Gifted Deposit FAQ’s | Mortgage Advice in Leicester

What is a gifted deposit?

A gifted deposit is either a portion of or the entire amount of deposit you need to put down on a property and obtain a mortgage, given to you purely as a gift (agreed in official documentation) and with an understanding that you will not repay it.

How can gifted deposits help out?

Gifted deposits in Leicester are very useful if you are financially capable of covering the monthly mortgage repayments, but are struggling to save up for the initial deposit as a first time buyer in Leicester.

This can occur perhaps due to a lower income or frequent larger outgoings, such as rental payments and home energy bills. We hear of this a lot when we speak to first time buyers in Leicester.

In receiving a gifted deposit, you may also allow yourself to gain access to much better rates of interest during your mortgage process, especially if that gift is above the minimum 5% deposit requirement.

Who can gift the deposit?

Generally it will mainly be parents (birth and adopted) and carers who are able to gift you the deposit. This is often discussed online using the terminology “Bank of Mum & Dad”.

Other extended family members may also be able to help out with a gifted deposit. This entirely depends on the mortgage lender that you end up with though, so it is worth speaking to a mortgage advisor in Leicester ahead of time, if that is the case.

Do your parents know you need help?

We’re often quite surprised at the amount of customers who have no idea their parents are able to help with their mortgage! We also encounter a good portion who feel like they maybe can’t ask their parents for help.

The truth is, the majority of parents out there are more than happy to help their children to find a home of their own, comfortably living as opposed to struggling whilst living in a rental property.

Typically speaking, taking out a mortgage may save you more money per month than you would get from renting, as depending on the conditions of your mortgage, you could be paying much less per month.

The deposit that is gifted often comes from inheritance, although parents can sometimes gift it much earlier if they have enough money saved or have released equity from their own home.

Gifted Deposit vs Loans

The majority of mortgage lenders won’t agree to accept a loan as a means of paying off your deposit. It will be often relate to the lender not being so sure if you have the ability to afford paying both back at the same time.

Is there a maximum or minimum gifted amount?

Whilst there aren’t limits to the amount that can be gifted to a home buyer, it’s worth remembering that some lenders will want you to have at least 5% from your own savings.

In general, the more you can afford to put down, perhaps combining savings and gift, the better the deals you are going to have access to.

Who could benefit from a gifted deposit?

It will usually be first time buyers and people moving house in Leicester who will benefit the most from gifted deposit.

You may also be able to use a gifted deposit to cover the initial 5% deposit for the Help to Buy Equity Loan Scheme, though this will again depend on the mortgage lender.

What proof is required?

Your donor will be required to sign a gifted deposit form stating that it is not a loan and is in fact a gift. Additional proof such as ID, address and bank statements may be required.

Our Mortgage Advice Service in Leicester

As an open & honest mortgage broker in Leicester and surrounding areas, we always aim to provide our customers with the highest level of customer service, through a fast and friendly mortgage advice service.

We always rise above for our loyal customers, no matter the mortgage situation they are currently going through. When someone gets in touch with us for mortgage advice in Leicester, we will consider all cases, no matter how complex.

Availability of a Mortgage Advisor in Leicester

A trusted and experienced mortgage broker in Leicester is available seven days a week, from early on until late. Our advisors will be ready and waiting to offer their support at all times.

Book your free mortgage appointment today with an expert mortgage advisor in Leicester and we’ll see how we are able to help you on your mortgage journey.

Top 5 Mortgage Hurdles You May Come Across

Hurdles Obtaining a Mortgage in Leicester

When you are going through the mortgage journey, there is a small chance that you will encounter some kind of issue. Sometimes, these can be challenging to deal with!

Having worked in the mortgage industry for over 20 years, we have a vast amount of experience as a trusted Mortgage Broker in Leicester, and have encountered a vast range of mortgage hurdles throughout the years.

This means that it’s very likely we have encountered your situation before and will have an idea of how to overcome it.

On the rare occasions that we haven’t encountered your circumstance before, we will work hard in finding the best solution to help you along the mortgage journey. The hurdles you may face can be ones you are unaware of especially if you are First Time Buyer in Leicester, however, we hope to help you with this.

With a plethora of mortgage hurdles out there, it would be a challenge to cover them all. Below highlights the top five hurdles you may encounter in the midst of your mortgage process.

Common Mortgage Hurdles

Childcare fees

Having your mortgage application turned away due to you having children is a rare occurrence, however, it can put you at a bit of a disadvantage if do.

The lender wants to be fully certain that you can manage all your mortgage payments as well as current expenditures. Childcare costs do come under the expenditure umbrella each month.

The reason why lenders have to factor this in is because these costs can often go into hundreds of pounds per month. Generally, childcare costs never decrease, they are always going up! From a lender’s point of view, childcare costs are the same as a car loan or hire purchase agent cost.

Regardless of if you don’t pay nursery fees, having children can mean you are offered less than other buyers who don’t have children. One advantage is that this type of family can usually be in receipt of tax credits and some lenders will acknowledge this along with child benefits.

Divorce/separation

In the unfortunate circumstance that you decide to separate from your partner, you may encounter some problems relating to finances, especially if you have one together.

If you are still financially linked with someone else, lenders may struggle to accept your application. This is because they don’t want you to have two different sets of mortgage payments to meet each month as it might be a lot to handle.

Our team often get asked the same questions when people reach out to us for Specialist Mortgage Advice in Leicester, below are just a few:

1. How can I remove my ex’s name from my mortgage?
2. How do I remove my name from my ex’s mortgage?
3. Can I get a second mortgage in Leicester?

If you are faced with mortgage hurdles like these, it can get very challenging, very quickly. The good news is that there is often a solution to these scenarios, it’s just working out the steps to overcome them. Having a Mortgage Broker in Leicester to provide a helping hand, you will have a lot of weight lifted in these difficult times.

Benefit income

When it comes to benefit income, different lenders will have varying viewpoints, one is how they are going to assess it. The good thing is that all benefit income like child tax credit, working tax credits, disability benefits and pensions can all be factored in one way or another. The lender decides whether to consider it or not.

Feel free to contact our team if you are looking for more information about mortgages and benefit income. Here at Leicestermoneyman, we will look over your situation for you and try to match you with a lender that will consider your benefit income, our goal is to get it right first time!

New Job

In many cases, a new job includes a larger salary. This additional income is usually put towards something like a new mortgage. You may think this means you have a higher chance of getting a mortgage, but this is not always the case.

It’s common to have a probationary period when you start a new job. Probationary periods are usually okay, but there will no doubt be some uncertainty there. You might a lender will only accept you when you have job security, it depends on the lender and mortgage costs.

To determine your work patterns, lenders will look at your previous places of employment. They need to know you aren’t jumping in and out of work. Gaps in employment can hurt your application.

You might find some lenders who will work from a newly signed employment contract even in month one or if your new job is about to begin.

Evidencing a deposit for a mortgage in Leicester

All mortgage lenders and mortgage brokers legally need evidence of where the borrowers’ deposit funds come from. This is to prove that the applicant has raised funds legally and to combat money-laundering. Your solicitor and estate agent may request evidence of your deposit also.

This is the part of the process we feel is the most complicated when applying for a mortgage and can result in some mistakes if not carried out correctly.

Your deposit might be from savings, premium bonds, the sale of another property, gifted from a family member or friend, from family overseas, or from a personal loan, either way, you need to have the paper audit trail for the accumulation of funds.

A Guide to Remortgages in Leicester: Top Reasons to Consider

Remortgage Broker in Leicester

The mortgage journey can have both positives and negatives along the way, but by the end of it, you will end up with one of the following outcomes; you’ll have a dream home to possibly raise a family in, a stepping stone property to help you climb the property ladder, or you could have an investment property that you are able to rent out.

Regardless of the initial path that you took, eventually you will find that your mortgages’ fixed period is coming to an end. At this point you could possibly look to upsize or downsize into a newer home. Some landlords perhaps look to sell their portfolio or sell a home to the tenant.

We find, however, that a more popular option is for homeowners to remortgage their home instead.

What is a Remortgage?

First of all, let’s look at what defines a remortgage in Leicester. In short, a remortgage is where you use funds raised from a new mortgage, to pay off a mortgage you already have. There are a lot of different ways this can be done, each with their own benefits.

Making use of the over 20 years of knowledge that the “Moneyman” Malcolm Davidson (host of our YouTube channel MoneymanTV) has, we have put together a useful guide to all of the options that may be available to you when the time comes to remortgage.

Remortgage For Better Interest Rates

Your initial fixed period will typically last somewhere within the realm of 2-5 years and will generally have lower fixed rates or potential discounted rates. Depending on your case, you may even be placed on a tracker mortgage, which will follow along with the Bank of England’s base rate.

Once that initial fixed term ends, it is likely that you will be placed onto the lenders Standard Variable Rate (often shortened to SVR). Basically, an SVR is a mortgage with a potentially fluctuating interest rate that is dependant on what the lender themselves chooses to charge.

Whilst this does not follow the Bank of England’s base rate in the same way a tracker mortgage does, these fluctuations have been known to come about as and when there are any changes to the base rate or the market. For example, if the base rate increases, your lender may push their rate even higher.

Because of this, Standard Variable Rates tend to be pretty expensive options to take, which is why a lot of homeowners would much rather remortgage for better rates. The hope is that in doing so, you’ll be saving yourself some money on a monthly basis.

Remortgage For Home Improvements

Once you have gotten a few years into occupying your home, you may be looking for a change. Rather than move home to accommodate these changes, lots of homeowners instead look to remortgage to release equity, to cover the costs of these.

There’s lots of popular changes we hear of customers looking to achieve. Perhaps you’re in need of more space for your family or possessions. Maybe you’ve been looking to refurbish the kitchen. Some may look to convert their loft into a bedroom or a spare room into an office.

Though the idea of obtaining planning permission and managing your own project can seem intimidating, many who have done so would argue it’s a lot less stressful and a lot more rewarding than finding a new home altogether.

This may work out a lot better for the future too, as creating additional space and having good quality craftsmanship is something that is likely to increase the worth of your home. If you were to ever sell your home and move elsewhere, this would be very useful.

Remortgage for Changes to Your Term

Depending on your case, you may simply wish to remortgage in Leicester in order to access a better term. This can either be done by reducing the length of your mortgage term or by switching to a more flexible mortgage product.

Reducing the length of your term will mean that you aren’t paying back or restricted for as long, but it will most likely mean higher monthly mortgage payments for you. The longer your term is, the lower your monthly mortgage payments should be.

Some will choose for a more flexible mortgage term when the time comes to remortgage. Doing so may allow you to overpay, meaning you could pay your mortgage off quicker, as well as possibly having the option to carry the same mortgage and rates over to a different home, should you ever wish to move home.

Though this may sound like the ideal path to take, they are generally tracker mortgages, which as we touched upon before, will follow the Bank of England base rate. This makes your monthly payments a little unreliable, as depending on base rate changes, they could fluctuate in cost.

Remortgage to Release Equity

Unless a serious market crash were to occur, every homeowner will have some amount of equity in their property. Your amount is worked out as the difference between property value and your mortgage balance.

As mentioned before, people will generally remortgage to release equity as a means of funding home improvements, though there are other options for this also.

Some will use their released equity to cover long-term care costs, whereas others may use it as a boost to their income. Other popular options include to pay for a large holiday, to pay off an interest-only mortgage that is in your name or to free up some spending money.

Occasionally, we find that Buy-to-Let landlords will remortgage to release equity from a property in their portfolio, as a means of covering the deposit for a future property purchase.

Equity Release in Leicester is a possibility for those who are aged 55+ and own a home that is valued at least £70,000. Explore your options by getting in touch with an expert later life mortgage advisor who can provide further information and assist you through your process.

Remortgage to Consolidate Debt

Another reason why a homeowner may remortgage to release equity, is to pay off any unsecured debts that you may have unfortunately built up over time.

Though it seems straightforward in concept, gaining access to a debt consolidation remortgage not only bases the amount you are looking to borrow on how much you owe a creditor and what your property is worth, but also your credit rating. This means that you could have a limited borrowing capacity.

On top of this, in order to fully pay off your previous mortgage and the debts you have gathered, you will have to borrow more than the mortgage amount. This means you will most likely have higher mortgage payments per month.

Though this is not at all an ideal situation, you’ll at least find solace in knowing that should your financial state take a turn for the worse, there are options for you to explore.

If your credit rating ends up particularly damaged, it’s not completely the end of the road, though it will likely be very difficult and require specialist remortgage advice in Leicester before you are able to proceed. Even in taking that step, a mortgage is not guaranteed.

Homeowners should always take out specialist mortgage advice before beginning the process of consolidating and securing debts against their home.

Book Your Free Remortgage Review with a Mortgage Advisor in Leicester

If you are nearing the end of your primary fixed period and are considering your options for a remortgage in Leicester, we would love to speak with you. Book your free remortgage review with a trusted mortgage advisor in Leicester today. We have time slots available all throughout the week, from early until late.

One of our dedicated mortgage advisors will be able to discuss your case and any future plans you have, in order to create the most appropriate next steps for you to take on your mortgage journey. We aim to make sure that this process is quicker and smoother than when you first took out a mortgage!

Different Help to Buy Schemes for Buying a Home in Leicester

It can be tough saving money for a deposit, particularly if you’re paying rent as well. To help those struggling to get on the property ladder in Leicester, the government introduced various Help to Buy Mortgages. 

This article will include the following:

• Help to Buy Equity Loan
• Help to Buy Shared Ownership
• Help to Buy Armed Forces
• Lifetime ISA Scheme

All aimed to help First Time Buyers in Leicester who are struggling to save for a larger deposit to get onto the property ladder.

Help to Buy Equity Loan

The Help to Buy Equity Loan scheme is popular amongst first time buyers in Leicester. To qualify for this scheme, you will need a minimum of a 5% deposit, and you can only purchase a new-build property. 

How does the scheme work?

Once you have saved up for a 5% deposit or more, the government will loan you 20%; if you have a 10% deposit, which makes up a 25% deposit. 

You will be left with a 75% mortgage and a government equity loan to pay off. You get five years to pay off this equity loan interest-free.

If you can’t meet the 5-year cut off point, you will start receiving interest in the outstanding loan amount. 

How our mortgage advisors in Leicester help

As a mortgage broker in Leicester, we understand the challenges of balancing your mortgage payments and the equity loan repayment at the same time. 

There are ways around this. For example, you may be eligible to remortgage to raise capital for this loan, however, doing so may lead to your mortgage payments increase.

Help to Buy Shared Ownership

The Shared Ownership scheme allows applicants to purchase a percentage of a property and then pay the rest back on rent.

The percentage of the property that you own usually needs to be between 25-75%, though this can change. The remaining portion is likely to be owned by the housing association. 

The way that your payments work is that you will have both your mortgage plus rent outgoings. So, you are paying 100% of the ground rent and service charge on the property. 

Help to Buy Armed Forces Scheme

Following the success of the Help to Buy Equity Loan scheme, this scheme had a similar concept as its predecessor, except you have to work in Armed Forces.

If you fit into the criteria, it could be an excellent option for you. The good news is from 1 January 2023, The Forces Help to Buy Scheme will become an enduring policy, ensuring its availability to all service personnel now and in the future. 

Lifetime ISA

The Lifetime ISA can be still beneficial, and it can help you secure a property as a First Time Buyer in Leicester. Essentially it’s a savings account where the money grows tax-free. 

The government will also top up your savings by an extra 25%, so if you meet the £4,000 maximum amount, you will receive a nice £1,000 bonus.

You have to pass specific criteria to gain access to this scheme. All of the details will be on the Government Lifetime ISA page.

Should I Use My Estate Agent’s In-House Mortgage Advisor?

Estate Agent Mortgage Advice in Leicester

During the start of your mortgage journey, you’ll most likely have to deal with an estate agent. If you end up in conversation with a larger estate agent, they will want you to use their own in-house team of mortgage advisors & conveyancers.

A lot of first time buyers in Leicester fall into this and are persuaded to use their services, usually spending more money than they otherwise would’ve had to.

The good news is that you don’t need to use their advisor at all, a point we’ll expand upon later on, and you may also open yourself up the either the same deals or better by going elsewhere.

Speaking to a Mortgage Advisor in Leicester outside of the estate agent could be a much better route for you to follow. The advisor working for the estate agent will give you a biased view that only benefits them and their profit.

A dedicated mortgage broker in Leicester will help you see the positives and negatives of each side. If you do still choose to go with the estate agents mortgage advisor, that is okay, though it’s important to remember that you have options.

We always aim to be transparent & efficient, looking to give the best possible experience and the best advice for our customers personal and financial circumstances, whilst providing a fast & friendly mortgage advice service.

Sales tactics of estate agents

If you do opt to use the services of your estate agent’s in-house mortgage advisor and conveyancer, have a good think about where their service cost is coming from.

They could potentially be charging you for their services without asking you and adding it onto the costs of other services, hoping you won’t notice.

Taking on expert mortgage advice in Leicester will reduce your concerns of this, as you will be well informed and aware of what you’re paying for. Your dedicated advisor will break down the cost of everything for you.

Even though it is highly illegal for them to do so, if you have opted not to use their services, they may refuse to put your property offers forward.

For example, you could be instead using the services of a mortgage broker and they may push forward someone else’s offer to completion over yours, purely out of spite that you didn’t use their services. Once again, this type of practice is illicit behaviour.

Estate agents may get even attempt to charge their customers extortionate fees for in-house conveyancing. Even with a straightforward purchase, you may find yourself being charged somewhere within the realm of £1,500, which is far too much.

Any time this occurs, you have full consumer rights to be given a full breakdown of exactly why it costs this much and where their calculations came from.

An experienced mortgage broker in Leicester will only want to do right by the customer. By coming to us for mortgage advice, you can avoid the tactics mentioned above.

How can I get a mortgage in Leicester?

Finding The Right Mortgage Advisor

Making sure you use the right Mortgage Advisor can be difficult; but can you make it easier?

From time to time, mortgage cases may require specialist care from a trusted mortgage advisor in Leicester. The in-house mortgage advisors from the estate agents don’t care for the details, so long as they can make a profit from it, even if it’s detrimental to you.

Speaking to an expert mortgage broker in Leicester you’ll find yourself matched up with an appropriate advisor with experience in a situation that’s at least similar to yours. They will work with you to ensure you get the right outcome.

An example of this would be the buy-to-let mortgage experts we have on hand for any landlords, new or experienced, looking to get a mortgage.

Once you’ve completed your free mortgage appointment and obtained an agreement in principle (we can normally get this for you within 24 hours of your appointment), your mortgage process can finally get underway.

We utilise our many collective years of providing open & honest mortgage advice in Leicester, helping thousands of customers achieve their home owning goals and dreams. Our customer reviews are a great inside look at how much of a difference our service makes to homeowners.

Kickstarting Your Own Mortgage Journey

Some people would rather take on the world of mortgages by themselves, and this is okay! The internet is a wonderful place and you can now do most of what you would need to do, by yourself on your browser.

By utilising price comparison websites, you may be able to find the best mortgage deal for your circumstances through your own research and understanding.

An obvious benefit to doing this would be that you’d save money on additional fees. Providing you have confidence in what you’re doing and understand the process, you could get through it awfully quick, more so than someone going to their bank.

The catch is that online mortgage shopping is quite difficult to do. Before you make any agreements, you should always make sure you have the best fit for your circumstances. Here are some tips if you’re doing this;

• Can you match the criteria for the “Best Buy” rates? Check before you apply for anything, to reduce the risk of harm to your credit score.
• Have you conducted the right research? A lot of comparison sites have commission based relationships with lenders. It’s their job to direct you to these companies for a payday. If they do not have a commercial relationship with a certain lender, they may just leave that deal off the list.
• In the event you encounter a problem along the way, you could be at a financial disadvantage. Pay attention to valuation and applications fees if you are not 100% sure you have been accepted, as they won’t be refundable.
• Progressing your application and sorting out any future concerns is solely your responsibility.

Should I Use My Bank or a Mortgage Broker?

Using Your Bank’s Mortgage Advisor

Making an appointment with a bank to speak to a mortgage advisor may be challenging. This isn’t always the case, though it also may just be the wrong choice for you to make. Here are a few things to look out for;

• The bank won’t shop around for the best deal, they will only present their own products, some of which may not even be suitable for you.
• No matter how long you’ve banked with them, you may find yourself getting declined. We’ve had genuine instances where 20 plus year customers have been turned away for lack of information.
• Mortgage appointments with a bank tend to have a long waiting list, with some lenders’ waiting lists being almost 6-months long.
• Your bank may have inexperienced mortgage advisors and struggle to help with difficult circumstances. Instead of solving problems, they have been known to just turn people away.

Using a Mortgage Broker in Leicester

Taking on the services of a mortgage broker that has no association with any estate agents ensures that you, as an inexperienced first time buyer in Leicester, have someone there to do the hard work for you, without any conflict of interest risks.

We work for you and only you, with no external ties. Whilst we do have mortgage lenders on panel, we don’t work for them, we simply match customers up to their various unique deals.

Our team do what they can to make sure you’re happy with your mortgage journey and the outcome you end up with. Managing Director Malcolm Davidson is here to explain both the positives and negatives of using a trusted mortgage broker:

The Pros and Cons of Using a Mortgage Broker in Leicester

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.

Pros & Cons

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.

Handling Difficult Cases

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:

• Mixed source of deposit (savings/gift)
• Poor credit history
• Let to Buy (keeping your current house and buying another)
• Affordability
• Contract workers/zero hours contracts
• Self-Employed Income

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.

Responsive Service

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.

Critical Illness Insurance Advice in Leicester

Mortgage Protection Insurance Advice in Leicester

Critical Illness Insurance is a type of insurance policy that specialises in covering an individual who potentially could suffer with an illness listed in their policy in the future.

When taking out the policy, you must mention any underlying medical conditions due to some illnesses not being in the cover. The policy could void in the event of a claim if you fail to disclose any underlying medical conditions.

The one-off payment could go towards finances for your mortgage, medical or home modifications, if this is needed.

What does critical illness cover? 

Critical Illness Insurance will cover pay out of specific medical conditions or injuries that are stated in the policy.

Not all instances of a particular illness will be covered. In the policy, it will state certain conditions that are covered and define these in the policy documentation.

Some customers confuse themselves with critical illness cover with life insurance. The difference between them is what they cover but both insurances can be purchased together.

Examples of critical illnesses that might get covered include: 

???? Cancer 
???? Stroke 
???? Heart Attack 
???? Certain types and stages of cancer 

Permanent disabilities resulting from injury or illness and other illness not stated will be considered within the policy.

What isn’t covered? 

The policy may not list more severe forms of cancer and conditions as they might not get covered. Potential health conditions that you weren’t aware of won’t be covered before you took out the insurance, also this type of insurance doesn’t pay-out if you pass away.

The policy details will provide you with what is covered and what’s not to make you fully aware and check all documentation to make sure they protect your needs.

Other types of insurance you might need 

Many insurance products can provide you with peace of mind should something go wrong. You can find out more in the links below: 

???? Do you need life insurance? This product will provide some financial support to your dependents if you die. 

???? Do you need income protection insurance? This type of insurance provides regular payments if you’re unable to work due to illness or injury. 

???? Do you need mortgage protection insurance? This umbrella term is used for various types of cover to help protect borrowers from any unfortunate events or circumstances that would prevent them from keeping up their mortgage payments. 

Our Critical Illness Insurance Advice service in Leicester 

Insurance is always a massive benefit. All our customers are offered a free, no-obligation protection review where we’ll assess the suitability of the existing policy we have for you.

Our Mortgage Advisor in Leicester can design the type of cover that will be most suitable for your family’s priorities and budget especially when affordability can be key in your situation.

Which Property Survey? We’ll Help You Choose in Leicester

What is a property survey?

There are three main types of property surveys that are available to you. We have put together a short guide outlined with a general look at which property survey would be a more suitable option for you.

As a First-Time Buyer in Leicester, your next step after being accepted for your offer on a property is to arrange a survey to establish the sort of condition that the property is in as well as the value of it, as this will give the lender confidence that it is worth what you are paying for it.

If anything of concern is found on the survey, you are then in a position by law to approach the seller and negotiate a price for the work that will be required to rectify it.

Choosing the right survey in Leicester

Here’s a short video from the Royal Institution of Chartered Surveyors (RICS) that explains the different types available to you.

Property Survey Types in Leicester

There are 3 main types of property survey available to you in Leicester:

1. Mortgage Valuation
2. Homebuyers Report
3. Full Structural Survey

Mortgage Valuation

A fundamental valuation will be the cheapest option for a property survey, and you will be required to have one of these before you are able to receive your mortgage offer. This is not to be confused with a full survey. The mortgage valuation confirms to the lender that the property is worth the amount they are going to be lending you.

Your mortgage lender may even offer you a free fundamental valuation as part of your mortgage deal. A Mortgage Valuation will not highlight any repairs that are needed, though it may still point out any apparent defects and recommend that you take a closer look at them yourself.

Homebuyers Report

A Homebuyers report will cover structural safety and highlight any apparent problems for you, including damp, as well as anything that doesn’t meet current building regulations. This kind of survey will give you an independent report of your property by an expert in surveying.

It’s important to make sure you aren’t paying for two surveys as well. It is advisable to ask the mortgage lenders surveyor to carry out this report on your behalf – it will usually take a couple of hours for the surveyor to complete.

Full Structural Survey

A Full Structural Survey is a survey type more advisable for older properties and those of non-standard construction. Depending on how large and the type of the property in question is, a full structural survey can take up to a full day to complete.

A full structural survey provides a detailed report on the current state of the property and highlights any issues that should absolutely looked into prior to going ahead with the purchase, providing you with peace of mind about the general condition of your potential new home.

You can find a surveyor to carry out a Homebuyers report or building survey through the Royal Institution of Chartered Surveyors.

The Different Types of Mortgages Explained in Leicester

The different types of Mortgages in Leicester we provide

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.

What is a Fixed-Rate Mortgage?

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.

What is a Tracker Mortgage?

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%.

What is a Repayment Mortgage?

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.

What is an Interest Only Mortgage?

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.

What is an Offset Mortgage?

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.

What is Gazumping & What to be aware of?

Gazumping is a term that is used to describe a situation, whereby a seller accepts a better offer from another buyer before the sale of a property, has gotten complete.

Gazumping is not uncommon, part of the property-buying process in England and Wales. This is because an agreement to buy or sell a property doesn’t become legally binding.

Until the lawyers exchange written contracts. Until that point, you only have a verbal agreement.

Gazumping can be a very traumatic experience for first-time buyers in Leicester. You may think you are about to purchase the property of your dreams when the sale comes hurtling down.

You may also be part of a chain that breaks and, as a result, you have to move your moving date back. It can be much more painful if you lose money as a result.

The reason for this is that you can sometimes be left out of pocket by non-refundable survey costs, conveyancing fees, and mortgage arrangement fees.

How does gazumping happen?

As we have mentioned, an agreement to buy or sell a property does not become legally binding until written contracts get exchanged.

Regrettably, there can be delays of up to several weeks between a seller accepting your offer and the exchange of deals taking place.

It can be due to having a property survey undertaken, your conveyancer carrying out the necessary searches and you have received your mortgage offer.

During this period, other First Time Buyers in Leicester may make a better offer on the property. Which the estate agent has to pass on to the seller.

Still, these preferable offers are not always better in terms of financial value. They may offer a faster sale or not have the burden of a chain.

Hence why the phrase ‘gazumping’ covers any preferable offer the seller decides to accept.

Ways to prevent gazumping

Sadly, certain things won’t happen until you have decided to make an offer, namely the property survey, conveyancer searches, and mortgage offer.

Nevertheless, you can decrease the time between making an offer and the contract exchange. Methods for doing this may include:

• Try to pinpoint a conveyancing solicitor and surveyor ahead.
  
• Act swiftly at each stage, providing all the relevant information the different parties require.
  
• Have a mortgage agreement in principle ready.

Also, there are a couple of tactics you could use that may help out. Add more security to the deal ahead of the exchange of contracts.

Firstly, as part of your offer, ask the seller to take the property off the market as this reduces the risk of other people seeing the property.

There is no obligation for them to agree, but it isn’t uncommon for them to respect this request, especially if they’ve struggled to receive offers in the first place.

Secondly, you could try to put in place a Lock-in Agreement that sees both parties put up a deposit as part of a binding agreement.

If either party attempts to change the deal or back out completely, then the other side takes their deposit.

These arrangements can incur costs such as legal fees to set it up, but you might feel it is worth the price for the security.

Finally, there are options to take out insurance to protect yourself against gazumping. These policies agree to pay you a set fee in the event of being gazumped.