As could likely be predicted, we personally feel like there are some really great reasons why you should use a mortgage broker in Leicester. This isn’t born out of bias, however, as we understand there are pros and cons to both, no matter if you’re a first time buyer in Leicester, looking to remortgage in Leicester, or have another situation.
Regardless of if you’re going via a branch or online, you are still able to go direct to the mortgage lender yourself. Below are all the pros and cons to either of your options.
When thinking about going direct to a bank or building society, the first thing that springs to mind is that you won’t be required to pay a broker fee, which in turn would possibly save you money. In the past, another positive that people thought of was “the bank manager knows my finances inside out”, though after credit scoring systems were introduced, this no longer became a factor.
On top of this, some mortgage lenders will have exclusive mortgage products on offer, that can only be obtained by going direct. They offer these as a way of attracting a good spread of business from their consumers and other brokers, turning exclusive products on and off whenever they believe it to be necessary. On the other side of the coin, some products may only be accessible by going to the broker and not by going direct to the lender.
From 2014 onwards, lenders were restricted from selling their mortgages on a non-advised basis to any customers of their services (those with bank accounts, for example). Up until that point, some applicants felt like members of staff who were not qualified for giving advice, were pushing their services on them.
They also felt like they weren’t able to benefit from some of the consumer protection that would normally come with mortgage sales performed by professionally trained mortgage advisors in Leicester.
The changes took a long while for lenders to come to terms with and towards the back end of 2014, it was not uncommon for customers to have to wait a long time to get a mortgage appointment. This is unfortunately still the case today sometimes. When you have had an offer accepted on a house, this is the last thing you need or want!
Because of the issues present with going direct, much like the wait for an appointment, more and more applications were made with mortgage brokers who could freely offer a same day service, something we are able to do ourselves. When you get in touch with us, we get you booked in with a mortgage advisor in Leicester as quick as we can, either on the same day or at your earliest convenience.
Affordability is an important factor too, as the quality of a lenders deal won’t matter if you have no way of affording it. Buying a house is such a large step in people’s lives, that they often would rather get professional and personal advice from a qualified and experienced mortgage advisor in Leicester.
Nowadays we find that a lot of mortgage applications aren’t as simple anymore. For whatever reason it may be, there are so many things that can make a case more complicated. Some examples of these are:
In the past, mortgage lenders were able to stand head and shoulders above the competition by simply offering a deal that was similar to one offered by another lender, but with slight differences to make it more appealing. Fast forwarding to where we are now and it is all so much more different, with lending criteria being the difference maker between deals and lenders.
An example of this, is that some lenders may lend more than other lenders might have to Self Employed applicants. Some also take a more sympathetic view on previous discrepancies that are showing on your credit report.
Your situation will be unique to you. It may be similar, but it will never be the same as another case. When you explain your position to an experienced mortgage broker, it is highly likely that there will at least be at least something similar that we have encountered before, allowing for a more personalised service. Hopefully, our hard working mortgage advisors will be able to get you a favourable deal with good interest rates.
It’s more than just getting a mortgage though. Even if the application itself is fairly easy, our customers who are first time buyers in Leicester rely on our experience and knowledge for more insight into the mortgage process.
For example, we are able to sit and discuss how much they are going to offer on the property they are buying. From there, our team of mortgage advisors in Leicester can recommend our customers other necessary professional services such as solicitors, whilst also explaining the different types of property survey and protection that is available to them.
One of the main pros of using a mortgage broker in Leicester, we believe, is that we are a lot more responsive than the mortgage lenders have been known to be. Our team work from early until late, all throughout the week (including out of hours), dedicated to our customers and ensuring the process is as speedy and stress-free as it can be.
Something that does get overlooked from time to time when looking at why customers may prefer to use a broker, is that everyone nowadays everyone has such a busy schedule. You might need a mortgage but don’t have the required time to sort it out. In these cases, your mortgage advisor can take the weight off your shoulders and work through it for you.
Professional applicants especially will see the benefits of this service, as they have clients of their own that they charge out their services to and often don’t have the time to work through it themselves. The customers we deal with regularly appreciate the benefits of having an expert on their side.
Perhaps in the future we’ll see lenders wanting to limit their links to brokers and wanting to take their business back. If this does happen, we don’t see it being likely that they will hire more staff in their branch networks. The future of all industry seems to be based around technology and the mortgage market may very well be heading this way too.
That may work for customers who are more than happy to do business with a “robo-advisor”, especially for cases that are easy and don’t require a thorough analysis. For the majority of people, however, there’s an element of “realness”, that “human touch” that can’t be obtained by going this route, and can only be found by speaking to a real mortgage advisor in Leicester.
To find out more information on our service or to present any mortgage queries that you have, please Contact Us and we’ll book you in for an appointment with a mortgage advisor in Leicester as soon as we can.
The circumstances you find yourself in will dictate the amount of deposit you will need for a property that you set your sights on. In this article we will take a look at how much deposit may be required, based on your personal situation.
Previously, it would be quite a common sight to find 100% mortgages. Before their eventual fall, even Northern Rock were offering their customers 125% loan to value mortgages. What that means, is if you were buying a property valued at £100,000 they would still lend you up to a whopping £125,000, and yet people wonder what went wrong…
The reason that these mortgage lenders will need you to put down a deposit, is to reduce their lending risk. If they lend a customer exactly 100% of the purchase price and that customer unfortunately falls into arrears, they would then have to repossess the property.
From there, lets say property prices dipped; now they’re trying to sell a house that’s worth even less, in order to make their money back. Naturally, with lower house prices, that’s not going to happen and they will be at a financial loss. Because of this reason, the higher percentage you’ll find is a 95% mortgage, requiring only a 5% deposit from you.
It’s also believed throughout the mortgage world, that if you haven’t invested some of your own or your family’s money into your home, then you are likely to be less attached and more willing to give up if making payments becomes challenging.
As well as this, many lenders feel that if you can’t save up at least a 5% deposit for a property, or even find someone to gift you this amount, then you probably aren’t quite ready to join the property ladder.
Not directly, however, if you are able to find 5% of the deposit required from your own saved income, then you may happen to qualify for the government Help to Buy Equity Loan Scheme.
This government scheme only applies to new build properties, with the idea being that you put in 5% and then the government will loan you up to 20%, making up a total of a 25% deposit. After 5 years, you need to look at paying back the equity loan back, sometimes through a remortgage or from savings you have been able to make during that time.
In most cases, you’ll find that 5% is considered enough to put down for a deposit on a property, however, not all lenders will offer 95% mortgages, which can leave you with limited options. Saving up for a larger deposit, for example, 10% deposit, will open the door to more products and most likely at a lower rate of interest.
With the majority of 95% deals, you will normally need a good credit score to qualify. There are lenders out there that may consider you for a 95% mortgage with a fairly average credit score, but you would probably incur a much higher rate of interest.
In the event of a poor credit history, the majority of the specialist lenders will require a minimum of 15% deposit if you have a poor credit history. As mentioned earlier on in this article, the reason the lender will need a deposit is simply to reduce their risk in case a repossession occurs.
It has always been a requirement to put down a larger deposit for buy-to-let mortgages and the majority of lenders at the moment are looking for at least 25%.
Technically, this could be possible, though pretty much all lenders will not allow this, as essentially this would still be 100% lending. Again, this no longer exists due to the aforementioned risk involved with such a financial process.
Yes, this happens all the time. We will often see this being called the “Bank of Mum and Dad” (both birth and adopted parents, as well as carers & legal guardians) gifting their loved ones the deposit, or other family members such as any Aunties & Uncles.
We have even seen instances where family friends are able to gift you money. These are all perfectly acceptable options, providing they are able to evidence the funds, prove who they are and confirm they are not expecting repayment of the gift in the future. We have written a detailed article all about Gifted Deposits in Leicester.
If you are buying as a sitting tenant and your landlord or family member has given you a discount from the properties value on the open market, or if you qualify for a discount to buy from your local authority (housing association or council) under the Right to Buy Scheme, then you will typically not need to put any of your own money in as deposit. This is due to the existing equity being already “built-in” to the mortgage deal.
Please bear in mind that the above information is for reference purposes only and is not to be viewed as personal financial or mortgage advice in Leicester.
If you are based in Leicester and living in a property owned by your local authority (that means your local council or housing association), you may have the opportunity to buy your home through use of a Right-to-Buy in Leicester.
The Right-to-Buy Scheme, providing you have the eligibility to do so, allows you to buy a property at a discounted price. This means that instead of paying a particular amount in rent to the owner for a property that isn’t yours, whilst the monthly mortgage payment may vary, you are able to truly call it home.
If you are new to the Right-to-Buy Scheme in Leicester or are confused about anything we mention here and would like guidance, please Get in Touch with our dedicated mortgage advisors in Leicester. They’re readily available throughout the day to answer any questions you may have.
We have a lot of experience in working with Right-to-Buy mortgages from our many years in the industry. As such we know how it works like the back of our hand and will be able to talk you through the process.
If you have no prior knowledge of the Right-to-Buy Scheme in Leicester, i.e., this is the first you’ve heard of it, it might be worth your time contacting your local authority to check whether or not you’re eligible to buy your rented home.
Once they have confirmed eligibility, you should receive a Right-to-Buy an offer from them, highlighting what the prices of the property will be when the scheme is in place and ready to go. The offer usually holds an expiry date, so you will need to speak with a fast & friendly mortgage advisors in Leicester in plenty of time before that period ends.
After you get in touch with us, we will book you in with a free initial mortgage consultation, taking account of your details so that we can understand your situation. You’ll speak to an experienced and dedicated advisor, who will hold your hand through the process.
To qualify for the Right-to-Buy discount, you should have been living in your rental property for three years, whether this is three years continuous or not.
The Right-to-Buy discount won’t be available to you if any of the following apply:
Exceptional living circumstances may also not be accepted, e.g., selected housing for the elderly or if you have a career in a specific sector.
When you start your mortgage process in Leicester, you will come to realise that there are lots of different options available to budding homeowners and existing homeowners alike.
Whether you’re a First-Time Buyer looking for your first home, are Home Movers looking for your next home or are looking to Remortgage in Leicester, there are many different routes you could take.
This article will cover a list, alongside related videos, of the most popular types of mortgages available on the market to customers. If you have any further questions mortgage-related, then please do not hesitate to contact us and speak to one of our dedicated Mortgage Advisors in Leicester.
A fixed-rate mortgage means that your mortgage payments will remain as they have been for a set period. You can set the length of the fixed term yourself, with common options typically being 2, 3, or 5 years or longer.
No matter what happens to inflation, interest rates, or the economy, you can rest assured that your mortgage payment, usually your biggest outgoing, will not change at any point during your term.
A tracker mortgage means that your interest rate will follow on with the Bank of England’s base rate. This means that the lender that you are with does not set the rate themselves.
You will be paying a percentage above the base rate of the Bank of England. To provide an example of this; if the base rate is 1% and you are tracking at 1% above base rate, that means you will be paying a scale of 2%.
When you take out a repayment mortgage, you are paying capital and interest together. So as long as you keep your payments going for the full length of the mortgage term, the mortgage balance is guaranteed to be paid off at the end, with the property becoming yours.
It is the most risk-free way for your capital to be paid back to the lender, in the early years it is mainly the interest that you are paying, and your balance will go down at a slower rate, especially if you have taken out a 25, 30, or 35-year term.
This situation will switch up in the last ten years or so of your mortgage, where your payments are paying off more capital than interest, and the balance will come down at a much quicker rate.
While many Buy to Lets in Leicester get set up on an interest-only basis, it is much more challenging to get a residential property on that same basis.
It is a lot less likely for lenders to offer an interest-only product nowadays. However, there are certain circumstances where this may be a viable option.
These include downsizing when you get older or having other potential investments that you will use to pay back the capital. Lenders are being a lot more stricter when it comes to offering these products now, and the loan to values are a lot lower than they once were.
With an offset mortgage, the lender will set you up a savings account alongside the mortgage account you have with them.
This works in a way where, let’s say you have a mortgage balance of £100,000 and £20,000 gets deposited into your savings account, you would only pay interest on the difference, so in this case it would be £80,000. It can be a very efficient way of managing your money, especially if you pay higher rates of tax.
The good news is yes, you can get a mortgage over 40 years old. However, it does come down to your circumstances.
If the mortgage term extends past your planned retirement age. Then a lender might ask you to provide a projection of your pension income.
Thanks to Nottingham Building Society they conducted a study. They indicated that almost 50% of the Mortgage Brokers who got surveyed. They had come across a rise in declined Mortgage applications from clients all because they are in their 40’s.
Customers aged between 45 – 54 got surveyed as they had previously been rejected during the last two years. Again the reason being their age.
Let’s start by turning the clock back. Before the days of computerized credit scoring and the levels of regulation, we now see today. If you visited a Building Society seeking a mortgage. You’d likely get interviewed by the Branch Manager or Mortgage Advisor in Leicester.
Then they would look at your circumstances, including how well you’ve managed your current account. Based upon this, they would, and they would decide whether your application was approved. If accepted, you would then get advised how much you could borrow, generally expressed as multiple of your gross salary.
However, these income multiples didn’t account for age. Therefore, whether you were 30 or 50 years old, you could borrow the same amount. Although this seems fair if both applicants were due to retire at 65 years old.
It would have different effects on both individuals. Let’s look at an example using a £70,000 (capital and interest) mortgage using a notional interest rate of 5%
For this example. We have two identical earners with the same mortgage debt, but applicant two’s monthly payment is much higher.
As a result, if mortgage rates shot up, then the risk of arrears and/or repossession occurring is more significant. Getting this is why modern mortgage calculators consider the maximum term of the mortgage.As well as your income and expenditure.
Even though we get reminded continuously, we will be working until an older age due to State Pensions. But the banks don’t seem to be considering this when granting mortgages.
Lenders will consider granting mortgages beyond retirement age. But only if you can demonstrate you would still be able to afford the payments after retiring. Getting this can usually get evidenced by a letter from your Pension provider with a projection of your future income.
However, this can cause a problem as virtually everyone reading this will likely take a reduction in income at retirement. Therefore, the Lenders will need you to prove that you can still afford your mortgage from that reduced income.
In practice, this hardly ever works unless you require only a minimal mortgage. In which case you probably wouldn’t need to stretch the mortgage past your retirement age. You may recall that the default retirement age got scrapped in 2011, and your Employer can no longer force you to retire.
As a result, fewer lenders are using the State Retirement age as the age you must have your mortgage paid off by. More are letting people self-declare the period you intend to retire.
In terms of things you can be doing to get a mortgage over 40, you must prepare to get questioned on how you will afford your mortgage in later years. Remember, the regulations are in place to protect consumers and encourage prudent lending.
If you need the mortgage term to run past your average state retirement age, you will need to demonstrate how you will sustain payments and provide proof if requested.
Please note that the above information is for reference purposes only and not viewed as personal financial or mortgage advice.
If you have any questions or require any help regarding Remortgages, Right to Buy scheme or a First Time Buyer in Leicester. Then get in touch with one of our friendly Mortgage Advisors in Leicester, and we will be happy to help discuss the topic further.
This article was originally published on 30th March 2020 and as of the 20th May 2020 the property market has now resumed and this information has become outdated. Everything was 100% accurate at the date that this article was published.
The mortgage market has endured thanks to the coronavirus. Everything has come on a bit fast, and we thought we should catch you up to speed.
Our intentions aren’t to scare you, but explain what has happened to the mortgage market and do our best to help you through the problems you may face during these difficult times.
The central dilemma for the mortgage market is that surveyors and mortgage valuers can’t go out and visit properties because the whole property market is on hold. Lenders need to know what they are lending against, so require some sort of valuation before accepting your application.
Some lenders rely on AVM’s (Automated Valuation Model) for valuations on a property. The reason being it’s a way for lenders to receive an estimate without actually going out to the property.
However, when they don’t need to send someone out to look at the property physically, these types of mortgages get restricted and to lower loan-to-values only.
During the last couple of days, as of March 28th, some lenders have been restricting their maximum loan-to-value down to 60%. So, they are continuing to process these types of applications but not necessarily ones at higher loan-to-values.
Each lender is taking a different approach. So far, no mortgage offers got withdrawn, and we think that it is just a waiting game at the moment, lenders are just putting everything on hold before rushing into accepting more mortgages.
We have whiteness that some lenders have decided to extend the periods of their mortgage offers from six months up to nine to allow the economy and the mortgage market to get back up and running again.
Following our recent article about Mortgage Payment Holidays, we want to remind you that you should only take one if you need to. Do your research, talk to a Mortgage Advisor in Leicester, evaluate your options, and see whether it is the right thing for you.
It is more than likely that they will extend the period of your mortgage anyway, so it could be better just to hold off. You should contact your lender if you are questioning your ability to meet your monthly mortgage payments.
If you decide that this is your best option, lenders are asking for you to get in touch online due to the sheer volume of calls they are receiving.
If you are going to request a payment holiday, check that it won’t affect your credit rating or mark any arrears against your account. Also, don’t just cancel your direct debit and remember that you will need to seek permission from your lender to take a payment holiday.
The main thing is not to panic. We are here to help you with all of your mortgage problems and get you and your mortgage through these next couple of months. At some point in the coming weeks or months, someone is going to press play again.
We will all be back to normal in the given time. You can still get in touch with a Mortgage Advisor in Leicester from 8am – 10pm, 7 days a week. Business is as usual. We can’t wait for you to get in touch and help you with all your mortgage needs.
Life insurance is designed to pay out, usually in a lump sum, in the event of death. With regard to your mortgage, the sum assured should be enough to pay off your outstanding balance.
Here is some information about the most popular types:
Whole of life insurance does not have an end date, therefore, providing premiums are being met the policy will pay out.
Generally speaking, this type of insurance is used for family protection and also as part of inheritance tax planning.
Term assurance is the most popular type of family insurance used to cover a mortgage.
Our Mortgage Advisors in Leicester will recommend the sum assured and term of the policy, usually to run in line with your new mortgage. The providing that all premiums are maintained, the sum assured will be paid out if you were to die during the term.
There are various types of Term Assurance available, such as decreasing and increasing cover. As part of our personal protection review, the most suitable policy for your needs will be recommended.
This is another version of Term Assurance, where instead of the sum assured is paid as a lump sum on death, it’s paid as an agreed monthly payment. This is very good for families looking to insure an income. Our Mortgage Advisors in Leicester will usually recommend a mixture of insurance types tailor-made to match your personal and family requirements.
If you are part of a couple, you could consider taking out a single life policy that will payout in the event of one of you dying.
This can be cheaper than paying the premiums on two separate policies, but bear in mind that joint policies only payout on the first death, after that the cover ends.
If you had two separate policies, the second policy would remain in force even after a claim had been made on the first.
Many companies offer their employees family a lump sum payment if the staff member dies while they are employed by the firm.
Although this doesn’t mean the death has to be at the workplace or in any way related to the job done.
This cover will most likely end as soon as you leave the company.
Giving our customers an equal opportunity to take insurance out through ourselves, is very important to us.
We’ll have a look at any existing policies you have in place with our free consultation and assess their suitability.
Then it’s our job to recommend which products meet your needs, including critical illness and income protection.
If required, we’ll then personalize the plan to match your available monthly budget.
Click here to read our Mortgage Protection explained in Leicester.
Mortgage Protection Insurance is a term used to encompass various types of cover designed to protect borrowers from events that could severely impact their ability to maintain mortgage payments.
There are different variations, but when connected to a mortgage in Leicester, they are all there to provide peace of mind and usually fall into the following categories:
• Life Cover
• Critical Illness Insurance
• Income Protection
• Accident, Sickness, Unemployment (ASU) Cover
• Family Income Benefit
As a rule, if the policyholder dies within the term, then the sum assured should be enough to pay off the outstanding mortgage balance and ensure the borrower’s dependents get left with a debt they might not otherwise be able to manage.
Our Mortgage Advisors in Leicester can run through all the different types of life cover and recommend the most suitable plan for you.
There’s a debate that says that life cover gets taken for the benefit of other people – i.e., your dependents – because sadly, you won’t be around to see any interest yourself.
However, these days, thanks to improvements in the sort of medical treatment available, many people now survive conditions that once might have been fatal.
Nevertheless, while undergoing what may be long spells of treatment and recovery, it could have a marked effect on your ability to meet your financial commitments. The decision has led to the development of Critical Illness Insurance.
Critical Illness Insurance works similarly to Life Assurance in that it is usually taken for a specific term of years and can have different options such as level/increasing etc.
It gets designed to pay out a lump sum and, like Life cover, for borrowers, it is typically taken on a decreasing term basis in line with the reduction of your mortgage balance.
The key is that the benefit gets paid if you fall victim to one of some specified critical illnesses and pays out whatever the long term prognosis of that illness.
The type of illnesses covered vary from company to company, that’s why this type of insurance cannot be solely price-driven, and advice highly recommended.
In practice, many companies will offer Life and Critical Illness Critical cover as a combined policy.
They would usually payout on the “first event,” i.e., whatever happens first – either death or a serious illness – the payout gets made. They can also get written on a single or joint life basis.
Whereas Life and Critical Illness cover pay out a lump sum, “Income Protection” pays out a monthly amount designed to replace your wages in the event of you being unfit to work.
Unlike Critical Illness cover, there are no restrictions on the illnesses or injuries covered, the only factor being whether they make you unsuitable to work.
There are, however, restrictions on how much you can cover and how quickly benefits would start to get paid.
Like Life and Critical Illness cover, these policies are underwritten based on your health and lifestyle at the time you apply.
All income protection policies get written on a single life basis.
Similar in many ways to Income Protection, these policies also cover you should you be made unemployed. Benefits are usually linked to your mortgage and other costs (rather than necessarily your wages) and would often be paid one month “in arrears” after a successful claim.
These policies get only underwritten at the time of an application rather than at the outset. Which can sometimes mean there can be some confusion/delay as to whether a claim would get met.
They are a useful safety net if you get made long-term unemployed, but be sure to check the details of how/when any unemployment benefits would get paid out, as it may be that you would have returned to work before any money becomes due.
Probably the least common of the “mortgage protection” type policies but can often be valuable – particularly for those with young families.
The plans get taken to cover Life and/or Critical Illness and get underwritten on the application the same was we mentioned earlier.
However, unlike the traditional forms of policy, rather than pay out a lump sum, the cover would pay an annual or monthly income for the remainder of the term of the plan.
Thus it can replace the income of the primary breadwinner for several years, dependent upon a particular client’s circumstances and, because of this, would usually be written on a level or basis or an index-linked basis designed to keep up with inflation.
There’s an adage that says you can never have too much insurance. Indeed, many people have one or more of the different types of policy, and it would be wrong to think of Mortgage Protection Insurance as just an “either/or” choice.
However, in the real world, affordability plays a massive part, so while it would be fantastic to cover yourself for every potential opportunity.
A good Mortgage Advisor in Leicester like us will sit down with you and tailor the type of cover to be the most suitable combination to your family’s priority and budget.
If you do take more than one type of policy, however, your advisor would usually place all the cover with one provider.
To save you the additional policy administration charges which individual policies carry but which get reduced when bringing all the systems under one plan.
Please give us a call or fill out our enquiry form to speak with one of our Dedicated Protection Specialists.