Tag: mortgage

Here are four top tips for first-time buyers

 

Posted on

Article written by Holly Mead from The Sun

RISING property prices are making it harder than ever for first-time buyers to get at foot on the ladder.

But mortgage broker Carmen Green has these tips for aspiring homeowners. 

Carmen, 26, is a mortgage adviser at Surrey-based mortgage brokerage Xpress mortgages. 

She started working at the brokerage at age 18, “when I had no idea what a mortgage even was”, but soon trained up and qualified for her current role. 

Carmen says the most common worry that first-time buyers have is around their spending. 

She said: “The question I get asked most is ‘do I need to stop spending money so my bank statements look healthy?’”

“I advise clients to go through their bank statements and consider if they were the one about to lend hundreds of thousands of pounds out.

“What might raise concerns to you? Is the person gambling, in an overdraft regularly, or spending every penny each month with no buffer?” 

“It’s a window into someone’s spending habits.

But that doesn’t mean buyers have to curb all of their spending to get a mortgage, Carmen adds. 

Instead, she says it’s important to show you are in control of your finances and not living beyond your means. 

So there’s no need to panic because you have a holiday book or splurged for a big birthday treat, as it’s about the overall picture not just one purchase. 

As well as the common questions such as this, Carmen gets some more unusual ones too. 

She adds: “I recently had a client send me a photo of a pile of euros under their bed and ask if that was suitable proof of deposit.

“It turns out there was a very valid reason they had that stash of cash but it wasn’t easy getting it through the money laundering and compliance checks!”

Another client was reluctant to hand over their bank statements.

“Without going into detail, I would say be mindful of what you name money transfers to your friends – as not all mortgage underwriters will share your sense of humour,” said Carmen. 

So with that in mind, here are her four top tips for first-time buyers: 

Set a budget

Setting a budget is one of the first things any aspiring homebuyer needs to do -this couple set a £50 a week rule.

And it’s not just about working out what property price you can afford.

Remember to factor in all the extras such as solicitor fees, stamp duty, moving costs and even the cost of furnishing your home. 

Carmen said: “Once you have worked out the costs of buying, you can calculate how much deposit you can put down and how much you can afford on the monthly mortgage repayments.” 

And don’t forget to factor in any potential changes in your circumstances: are you expecting to change job, have a baby, or see an increase in travel costs, for example? 

These will all affect what you can afford to repay each month – and how much you can borrow. 

Check your credit file 

Your credit score is one of the things any lender will look at before deciding whether to give you a mortgage or not.

That means you need to make sure it’s in as good a shape as possible. 

Any bad credit registered against you such as missed or late payments, defaults, or County Court Judgements, will be flagged to a lender. 

You can do a free “soft check” or your credit file through credit agencies such as Experian and Equifax.

This will help you understand how good your credit profile is, and also let you spot if there are any mistakes on it. 

A mortgage adviser can help you go through the file if you’re not sure what to look for, as well as giving you tips on how to improve it. 

“It’s not uncommon for an incorrect missed or late payment to be on your file causing a negative impact, so spotting this means you can get it removed before you apply for a mortgage.”

Sort your documents

Buying a property means a LOT of admin, so it makes sense to get all your paperwork up to date and in place. 

You’ll need all ID documents such as a driving licence or passport, payslips, a p60, bank statements and any recent accounts if you’re self-employed.

Make sure everything is registered to the correct address and that any ID is still valid. 

Having all this to hand before you start the process can make it a lot less stressful. 

“As a mortgage broker, it also means I can do my research and give advice more accurately too,” said Carmen. 

Choose your location

The saying “location, location, location” exists for a reason – choosing where to live is important. 

Once you settle on an area in which to conduct your property search, you’ll have to do some research into property prices there and see what you can afford. 

Carmen said: “It might be that you can’t afford the four-bed house you saw on Zoopla and fell in love with. 

“Ask yourself, would you prefer to look in a different location to buy a similar-sized house, or stick to the same area and get something slightly smaller?” 

Thinking about how long you plan to stay in a property or whether you’ll need more space in the future, for example, are also important to consider. 

There are some buying schemes that could help you afford a home in your top area, such as Shared Ownership Schemes, so these may also be worth investigating. 

Plenty of our My First Home first-time buyers have used these schemes to get on the ladder.

Carmen said: “Being able to share the excitement a client feels at buying their first home or a new home is the best thing about my job – it never gets old.

“And if I can save clients thousands of pounds by getting them a good mortgage deal or remortgaging them, that feels good too as so many people often don’t realise how much they can save.”

01932 350 641
info@xpressmortgages.co.uk
www.xpressmortgages.co.uk

Six common mistakes that could delay your application or even get it rejected

 

Posted on

Article written by Holly Mead from The Sun

THERE’S an awful lot to think about when you’re buying a home – but making a mistake could delay your mortgage application or even see it refused.

Common errors could easily knock your homeownership plans off track.

It’s easy to make mistakes when you’re rushing to secure an offer on the house of your dreams.

But as house prices soar, some mortgage providers are getting stricter on who they will lend to – so it’s best to avoid any mistakes if you can.

Rachel Lummis, mortgage advisor at Xpress Mortgages, said there are plenty of things you might not realise can trip you up when applying for a mortgage.

“If you’re making a big lifestyle change, you’ve missed payments on a loan or credit card, or you’ve been applying for credit just before the mortgage process – even taking out a new mobile phone or credit card.

“All these things could mean your application is delayed or stop the provider from wanting to lend to you at all.”

She told The Sun the most common mistakes that buyers make – and some of them could mean your mortgage application gets refused.

Not preparing properly

Rachel said: “Before even looking at a property, you need to be mortgage ready and get your paperwork in order.

“This is the biggest cause of delays.”

Spend some time getting all your paperwork together: you’ll need at least three months of payslips, bank statements and household bills to prove your income, outgoings and address.

Rachel said: “Some lenders prefer you to have been employed for three or six months before they will approve you.”

Watch out for joke entries on bank statements – if a friend has transferred you cash with a comedic reference, it could stop a lender approving your application.

If you’re self-employed, you’ll need your accounts and tax return.

Not being registered to vote

Being on the electoral roll is important but often overlooked.

Registering to vote gives lenders proof of your address and how long you have lived at a property.

Rachel said: “Even if you are renting and don’t think you’ll be at a property long, you should always register to vote.

“Some lenders won’t accept you if you aren’t on the electoral roll.”

Registering is simple – just contact your local council.

Not checking your credit file

Check your credit score and particularly look out for any marks that might impact your ability to borrow.

All three of the main credit reference agencies – Equifax, Experian, and TransUnion – let you view your credit score for free. Although if you want to monitor it regularly, you’ll have to pay.

The better the score, the more chance you’ve got of being granted a mortgage.

You can build your score by using credit responsibly – that is to say, paying off your credit card in full each month and not maxing out your credit limit.

Rachel said: “If you have a poor credit history, don’t despair – there are still providers which will lend to you.”

Watch out for applying for credit in the run-up to your mortgage application too – providers want to see consistency and stability, and taking on extra debt could be a cause for concern.

Not having up-to-date ID

Checking your identification is in date and correct is crucial.

If you’ve changed your name, perhaps because you recently got married, your mortgage application will need to be in the same name as your ID documents.

Got a middle name? Make sure it appears on your passport and any other form of ID you’re submitting as proof of identity.

Rachel said: “If your driving licence has an old address on it, it won’t be valid.

“Recently married? Congratulations – but you won’t be able to use your new name unless you’ve updated your ID. Have your marriage certificate to hand too.”

Other lifestyle changes could impact your application too – for example if you’re buying a property in Scotland but your job is based in London, a lender might think this is a red flag.

Not providing proof of deposit

Before granting you a mortgage, a lender will want to know where your deposit is coming from.

This is because of money laundering rules – the provider needs to know that your cash is coming from a legit source.

If it’s from savings you’ve built up over time, you’ll need to show the evidence – whether that’s from bank statements, a Premium Bond statement or your Isa account.

Rachel said: “If the deposit is a gift from relatives, you’ll need a gifted deposit letter, stating that this is the case.”

If the money is from an inheritance, you should have a letter from the executor of the will and a statement showing the money being paid in to your bank account.

Not telling the truth

There’s a time and a place for bending the truth, and your mortgage application is NOT it.

“Always be upfront and honest,” said Rachel. “Lenders use underwriters to assess every mortgage application and they go through everything with a fine tooth comb.”

If you have any bad debt, it’s best to disclose it upfront rather than wait for the lender to find it.

Don’t exaggerate your income or play down your outgoings either – a lender needs to assess whether you can comfortably afford the debt you want to take on.

Meanwhile, a new mortgage lender is set to offer buyers fixed-rates of up to 50 years.

And homeowners can use a free calculator to find out if it’s worth remortgaging.

01932 350 641
info@xpressmortgages.co.uk
www.xpressmortgages.co.uk

Self-employed should submit tax returns early

 

Posted on

Changes for self-employed applicants

Self-employed mortgage applicants face a tougher process in applying for a mortgage than their employed counterparts as lenders seek extra assurance of stable income, both in the past and going forward.

Not only have many faced tough and unexpected implications for having made use of self-employed government grants implemented to help them through the Covid-19 pandemic, but generally, the roughly 15% of our society who brave going at it alone are arguably more hindered than rewarded in the mortgage world.

Now, as always at this time of year, the process for self-employed becomes even more demanding as many lenders require tax returns to be submitted ahead of time in order to avoid assessing mortgage affordability with figures that are more than 18 months old. As such, those wanting to use their year-end tax figures from 2019-20 must have their mortgage application submitted before October.

For those who have submitted their tax return ahead of the HMRC’s January 31 2022 deadline for this current tax year, this is somewhat of a nonissue. However, for the many who would typically use the full allotted timeframe to submit their tax return, this can be a surprising and unwelcome finding.

Importantly, it should be noted that lenders do not expect the outstanding tax to be paid early, only that the applicant has submitted their tax return. For more information about self-assessment tax returns, please refer to the government website:

Self Assessment tax returns: Deadlines – GOV.UK (www.gov.uk)

Help is at hand

Nevertheless, even if the process for self-employed does have a few more obstacles along the way, here at Xpress Mortgages we help self-employed on a daily basis make their mortgage dream a reality.

Although the majority of lenders do follow this, there are a select few who don’t, while some can use the trading year for Ltd companies – in this case, you are going to need to speak to a mortgage adviser.

Our expert advisers also know the criteria of the lenders meaning they can package your mortgage application in the best way possible, giving it the best chance of being accepted first time.

We have access to the entire market along with an understanding of which lenders would best suit your situation.

If you are self-employed and looking to apply for a mortgage in the near future, get in touch with our friendly team today and we will help you through every step of the process.

01932 350 641
info@xpressmortgages.co.uk
www.xpressmortgages.co.uk

Abolition of ground rents moves a step closer but only on new property

 

Posted on

Currently, a Leasehold Reform Bill is being debated in parliament that will abolish ground rents charged on all new build property.

Not to be confused with standard monthly rent paid to the owner of the property, ground rent is a rental charge attached to the ground on which the property sits. It is paid annually or half-yearly, and failure to pay can result in the freeholder seeking to obtain possession.

The Leasehold Reform (Ground Rent) Bill will put an end to ground rents for new, qualifying, long residential leasehold properties in England and Wales. This is part of the most significant changes to property law in a generation.

It will be the first of a two-part legislation to reform the leasehold system. This Bill will mean that if any ground rent is demanded as part of a new residential long lease, it cannot be for more than one peppercorn per year (notional value) meaning that future leaseholders will not be faced with financial demands for ground rent. The Bill also bans freeholders from charging administration fees for collecting a peppercorn rent. Fines of up to £5,000 will be levied on freeholders that charge ground rent in contravention of the Bill. 

Some leaseholders have experienced ground rents doubling every ten years on top of their mortgage and any service charges, with no prospect of ever selling the property on. Their only way out has been to buy the freehold, only to discover this is yet another area targeted by the profiteers.

Developers, including some household names, have been selling newly built flats (and houses) as leasehold, creating high annual ground rents and including provisions in leases for the rent to be increased – sometimes doubled – after a certain period of time. A number of buyers of this type of property have, quite often, been told by the builder that they would be given the opportunity to buy the freehold at a later time before the builder developing the site, only to find that, when they try to buy the freehold, the builder has already sold it to an investment company. Critics of the bill are rightly complaining that it does not go far enough, because existing leaseholders are not included in the new Bill as it is currently structured.

Japanese Knotweed – be afraid, be very afraid (if you are a homeowner)

 

Posted on

We tend to think of threats to our property such as beetle infestation, rising damp or flooding. However, it is becoming clear that one of the most potent threats is an innocuous-looking plant called Japanese Knotweed.

Japanese knotweed is an aggressive and invasive species of plant that costs landowners, local authorities, and building developers thousands of pounds each year in removal fees and project delays.

Since its introduction to the UK in the 19th century from the Far East due to the beauty of its flowers, Japanese knotweed has had a negative impact on the UK’s ecosystems, causing damage to buildings, walls, hard standing, drainage systems, and flood defences. The risk of structural damage caused by Japanese knotweed to property has led mortgage lenders to refuse to lend on properties affected, which in turn can see properties down valued. Unless the infestation is eliminated, prices of properties can be adversely affected.

When buying a property, it is always advisable to instruct an RICS qualified surveyor to undertake a Homebuyer’s Report or the more comprehensive full structural survey, in order to have a clear picture of the state of the property. Surveyors are trained to spot plant infestations and Japanese knotweed in particular. It is also worth knowing that it is a criminal offence for sellers not to reveal Japanese knotweed infestations, which emphasises the level of importance that the authorities place on trying to identify and eradicate this menace.

A study by scientists found the plant is impossible to manage with standard measures and homeowners are unable to control the spread of the plant themselves. Its destructive ability means it can be a nightmare for homeowners, as it not only poses a structural risk but its very presence can reduce a property’s value by as much as ten percent. For anyone wishing to eradicate the infestation, only recognised Japanese knotweed eradication companies are qualified to eradicate it once it takes root. Costs can start from £5000.

It is estimated it would now cost £1.5 billion to clear the UK of knotweed.

Opportunities to move credit card balances are diminishing

 

Posted on

Credit cards are a staple part of most people’s financial lives and, used properly, can provide valuable liquidity at particular times as well as enabling individuals to purchase high value items and services, or just simply for paying expenses. Knowing that there is at least a 30 day period to repay balances without incurring charges makes using credit cards a versatile and important way to smooth out financial bumps in the road, or a convenient method of making payments in one place for later reimbursement by an employer.

However, their plus points can easily be obscured because of how easy credit cards are to use. Outstanding credit card debt came to £54.7 billion at the end of February 2021, averaging £1,962 per household and £1,032 per adult*. The only good news is that due to the lockdown there was a decrease of 23.9% over the previous year.

One of the accepted ways of managing credit card debt in the past, apart from debt consolidation, has been to switch outstanding balances to other cards with rates down to 0% for a set period (also known as balance transfer deals) and then move them on again to other 0% cards.

However, recent research by Moneyfacts has shown that the number of interest-free balance transfer deal offerings has fallen by a third since January, with just 54 accounts still available, the lowest figure ever recorded. The report published showed a 29% fall in available balance transfer deals since January, and only 11 of those deals did not charge fees when transferring the balance across to a new provider.

While there has been some relief offered by banks to customers with outstanding balances as part of the payment holiday protocol initiated by the government to help people who would struggle with payments of mortgages and loans, this relief is due to finish.

Those struggling with credit card debt should act quickly if they want to avail themselves of the balance transfer deals which are still there. However, your financial adviser should be contacted to give you an opportunity of finding out if there are other avenues to help alleviate the pressure.

Debt consolidation

If you are a homeowner, you might be able to consolidate your outstanding credit card balance by adding it to what you already owe on your mortgage, either by taking a further advance with your current lender or by remortgaging to a new lender. In most cases, because the mortgage term is longer, consolidating in this way means that your repayments on the new mortgage will reduce your overall outgoings considerably. If you consider consolidating your debts in this fashion, it is essential to note that the total credit charges in the long term may be higher than your current short-term arrangements. It is crucial that you explore all the options available to you with your adviser as there may be more suitable options available to you, depending on your circumstances.

Another option would be to take out a secured loan (second charge mortgage) which runs alongside your existing mortgage, but leaves it in place.

For renters, if your credit history is positive, your bank might be able to offer you a personal loan. However, we recommend that you take advice before taking any action.

To discuss this with of our friendly expert advisers, give us a call on 01932 350 641 or email info@xpressmortgages.co.uk.

Source: https://themoneycharity.org.uk/money-statistics/

Escape To The Country?

 

Posted on

As the lockdown begins to ease, we can all begin to breathe a sigh of relief as restrictions are gradually lifted and movement, not only across the UK but also to selected countries around the world, is again within our grasp.

Naturally, there has been a growing trend, particularly among city dwellers with restricted access to open space, to look at moving to the country. The promise of a rural existence has led to a frenzy of activity to purchase property from people looking for more inside and outside space.

Evidence of people moving out of cities to towns and villages is one of a number of reasons for house price rises in rural areas, according to the Resolution Trust, an independent think-tank. It claims that property values in less densely populated areas have risen almost twice as fast as in cities and towns. Their survey reports that since February 2020 prices have gone up by more than 10% in the country, compared to 6% for urban areas.

The government’s implementation of a stamp duty holiday allied to a mortgage sector awash with funds and rock bottom rates of interest, have also been significant drivers behind the boom in house sales, particularly in country areas such as Cornwall.

At the same time, the popularity of flats has also fallen along with that of smaller properties. The pandemic showed that those homeowners and tenants of larger properties benefitted from having more space indoors and in many cases the extra luxury of a garden, which has been shown to be of great benefit both physically and mentally during the lockdown.

In fact, according to the Resolution Foundation, one in five children in low income households spent the first lockdown in overcrowded accommodation, with overcrowding affecting all age groups more than they were twenty years ago.

Having looked at the triggers for this exodus, a necessary question is whether you are tempted to join in and start looking for property in the country?

If we look at places like Cornwall where many of us have either visited or have childhood memories of long ago holidays, we may have in mind images of shimmering seas, golden beaches and blue skies but does the reality live up to the fantasy? Here are a few points to consider:-

PROPERTY – Property prices are currently exceeding all expectations. Estate agents are reporting that they have little to sell and what they do have in many cases is being bought sight unseen! Prices displayed by estate agents’ particulars have turned out merely to be a starting point and properties are selling to the highest bidder. The situation can’t go on indefinitely, but unless you have the cash to burn, it might be advisable to hold back until the market cools down. Cornwall’s experience is shared by many other locations, but these will vary.

AMENITIES – Many properties are being sold to those looking for a second home, but if your intention is to move permanently, before buying it is vital that you have amenities near you that you can rely on. How far from that beautiful cottage do you have to go for food and essentials shopping? How about a GP surgery and how local is the ‘local school’? Will you need a bus service and how far are you from a rail terminal? If you are planning to work from home, has broadband reached your location yet and can you get a reliable mobile signal from your provider?

Lastly, it rains in England – a lot. That country idyll might not look so wonderful in pouring rain!

Number Of Mortgage Approvals Made To Home Buyers At 13-Year High

 

Posted on

If you are looking for actionable signs from the property market, it is always useful to look at what the Bank of England says. In recently released figures, they show that the number of mortgage approvals made to property buyers reached a 13 year high in November 2020.

Around 105,000 property loans for a home purchase were approved, which is an increase on the 98,300 which were approved in October. The November figure was the highest since August 2007.

The housing and mortgage market was shut down for some time in 2020

One of the most interesting things about this increase in approvals is that it helps 2020 get close to the level of mortgage approvals in 2019. When you take on board the housing and mortgage market was all but shut down for six weeks in spring, this is highly impressive.

  • In 2020 up to November – 715,300
  • In 2019 up to November – 722,000

When it comes to non-mortgage borrowing, consumer credit contracted. In November 2020, there was an annual contraction of 6.7%, and this is the lowest figure since records began back in 1994.

Non-mortgage borrowing represents overdrafts, credit cards and personal loans.

The borrowing on credit cards also fell by 14.5% annually, which represents a new low on the records.

Many households have focused on clearing debts in 2020

It appears many households have taken the opportunity to clear off debt this year. The Money and Credit report indicates that since the start of March 2020, £17.3 billion worth of consumer credit has been repaid.

The typical rates on new personal loans rose in November to 5.46%. This figure is low compared to the rates of 7% that we saw in the early part of 2020.

There was a drop in the typical credit card borrowing rate to 17.49% in November. This is also a new low since these records were started.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “With non-essential shops and the consumer services sector closed in November, households had fewer spending opportunities than usual. Nonetheless, unsecured (non-mortgage) credit conditions have tightened, and some households likely will use the cash that they accumulated in 2020 to pay off debts when they become due.”

Samuel concluded by saying; “As a result, we continue to think that households will spend only a small fraction of the ‘enforced savings’ that they accumulated last year, and that households’ overall expenditure will take until mid-2022 to recover to its prior peak.”

Of course, with many new challenges to overcome in 2020, many people will remain cautious for some time.

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.

Request A Callback

Request A Callback

Please fill out the form below if you would like to request a callback.
X