Planning to Get a Mortgage in Leicester?

Getting Ahead of the Mortgage Game

It’s essential to plan your mortgage journey, it’s that first step to take before starting the process. Doing so could give you the upper hand and put you in front of other buyers. Preparing a mortgage agreement in principle should be at the top of your list before you start viewing properties.

It’s always to consider every possibility. In this unfortunate situation, you may have planned a mortgage to the last detail but ended up separating. This will require you to take out a mortgage as the sole applicant with no time to plan.

As an expert Mortgage Broker in Leicester, when you are looking at Moving House in Leicester. We do recommend that you start planning your mortgage six months prior.

Why Planning for a Mortgage is Important

In some circumstances, the mortgage process can throw many hurdles which is why planning is essential. By preparing for any hurdles you may encounter, you should be able to work out what to do to overcome them.

Having worked in the mortgage industry for over 20 years, we have witnessed a large variety of mortgage problems. Even in the final stages of the mortgage journey, some occurrences can negatively impact the process, however, they can sometimes be solved if you prepare enough, or have a Mortgage Advisor in Leicester by your side.

Below are some common problems we have found customers encounter during their mortgage process:

  • The applicant doesn’t have a decent deposit size. 
  • Your credit score is too low. 
  • You have been too related when it comes to conducting your bank account.
  • Being a self employed applicant whose latest accounts don’t look adequate.

By preparing six months before starting your mortgage journey, you may be able to avoid some of these problems.

Deposit

For some First Time Buyers in Leicester, saving up for a deposit can be the most difficult part, especially for those who aim to achieve their mortgage goals while currently renting. Will understand that saving for a deposit is a timely goal.

In the circumstance where you are struggling to reach the initial deposit total, you may be able to get financial support from your family through a gifted deposit. This amount gifted can be either the entire amount or a contribution.

Maybe one of the Help to Buy schemes can help give you a small deposit boost. There are many schemes available that are designed for applicants needing support with deposits. These are usually popular with many First Time Buyers in Leicester as a way to get them on the property ladder. There could be a scheme out there that suits your circumstances.

Credit Score 

Credit scores are a huge benefactor when it comes to applying for a mortgage. If you have a poor credit score, this can lower your chances of a lender accepting you for a mortgage.

We recommend you use Check My File to see your insights into your credit score. By doing this, you will be able to obtain a copy of your credit report which our team will be able to look at free of charge.

Click to Claim Your Free Trial

Bank Accounts

On your mortgage application, you must look after your finances. Every lender will carry out a thorough analysis of your bank statement and will look at all your income and outgoings. Gambling transactions are something that will catch Lender’s eye especially if they are frequent and erratic outgoings.

In the fortunate case where you can receive a gifted deposit, make sure to keep that sum of money in the gifter’s account. That way, you will not have a large bank transfer in your account that lenders would question about.

Therefore, it’s wise to keep this gifted deposit inside of your family member’s or friend’s account. 

Self Employed Applicants

We tend to find some self employed applicants in Leicester, you may find the mortgage journey a little bit different compared to a regular full time employment applicant.

The evidence you will need to provide as self employed will include at least one year of accounts and three months of bank statements to show your income and affordability. In some cases, you may need to provide additional evidence, however, this just depends on the lender. 

Other mortgage hurdles 

Through the mortgage journey, you may come across a range of mortgage hurdles that could stall your purchase completely. One of these includes a break in the property chain. A Mortgage Broker in Leicester like us will be able to help you overcome these hurdles. We are here to support you 7 days a week. 
 
If you have a specialist or complex case, look at getting Mortgage Advice in Leicester. Our team can provide you with a helping hand through your mortgage journey. 

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Leicestermoneyman Spring Budget 2021 Update

Rishi Sunak’s second Budget as Chancellor brought two pieces of welcome news for the property sector as the Government attempts to transform “Generation Rent” into “Generation Buy” to help stimulate the UK economy, namely the new 95% Mortgage Guarantee and an extension of the Stamp Duty Holiday.

95% Mortgage Guarantee

The name of this scheme is misleading as not everyone that applies is guaranteed to be offered a mortgage, it is still subject to affordability and credit score. The “guarantee” itself is that the Government will ensure Lenders don’t stand a loss if they grant a 95% mortgage to a customer who then subsequently falls into arrears and is repossessed leaving behind negative equity.

This scheme should in theory give Lenders more confidence to lend even though the applicant only has a smaller deposit to put down. Of course, Lenders never want to repossess someone’s home unless it is the last resort, but if that happens then the new scheme would cover any shortfall.

Lenders have been worried about the prospect of home values decreasing so this measure should alleviate that concern although of course, the chances of negative equity occurring will naturally reduce should property prices increase as a result of these announcements!

The scheme is available to both 1st Time Buyers and Home Movers, it’s available on any property (not just new build) and will run until December 2022. Some major High Street Banks have already signed up to the scheme and it’s likely more will follow later on. It’s still a big challenge for Lenders to cope with the demand they are getting for mortgages due to the difficulties training and supervising staff working from home but they will want to offer as many of these mortgages as they can.

Stamp Duty Holiday Extension

When the Stamp Duty Holiday was launched last year we all hoped life would be very much back to normal by the cut-off date of 31st March 2021 but things didn’t pan out that way as we know. Solicitors are struggling to keep up with the workload and if lots of chains had collapsed then it would have partly defeated the object of the exercise.

Therefore it was good to hear the scheme has been extended to 30th June for purchases up to £500,000 and 30th September for purchases up to £250,000.

The Government certainly sees the property sector as an area that can play a big part in our economic recovery and if you are looking to buy a home or remortgage this year please reach out and we will be happy to advise you.

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Mortgage Payment Holidays | Mortgage Advice in Leicester

Mortgage Payment Holiday Advice in Leicester

At the start of the Coronavirus pandemic, the Government promised that all borrowers would be allowed a three-month mortgage payment holiday if they needed it. Most lenders followed the Government’s guidelines and did their best to help out their borrowers during these hard few months. 

We feel that it is best, to sum up, what mortgage payment holidays are, what lenders are doing, and who can deliver you with help and advice through these next few months. 

What is a Mortgage Payment Holiday?

Mortgage payment holidays are an agreement entered into with your bank, building society or mortgage lender to defer your monthly mortgage payments for a set period. In this case, 3-months.

It does not mean you never have to pay the amount back, but the interest you defer gets added back onto the loan amount, while your capital balance will not decrease. In other words, your mortgage amount will increase slightly, and you will continue to attract interest on the whole amount.

When you are ready to continue the payments, this could mean that either your monthly payments recalculated at a slightly higher level or your mortgage term increases to some extent.

Most lenders will probably prefer not to extend your mortgage term as this could take you past their standard retirement ages, but the detail on this will follow in due course.

Dependent on your mortgage deal, you may be able to pay off a lump sum later in the year to bring your mortgage back to where it would have been.

Mortgage Payment Holidays are available both for those with residential or Buy-to-let Mortgages in Leicester, which means landlords also have assistance if rental payments are affected.

What is the Government Proposal?

The full proposal is in detail below:

  • Mortgage lenders will offer an automatic 3-month mortgage payment holiday for customers impacted, directly or indirectly, by COVID-19.
  • The mortgage payment holiday will apply to customers who are up to date on their payments, not in arrears, and wanting to self-certify that COVID-19 impacts them.
  • Meaning that lenders will not complete an income and expenditure assessment, or evaluation of alternate payment options as ordinarily required under MCOB.
  • This proposal will allow lenders to be more responsive to customer needs and offer forbearance in a simple way to customers in an environment where COVID-19 also impacts the operation of collections teams made.
  • Customers will be made aware that interest will accrue in the holiday period, and they will need to make up deferred payments in the future.
  • Customers who wish to undertake a full assessment of their ability to pay or financial difficulty may still do so.

How do I apply?

We would recommend speaking to your Mortgage Advisor in Leicester. They will asses your financial situation first before looking to defer your payments as your situation may not yet be pressing.

Approaching a Mortgage Broker in Leicester like us will allow you to explore all of your current mortgage options and could make things feel a lot less stressful.

For a customer, up to date with payments, not in arrears, and impacted by COVID-19:

What does this mean for my Credit Score?

In some cases, a mortgage payment holiday can harm your credit score, but most lenders have now said that for matters linked to the virus, they will ensure that this is not the case.

You must ask this question to your lender directly and record the response, including the date and the name of the person you are speaking to avoid confusion later. Different lenders are doing different things.

Will I still be able to Remortgage or take a Product Transfer with my lender?

At first, everything seemed like it would remain the same, and you would still be able to make changes to your mortgages as usual. Leading to a change over in the last couple of days, and lenders have been asking borrowers to avoid making changes while you are within a mortgage holiday period. So, at the moment, they are not allowing mortgages and product transfers.

Borrowers nearing the end of their existing product could get compelled to move on to the higher lenders variable rate, which means that borrowers who act too early could find themselves on a mortgage payment holiday that accrues interest on a costly variable rate.

We would highly recommend speaking to your Mortgage Advisor in Leicester, and they will determine the best course of action based on your personal and financial situation. If possible, arranging your mortgage transfer first then asking for the holiday would seem to be the most sensible way forward.

My Mortgage got Offered Will my Lender Withdraw the Offer?

At the moment, no Lenders have withdrawn mortgage offers; in fact, some are extending offers past the standard six-month expiration date. 

Should I Pull out of my Purchase?

You should not pull out of your purchase unless, for example, you are worried about losing your job as a result of Coronavirus. We are advising everyone to proceed as usual for now and “wait and see” – you are not committed to completing your purchase until contracts get exchanged.

What “Other Options” are available?

In some cases, lenders can offer you a temporary switch to interest-only to reduce your monthly payments but not to add any further to the loan amount by still servicing the interest payments each month.

It may not be necessary to convert all your mortgage to interest only, and it may be that putting part of the mortgage on this basis could give you the breathing space you need.

People with savings may find that remortgaging onto an offset basis could give them a helping boost they were looking for, and they will be cutting down on their monthly payments while keeping hold of their savings.

For example, someone with a £400,000 loan and £100,000 in savings would only pay interest on £300,000. Meaning their monthly mortgage payments will massively be reduced.

For others, a straight remortgage to another lender, calculating the cost of any early repayment charges, may well be enough to ease the burden or simply extending the term of your mortgage.

If you still have any other questions on mortgage payment holidays or just want general Mortgage Advice in Leicester, give us a call today. We want to help you and your mortgage journey through these tough few months ahead. Speak to an experienced Mortgage Advisor in Leicester today.

Credit Card Debt Consolidation Mortgage in Leicester

Mortgage Advice in Leicester

Considering a Credit Card Debt Consolidation Mortgage loan may seem like an easy way of dealing with credit card debt.

If you are looking to do this you will be moving ‘unsecured’ credit card debt into a mortgage. You may be reducing your monthly repayments with a lower rate of interest into a single mortgage repayment.

But the lower interest rate and new loan (a mortgage) is not like credit card debt | an unsecured debt, a mortgage is secured against the home. Such a move should be considered in-depth and in detail before making any decision. 

You also will probably be aware that you will end up paying back more interest because you are likely to be paying this back over a longer period of time.

However, by consolidating your debt into a mortgage you will be reducing your monthly outgoings, lowering your monthly repayments, which is usually the objective most people are seeking.

Debts can have been accumulated on credit cards or other loans due to home improvements. In most instances, this may also have increased the value of your home.

Other times it’s just that the debt has been outstanding for several years with additional expenditure in different areas and it can be hard to reduce this debt.

The alternative to consolidating your debts into a mortgage loan? You could consider taking out zero % credit cards and take the sensible step of looking for a new card when the zero % period ends.

However, it’s not guaranteed that you can always get a transfer and it’s when that happens that homeowners decide to take action.

Consolidate debts into a mortgage is frequently preferable and more manageable than paying a double-figure interest rate.

Take Advice When Consolidation Debt & Remortgage

A debt consolidation loan in the form of a Remortgage in Leicester is not something most people would want to arrange without taking advice. With a broker you will benefit from the consumer protection which is in place and a suitable tailored mortgage will be recommended for you. Note that the Broker works for you and not the Lender so will ensure you get the right outcome.

The savings some people make are hundreds per month if they are carrying large debts and some people prefer to have everything within one monthly payment too.

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