when reviewing mortgage applications is the credit score. If you have a poor credit score, you run the risk of having your application rejected, or only receiving a poor standard of mortgage offer.

Therefore, before you apply for a mortgage, you should check your credit score, making sure it is likely to be approved. If your credit score is poor, it might be best waiting until it is improved before applying.

If you are looking for a quick tip which will enhance your credit score quickly, make sure your current address is on the electoral roll. Ensuring this information is correct and up to date provides a platform for the lender to trust you, and your application.

Review your finances

Given the lender will review your finances and base their decision on what they see, it is helpful for you to do this before them. Make sure you have at least three months’ worth of bank statements, and make sure these offer proof of your income.

Lenders want to see you can afford to make monthly repayments without placing your finances in jeopardy.

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Who Are The Fastest Mortgage Lenders Right Now?

With the Chancellor stating there will be no extension to the stamp duty holiday, which will end on 31^st March 2021, many prospective buyers are now weighing up their options.

While it would be nice to receive the financial saving associated with the stamp duty holiday, many buyers are facing up to the fear of not being able to arrange a mortgage in time.

The mortgage sector is under considerable pressure

There is considerable activity in the property market, and this means mortgages are in high demand. The mortgage sector has already faced considerable pressure in 2020, and it is understandable there is a backlog in dealing with applications.

Therefore, studies which indicate the areas where homeowners can buy a home in good time, and which mortgage lenders are faster than others, will be of benefit.

Trussle is an online company in the property sector, and they have looked into this area.

When it comes to the areas where property deals are concluded faster, the following locations have been highlighted as places where you can buy a home quickly:

• West Midlands
• The South-West
• The North-East

With the median number of days of starting a mortgage application to completing the deal taking around 115 days, the 6^th of December 2020 is the date people should consider if they are looking to buy property at a reduced cost.

Of course, the backlog in the market has caused problems and some industry experts point to an increase of 50% in the average time from mortgage submission to approval when compared to the 2019 figures.

Trussle have also highlighted the differences in time taken for mortgage approval for certain types of property. For flats, the average time for completion is 120 days while for semi-detached properties, it takes an average of 108 days for the purchase to be completed.

What mortgage lender act fastest?

When it comes to mortgage lenders who approve new mortgage submissions in the shortest amount of time, the results are as follows:

1. Barclays, found to take an average of 10 days
2. Halifax, found to take an average of 14.5 days
3. BM Solutions, found to take an average of 17 days
4. Coventry Building Society, found to take an average of 18 days
5. HSBC, found to take an average of 19 days

In 2019, and up until June of this year, the average time taken was 10 days.

Miles Robinson is the Head of mortgages at Trussle, and he said: “The stamp duty holiday deadline is looming, which is understandably causing concern. There are delays across the market and we are urging buyers not to delay their mortgage application if they want to take advantage of the stamp duty holiday before the holiday ends on the 31 March next year. We hope that this guidance provides helpful timelines for those in different regions across the UK.”

Miles also said; “We must also advise that those looking to buy a new home should make sure they budget enough to pay the stamp duty land tax, just in case the purchase does not complete before the deadline. If a buyer were to pull out after they’ve already exchanged, sellers may be in a position to sue for consequential loss at this point, and buyers may lose their deposits. This is going to cause a lot of stress and uncertainty for customers over the coming months, and we’re urging all buyers to take the necessary preparations.”

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Equity Rich Mortgage Applicants Enjoying Great Rates

While the end of November and start of December has seen a welcome increase in the number of 90% mortgage deals on offer in the market, it is fair to say that this is an area of the market that has been badly underserved since March.

95% mortgages are virtually non-existent, and in the middle of November 2020, Moneyfacts stated there were only 56 fixed and variable rate products at the 90% level. In March 2020, there were 779.

Many mortgage applicants are losing out on great deals

There has also been a notable change in the average rate of interest on these mortgages. Before the lockdown, the average two-year fixes rate 90% mortgage charged 2.57% interest. Moneyfacts said, as of mid-November, the average interest rate was 3.76%.

At the lower rate of interest, the average customer would have paid £814 per month on their mortgage but at the higher rate, the average monthly mortgage payment would be £927 per month.

Homeowners who can provide a 15% deposit receive a slightly better deal, but it is far from startling. In July 2020, the average interest rate for 85% mortgages was 2.11% and in November, this rose to 3.12%.

The larger the deposit, the better your options

However, mortgage applicants who have considerable sums of money and how can afford to place a sizable deposit on their property will find they can enjoy rates which are better than they were before the pandemic.

Anyone who is able to place a 40% deposit on their property will find the average two-year fixed rate stands at 1.77%. In March 2020, the average rate was 1.8%, so people with the means to fund a large deposit are better off now when applying for a mortgage.

Chris Sykes, mortgage consultant at Private Finance, said: “Lenders are still looking to compete aggressively on the lowest risk lending propositions in the market. That means those who have mortgages, have a proven track record of making payments and own property that for most will have increased in value since purchase, at the earliest two years ago.”

With respect to the number of products available, people willing to take an 85% mortgager deposit are in a stronger position. At the last check, there were 344 deals available, which is still considerably down on the 664 prior to lockdown, but it is greater than the options afforded to people looking for a 90% mortgage.

Eleanor Williams, at Moneyfacts, has advised borrowers looking to arrange their best possible deal should speak with an independent broker or financial adviser. Eleanor said; “Financial advisers will be able to use their knowledge of the market to assist with finding the right product for their circumstances and navigating potential concerns around any possible underwriting or conveyancing delays.”

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Are You Confused By Basic Mortgage Terms? Check This Guide

As more than 20 million people in the United Kingdom hold a mortgage, you would be forgiven for thinking that these people understand their mortgage. Your mortgage is likely to be the most important agreement you have in life, but a recent study by firstmortgage.co.uk suggests many people are unaware of many key issues in their mortgage.

Are you comfortable with mortgage terms?

The study finds two-thirds of respondents are confused by what their deposit is, and that 70% of respondents are unsure of what the annual percentage rate (APR) is.

The following definitions should help.

Mortgage Deposit: The deposit is a lump sum that you pay at the point of buying the property. This payment allows you to own part of the property outright. The rest of the agreed price is paid by a mortgage, which is a loan paid in instalments.

Your deposit provides the lender with confidence that you are serious about buying the property.

APR: The APR refers to the annual rate of interest which is charged to borrowers. The APR is expressed as a percentage which represents the annual cost of these funds over the term of the loan. The APR includes fees or additional costs.

Do you know what you are paying each month?

The study also found that over half of mortgage holders are unsure of what a fixed rate mortgage is and 64% of people didn’t know what was meant by the term re-mortgage.

The following definitions will hopefully be of benefit.

Fixed-Rate Mortgage: A fixed-rate mortgage is one where the interest rate is fixed for a specified term of the loan.

This style of loan is popular for people who want to know how much they will pay each month. If interest rates rise, a homeowner can benefit from holding a fixed-rate mortgage, while if interest rates fall, a homeowner can lose out from holding this style of mortgage.

Re-Mortgage: A remortgage is when you pay of an existing loan or mortgage, with the proceeds of a new mortgage. The same property is used for the new mortgage as was used for the previous mortgage.

It appears as though people are aware of their lack of knowledge in this area. 64% of respondents said it would have been useful if they learned about mortgages before they applied for one. One-third of respondents said they only carry out “a little bit of research” before applying for a mortgage.

David McGrail of firstmortgage.co.uk spoke about the dangers of applicants arranging a mortgage without full knowledge of what a mortgage is, or what it entails. David said; “Understanding exactly what is and isn’t a part of a mortgage is crucial when applying for a mortgage. People should know what mortgage they are getting, how and when this might change and how much they could be repaying a month. For example, a variable rate mortgage would change in line with interest rates, while a fixed rate mortgage wouldn’t. Knowing what type is best for you is vital.”

McGrail also said; “There are so many types of mortgages, whilst the two main mortgage products are considered to be fixed rate and variable rate, there are numerous others such as offset mortgages, tracker mortgages or interest only mortgages, that might be right for some people. I would strongly encourage people to do their research and reach out to an adviser to discuss potential options before applying.”

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

UK Mortgage Approvals Soar To 13 Year High

The number of mortgage approvals in September 2020 rose to a 13-year high. The stamp duty holiday and pent-up demand in the housing market are combining to create significant demand in the property market.

Even though there is considerable uncertainty in the economy right now, it appears many people are keen to move home. With the chance to save up to £15,000 in stamp duty costs right now, it is easy to see why many people are busy now.

The Bank of England states the number of mortgages for house purchases approved in August 2020 was 85,500 and in September, this rose to 91,500. This stands in contrast with the predictions, with many specialists believing August would represent a peak and then approvals would dip.

People are looking to buy a home soon

The September 2020 approval numbers are the highest since September of 2007. If you are looking to compare the number of mortgage approvals with the figure before the March lockdown, the figure is 24% higher than the February 2020 approval numbers.

When it comes to house borrowing numbers, the August 2020 figure was £3bn and in September, the net mortgage borrowing rose to £4.8 billion. This is a significant leap, and it suggests many people are looking to move as soon as possible.

GetAgent, which monitors homebuyer demand across the UK on a quarterly basis based on market data from the major property portals, indicated there was an 8.5% rise in buyer demand in the third quarter of this year compared with the second-quarter.

Colby Short, founder of CEO of GetAgent, said: “The meteoric uplift in UK homebuyer demand in the third quarter of this year demonstrates a market that has well and truly bounced back from pandemic paralysis. More affordable areas were the strongest performing in terms of buyer demand in Q3, with plenty of room for further growth in some parts of the country.”

Colby continued: “It’s fair to say that the current stamp duty holiday in its various forms across England, Wales and Scotland has played a huge part in this revival and should continue to do so over the final quarter of 2020 at the very least. This is great news for home sellers who may have seen the value of their property plateau or even fall during the prolonged period of Brexit uncertainty that plagued the market over the last few years. With buyer demand now seeing a healthy increase, sold prices are likely to follow suit.”

Money was paid back in September too

In September 2020, people in Great Britain made net repayments of £600m. This means they repaid more money than they borrowed. In July and August of this year, borrowings were greater, related to falling borrowing rates during the lockdown period.

Simon French is the Chief Economist at Panmure Gordon, and he suggests this is a “first hard data signal that consumers are hunkering down for a difficult couple of quarters“. Therefore, it might be of benefit to keep an eye on this form of activity in the coming months.

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Mortgage Application Backlog And Stamp Duty Holiday Concerns

With concerns up to 325,000 buyers might miss out on the stamp duty holiday due to backlogs in the market, there is a growing demand for an extension or further support to be issued to buyers.

Dominik Lipnicki, of advisers Your Mortgage Decisions, said: “Lenders appear to be worried about just how fragile the property market really is and if the current crisis will result in house price falls. We have seen a post-lockdown boost, aided by Rishi Sunak’s stamp duty scheme but many agree this may well have been a temporary recovery with darker times ahead.”

A spokesman for banking body UK Finance said: “Rates offered will be influenced by several factors including the lender’s funding and operating costs, risk appetite and provision for any potential losses over the life of the loan.”

Concerns about people missing out on the stamp duty holiday have led many property market specialists to call for it to be extended. This has led many key property industry people and bodies to sign an open letter to the Government, asking for an extension.

Signatories of the letter include:

• British Association of Removers
• NAEA Propertymark
• The Guild of Property Professionals
• Purplebricks
• Residential Property Surveyors Association
• Conveyancing Association
• Society of Licenced Conveyancers
• Kate Faulkner
• House Buying and Selling Group
• Simplify
• Landmark

The letter details the significant pressure placed on the housing market because of the holiday, and how the industry is already feeling under the strain as of late October 2020.

The letter reads; “Operational constraints in all areas of the home buying industry caused by the disruption brought about by Covid-19 and the current advice to work at home where possible, have seen average property transaction times lengthen from 12 weeks to 20 weeks. We are concerned that consumers continue to offer on properties expecting to benefit from the SDLT rate reduction but in reality they may be too late.”

Some parties have called for the stamp duty holiday to be extended to September 2021, which would be an extension of six months. There have also been calls for the holiday to feature a tapering off process, which would avoid the “cliff edge” many fear.

NAEA Propertymark is calling for assistance

NAEA Propertymark chief executive Mark Hayward is one of the signatories on the letter sent to the Chancellor, but he has also released his own letter on the subject.

Mark said; “The joint letter sent to the Chancellor today is an important step in protecting those in the process of buying or selling a house that might miss out on the 31st March stamp duty deadline because of increased pressure on service providers within the industry, which is causing delays for buyers and sellers in the sector.”

Mark Hayward continued by saying; “The boom, caused by the stamp duty holiday, has been hugely beneficial for the housing market; however, the stamp duty cliff edge on March 31 could cause thousands of sales to fall at the final hurdle and have a knock on and drastic effect on the market which has recovered well from the Covid slump.”

Mark Hayward from NAEA Propertymark concluded by saying; “We are calling on government to rethink these timings, so pressure on the system can be released to allow transactions to complete and avoid a disorderly and distressing period for movers and businesses throughout the market.”

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Many Buyers Have Never Used A Mortgage Broker

Given the cost of buying a home, and how important it is in your daily life, you would think people would seek help from experts in the field. There is a lot to be said for guidance and advice from trusted professionals, and if you are looking for assistance in arranging a mortgage, you would think most people would call on the services of a mortgage broker.

However, in a recent study, it appears as though 39% of homebuyers in the country have never used the services of a mortgage broker.

For house buyers aged 55 years old or older, the percentage of people who have never used a mortgage broker increases to 49%. This perhaps suggest there is a generational gap in the use of these professional services.

Younger buyers know the benefits of using a mortgage broker

This feeling is reinforced by the fact that 74% of people aged between 25 and 34 have admitted to using a broker for a property loan.

If the current and next wave of buyers recognise the importance of professional help and assistance, it should ensure that the benefits of using a mortgage broker are clear for people who research the subject.

Why should you use a mortgage broker?

Some of the leading benefits of using a mortgage broker to arrange a mortgage include:

• A mortgage broker is likely to have a better awareness of how the market is performing and what products are currently available, assisting a house buyer in finding the best deal for them
• You will receive bespoke information and advice tailored to your needs, helping you make a more intelligent decision when it comes to selecting a mortgage
• Many home buyers have found the use of a mortgage broker has saved them a considerable amount of money, sometimes in the tens of thousands
• Using a mortgage broker saves you time as you don’t need to research options yourself, and this time can be used on more pressing activities
• A lot of property buyers find using a mortgage broker lowers the level of stress associated with arranging a mortgage, which is always helpful

Gerard Boon, founder and partner at Boon Brokers, said: “There is still a lot of confusion around mortgage brokers and what they can do. A good broker with whole of market access can find the very best mortgage product out there for a client, saving them a small fortune. One common misconception, however, is that homeowners have to pay broker fees when applying for a home loan or remortgage.”

Gerard continued by saying; “Consumers shouldn’t assume that broker fees are the norm, as all mortgage brokers in the UK are paid a ‘procuration fee’ by the lender upon completion of a mortgage application. Paying a broker fee does not guarantee a better service – there is no correlation between quality of service and broker fee charged. The only purpose of the broker fee is to increase the firm’s profit margin.”

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision

Cost Of Average UK Home Breaches £250,000 For First-Time

There is considerable activity and interest in the housing market right now. The stamp duty holiday is motivating people to move home, as there is a chance to save up to £15,000 on fees in many areas.

With this in mind, many people will be interested to learn the cost of the average UK home has moved beyond £250,000 for the first time. This is according to The Halifax, recognised as the largest mortgage lender in the country.

The company, which is part of the Lloyds Banking Group, said property prices in October 2020 were 7.5% higher than house prices in October 2019.

Buyer activity has changed in 2020

The demand for larger homes has risen, and people are looking for property with greater garden space. There is no denying there has been a change in priorities because of the COVID-19 pandemic, and lockdown periods. Also, remote working is far more common, and this influences buyer activity in the housing market.

The Halifax has also said the economic issues related to the pandemic will place “downward pressure” on house prices as we move forward. The lender believes this will arise in the initial few months of 2021, and there has already been a slight slowdown in the month-on-month increases in property values.

Russell Galley is the managing director of the Halifax, and he has spoken about the furlough scheme and other mechanisms used by the Government. Russell said; “The country’s struggle with Covid-19 is far from over.”

Many factors shape the housing and mortgage market

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “People require more outdoor space and not all flats have roof terraces and balconies. But while Covid is having a massive impact it is likely to be temporary in the scheme of things, with people not able to work from home four days a week forever. Once we have more normality, [employers] will want to see people in the office more. Those flats that are 20 minutes from the workplace will be more appealing than a house on the Dorset coast if you have to be in the office four times a week.”

It is also important to bear in mind there is a massive difference in house prices across the country. While it is comforting to look at an average figure and then compare your home or what you expect to pay, the situation in your chosen area might be extremely different.

Anna Clare Harper is the author of Strategic Property Investing, and she said; “If you’re thinking about buying a property in this fast-changing environment, one of the best things you can do is to detach from the emotional dimension, so that you are able to analyse whether you are getting a good price and value for money.”

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Another Mortgage Holiday On Offer If Required

The Financial Conduct Authority (the FCA) is set to offer support for mortgage borrowers who have been affected, or who might be impacted, by the second lockdown.

The regulator has announced it is set to extend payment deferrals by up to six months. For homeowners who currently have a mortgage holiday in place, a further three months of payment deferral has been proposed.

For homeowners who previously had a payment deferral but who have since resumed paying, the regulator has proposed an additional three month if required.

The FCA has also proposed an extension of property repossessions until after January 2021.

Fresh support for homeowners

Sheldon Mills is the interim executive director of strategy and competition at the FCA, and he said the FCA was liaising with lenders to ensure struggling borrowers could find the support they need. Mr Mills said; “Tailored support will still be offered and remains the most appropriate option for many borrowers, but we are proposing to extend payment deferrals for additional support. It is in borrowers’ own long-term interest only to take a payment deferral when absolutely necessary. Those that are able to keep paying, should do so. This allows support to be targeted to those most in need.”

Mr Mills has also advised borrowers to wait for their lender to contact them with new details and information, as opposed to contacting them.

Not all borrowers will benefit

The FCA has stated some borrowers will not be eligible for a payment deferral. Any borrower who has already claimed two deferrals in a six-month period would not be eligible for another. These people are advised to seek tailored support.

UK Finance figures suggest that as of October 9th, 162,000 mortgage customers were utilising a payment deferral. This is down from the peak of June 2020, which saw 1.8 million mortgage customers utilising this support.

Implications on credit scores

As per the proposals made by the FCA, borrowers will be able to request a payment deferral until the 31st of January 2021.

Under these proposals, any payment deferral will not be recorded as a missed payment on the borrower’s credit file. However, it should be noted this deferral might still be considered when a credit application is made.

Lenders consider a wide range of factors and information when deciding on what loans to offer. Additional and bespoke support might be listed on the credit file of someone in this situation, and lenders should notify borrowers when this is the case.

Robin Fieth is the Chief Executive of the Building Societies Association, and he said: “We recognise that the ongoing economic issues being caused by the pandemic are generating significant challenges for some households.”

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Mortgage Applicants – Avoid Money Laundering Suspicions

The stamp duty holiday has created significant activity in the housing market. Many people are looking to move home soon so they can save on the stamp duty holiday, and this is leading to a backlog in the process.

Lenders are under significant pressure, and this is one of the reasons many people are calling for an extension to the stamp duty holiday.

Delays are happening in the mortgage market right now

Rob Hailstone is the founder of the Bold Legal Group (BLG) has spoken about the need for the stamp duty holiday to be extended. Rob has highlighted the significant pressure property market professionals, such as mortgage lenders are under, and how this is slowing down the market.

Rob said; “It is not just the demand side that is creating a challenge to the conveyancing profession, but also the dependence on outside parties to progress transactions. Covid-19 restrictions mean that many local authorities are operating under extreme difficulties and this has affected their ability to supply their own searches and also to provide access to data for personal search companies. In addition, many mortgage lenders are experiencing delays in supplying offer letters and the valuer profession is also under extreme pressure.”

Rob also shared an email from a member which read; “There are delays with searches, surveys, mortgage offers and pretty much every other aspect of the process. Chasing, on the face of it seems sensible, but the more we chase people the more they get distracted. You might get put to the top of the pile for a few moments but doesn’t seem to last for long.”

If you are applying for a mortgage, and there are problems, it is likely your application will be delayed even further. An issue all applicants should consider is mortgage application fraud, and the steps lenders take to avoid this problem.

Mortgage fraud is rising

Cifas research indicated the number of fraudulent applications on mortgages increased by 5% in 2019, and that 13% of British adults believe it is reasonable to exaggerate income on a mortgage application.
It might seem harmless, but it could cause you severe problems. At the very least, it could delay your application, but if you have made a fraudulent application, you could face a serious penalty.

Therefore, if you are looking to arrange a mortgage, take these steps to minimise the risk of making a fraudulent application which could delay the process, or cause your greater trouble:

• When you benefit from a gifted deposit, make every effort to show that it is genuine, including a signed letter or document from the person gifting the money. Also, include a signed letter which states the person gifting the money doesn’t receive any right to the property
• When you benefit from an inheritance, offer information which allows this money to be traced and verified
• If you have saved a considerable sum of money, please include Bank statements showing a build-up of funds over 3 – 6 months
• DO Not use your credit card to fund your deposit. Most lenders will reject an application when a credit card is used for funding the deposit
• Make sure you are listed on the electoral roll

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Stamp Duty Warning For Mortgage Seekers

There is no denying the stamp duty holiday has breathed fresh life into the housing market. When the property market re-opened in May, there was considerable activity. However, industry experts questioned how long this would last before demand for homes dried up.

The introduction of the stamp duty holiday in July means that demand hasn’t dried up, it has actually intensified in the UK housing market.

Of course, while many buyers are buoyed by the thought of saving money, not every prospective buyer has felt supported by the money saving measure.

A range of industry experts believe the stamp duty holiday is best suited to existing homeowners, or people looking to buy larger or more expensive homes. This means the stamp duty holiday hasn’t been of significant benefit to first-time buyers.

It can be argued there is a range of support systems in place for first-time buyers, and not everything needs to be aimed at this market. However, there is no denying that this group of buyers require as much support as possible.

Not every buyer will appreciate the stamp duty holiday

There has also been a warning regarding the stamp duty holiday and some buyers from Martin Lewis. The Money Saving Expert issued a warning in his weekly newsletter that the stamp duty holiday might have a knock-on effect for some mortgages.

Martin detailed how the stamp duty holiday, and the COVID-19 pandemic, has created a scenario where lenders are under considerable pressure. Many mortgage lenders are struggling to keep up with demand, and this has led many lenders to reduce the range of mortgage solutions they offer.

This, sadly for first-time buyers and people requiring additional assistance in the market, is bad news. The most commonly dropped mortgages are mortgages with a high loan to value. This means the mortgages which are more likely to be removed from the marketplace are mortgages which require a minimal deposit.

Many buyers need additional assistance when buying property

In the newsletter, Martin Lewis explained the drop in mortgages available for a small deposit. At the start of the pandemic process, you could choose from 386 mortgages with a 5% deposit, but at the time of writing his newsletter, there was just one standard mortgage at 5%.

There were other 5% mortgages available, but they all featured terms and conditions. An example of the conditions attached to a mortgage would be to have a parent as a guarantor.

With respect to 10% mortgages, there were 751 products available at the start of the pandemic, but at the time of creating the newsletter at the end of September, there were only 57 products. This means for many people in the UK, 15% is the starting point in finding a suitable mortgage.

While there will be many people who are keen to buy soon with the stamp duty holiday, Martin Lewis recommends waiting if you cannot find a suitable mortgage.

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Can Affordable Mortgages Create Generation Buy?

In an announcement that will have many people re-evaluating their chances of stepping onto the property ladder, the Prime Minister Boris Johnson has proposed a scheme that will assist first-time buyers in arranging a mortgage.

It is hoped that FTBs will be able to get a mortgage with only a 5% deposit. The soundbite around this scheme is one that aims to turn “generation rent” into “generation buy”.

Speaking at the virtual Conservative party conference, the Prime Minister hopes to create an additional two million property owners. He spoke at length of the need to fix the broken housing market, and how we can help young people step onto the property ladder.

This scheme could be costly for the Government

Industry specialists predict the measure could cost tens of billions of pounds.

The Prime Minister said; “But these reforms will take time and they are not enough on their own. We need now to take forward one of the key proposals of our manifesto of 2019: giving young, first-time buyers the chance to take out a long-term, fixed-rate mortgage of up to 95% of the value of the home – vastly reducing the size of the deposit.“

The Prime Minister also said; “We believe that this policy could create two million more owner-occupiers – the biggest expansion of home ownership since the 1980s. We will help turn generation rent into generation buy.“

More information is needed about this mortgage scheme

While this announcement is eye-catching, and will provide some people with hope about entering the housing market, there wasn’t a great deal of detail or further information. Before people will be able to determine whether this proposed scheme is of benefit to them, they will need more details as to how the plan will work in practice.

Many industry bodies and lenders will also be keen to know whether the Government intends to underwrite the mortgages.

In their 2019 manifesto, the Conservative Party pledged to “encourage a new market in long-term fixed rate mortgages which slash the cost of deposits, opening up a secure path to home ownership for first-time buyers in all parts of the United Kingdom.“

As you would expect, there have been many responses to the announcement made at the Conservative party conference. The Economic Editor of the BBC, Faisal Islam, tweeted; “If its 2 million people, & average size of a first-time buyer mortgage is £185,300 – and market currently serving 75% LTV and below with cheap rates, but not 95% – back of the envelope, that’s several tens of billions of guarantees to cover possible losses.“

As for property market and mortgage industry professionals, there have been some initial remarks made. Rob Hougton is the CEO of reallymoving, and he raised concerns that high loan to value mortgages can be risky.

Rob Houghton said; “For those who have been saving a deposit for many years this will be welcome news, enabling them to make the first step onto the property ladder, but we would urge people to proceed with caution, consider the risks carefully and think long term about their property choices. The Mortgage Market Review, which came into force after the credit crunch, remains in place to protect buyers from the kind of irresponsible lending practices we’ve seen in the past.“

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

More Lenders Offering A Later Life Mortgage

With people living longer, there is a need for businesses and industries to re-examine the products and services they offer. This is particularly true in the mortgage sector, which has previously shied away from offering a wide range of mortgages to people in their 50s or older.

This is no longer the case, and it is pleasing to see more options available for this market. There is a need for more mortgage options to be made available for buyers of this age, but if you are looking for assistance in buying a home, help is available.

Stamp duty holiday is encouraging more buyers

With the stamp duty holiday in place, it is natural many people are considering buying a home or moving to a new home. Being in your 60s, or even older, isn’t a barrier to arranging a mortgage. Also, you don’t need to think downsizing is your only option.

While downsizing is an ideal solution for many people and households, it isn’t perfect for everyone. Also, given the impact of the lockdown period, it is naturally people are looking for larger homes and properties with a garden. If this style of home appeals to you, there is no reason why you cannot move into this style of house with your next move.

What mortgage products are available for older buyers?

When it comes to mortgages in later life, there are three main products to consider:

• Standard mortgages
• Retirement interest-only mortgage
• Equity release products

Clayre Bareham at Mortgage Advice Bureau adds: “Anyone considering equity release should always seek specialist advice when looking at their options as there are a range of products now available which meet differing requirements – whether that means taking a lump sum out straight away, or having the ability to take ‘withdrawals’ out over the coming years, or a mixture of the two, can be considered.”

As you would expect, the introduction of the stamp duty holiday has led to an increase in the number of mortgage applications. Keith Barber from the Family Building Society spoke about the rise in mortgage applications, saying; “Over the summer, we saw increased business from borrowers whose mortgage will last beyond age 70. What we’re seeing demonstrates that stamp duty has been a key consideration in previous decisions to delay house moves and house purchases.”

The Unbiased website, a financial advice comparison website, recommends calling on the services of a mortgage broker if you are applying for a mortgage in your golden years. The site states:

“Get a statement from your pension or annuity provider to prove your long-term income. You should also check your credit score. Next, do some research about mortgages for pensioners. You will want to compare the age limits, interest rates, term lengths, fees, eligibility criteria and flexibility options of the various products. There are comparison sites to help you see what is available, but a mortgage broker can give you access to a wide market of lenders and help you choose the one that is best for you.”

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Self-Employed Clients – Give Yourself Ample Time To Apply

The stamp duty holiday is encouraging many people to consider buying property or moving home. If you are self-employed, there is no barrier to buying a home right now, and you might find the chance to significantly reduce the stamp duty you’d pay a great incentive.

While many mortgage lenders have reduced the options available to a range of clients, including self-employed professionals, there are still options available. If you are looking for guidance on what your options are in the current mortgage market, it is best to speak with a qualified and experienced professional.

Advice for self-employed people looking to arrange a mortgage

The below is an issue we have experienced over the years affects the self-employed, and it might be useful information for you.

From Monday the 5th of October 2020, anyone submitting an application should note that it is the 2020 tax calculations and overview that is required.

Previous years figures will be deemed out of date by most lenders, and therefore, will not be suitable for you to use when applying for a mortgage.

This issue is down to lenders not accepting self-employed figures that are more than 18 months old.

Not every business or organisation follows the same deadlines

We appreciate that self-employed people don’t need to prepare their latest returns to HRMC until the 31st of January of next year. However, these are separate bodies who follow separate rules, and the HMRC deadline is irrelevant if you are looking to arrange a mortgage with a lender.

This might sound annoying, but it is far better to be advised of this issue now, rather than filling in an application and then be told the supplied information is invalid.

We are always on hand to help, and here are some general notes for the self-employed when applying for a mortgage:

• If you operate as a sole trader or a company director with more than 25% of a limited company, you will be classed as self-employed
• Sole traders should use net profit as their income

Any limited company operators looking to verify their income to a mortgage lender should consider the following process.

With many lenders calculating borrowing potential by reviewing salary and dividends, your latest three years tax calculations will be of benefit. This is referred to as the SA302. You will also need the corresponding tax year overview.

At the time of creating this article, the relevant year overviews are 2017, 2018 and 2019. However, from Monday 5th October onwards, you will need to supply 2018, 2019 and 2020.

We appreciate this might be inconvenient, but if you want to enhance your chances of arranging a mortgage, it is important to provide lenders with appropriate information.

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

What Negative Interest Rates Would Mean For Mortgage Holders?

With an increasing level of discussion about negative interest rates, it is important mortgage holders and prospective buyers understand what this would mean for them.

The base rate set by the Bank of England is currently held at 0.1%. This figure represents a historic low, but with many economic challenges in the UK, industry experts believe the Bank of England might opt for a negative base rate.

A negative interest rate encourages people to spend

When the base rate is negative, commercial banks have to pay for cash deposits they hold. This could create a situation where savers have to pay for saving money while people with a variable rate mortgage could actually be owed money by their lender.

The reality of the situation is, as you would expect, slightly different. Mortgage holders with this style of mortgage shouldn’t expect any money back or any additional benefit, other than not having to pay interest.

There will of course be other fees and charges associated with mortgage, but many borrowers will pay less for their mortgage.

The reason negative interest rates occur is to stimulate spending. If people are penalised for saving money, it is likely many will choose to spend their money instead. In turn, this will drive economic activity.

Fixed-rate mortgage holders might miss out

While variable rate mortgage holders will hopefully have lower monthly payments, fixed rate mortgage holders will not benefit in this way. However, this is a risk associated with fixed-rate mortgages, and many holders will be okay with this outcome.

The key benefit of a fixed-rate mortgage is that the amount you pay each month is fixed. This allows mortgage holders to budget accordingly. With many people being risk averse, this style of mortgage is popular, even if it means holders miss out on some benefits if interest rates are lowered.

In these circumstances, fixed-rate mortgage holders will feel annoyed at missing out on the benefit. Of course, these mortgage holders benefit from consistency, and being able to budget accordingly.

Some mortgage holders are risk-averse, which means a fixed-rate mortgage is of benefit to them.

Kevin Brown is a savings specialist at Scottish Friendly, and he said; “The prospect of the Bank of England coming to the rescue of the nation’s hard-pressed savers remains a long way off, with today’s announcement possibly paving the way for negative interest rates in the coming months. Although the steep drop in inflation in August means there is temporarily more choice for savers looking for inflation-beating returns, this period is likely to be short lived. The cash savings market in the UK is beyond repair while the prospects for the UK economy remain so uncertain.”

Rachel Winter of Killik & Co, said: “The rumours of negative interest rates continue to rumble on but, in welcome news for UK savers, they are yet to become a reality. However, there remains the prospect of significant job losses when the furlough scheme comes to end next month which will inevitably put further pressure on household finances, so the possibility of lower rates in future cannot be ruled out.  As we have seen over the past decade, lower interest rates can have the effect of enticing more savers into the stock market as they seek to earn a return on their savings.”

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Frugality Matters When Applying For A Mortgage

If you want to enhance your chances of arranging an affordable mortgage, you need to improve your finances. There is a lot to be said for making sizable changes which help you apply for a mortgage, but you should also consider the smaller steps which make a massive difference  when applying for a mortgage.

John Ellmore is the Director of KnowYourMoney.co.uk and he spoke to the Express on the importance of frugality when applying for a mortgage.

John said; “Within recessions, consumers who have fears over their income or finances ought to be strict with themselves and get into the habit of making sensible financial choices. A good starting point is to review bank statements to understand incomings and outgoings – and many will be surprised by just how much they are spending. Throughout the lockdown period, many consumers attempted to overcome boredom with online shopping, for example.“

Life is moving forward

There is no denying lockdown transformed the way many people live and engage with others. Even though the economy and life is moving forward, things aren’t exactly returning to their old ways. Buying habits have been transformed.

Research by KnowYourMoney indicates 23% of adults in the UK felt they spent too much money on online shopping during lockdown. This is understandable, but it is not sustainable. There is a need for people to review their finances, and if it is possible to make savings, they should do so as effectively as they can.

John Ellmore also spoke on this matter, saying; “So, a thorough audit of one’s finances will enable consumers to identify and eliminate needless or excessive spending. Additionally, a financial audit will allow consumers to review their larger expenses and see where savings could be made. After all, UK households spend an average of £34.40 a week – or £1,788.80 a year – on utilities (gas, electricity, water etc.), according to the Office for National Statistics. It underlines the importance of shopping round for the best deals – comparison websites are a great place to start with this, as they do the legwork for consumers.“

Do you need help reviewing your finances?

There is a lot of help available to ensure people manage their finances better. When it comes to the stage of applying for a mortgage, there are skilled and experienced brokers on hand to offer effective guidance.

However, applicants can enhance their chances of arranging a suitable mortgage by being proactive. Rather than waiting to speak with a mortgage broker and making changes, would-be buyers should review their finances now and make suitable changes.

John Ellmore also said; “Making the most of savings tools provided by some banks can also make a big difference to one’s financial health. For example, some banks give consumers the option to ’round-up’ on every purchases; this means that every time a consumer makes a purchase – such as a cup of coffee costing £2.70 – the consumer is able to round up the price to the nearest pound and put the difference into a savings account. Over time, these little contributions really add up.“

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Is Remortgaging Right For You?

With the UK in a recession, it is vital people review their finances. If you own a mortgage, and you are concerned about the costs of this mortgage, you might want to consider remortgaging the property.

Paul Stringer is a Director of the Norton Finance Group, and he is a noted name when it comes to remortgage advice. He explains what remortgaging is by saying; “Essentially, remortgaging is where you look to agree on new payment terms with your current or new provider. A mortgage is one of the biggest financial commitments many of us have, but there is no reason why you need to stick with the same deal. It could be a chance to secure a better deal with better payment structures or interest rates, which could reduce monthly expenses. It could also be a way to raise money for things like home improvements.“

Reasons people consider remortgage include:

• To release equity
• To renegotiate their payment structure
• To save money
• To move to a more attractive rate

Paul Stringer also said; “Mortgage rates continually change, the Bank of England base rate, which most mortgages are priced by, is currently historically low. It could be possible to save a lot of money on monthly repayments and overall loan costs by having a look around for a different rate. However, be sure to check your current deal as early repayment charges could be in place for leaving early.“

Is remortgaging right for you?

Remortgaging isn’t the right solution for everyone, and the following drawbacks should be considered:

• A decrease in the value of your property could hamper you when remortgaging
• People who haven’t repaid much of the mortgage since they bought it might be hampered when remortgaging
• People whose financial circumstances have worsened since arranging a mortgage might not benefit from remortgaging

Paul Stringer, spoke about these points, saying; “There has been a decrease in the value of your home – borrowing a lump sum against a house in this instance could mean you’ll end up paying more than the value of your house over time. If you haven’t been able to repay much of your mortgage value since purchase, say if you are on an interest-only plan – in this instance your monthly repayments could rise if you remortgage. If your financial circumstance has worsened since you first bought your house, it is likely you won’t get improved terms. Remortgaging offers are based on your financial situation, just as it is with an initial mortgage application, so your salary, employment, and credit scores are all considered by lenders.“

You must consider the costs of remortgaging

While remortgaging makes property ownership more affordable for many people, there are costs associated with this process. Before you commit to remortgaging, you need to review the costs of doing so, and make an informed decision as to whether it is the right move for you to make.

Paul Stringer, also said; “There is also a likelihood that there will be a cost involved in applying for a new one. Termination of an agreement will likely lead to fees; this is known as an early repayment charge. This is where you must pay your old lender for a portion of the interest they will lose out on. In the long run remortgaging may save you money but consider if you are able to afford to do it now. Some lenders might charge admin fees for any changes to a contract.“

Therefore, you must ensure you can afford the upfront costs associated with remortgaging, as well as the longer-term on-going costs.

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

More Mortgage Options For First-Time Buyers

The stamp duty holiday has encouraged many people to make a move in the housing market, but not everyone has been able to capitalise on this measure.

It is fair to say the stamp duty holiday isn’t a fantastic option for first-time buyers. Many experts will state there are other ways for first-time buyers to find support in the housing market. However, there is no denying the stamp duty holiday seems better placed to help people looking to buy more expensive homes or property in more expensive areas.

Mortgage lenders have been under pressure of late

It would be fair to say many mortgage lenders have been under considerable pressure of late. The demand for mortgage holiday solutions transformed the industry, almost overnight. A lot of lenders found themselves stretched and unable to manage their resources in the way they would have liked.

You should also consider many mortgage lenders were working with a reduced staff. Therefore, many lenders had to compromise on what they offer, and low deposit options were reduced.

However, in recent weeks, this has changed, and buyers who can afford a 10% deposit now have a greater range of mortgage options to consider.

The companies who have provided options for people looking to borrow up to 90% of the property value are:

• Metro Bank
• Nationwide

To emphasise how quickly things are changing in the mortgage market, HSBC were providing 90% mortgages, but have now stopped offering this product, at least for now. This reinforces the importance of working with a professional who is following the market closely, as they will ensure you receive the most up to date information.

First-time buyers need more help when looking for a mortgage

According to Defaqto, there was a total of 28 products available for customers looking for a higher LTV mortgage. Katie Brain is the Banking Expert at Defaqto, and she said; “It can be really hard to save for a deposit for a home and high LTV mortgages are often the only way a first-time buyer can get on the ladder. The Stamp Duty Holiday may help first-time buyers but without the finance, home-ownership will be out of reach for most. It is encouraging to see lenders returning to the market and new products coming out for those with small deposits. We are seeing many come onto the market for only a few days and so borrowers will need to act quickly to secure these deals.“

It is great to see mortgage options returning to the marketplace, but it is important people take a cautious approach to these products. The mortgage sector, and the economy in general, is seeing many changes. In recent months, there have been examples of mortgage products placed on the market only to be removed just as quickly. Therefore, mortgage applicants should seek guidance before committing to a solution.

Katie Brain also said; “Buying a home is a huge investment and not without risk, anyone who is looking to take out a mortgage should speak to a professional adviser before committing.” Calling on the services of a trusted professional can minimise many of the problems associated with quickly-changing markets.“

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Mortgage Mistakes Cost Millions

Anyone who is looking to buy a home or arrange a mortgage should get as much help as they can. There is a lot of experts and specialists on hand to offer guidance. This is useful in finding out the best tips to follow, but you should also look to learn the most common mistakes people make with their mortgage.

When you know the most common mistakes, you can take steps to avoid these mistakes. This will hopefully help you make a more informed decision with your mortgage.

When it comes to well-known and trusted companies in the UK, MoneySuperMarket is leading name. When this company talks, people listen, and given they recently provided information about a common mortgage mistake which is leading to an additional £175m being paid each by mortgage holders, it is important people pay attention.

Do you want to lower your monthly mortgage payments?

The mistake relates to mortgages which switch over to the Standard Variable Rate mortgage, the SVR. If this has happened to you, there is a high chance you are paying too much for your mortgage each month.

The study by the well-known UK name indicates homeowners who have an SVR mortgage could save £133.46 each month by moving their mortgage to a better deal.

11.97% of mortgage holders in the UK hold an SVR when they apply to remortgage their property. When you take on board there is close to 11 million outstanding mortgages in the country, this equates to more than 1.3 million who have lapsed into the more expensive rate.

There is a problem that many mortgage holders don’t know they will be moved over to the SVR automatically when their agreed rate ends. This might leave you facing a nasty shock when it comes to your next mortgage payment.

Know what your mortgage costs each month

Emma Harvey is the Consumer Affairs spokesperson at MoneySuperMarket and she said; ”Standard Variable Rates on mortgages are notoriously expensive and with 15% of those remortgaging being unaware of how they work, automatically lapsing onto them is a common and costly financial pitfall.“

Emma continued by saying; “Regardless of whether you’re on an SVR mortgage or another type, there could still be significant savings to be made when your initial mortgage deal comes to an end. In fact, we found that the average saving for mortgage holders still within their initial product period is £28.36 per month, which really adds up.“

Emma also said; “In order to stay on top of how much you’re spending on your mortgage, be aware of when your current mortgage deal is due to come to an end and start researching rates several months in advance. You can arrange your new deal three months before the end date so that you switch over at the end of your initial term, ensuring you are always on the best deal.”

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Minimise Risk of Mortgage Application Rejection

With the stamp duty holiday likely to lead to more mortgage applications, it is important prospective buyers are aware of the risks involved with applying for a mortgage. Buying a home is a major commitment, and a mortgage represents a significant outlay.

Lenders are keen to feel as confident as possible about offering a mortgage, and this means applicants are scrutinised closely. This is especially the case in the modern environment with the COVID-19 pandemic impacting on the mortgage market.

Due to demand for other products, and staffing issues, many lenders have reduced the mortgage products on offer. Even though the number of mortgage products on the market is improving as we move forward, availability is less than it was before.

Many mortgage applicants have suffered rejection this year

Also, research from Butterfield Mortgages suggests 50% of property buyers have been denied a mortgage this year. This includes applicants who receive a mortgage offer in principle, only to find they fell at the final hurdle.

Applying for a mortgage is often a challenging process, with a number of steps required to eventually secure the loan. For those who are applying for a mortgage, it is usually the case that a large amount of documentation is required to process this. A detailed record of income and outgoings are required, as well as details of other earnings such as investments or benefits.

Michelle Stevens is a Mortgage Specialist at finder.com, and she spoke to the Daily Express to talk about why some applicants might find their mortgage application is rejected.

Ms Stevens said: “A mortgage is a huge financial commitment for both the lender and the borrower, so there are always stringent checks in place and therefore always the potential risk of being rejected. To avoid this scenario, applicants should make sure they have all the financial documents ready for their application – including any bank statements, payslips or proof of income.”

Applicants must consider their application carefully

Ms Stevens spoke about the importance of creating a budget for the mortgage application, saying; “Perhaps an overlooked but basic thing for budding homeowners to do is check how big a mortgage they will qualify for on their income. This is so they are not over-reaching in terms of affordability and applying for an amount they might get rejected for. There are mortgage calculators readily available online that will give you a rough guide on how much you can borrow before you start shopping around for a dream home.”

The Money Advice Service has provided a list of reasons why mortgage applications are rejected. The list includes:

• Issues surrounding an applicant’s credit – including a poor credit history or too many credit applications
• Current loans impact on a lenders’ chance to get an attractive mortgage
• Debt is another barrier to obtaining a suitable mortgage

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Mortgage Searches Increase Due To Stamp Duty Holiday

The recent stamp duty holiday has already affected buyer behaviour, and many housing specialists believe there will be a greater level of activity in the market. One industry source believes there will be an additional 100,000 houses sold because of the savings on offer to buyers.

It stands to reason that if more people are looking for homes, there is also an increase in people applying for mortgages.

The Experian Marketplace mortgage comparison site has experienced a 29% increase in searches, in the wake of the stamp duty changes.

The stamp duty holiday has encouraged buyers to act

On Wednesday 8th July, the Chancellor of the Exchequer, Rishi Sunak, has announced an increase in the stamp duty threshold in the Summer Update. The key points of the stamp duty changes are:

• Stamp duty threshold is now £500,000
• This increase in stamp duty threshold is set to run until 31st March 2021
• The increase in stamp duty threshold takes place immediately

Amir Goshtai is the Managing Director of Experian Marketplace, and he said; “Since the chancellor’s announcement of a stamp duty holiday, we’ve seen a surge in people searching for mortgages, demonstrating its immediate impact.”

Amir continued by saying; “Mortgage product availability is starting to grow to meet this demand, as lenders reintroduce products back to market, including higher loan to value ranges. The announcement should also help more people qualify for these products as the stamp duty holiday enables them to provide a larger deposit.”

Some experts believe the boost will be short-lived

Not everyone is confident that the initial burst of activity in the housing market after lockdown will lead to a long-term impact.

Andrew Southern is the Chairman of property developer Southern Grove, and he said; “The annual decline isn’t particularly flattering but it’s the trajectory that’s most important. The next few months are going to make June look like an amuse-bouche rather than an entrée. A healthy improvement in volumes month on month points to a large proportion of agreed sales that were knocked back due to the pandemic finally reaching completion. However, those who only began seriously looking in late May won’t necessarily feature in these figures for months yet.”

Other factors shape housing market and demand for mortgages

An issue that is likely to impact the housing and mortgage markets in the future is an increase in divorce enquiries. Information provided by Co-Op Legal Services in June 2020 indicated divorce enquiries increased by close to 40% since the beginning of lockdown.

James Forrester is a Managing Director of Barrows & Forrester estate agents and he spoke to City A.M., saying; “We are seeing a spike without a shadow of a doubt, and we’re starting to see that boost of stock come through. It’s just unfortunate we’re seeing the boost from people deciding they no longer want to be together.”

While it is sad to see relationships ending, especially if the challenging circumstances of the lockdown period has exacerbated issues, it is important the housing and mortgage sector are aware of this new demand for services.

There is still considerable uncertainty in the mortgages market, but it is easy to see why many industry professionals believe the market will be busy.

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Stamp Duty Cut – Boost For Mortgage Sector?

It is always helpful to hear the opinions of business leaders of companies involved with the mortgage market, and the Chief Executive of Yorkshire Building Society has spoken with the I newspaper and website. Mike Regnier has said the company has experienced a “strong resurgence” in mortgage applications from first-time buyers since the housing market re-opened.

This is positive news, and when you consider the stamp duty holiday, introduced in early July, there are measures which hopefully support buyers find a suitable mortgage and step on to the property ladder.

The Yorkshire Building Society was one of the first leading organisations to reinstate their 90% loan to value mortgage. The company states they have completed 31,384 mortgages in the first six months of this year and of these, 3,002 have been mortgages for first-time buyers.

Mike Regnier said; “Operationally we’d love to do more, but we just don’t have enough underwriters. We see our role as a mutual as supporting getting customers into homes, particularly first-time buyers.”

The limited ability to offer new mortgages has been caused by a number of things, but clearly the COVID-19 pandemic has played a huge part in this. Not only has the company had to manage their staffing issues during this trying time, the volume of mortgage holiday requests limited what the company could do in terms of new business.

In the first six months of 2020, the Yorkshire Building Society assisted 37,307 existing customers arrange a mortgage payment holiday.

Mr Regnier also spoke about the prospective of a negative bank rate. He said; “I don’t think it’s right and I wouldn’t like to see it. My strong preference would be not to go negative.” He further added that a lot of the society’s customers are reliant on interest for their income and many savers would face a “bleak” outlook if this change was implemented.

With respect to how the mortgage market has been affected by the stamp duty measures, there has been a range of opinions from property experts.

Rightmove commercial director Miles Shipside said: “The uplift in enquiries is likely a mixture of people looking in new areas to see what they can now afford, changing their search criteria to bigger, slightly more expensive homes, and new movers coming into the market because they now have enough extra budget to move home.  The savings of £15,000 on property above £500,000 may also help some people to trade up more easily.”

Anything which makes the overall cost of buying a home more affordable is to be commended, and it is easy to see why some households are keen to move sooner rather than later.

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Landlords With Bounce Back Loans Struggling To Arrange Mortgage?

Even though Government support in the initial stages of lockdown was very welcome, many people were concerned about potential problems or penalties associated with the assistance. This is why many landlords will be dismayed to learn that some professionals in this field who took out a Government Bounce Back Loan have reported problems in securing new mortgage finance on rental properties.

When you consider the stamp duty holiday that is now in effect, there will be landlords looking to expand their property portfolio. It therefore shouldn’t be a surprise to learn that some professionals are looking to arrange a mortgage, but might be denied because they received assistance this spring.

What is a Bounce Back loan?

A Bounce Back loan is a loan that has been backed by the state for a sum between £2,000 and £50,000. This loan has been capped at 25% of the total turnover for the business. With a Bounce Back loan there is no need to make repayments in the first year. The loans can last for up to six years, and there is no penalty for repaying the loan early.

What is the problem with this style of loan?

On the surface, Bounce Back loans sound favourable to landlords, but the presence of the loan might cause problems.

If there is evidence of a Bounce Back loan, it is likely an underwriter will review the applicant’s circumstances in greater detail. In some cases, this might lead to an application being refused, or the applicant receiving less favourable terms than they expected.

Anyone looking to understand the scope of problems that might arise from this situation should note that more than 860,000 bounce back loans have been issued since May. This is a relatively short time-frame, but it suggests that a lot of people might be affected. Given the financial challenges many landlords have faced in recent times, it wouldn’t be a shock to see many landlords struggling.

Andrew Montlake is a broker at Coreco and he said; “Given the nature of the bounce back loan and its ready accessibility, it seems natural for many businesses and landlords to take advantage of this so they have it as a ‘just in case’ provision. It does not necessarily mean that that they are in any kind of trouble at all. You could argue that it would be remiss of them not to take up the offer.”

Andrew continued by saying; “Whilst I understand that lenders are approaching the current environment with some caution, the whole point of the assistance is to help people to carry on as normal. Not lending to people just because they have taken a bounce back loan seems against the spirit of the government assistance.”

Matt McCullough is a National Sales Manager at Aldermore, and he was speaking at The Buy To Let Online Forum, when he said; “Bounce back loans form part of many businesses contingency plans at this challenging time and so long as a loan taken isn’t being used to fund a mortgage it would be suitable for us. Lenders really want to ensure that companies are not facing ongoing challenges that could in practice put the mortgage at risk. So long as that is also mitigated then there isn’t a real overall issue.”

TMW said, via a spokesperson, “We don’t decline applications just because someone took a bounce back loan. However, if someone had a loan that was still to be repaid, it would be considered as part of the holistic assessment of the mortgage application.”

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

Self-Employed Facing Challenges In Arranging A Mortgage

In a challenging year for people looking to arrange a mortgage, some people have a more laborious task than others. While remote working is likely to become a more common feature of everyday life for many people, for an existing part of the working demographic, this has been the backbone of their working day for some time.

Self-employed professionals are no strangers to working from home, and they are also no strangers to finding it hard to arrange a mortgage. Many lenders have shied away from offering mortgage products to self-employed professionals, citing concern about whether they will remain financially able to pay their mortgage each month.

Given this was the attitude of many lenders before the COVID-19A pandemic, it is fair to say many self-employed professionals are not too optimistic about their chances of arranging a mortgage anytime soon. However, while leading lenders are not offering much support for this demographic, there is hope from one organisation.

Help is available for self-employed professionals

The Beverley Building Society is offering a deal which is specifically aimed at self-employed professionals who have been negatively impacted by the COVID-19 pandemic.  While not every freelancer or independent professional is in the same position, it stands to reason many have struggled due to the new challenges facing businesses and sectors.

With mortgage lenders restricting the range of products they offer; many people were going to find it harder to arrange a mortgage. However, some groups are hit harder, and this is why it is pleasing to see there is a suitable level of support for a group who needs financial backing at this time.

There is a helping hand at the start of the mortgage process

The deal on offer from Beverley provides borrowers with a 12-month interest-only period, and then the arrangement switches to a full capital repayment mortgage. In the first year, borrowers will only pay the interest component of their mortgage, not the capital element.

This means it will take them longer to pay off their mortgage, but it will provide breathing space at a challenging time, and many professionals will likely be keen to read more about this offer.

A spokesperson for the Beverley Building Society released a statement to This is Money, saying, “The rate ultimately offered depends on each applicant’s circumstances and factors such as how new or established their business is, their trading track record and the extent to which they have been affected by the pandemic.”

There will be two fixed-rate terms available to borrowers, a two-year and a three-year fixed-rate. The lender says they will review the borrowers’ ability to repay the loan by looking at one years’ accounts. This opens the process to people who have been self-employed for at least one year, which is helpful for some.

The scheme is available to all professions and trades in England and Wales. The lender says aspects such as professional qualifications, experience, future prospects, the industry worked in, and a longer-term trading track record will be considered before offering a loan.

It isn’t easy arranging a mortgage if you are self-employed, but this new product might help many professionals. Anyone looking for guidance on finding their ideal mortgage should seek assistance from experts in the field.

Young Buyers Place Mortgage Plans On Hold

Dealing with the COVID-19 pandemic is challenging for us all, but as is usually the case, some people in society will be more harshly affected than others. As the pandemic is likely to have a significant impact on finances and the economy, there are concerns about the longer-term impact on homebuyers.

The group most likely to be affected by this are house hunters under the age of 35 and studies carried out by Zoopla confirms this fear.

More than one third of prospective buyers in this group state they believe their property dreams are now on hold. 30% of respondents said that issues relating to arranging a mortgage or saving for a deposit will force them to delay their property plans until they have more confidence in their finances.

House prices are a concern for some buyers

Another 30% of prospective buyers say they have delayed their property search because they are concerned about house prices. A similar percentage of prospective buyers have expressed concerns about the economy as the key factor in delaying their next move.

However, while there are concerns about the short-term impact of COVID-19 on these buyers, there is still optimism that they will make a move in the long-run. Nine out of ten respondents said they still plan to move ahead with a property sale in the next 12 months.

Buyer demands are changing in the market

While some people have had their property plans placed on hold because of the pandemic, it should be noted there has been a change in buyer demands in the market. According to Zoopla, 42% of prospective buyers expect they will work remotely in the future, and this shapes what buyers want from a property. 22% of prospective buyers have made a home office a priority for them when they next make a move in the house market.

Andy Marshall, chief commercial officer at Zoopla, said: “Given the unprecedented impact of coronavirus, it’s to be expected that home buyers and sellers will have reordered their priorities and what they are looking for from their next home move. It’s reassuring to see that 86 per cent of those who had planned to move before lockdown still intend to go ahead with their plans in the near term.”

Andy continued by saying; “Without doubt, lockdown put the functionality of many homes under pressure, and many homeowners have emerged with a revised list of requirements that they’re looking for a new home to fulfil – as well as a need to move, fast. With more Brits looking to travel into the office less often, while socialising at home more, expectations of what a home can deliver look likely to be greater than ever.”

While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.

One Sixth Of Mortgage Holders Took Mortgage Holiday

It is believed, according to a report made by the BBC, that one-sixth of homeowners have taken out a mortgage payment holiday. This would equate to two million people in the United Kingdom, and it is important people realise the impact of doing so.

It has always been stated that the mortgage payment holiday wasn’t free money; and that it would need to be repaid at some time. Also, interest would apply, increasing the cost of the mortgage. However, there are now growing concerns that there could be a longer-term impact of mortgage payment holidays.

Lisa Orme is the managing director of Keys Mortgages and she has advised mortgage holders only to take a mortgage payment holiday as a last resort. Lisa said, “We know, anecdotally, that people have used them to pay off credit cards, pay for holidays, pay for cars. I’ve been saying to people, despite all these promises about how it won’t affect your credit file, I absolutely guarantee it will come back to bite you.”

Sarah Coles, personal finance analyst with Hargreaves Lansdown, also spoke on this matter, saying, “Banks will look at your payment history. And if you’ve got a three-month gap around this period, they are going to know that has clearly come from a mortgage holiday. If you’ve got a six-month gap, they are going to know you’ve had to extend it. And that will give them a really clear indication that you were having some financial issues at the time. So it will then make it harder to borrow.”

There has also been clarification on this matter from the FCA who released this statement in May, “Lenders may use sources other than credit files, such as bank account information, to take account of other factors in their lending decisions. These factors could include changes to income and expenditure.”

Lenders are contacting customers with revised payment details

With many households who arranged a mortgage payment holiday when it was first offered now at the end of the three-month period, lenders are contacting customers to outline details of the new payment.

Virgin Money Group states that there will be no impact of a payment holiday on any lending decision they make in the future, but this is considered to be unusual in the industry right now.

There have been significant numbers of people taking mortgage holiday payments

Lloyds Banking Group, which includes the Halifax, state they have approved 450,000 mortgage payment holidays for customers. The Remote Mortgage Director of Halifax, Tom Martin, has spoken about how a mortgage holiday might impact on a person’s ability to borrow in the future.
Tom said, “We base our decisions on a full understanding of a customer’s up-to-date circumstances. We do take into consideration your latest financial position, but we recognise as well that these are unprecedented times and we will consider individual circumstances as part of that process.”

NatWest have also released a statement on this matter, saying, “We will take customers’ circumstances into consideration when considering any borrowing requests. If a customer’s income is currently impacted by COVID and they are unable to afford their mortgage, we would consider this.”

A Treasury spokesperson said, “The Financial Conduct Authority has been clear that payment holidays should not have a long-term impact on people’s credit rating.”

Anyone who is considering arranging a mortgage payment holiday, but who hasn’t done so yet, still has time to arrange this. The deadline to apply for a three-month mortgage payment holiday is 31st October 2020, and is available for people whose finances have been negatively affected by the COVID-19 pandemic. The FCA has banned all property repossessions until the end of October 2020.

If you are looking for up-to-date and informed guidance on the mortgage market right now, it is best to speak with an experienced professional.

Mortgage Advice Even More Essential For Buyers And Investors

There is no denying the COVID-19 pandemic has had a significant impact on the mortgage market. Therefore, anyone considering a property move soon is advised to speak with experts and receive tailored advice for their needs and requirements.

Arranging a mortgage is often a challenging task at the best of times for some people, but when you consider the additional obstacles created by the pandemic, arranging a mortgage is even more difficult.

Implications of the furlough scheme are still being considered, and of course, thousands of people across the country have lost their jobs because of coronavirus. When you apply for a mortgage, you are advised to stabilise your finances and have a period of consistency before making your application. In the current climate, this will be a difficult task for many households.

Mortgage products were withdrawn during lockdown

Of course, there have also been changes in the mortgage market. When lockdown started, there was significant pressure on mortgage lenders. Existing clients were inquiring about mortgage holidays and were looking for guidance on re-mortgaging. When you also consider many mortgage lenders were working with fewer employees, it was obvious that something had to give.

Where lenders cut back was on mortgage products. There was a temporary withdrawal of many of the highest Loan-To-Value (LTV) mortgages. This made it even harder for buyers to find a mortgage, and even though more mortgage products are being added each week, it will take time for a full range to be offered.

This all means anyone looking to arrange a mortgage soon are advised to seek expert help. Working with a skilled and experienced broker is good advice at the best of times for the mortgage industry, but in the current climate, time spent with a broker or financial expert is likely to be time well-spent.

Young buyers are finding additional barriers to arranging a mortgage

According to Zoopla, at the end of June, there were only 14 mortgages available at 90% LTV. This contrasts badly with a total of 386 which were available in January. This will impact the market and further studies by Zoopla suggests a third of prospective buyers under the age of 35 have delayed or halted their plans to move home. A significant proportion of this group has said the lack of high LTV mortgage products as a critical factor in their decision.

However, as stated above, things are changing. One mortgaging sourcing platform states the number of available mortgage products entering the final week of June stood at 9,033. This was a rise of 3.3%. The number of mortgage products on offer in the market is more than 20% higher than the lowest point endured during the lockdown, which occurred in mid-April.

The same source states that the range of products in the below 80% LTV part of the mortgage market, which is likely to attract buyers who can place a large deposit, is stable. Of course, this is only open to a small number of prospective buyers, with options remaining limited for buyers who are looking to pay a deposit of 15% or less.

With so many challenges, arranging a mortgage is tough, but not impossible. If you are keen to arrange a mortgage shortly, speak with an expert who will help you make an informed decision.

How To Access Affordable Rate Mortgages?

When the housing market re-opened in the middle of May 2020, property portals such as Rightmove and Zoopla listed a considerable increase in buyer demand on their sites. However, these platforms aren’t the only ones which experienced a considerable increase in demand, with MoneySuperMarket indicating a spike in mortgage searches.

The well-known price comparison website announced an 18% increase in week-on-week visitors looking for mortgage deals the day after the market opened.

Emma Harvey is the Mortgage Expert at MoneySuperMarket, said; “The prospect of the housing market starting to open up again will be welcome news for many would-be homeowners and movers, however, like many aspects of life in the COVID-19 era, it will be a far from straightforward recovery. Underwriting and approving mortgages is still a hugely manual process which requires workers from across the industry being able to work together. Not just the lenders themselves, but also brokers, valuers, estate agents, councils and solicitors.”

Speak to your lender or broker if you are in the middle of an application

With many moves in the housing market put on hold due to the lockdown, there will likely be many people in the middle of their mortgage application. While everyone should continue to evaluate their options, people who are underway with the mortgage application are encouraged to continue with the process. At the very least, these prospective buyers should engage their lender or broker to decide if it is best to continue with their application.

While there have been many changes to the way we live, and the housing market, it is vital to remember the fundamentals when it comes to assessing affordable rate mortgages. Your credit score and ability to pay remain crucial factors in arranging the best mortgage for your needs.

Emma Harvey discussed the challenges faced by applicants dealing with the COVID-19 pandemic. Emma said; “Banks will always ask for the last three months of earnings, with some lenders offering more flexibility around exceptional circumstances than others. However, those people who are currently furloughed should not suffer any adverse credit or change in risk profile. Consumers just need to be honest about the situation and if in doubt talk to their lenders or broker for support. “

The deposit remains a crucial component of the mortgage application

Your circumstances will dictate what steps you can take to bolster your application, but at the heart of every mortgage application is the deposit you can offer when looking to buy a home. Emma said; “As always, the larger the deposit you are able to put towards your property, the better. It will bring down your LTV and give you access to the lower interest rates with lenders. If you’ve been able to save any additional funds during the lockdown, this will certainly be beneficial.”

Applying for a mortgage is the last thing many people are considering, but for some individuals and households, now is the right time. Mortgage lenders are still active, so anyone interested in arranging a mortgage, should prepare themselves for the process, and speak with industry experts.

What Is The Real Cost Of A Mortgage Holiday?

While there is no denying mortgage holidays have provided confidence and peace of mind to many homeowners, it is crucial to know that mortgage holidays do not represent free money. There is a cost associated with mortgage holidays, and as people start to consider the longer-term impact of COVID-19, the real cost of a mortgage holiday comes to the fore.

According to UK Finance, one in six mortgage holders have arranged a mortgage payment holiday. The cost of a mortgage holiday depends on many factors, including:

• The size of the mortgage
• The interest rate of the mortgage
• The length of time left on the mortgage before it is paid off

A small mortgage payment can quickly add up to a large amount

While each mortgage holder needs to consider their circumstances, Money.co.uk believes that taking a three-month mortgage holiday could increase your overall mortgage payment by £1,331.95. While mortgage holders will likely see a manageable additional payment added to their mortgage each month, over time, this amount can make the cost of buying a home more expensive.

With the mortgage payment holiday option extended to six-months, it is vital people don’t just take the holiday break because they are comfortable with it. As with all major financial decisions, it is crucial people evaluate their options and find an option which is best for their needs.

Salman Haqqi is a Personal Finance expert at money.co.uk, and he said: “Mortgage holidays have proved to be a lifeline for millions of homeowners, who would have otherwise struggled to meet their payments and may have faced losing their homes. However, our findings show that payment holidays should be a short-term fix. It’s important to remember that you will still owe the money and interest will continue to accrue while the deferred payments remain unpaid. And in most cases when a customer takes a three-month payment holiday in a 21-year or 252-month mortgage, the end date of the mortgage doesn’t get automatically extended, so the customer now needs to pay back the mortgage in 249 months.”

Another thing to consider about a mortgage payment holiday is whether it will have an impact on your credit score. Initially, assurances were made that taking a mortgage holiday wouldn’t negatively affect your credit score. However, with mortgage payment holidays being extended, there is a chance that the holiday will be considered in credit scores. There is also the issue as to whether lenders will view holiday payments in a negative light.

Xpress Mortgages director Rachel Lummis says: “I do believe that taking a mortgage payment holiday will have an impact when making an application in the future. I expect the lender will want to know why the borrower took one, what their current situation is and ensure that there are no affordability issues going forward. Questions will most certainly be asked.”

Rachel continued by saying; “We have already seen that some buy-to-let applicants who have taken a payment holiday with a lender and either been in the process or then applied for a new mortgage with the same lender are being told their application cannot continue. The mortgage payment holiday scheme is a lifeline to many and the right thing to do. But others who took a payment break without absolutely needing to may regret doing so further down the line.”

Applying for a mortgage is the last thing many people are considering, but for some individuals and households, now is the right time. Mortgage lenders are still active, so anyone interested in arranging a mortgage, should prepare themselves for the process, and speak with industry experts.

New Help For First Time Buyers But Barriers Remain

One of the key indicators that the mortgage market is beginning to stabilise can be seen in the range of products being launched to the market. One example of this comes from the Clydesdale/Yorkshire Bank re-introducing its 90% LTV mortgage for first-time buyers.

This is a three-year fixed-rate mortgage that comes with an initial rate of 2.39% which reverts to 4.55%. Some of the critical features of this mortgage are that there is no product fee, there are free valuations, and there is a £250 cashback offer.

This product is just one of the options which are being offered to first-time buyers. There is a considerable level of uncertainty in the property market. However, in uncertainty, there are opportunities. For some first-time buyers, the market is not welcoming at this time, but for other would-be buyers, there is a genuine opportunity.

Therefore, first-time buyers should feel optimistic that there are options to consider, but equally, those looking for the best products might have a longer wait.

Physical valuations face lengthy delays

This is because there is likely to be a lengthy wait for mortgages with a 5% deposit, and this is directly linked to the COVID-19 pandemic. Mortgage lenders need to consider their risk when offering mortgage products, and it seems as though lenders are not willing to offer their most appealing mortgages without a physical valuation.

Research carried out by Moneyfacts indicates HSBC is the only company offering a 90% LTV mortgage through the use of automated valuations right now.

It is easy for people, and the industry, to focus on the financial challenges associated with COVID-19, but there are logistical and physical barriers to overcome in the market as well. While the housing market re-opened in May 2019, there is still a hesitancy to carry out physical valuations. Government guidance on social distancing advises against this, which creates a natural barrier in the mortgage market.

Backlog in the market will delay property deals

With lockdown restrictions loosening in June, there might be some movement in the market, but it should be remembered there is a backlog in the market. Figures provided by Zoopla suggest a total of 370,000 houses have been delayed due to the coronavirus lockdown. Since the market re-opened, some of these deals have concluded, but there are still deals in limbo because of the need to arrange a physical valuation.

There is an estimate that there is a backlog of 60,000 properties requiring a physical valuation, and this isn’t going to be cleared overnight.

An interesting aspect in the industry is that the average age of surveyors in the United Kingdom is 55, according to The Royal Institute for Chartered Surveyors (RICS). When you consider the proportion of employees in this age who have been furloughed or who are self-isolating to protect themselves, there might be a noticeable delay in real property valuations for some time to come in the UK.

Applying for a mortgage is the last thing many people are considering, but for some individuals and households, now is the right time. Mortgage lenders are still active, so anyone interested in arranging a mortgage, should prepare themselves for the process, and speak with industry experts.

Mortgage Products To Support Young Buyers

It is fair to say many people have been evaluating their finances in relating to how we deal with COVID-19. Some people have experienced challenges or changes in their job or personal circumstances. For many people, the thought of moving home or buying a house is far from their minds.

However, there will be many people who are in a position to step on the property ladder. With affordable interest rates and an increase in mortgage products from lenders being placed on the market, there will be prospective buyers who have a genuine opportunity to find a solution which helps them buy a home.

Young buyers benefit from structured financial support

Of course, even when there are opportunities to arrange a mortgage and buy a home, young buyers benefit from additional assistance. With many lenders looking to introduce or reintroduce suitable options for all buyers, a product aimed at young borrowers is sure to be of interest to many would-be buyers.

The Principality Building Society has reintroduced its Joint Borrower Sole Proprietor mortgage product. The lender states this mortgage product allows buyers to receive help from relatives in arranging a mortgage. While “the Bank of mum and dad” is often said as an insult, anyone who is in a position to receive support from family members should consider this as a suitable option.

The product allows parents, step-parents, guardians or grandparents to include their income in the affordability assessment of the applicant. Up to four applicants can be placed on the mortgage application, and there is no minimum income level required for the application.

Another critical feature of the product is relatives do not need to be listed on the title deeds. Also, there is no need for the relatives to be classed as joint-owners of the property.

Family members benefit from structure in offering support

While this product will not be suitable for everyone, it will be of significant benefit to some buyers. While some households have family members who are willing to support their loved ones, there is often a need to formalise the support. This style of product provides a structure for financial assistance in buying a home, and products like this can help more people step on the property ladder.

Helen Lewis is the National Account Manager at Principality Building Society and she said: “It’s a challenging time for first-time buyers not only with rising house prices but current uncertainty in the housing market due to coronavirus. We’re pleased to respond to this by reintroducing the Joint Borrower Sole Proprietor offering, which will assist young borrowers wishing to get on the property ladder and support our valued brokers. This product offers additional support for new borrowers to overcome affordability issues and ensure they can get on the ladder as soon as possible.”

Applying for a mortgage is the last thing many people are considering, but for some individuals and households, now is the right time. Mortgage lenders are still active, so anyone interested in arranging a mortgage, should prepare themselves for the process, and speak with industry experts.

Coronavirus, Mortgage Payments And Credit Score

If you are reviewing your finances in light of the coronavirus, you will be considering your mortgage payments and your credit score. Please review the following information which will help you make an informed decision.

How does a mortgage holiday work?

If you decide to take a mortgage holiday, you must know how this will impact your payments in the future. There are generally two options to make up for the mortgage holiday, which are:

1. Spreading the missed payments over your remaining monthly mortgage payments
2. Increasing the length of your mortgage term by the length of your mortgage holiday

In the last example, if you have 12 years left on your mortgage, and you take a three-month mortgage holiday, you will have 12 years and three months left when your mortgage resumes.
Your lender will likely decide which option is most suitable for you. At the moment, it appears as though spreading the cost of missed mortgage payments and the additional interest over the remaining mortgage payments is the default option preferred by lenders. However, be sure to discuss this with your lender to ensure you know what option has been selected.

Other payment holidays on offer

While mortgage holidays are the most commonly discussed form of payment holiday, it is possible to arrange a payment holiday for loans and credit card payments if required. If you are struggling financially, and need additional assistance, you can request a payment holiday.
As with mortgage payment holidays, you must agree on a holiday with your lender or credit card provider. If you fail to notify your lender and stop paying, you run the risk of damaging your credit score and creating significant problems for yourself.

It is unlikely you will need to prove you are struggling. At this time, most lenders aren’t asking for proof that people have been negatively affected by coronavirus for them to provide a payment loan.

However, people should be aware that a payment holiday is not free money. It must be repaid, and there will be additional interest to pay. Taking a payment holiday will cost more in the long-term, even though the short-term relief will be of significant benefit to many.

If you already have significant debt problems, your lender might decide against offering you a payment holiday. Similarly, if the lender believes your job is at risk and will not recover when people return to work, they might decide against offering you a payment holiday.

Will my credit score be affected?

If you agree on a payment holiday with your lender, you should see any adverse impact on your credit report. New credit-reporting guidance allows for an “emergency payment freeze”, crafted concerning the coronavirus. It is always a good idea to arrange confirmation with your lender, but for the majority of people, a payment holiday will not be recorded on their credit score.

Applying for a mortgage is the last thing many people are considering, but for some individuals and households, now is the right time. Mortgage lenders are still active, so anyone interested in arranging a mortgage, should prepare themselves for the process, and speak with industry experts.

Can I Get A Mortgage After Being Furloughed?

It is understandable many people and households have a lot of questions about their finances right now. Your circumstances might need you to review both the short and long-term impact of dealing with COVID-19. Housing and mortgage matters are amongst the most frequently asked questions right now, and the impact of being furloughed is a crucial issue for a lot of people.

Is it possible to get a mortgage after I have been furloughed?

If you are currently furloughed, you likely have a few short-term issues you want answering. You might also have some long-term matters to review, and if you plan on buying a home soon, this is likely to be in your thoughts.

Therefore, it is positive to know there is no reason why being furloughed from your place of work will impact your ability to obtain a mortgage. If you meet the general eligibility criteria imposed by a lender, you are classed as being in employment, so you should be unaffected.

Of course, each lender will have their views on this matter. There is a chance some mortgage lenders will approach applicants who have recently returned from furlough leave with caution. If a lender believes the applicant’s job is at risk, they will scrutinise the application in greater detail.

Not every person who is on furlough has a job which is at risk. However, given the cautious nature of lenders, this is likely to be considered. It might mean a lender offers a less appealing mortgage rate than they would have. Each application is reviewed on its own merits, and being furloughed+

If I am still on furlough, can I apply for a mortgage?

With the furlough scheme being extended to October 2020, there is a chance people will be on the scheme for a longer period. If you are still on furlough when you apply for a mortgage, there is a chance that lenders will scrutinise your application more closely.

There is so much uncertainty in the market right now that no one can say for certain what will happen. After all, each lender has their criteria, and makes their own decisions. However, if there are question marks over your job, or the current financial situation has led you to miss payments which affect your credit score, your mortgage application might not be as robust as you would like it to be.

Can I remortgage after a furlough?

There is no reason why you cannot. With interest rates being favourable, it is easy to see why many homeowners are looking for ways to consolidate their financial matters, and a remortgage is a sensible idea for many homeowners.

If you are currently on furlough, or you have just returned from furlough, this may hamper your chances of arranging a suitable mortgage. However, it shouldn’t be viewed as a barrier to remortgaging and improving your finances. The biggest concern would be if you missed mortgage or other financial payments without having an agreed holiday in place. If you don’t have that issue to contend with, there is no immediate reason you cannot arrange a mortgage.

Applying for a mortgage is the last thing many people are considering, but for some individuals and households, now is the right time. Mortgage lenders are still active, so anyone interested in arranging a mortgage, should prepare themselves for the process, and speak with industry experts.

Reasons For Optimism In Housing Market

With so much uncertainty right now, it is easy to see why people are choosing to adopt a cautious approach to most things in life. This is the case with the housing market. Even though the UK Government has re-opened the market, there is a wide range of opinions on whether this is the right time to do so.

Some people are looking to move as soon as possible. There are many reasons and circumstances which necessitate a move. Therefore, if people need to move, it is good they can do so, as long as social distancing measures are followed. People who don’t want to move right now are under no obligation to do so.

Of course, in these challenging times, it is vital to look for positive news and causes for optimism. Housing market behaviour in the short-term is difficult to predict, but some leading housing market and mortgage specialists are optimistic about the longer-term future.

Nick Sheratt, from Mojo Mortgages is one of the many experts who has spoken about the mortgage market during the lockdown. He has said; “From a purchase perspective, I am not expecting any significant movements in the short term. We are seeing purchase transactions going ahead. From a re-mortgage perspective we have not seen a great downturn in those transactions, so there is no kick start to the market required. There are some challenges from a conveyancing perspective, naturally. Brokers require support from legal companies and lawyers to ensure we can keep transactions moving.”

Not every comparison rings true

It is natural people look back to previous turbulent times, and try to draw a comparison between then and now. However, those looking at the market crash of 2008 need to realise that these are different circumstances. Yes, both of these eras were extremely problematic, but there is no suggestion the same long-term problems will arise now.

Nick Sheratt continued by saying; “I am calm about house prices. I think we are likely to see some turbulent swings, but in my opinion these will be minimal. Naturally, there will be some trending downwards, but I’m not envisaging anything like what we saw a decade ago. I think once lockdown ends, we will naturally see a spike in transactions, where people have been waiting to try and get their homes in place.”

With Rightmove issuing positive figures for the tentative first days of the housing market re-opening, there is a suggestion that buyers are keen to move sooner rather than later.
One reason to be positive about the market is the fact mortgage products are increasing, and mortgage lenders are offering more support. When lockdown started, the priority of most lenders was to focus on people requesting a mortgage holiday. After this, current customers looking to re-mortgage was a priority.

Given many mortgage lenders were operating with a smaller workforce, this was understandable. However, as we move forward, it is heartening to see a broader range of mortgage products available to choose from. Also, with interest rates being at a historically low level in the UK, there is an opportunity for many people to find an affordable mortgage.

Applying for a mortgage is the last thing many people are considering, but for some individuals and households, now is the right time. Mortgage lenders are still active, so anyone interested in arranging a mortgage, should prepare themselves for the process, and speak with industry experts.

[¹] https://www.express.co.uk/finance/personalfinance/1275399/mortgages-property-market-housing-coronavirus-crisis

Rise In Mortgage Products Positive Sign

While news that the Government has re-opened the housing market has received mixed opinions, there is no denying that it is a positive sign for the long-term future of the market. While people must follow social distancing guidelines, and stay safe, the sooner firms and people move forward, the better for many reasons.

There has been a demand for the housing market, and initial figures provided by Rightmove suggest many people were waiting to move.

• For the day the property market re-opened, there was a 111% week-on-week increase in new sales listings
• The number of unique enquiry demand from the day before the market to the day the market opened doubled, and was just 10% less than the same day in 2019

Rightmove property expert, Miles Shipside, said; “Unique enquiries on property for sale doubled from the day before, though we expect consistent momentum to rebuild over several months rather than weeks. With no new seller asking price data it’s too early to comment on price movements, though high demand is needed to support a stable market.”

Many factors influence people’s ability to buy, and the number of mortgage products available in the market is a crucial element. Miles Shipside also spoke about mortgage options supporting the marketing, saying; “If there are attractive lower deposit mortgages available it would help sustain the recovery in activity. The industry has been caught by surprise, as we were all expecting the housing market to stay closed until at least June.”

The housing market is evolving all the time, and there will likely be changes to what buyers want in a home. There is a strong chance that gardens and home-office space will become crucial factors for people looking for their next house. Also, if more people can work remotely, there is a chance that city or town-centre living becomes less appealing for many households.

All these factors will influence buyer behaviour, but as Rightmove suggested, mortgage products shape the market. A recent review of the market undertaken by Mortgage Brain indicates the number of mortgage products available is rising throughout the lockdown.

For the last week of April, there was an increase of 5.9% for mortgage products available on the market. At this point, there were 8,044 mortgage products available, which was a rise of 488 on the previous week. Crucially, this was also the second consecutive rise, indicating the mortgage market is moving in the right direction.

Kevin Dunn is a Director at Furnley House, and he said; “Last week we thankfully saw the return to the market of some higher loan to value deals from some of the bigger lenders. Hopefully this will have a ripple effect to give other lenders the confidence to return more products to the market too. There are definitely some green shoots to suggest the market is slowly coming back.” Applying for a mortgage is the last thing many people are considering, but for some individuals and households, now is the right time. Mortgage lenders are still active, so anyone interested in arranging a mortgage, should prepare themselves for the process, and speak with industry experts.

[¹] https://www.mortgagestrategy.co.uk/news/product-numbers-rise-by-5-9-mortgage-brain/

[²] https://www.rightmove.co.uk/news/articles/property-news/housing-market-reopens-in-england

FCA Guidance For Mortgages During Coronavirus Crisis

In dealing with the Coronavirus crisis, it is imperative to follow guidelines and rules from specialists and experts. This applies to health matters, social distancing recommendations, and on how individual sectors are responding to the Coronavirus crisis.

Understandably, many people are looking for assurance regarding finance and mortgage payments during the Coronavirus crisis. This is why it is vital to heed advice and recommendations from the Financial Conduct Authority (FCA).

What is the FCA, and what do they do?

The FCA is the conduct regulator for 59,000 financial services firms and financial markets in the United Kingdom. The FCA is also the prudential regulator for more than 18,000 of these companies. The FCA was established on 1 April 2013, taking over from the Financial Services Authority.

The Financial Conduct Authority is the conduct regulator for 59,000 financial services firms and financial markets in the UK and the prudential regulator for over 18,000 of those firms.

The FCA has issued a broad range of guidance on how they expect mortgage lenders and administrators to support clients and customers in the current situation. Therefore, it is imperative mortgage holders, brokers, lenders and anyone with interest in the market follow the guidelines.

Applying for a payment holiday

Anyone who is experiencing, or who expects to experience, difficulties in paying their mortgage due to the Coronavirus should contact their lender. Mortgage holders shouldn’t cancel their direct debit without speaking with their lender.

Any mortgage holder who cancels their payment without authorisation will be deemed to have missed their payment. This may be reflected on the mortgage holder’s credit file, which could hamper their ability to re-mortgage or arrange credit in the future.

Unless the lender has stated otherwise, interest will be charged during the mortgage payment holiday. It is up the lender and mortgage holder to agree upon a manageable way to cover the missed payments.

No one knows how long the current circumstances will run for. Therefore, a lender who experiences a more extended period of being unable to pay their mortgage should contact the lender. The lender may be able to offer an extended holiday period or may offer alternative arrangements.

If you are still not able to make your full mortgage payments due to circumstances relating to Coronavirus, then the lender may offer you a further payment holiday, or other arrangements, if these are appropriate to your circumstances.

Anyone who isn’t experiencing difficulties in paying their mortgage should not apply for a mortgage holiday.

Anyone who was struggling with mortgage payments before the Coronavirus crisis or whose struggles to pay their mortgage don’t relate to the Coronavirus, should contact their lender. A lender may be able to offer other solutions or guidance for people in this position.

No matter the reason, it is best for a mortgage holder to engage their lender with concerns as quickly as possible.

As circumstances change, guidance might be updated, so mortgage holders should stay up to date with information. However, it is clear the FCA recommends lenders and mortgage holders communicate quickly and clearly.

[¹] https://www.fca.org.uk/about/the-fca

Pros and Cons of Mortgage Holidays

For homeowners, mortgage payments are usually their biggest outgoing. Given the importance of having a roof over our heads, it is also the most significant outgoing people have. In challenging financial times, mortgage holders should prioritise their mortgage payment.

Therefore, it is natural that during the current Coronavirus crisis, many people are concerned about managing mortgage payments. This is why the Government was swift to announce support for homeowners. It was announced that mortgage payment holidays of up to three months would be made available to those who required it.

Statement from the Building Societies Association

Usually, a lender would review a client’s finances before deciding which form of support is most pertinent for them. However, this process is being waived in the current climate. Firms have greater flexibility to place mortgage holders into an appropriate system.

Robin Fieth, Chief Executive of the Building Societies Association (BSA), said: “Lenders and borrowers face an unprecedented set of circumstances.  People who would have been preparing and expecting to move house in the coming weeks now face a wait until COVID-19 restrictions can be lifted.  Our hearts go out to them, and our heads are clear that it would be unfair for these people to have to start their mortgage application all over again once life returns to a more normal state.  A three-month extension of existing mortgage offers seems a fair and reasonable step to take.”

Fieth continued by saying; “It is possible that some borrowers financial circumstances may change during the three months.  If this happens, or the terms of the purchase change, we will work closely with the borrower to achieve a sensible outcome.”

The Pros and Cons of arranging a mortgage holiday

While knowing there is support on offer for people who need it is helpful, not everyone should take a mortgage holiday. There are Pros and Cons of a mortgage holiday, and each mortgage holder should consider their circumstances.

Pros of a mortgage holiday

• Not having to pay money now, which is vital if you are struggling because of the Coronavirus crisis
• You will give yourself breathing space, reducing stress and giving yourself time and space to consider your options
• The BSA says lenders will take steps to ensure clients don’t jeopardise their credit score by taking a mortgage holiday

Cons of a mortgage holiday

• A mortgage holiday is not free money, and it will need to be paid later
• Interest accrued at this time will be added to the payment, leading to higher monthly payments for borrowers

Mortgage holders must determine what impact, if any, a mortgage payment holiday will have on their payments, the length of their mortgage term, and whether it will appear on their credit file.

It is vital mortgage holders don’t stop making payments without arranging a holiday with their lender. Taking a mortgage holiday without agreement from a lender will cause the account to go into arrears, and this will hamper their credit file.

It is comforting to know there is support for homeowners during the Coronavirus crisis. However, just because a mortgage payment holiday is on offer doesn’t mean mortgage holders must take it. Review your options, and if you must, speak with a mortgage specialist to determine your position.

[¹] https://www.bsa.org.uk/media-centre/press-releases/lenders-to-give-three-month-mortgage-offer-extensi

You Can Still Apply For A Mortgage

Understandably, many people are not focusing on matters as they usually would, but equally, there is a need for people to maintain as “normal” a life as possible. A lot of industries are trying to operate as best as they can, adhering to social distancing recommendations while making themselves available for their clients.

The Government has issued recommendations to the housing market, but the market is still operating. The same can be said for the mortgage sector. It is vital people stay up to date with what is happening in the market, and make themselves aware mortgage lenders are still offering mortgages.

Some lenders are offering a limited range, and some companies have tightened their criteria, but mortgages are still on offer. It pays to be diligent and present a robust application at the best of times. Nevertheless, in the current climate, all potential applicants should review their options and ensure they make a compelling argument with their application.

Agents are still offering valuations

One of the most integral aspects of applying for a mortgage is having a property valuation. Lenders will review the home applicants wish to buy, and will decide if the mortgage offer is acceptable for the property. Also, homeowners who are looking to sell their current home when purchasing another benefit from having their current home valued.

While there are limitations as to what agents can do in valuing a home, it is still possible to conduct a virtual viewing. Even with Government guidance requesting agents don’t visit homes, video technology and understanding of a local market ensures a value can be placed on a property.

Therefore, lenders can still receive information enabling them to determine whether they should offer a mortgage or not.

Lenders are keen to offer mortgages

While lenders are imposing stricter criteria on loans, they are still looking to provide this service. There are attractive mortgage rates on offer to candidates who meet criteria, which means this may be an ideal time for some buyers to be active in the market.

Technology will drive the market forward

Video connectivity will help in valuing property during the mortgage process, but this isn’t the only way technology will drive the mortgage industry forward. Interviews can be conducted live over a video connection. There is a wide range of social and business apps which allow for real-time engagement, and many lenders will look to engage clients in this manner.

Also, document signing apps and technology will ensure safe and secure transferring of documents. While these are unprecedented times, lenders cannot afford to compromise on security or anti-fraud checks. This will mean many lenders will place more considerable significance on technology in reviewing documents and sharing information.

Some lenders have already embraced new ways of working, but the current challenges will see many more companies utilise advanced communication methods.

Applying for a mortgage is the last thing many people are considering, but for some individuals and households, now is the right time. Mortgage lenders are still active, so anyone interested in arranging a mortgage, should prepare themselves for the process, and speak with industry experts.

Self-Employed Professionals – You Can Get A Mortgage

With self-employment figures in the UK reaching 4.8 million people in 2017, this is an important part of the workforce. By those figures, people in self-employment accounted for 15.1% of the labour force, and it wouldn’t be unreasonable to assume that this number has grown since. Therefore, self-employment is an integral part of the economy, and there is a need for these people to receive the support that people in traditional roles receive.

This is the case when it comes to mortgages. Traditionally, people who are self-employed struggle have struggled to arrange a mortgage. Some lenders have not welcomed their application while others have subjected the claims to rigorous testing. It is right that lenders apply strict criteria to mortgage applications. Still, the difficulties faced by many self-employed professionals have made many shy away from the thought of owning their home.

Nowadays, the market or economy cannot afford to overlook this group of potential buyers. With more than 15% of the labour force classed as self-employed, removing this group would significantly damage the number of potential buyers. Therefore, lenders have been tasked with finding ways to offer more options that are suitable for this group.

A growing number of lenders are offering mortgages which are tailored to the needs of people in self-employment. It is likely the process is slightly more arduous than the traditional mortgage application, but equally, it should be manageable. With people in self-employment more likely to be comfortable or experienced in tax-returns and financial matters, there is a grounding in these matters.

Be prepared for the mortgage application process

If you are self-employed and you want to apply for a mortgage, you must prepare yourself. There are many documents you will need to provide to the mortgage lender, so it makes sense to have these ready in advance of the application.

If you have a contract for any work you carry out, this will be useful to have. Also, if you can provide any contract history of the past three years, this will strengthen your application. It would be best if you were willing to provide two years’ accounts and at least three months of personal and business banking statements. You may also find it useful to offer a CV and breakdown of the work you undertake.

It would help if you made as compelling an argument as you can about your suitability for a mortgage. The more relevant information you provide to a lender, the more likely it will be that they will approve your application, or provide you with an acceptable offer.

It would help if you also spoke with experts

Applying for a mortgage is a stressful and challenging activity, but help is available. As a self-employed professional, you will understand the importance of calling on an expert to do the job they are trained in. This is likely how you receive job offers, and it makes sense for you to follow this approach when applying for a mortgage.

[¹] https://www.ons.gov.uk/employmentandlabourmarket/…/trendsinselfemploymentintheuk/2018-02-07

2020 Buyers: Mortgage Tips To Start Your Search

The start of 2020 has provided us all with a reminder of how quickly things can change in a short period of time. It is understandable that many people will put home buying on the back burner for now, but at the start of 2020, there was a spike of house hunters looking for a property.

No one knows what is going to happen over the upcoming weeks and months, but hopefully, there will be a return to the buyer behaviour experienced at the start of the year. Industry experts believe the increase in buyer activity at the start of 2020 relates to a release in the pent-up demand for property, and this may be repeated.

The year started with confidence and optimism in the housing market

Mark Hayward is the Chief Executive of NAEA Propertymark, and he said: “It’s positive to see the New Year has brought some much-needed confidence to the market, with a significant increase in demand from house hunters following the general election result. A clear strategy is needed to tackle key issues such as stamp duty costs, which needs to be addressed in its entirety to encourage more frequent moves, improve affordability and relax punitive financial tax on home movers.”

We appreciate you may not want to buy a home or arrange a mortgage today, but if you have more time, you may find it is useful to consider your options and prepare yourself to apply for a mortgage later on this year.

Leading tips to consider when preparing for a mortgage include:

• Review your credit score and take steps to improve this
• Do the sums and make sure you know what you can afford to pay each month
• Try to minimise your debt as much as you can
• Collect information that offers proof of income and your finances
• Start to save as much of a deposit as you can
• Review your mortgage options and consider what is best for you
• Get advice from experts and experienced professionals

Common sense is a crucial component when considering a mortgage

Most of the advice for first-time buyers is based on common sense. Saving for a deposit and ensuring your credit score is as attractive as possible makes sense, as these are the elements which influence the decision made by mortgage lenders. If you make yourself more appealing to mortgage lenders, you will find that you improve your chances of obtaining an affordable mortgage.

You should also be turning to experts for assistance and guidance. There are so many areas of life where you should turn to experts for help rather than rushing ahead yourself, and arranging a mortgage is one of these things. The importance of owning property, and the implications of not paying a mortgage, are not to be taken lightly.

It is imperative you consider the ramifications of arranging a mortgage, but thankfully, there is more than enough support and guidance to choose from. If you are hopeful of owning a property in the next few years, this time may be the ideal opportunity to plan for this.

How An ISA Helps You Step On Property Ladder?

Buying a home is an expensive time, but it is also a challenging prospect. Many first-time buyers struggle to step on to the property ladder. Saving as much money as you can for a deposit is sensible, and you should be looking for assistance in this activity.

A Lifetime ISA is a smart option to boost your funds. With a recent study by UK Finance suggesting that the typical first-time buyer needs a deposit of around £50,000 to buy their first home, any help buyers can get is more than welcome. This sum of money is based on saving for a deposit equivalent to 23% of the average property value.

It makes sense to save as much of a deposit as you can

However, even if you are fortunate enough to arrange a mortgage that only requires a 5% or 10% deposit, you still need to save a lot of money. A 10% deposit for the average priced property in the UK is around £23,000, and anyone buying in London would need around £45,000.

Therefore, a 25% boost on top of your savings would be very welcome, and this is what is available with a Lifetime ISA. This offer is available for people aged between 18 and 40 who are keen to step on the property ladder. With savers able to save £4,000 each year, there is a chance to boost your savings by £1,000 on an annual basis.

While you must open this account before you reach 40 years old, if you do, you can continue to make payments after this time. The Government bonus is applicable until you hit 50, so there is an opportunity for people approaching 40 to receive a significant benefit in their savings.

Couples can enhance their saving by working separately

Any potential buyer who was in a position to save £4,000 a year could save a £50,000 deposit in 12 and a half years. Also, if you are saving as a couple and have the funds to do so, you can open individual accounts. In doing so, and by saving £4,000 each per year, it would be possible to save a £50,000 deposit in five years.

While many potential buyers will feel saving this amount of money each year is beyond them, it is an excellent option for other buyers to consider. If you are focused on saving for a deposit and buying your first home, it makes sense to utilise every advantage that is open to you.

With the Help To Buy ISA scheme closed to new customers, this option is likely to be an attractive one. While the interest rates on the Lifetime ISA scheme isn’t as appealing as the rates were for Help To Buy customers, there is no point in looking back and wondering what might have been. If you are only starting your property buying adventure now, you should focus on what is available to you.

Saving for a home is a challenging process, and the cost of the deposit is a massive hurdle. First-time buyers should look for assistance, and a Lifetime ISA may be a great option.

Improve Your Chances Of Getting A Mortgage In 2020

With an increased level of optimism regarding the UK housing market, it is inevitable many people will look into buying a home this year. With estate agents and online property portals saying they witnessed an increase in house-hunter registrations¹ after the General Election of December 2019, this year may be the ideal time to step on the property ladder.

Miles Shipside is Rightmove’s director and their housing market analyst, and he spoke about the increase of buyers, saying; “The housing market dislikes uncertainty, and the unsettled political outlook over the last three and a half years since the EU referendum caused some potential home-movers to hesitate. There now seems to be a release of this pent-up demand.”

If you wish to join the influx of people stepping onto the property ladder this year, it makes sense to improve your chances of getting a mortgage in 2020.

Save for a deposit

One of the most significant barriers to homeownership is saving enough money to pay for the deposit. This should be one of the areas you focus on to ensure you achieve your property ambitions.

A sensible starting point is knowing how much you need to save. As a minimum, you need to save at least 5% of the property price.However, the more money you can save to use as a deposit, the better. Lenders offer more attractive mortgage rates when the buyer is able to provide a sizable deposit. If you want to significantly enhance your chances of being accepted for a mortgage, and getting the best possible rate, you need to save a suitable deposit.

Tips to consider include:

• Open a savings account or ISA aimed at raising a deposit
• Review your expenditure and look for ways to lower your spending
• Look for schemes which provide you with cash back when you shop
• Consider ways you can improve your income
• If permissible, consider asking family members for assistance

Improve your credit score

Another important aspect of arranging a mortgage is to have a reputable credit score. Lenders review applicants credit score, and the better the score, the more likely it is the applicant will be accepted and receive an appealing offer.

You should check your credit score with one of the leading agencies which hold files (Experian and Equifax). Both agencies contain different information, so there is no harm in reviewing all three records.

It is helpful to know your score because this makes it easier to assess if you should apply right now. Also, if there are any errors or omissions on your file, have these rectified before you apply for a mortgage.

Other tips to consider in improving your credit score:

• Ensure your correct address is on the Electoral roll
• Pay bills by direct debit
• Ensure your credit cards aren’t close to their limit
• Don’t apply for credit too often

If you follow these tips, you will be in a better place to apply for a mortgage. You should then contact a mortgage broker, and review your options with them. Working with a dependable broker will ensure you see what options you have, and you will receive guidance on what to do next in your application.

Xpress Mortgages has a team of mortgage experts who are happy to help, so please get in touch.

[¹] https://www.mansionglobal.com /articles/u-k-house-hunters-flood-britains-leading-listing-site-211326

Would Lifetime Mortgages Help People Buy A Home?

Given the challenges many people face in arranging a mortgage and buying a home, it is natural people are looking for assistance.One solution for many potential homeowners is a lifetime mortgage. Therefore, a growing number of prospective buyers are asking would lifetime mortgages help people buy a home.

What is a lifetime mortgage?

With a conventional mortgage, interest is charged on a sum that decreases over time. However, with a lifetime mortgage, interest is charged on an increasing quantity. The interest on the mortgage is added to the outstanding amount each year. You will find most lifetime mortgages carry a fixed rate of interest.

With a lifetime mortgage, you will not repay more than the property value.

How do I arrange a lifetime mortgage?

You should enquire if a lifetime mortgage is available to you because not all lenders offer this style of mortgage. For some lenders, there is a strict lending criterion in place. For a lifetime mortgage, there isa minimum age, which is usually around 55 or 60 years old, depending on the lender.

With this style of mortgage, the amount you can borrow increases as you get older. Usually, people aged 65 are allowed to borrow a maximum of between 25% and 30%. However, older people can often borrow up to50% of the value of their property.

Many lenders require properties to hold a minimum value, and there are minimum loan amounts in place.

What are the different types of lifetime mortgage?

There is more than one option to consider with lifetime mortgages, so make sure you know what your options are. The leading forms of lifetime mortgage are:

• A lump sum
• Flexible lifetime mortgage
• Enhanced lifetime mortgages

With a lump sum, you receive all the money at once, while the interest payable is “rolled up” over the full term. The borrower doesn’t pay anything for the rest of their life, but the interest is compounded annually until the mortgage holder dies or moves into a residential care home. The interest rate is usually fixed from the start with a lump sum mortgage.

With a flexible lifetime mortgage, you can draw a smaller amount of money at the start, and they draw additional amounts as and when required. Interest is only payable on the money which has been withdrawn, which means this style of lifetime mortgage is more affordable.

Enhanced lifetime mortgages are available for mortgage holders with a lower than average life expectancy. These funds can be used to arrange care for later life.

With many homeowners looking to draw on the value of their home, this style of mortgage can bring a range of benefits. Some people wish to support their loved ones before they pass away, and this style of re-mortgage can help them do so. There is also the fact that many people want to see out their golden years in great style and comfort, and this option helps them with the process.

With an ageing population in Great Britain, the mortgage market is evolving to meet the needs of buyers and homeowners. Xpress Mortgages has a team of mortgage experts who are happy to help, so please get in touch.

Should Mortgage Applications Be Simpler?

As buying a home is the most substantial commitment you will make in your life, it is no surprise that many people face challenges in arranging a mortgage and then buying the property. Saving for a deposit is a challenge, and you must also ensure you have a credit score which appeals to mortgage lenders. Given the size of commitment people make when buying a home, it shouldn’t be simple to purchase a property, but some applicants are surprised at how challenging the process.

In a study undertaken by Experian in 2018[¹], a fifth of first-time buyers stated saving money is a challenge for them. However, more than a quarter of applicants said it was the mortgage application process which was the most challenging element.

Amir Goshtai of Experian said; “Getting a mortgage is one of the biggest financial commitments many consumers will make in their lifetime, and our research shows it can be overwhelming.”

Homebuyers face additional costs when arranging a mortgage

Experian also said it is the additional costs of arranging a mortgage that is most challenging to buyers. Their report says close to one-third of buyers underestimated the cost of moving home, after they had saved a deposit of 10% of the property price.

28% of mortgage applicants said they didn’t know how much they would have to pay in legal fees, 24% were unaware of what they would pay in survey costs, 19% didn’t know how much they would pay in estate agent fees, and 15% were left in the dark over the cost of stamp duty. Of course, since then, the regulations regarding stamp duty charges for first-time buyers[²] are no longer applicable, or at least more affordable.

For buyers aged between 25 and 34 years old, a lot of these fees were surprising. 44% admitted they were unaware of these charges, which is more substantial than other age groups. One-third of respondents aged between 35 and 44 were unaware of the charges, 29% of people aged between 45 and 54 didn’t know about these charges, and 22 of people aged 55 or older were unaware of these charges.

Will mortgage applications become easier to manage?

However, with improvements in digital applications, some people in the mortgage industry believe the application process will become more straightforward in years to come. Pete Mugleston is the Managing Director of Online Mortgage Advisor[³], and he said; “I can see, in another 10 years, the mortgage application process being as simple as car insurance for many borrowers. Today, getting an appointment with the bank is tough, and brokers are handling the majority of applications. The Mortgage Market Review (MMR) has tightened regulation, and further ensured borrowers are creditworthy and able to afford their loans.” 

Mortgage applications are taken seriously, and this will always be the case. However, if technological advances make the process easier, many applicants will appreciate the changes. Xpress Mortgages has a team of mortgage experts who are happy to help, so please get in touch.

[¹] https://www.experianplc.com /media/ news/2018/mortgage-application-process-is-the-biggest-hurdle-when-buying-a-house/

[²] https://www.zoopla.co.uk/ moving/buyers-guide/conveyancing/what-do-the-recent-stamp-duty-changes-mean-for-first-time-buyers/

[³] https://www.introducertoday. co.uk/breaking-news/2020/1/mortgage-applications-to-be-as-simple-as-car-insurance-in-the-next-10-years–claim?source=trending

Older Mortgages Are on The Rise

With people living longer in the United Kingdom, it is no surprise there is a rising demand for mortgages which suit people’s lives. In data provide by Money facts, it appears homeowners who are looking to borrow money into their 80s want greater choice, and the market is responding.

In 2015, there wasn’t a mortgage which allowed borrowers to repay their debt between the ages of 80 and 84 years old. However, with the growing demand for this service, and lenders reacting to commercial pressure, there are now more than 1,000 options for borrowers to choose from.

Lenders needed to limit their mortgage offerings

It is easy to see why lenders limited mortgage options and the availability of borrowing. It wasn’t just people looking to borrow at an older age who were limited, and it was people from all backgrounds. In response to strict criteria imposed to restrict risky lending, many banks and mortgage lenders reduced the number of mortgages which were available to people who were aged 65 or older.

Even people who had pensionable income struggled to convince banks to offer them a loan into their 70s. However, this is no longer the case, and in the present day, there are only 18 mortgage offers which have a maximum age restriction between 65 and 69 years old. In 2014, there were more than 900mortgage deals with this criterion.

Darren Cook, a finance expert at Moneyfacts[¹], says: “Over the past five years, mortgage providers have become far more accommodating to borrowers who wish, or may have no alternative but to extend their mortgage term well past the official pension age.”

Darren continued by saying; “The scaling back of strict criteria around the maximum age at the end of a mortgage must be a welcome relief for those borrowers who may have reached the end of their mortgage at 65 on an interest-only mortgage and have had few options available to turn to.”

People want more mortgage options

While banks remain conservative, it appears the change in outlook is being driven by building societies. Eight building societies are willing to provide mortgages to lenders who will be 85 years old after the mortgage term. Some societies don’t have an upper age limit, and who instead impose a maximum term on their mortgage offers. As an example, the Ipswich Building Society provides a 40-year term mortgage.

Taking this to its natural conclusion, a mortgage applicant at the age of 60 years old could receive a mortgage they wouldn’t pay off until they were 100 years old.

With more people enjoying a good standard of living for longer, it is natural mortgage products will evolve to meet the needs of these clients. The pension age is under review[²], and people may be expected to work to an older age before they can enjoy their retirement.

Xpress Mortgages has a team of mortgage experts who are happy to help, so please get in touch.

[¹] https://moneyfacts.co.uk/news/ mortgages/lenders-relax-maximum-mortgage-age/

[²] https://www.gov.uk/ government/news/proposed-new-timetable-for-state-pension-age-increases