If you fall ill, suffer an accident or find yourself otherwise unable to work and not earning for any length of time, how will you manage to keep up with your mortgage repayments?
Because this is a realistic concern, if albeit an unfortunate reality for some, many mortgage lenders incorporate into their mortgages protection insurance to safeguard individuals against such circumstances. Hence, protection Insurance is exactly that – it protects and insures a mortgage buyer against finding themselves unable to afford their mortgage repayments because of an accident, injury or illness.
How Does Mortgage Protection Insurance Work?
Protection Insurance works a lot like many life insurance policies or in a similar manner to statutory sickness pay; if you find yourself suddenly unable to work through an accident, illness or injury, protection insurance can replace your usual incomes to ensure you do not fall behind with your mortgage repayments.
Like statutory sickness pay, protection insurance is subject to a ‘waiting period’ before it is payable to a claimant; if, when you fall ill you initially receive sickness payments from your employer, you will not for that time usually receive a pay out from any protection insurance you have taken out. Instead, payments will begin if or when your sickness payments cease, if you are still unable to return to employment at that time.
How Is Protection Insurance Paid?
Unlike sickness pay, there is no set limit on how long you can claim protection insurance payments. Rather, you will usually receive payments in place of your wage until you are either able to return to work or you retire, if you happen to retire before your recover or opt to take voluntary retirement because you are unwell, injured and / or facing the prospect of not recovering enough to return to work.
It should be noted that unlike both critical illness insurance and short-term income insurance, there is no limit as to how long protection insurance is payable; the duration for which you will receive protection insurance payments will only be determined by the duration of your illness or health problems, or until your policy expires. Further, protection insurance does not provide a claimant with a one-off or ‘lump sum’ payment, like most critical illness policies. A person is able to claim against their protection insurance as many times as is necessary in the course of a policy and most often will claim to receive a monthly sum equal to approximately half or just over of their normal gross salary.
Should I Invest In Mortgage Protection Insurance?
Whether to invest in protection insurance is a question every potential mortgage buyer should ask themselves. The answer though requires some thought, research and is often where a mortgage broker can step in to help and offer their expert advice.
Because protection insurance policies are tailored to the needs of those taking the policy out, negotiating the terms of a policy can often seem complicated and confusing. There are a myriad of situations, considerations and factors which need close attention and careful thought before taking out protection insurance. Fortunately, we here at Search Mortgage Solutions, are experts in getting you the best and the right deal when it comes to Protection Insurance – and whether you need it. To find out more, visit the mortgage protection insurance section of our website.
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A Guide To Moving House – Part 3
In part 1 of our guide to moving house, we took a look at those things which you need to do in the run up to finding your dream home, whilst in part 2 we looked at those things in preparation to your move date. In part 3, we’re going to take a look at what, to many, is the most important task – turning your new house into a home!
1. Change Your Locks!
Whilst it might sound bizarre – consider changing the locks to your main entrance doors as soon as you’re in. It’s not necessarily something everyone would do, however you can’t be too careful and can you really call somewhere your home until you’re 100% confident that you’re the only ones with access? As stated by the guys over at MPL Locksmith Training when we asked them on the topic, “It’s not usually the previous home owners who you hear of entering a property once it’s sold with their own key, however perhaps those who they’ve given a key to in the past. The bottom line is that you can’t be too sure who has a key to your house unless you change the locks. Confused.com suggest that over 50% don’t change locks and, as far as we’re concerned, it’s something which every new home owner needs to do as a priority! A quick call to a specialist locksmith can see your locks changed in a matter of hours and you’ll be pleased to know it won’t break the bank either!”
On the other hand, if you’re a keen DIY’er, why not change your locks yourself? This great guide on ‘Fitting Your uPVC Door Locks’ from uPVC Door Locks talks you step by step through the whole process and offers a quick and easy approach to keep costs down.
2. Replace Your Bedding
Above all else, in order for you to be able to call your house your home, you need to be able to get a great night’s sleep and what better way to settle in than to replace your bedding for your move in date! It doesn’t need to cost a fortune to replace the entire families bedding, especially when you shop online. At the moment, we love the Jeff Banks bedding sets if you’re into something a little luxurious yet affordable or if you’re after something homely yet which has a little fun factor, the luxury bedding sets from Amara are just perfect! To start you off on your journey to find the best bedding you can … here’s an image of just one of the fun bedding sets mentioned above:
3. Add A Little Luxury To Your Garden
Turning your house into a home doesn’t just mean the interior and it’s important that you give some attention to your garden as well! After all, when ‘done right’ your garden is the perfect place to unwind after a busy day, to let the kids play or to host a family barbecue!
Where budgets allow, why not treat yourself to something luxurious such as a hot tub? It’s something which the whole family will get use out of and if you opt for an affordable model such as a Vita Spa, you won’t have to break the bank whilst still adding that extra special touch to your home! We took the time to look into the numerous different garden luxuries and are struggling to beat these great models, however if you’ve got your own suggestions, please do let us know!
On the other hand, if a hot tub isn’t your thing, something as simple as digging a pond and filling it with your favourite fish can add an extra special touch and help to turn your new garden into your own space!
At the end of the day, a house isn’t a home until you’ve added your own special touches and once you’ve moved in, the fun and creativity really begins!
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A Guide To Moving House – Part 2
In part 1 of our ‘A Guide To Moving House,’ we looked specifically at the things you need to consider prior to having an offer confirmed, however in part 2, we’re going to take a look in particular at those things which you might need to give a little thought to in the run up to your moving in day, if nothing else, in preparation for getting ready to move in.
1. Consider Renting A Storage Unit
We all know how stressful the weeks running up to a move can be and having all your belongings packed into boxes never helps. Boxes simply get in the way and you suddenly find that you’ve absolutely nowhere to live in the final weeks in your current home. As such, one of our top tips is to consider renting a storage unit for a short period, if only to offer you a solution to move your belongings out of the house and give you a little space to pack up those items which you use on a daily basis.
We had a brief chat with the team over at The Storage Works in Great Harwood who outlined to us, “it’s common for customers to hire a storage unit for a couple of month’s either side of their big move and you’ll generally find that almost all storage warehouses are more than happy to cater for this. Most will offer storage rates on a weekly or monthly basis and you generally won’t need to tie in for a long period. This offers the perfect solution for those wanting to start packing early without needing to find storage space for box after box at home whilst you’re still trying to live a ‘normal’ life whilst also packing the last of your belongings.”
2. Hire A Removals Company
Despite what some think, you can rarely complete a home move on your own, even if you own a van. Items such as sofa’s and dining tables simply aren’t designed to be moved around in domestic vehicles and, as such, it’s generally the easiest option to hire a removals company for the day, complete with a team to do all of the heavy lifting for you. They’ll help to ensure all of the logistics are in place and that the move runs smoothly, ensuring you’re free to worry about the important parts rather than packing vans and driving back and forwards with furniture hanging out of the back!
Whilst many of you will be familiar with a local removals company, if you’re not, our suggestion would be to use Rightmove’s ‘Removal Quote Tool’ to receive quotes from a number of companies who are both members of the British Association of Removers and who abide by a very strict code of conduct.
3. Hire A Skip
It’s a common fact that when you’re moving house, you’ll find you’re able to part with a whole host of belongings which you’ll never again need! It’s the perfect time to have a clear out and one which will be well needed before the big moving day! We caught up with Redmond from Reds Skip Hire who outlined to us:
“Whilst people hire skips for many reasons, one of the most common is due to them having a clear out, often when they’re moving house! With skips available in all sizes, often the same day from people such as ourselves, it’s an easy and efficient way and saves the time of having to trail to the local waste recycling centre over and over again!”
4. Start Planning Any Renovations Or Interior Design Work
Ahead of your big move date, we’d strongly recommend that you take the time to begin planning any renovations or interior design work which you’ll want to have done. Trust us when we say that, in many instances, it’s far easier to have work carried out as soon as you move in, before you’ve fully unpacked everything than decide two month’s down the line that you want to make some changes.
Our top tip here is to consider the storage you have available. Whilst there’s nothing wrong with buying free-standing storage from the likes of Ikea, a far more flexible solution if budgets allow is to start discussions with a bespoke furniture designer who can design and manufacture pieces which fit around your everyday lifestyle. One such example is London based Barbara Genda whose bespoke wardrobes offer the perfect solution to those wanting a bedroom storage space designed specifically for them. In Barbara’s own words, “Our walk-in closets are specifically designed around your individual needs and all of our fitted bedroom wardrobes are made from our exquisite selection of fine woods and classic finishes.” On the other hand, if you’re looking to add a little uniqueness to your home but don’t have the luxury of the space or budget for a fully customised storage space, why not go as far as you can and commission a bespoke piece from a specialist in that space? Our London team have heard great things about Novita Furniture from clients and we love the examples on their site!
The bottom line is that any bespoke projects such as this need careful planning and, as such, if you can arrange for the work to be done prior to moving in, you’ll thank yourself for it in the long run!
Of course, this is really only just the tip of the iceberg when it comes to tips for the run up to your move, however in part 3, we’ll take a look at a number of top tips for turning your house into a home!
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A Guide To Moving House – Part 1
When it comes to moving house, there’s a whole host of things to consider and that’s why, here at Search Mortgage Solutions, we’re committed to helping make the dreams of our clients a reality. We all have dreams and whilst securing a mortgage is only part of a bigger picture, it’s a big part and one which almost all other things involved in the process hinge upon. We are, however, here to help see our clients right through to their move in date and, as such, have put together our very own ‘Guide To Moving House;’ a three part post which looks at everything from securing your mortgage through to considering ways to turn your new house into a home. In short, it’s a collection of our top tips as well as a few from carefully selected others within the ‘property’ and ‘home’ industries.
1. Securing Your Mortgage
We would say it but securing your mortgage is the first thing which you need to do when considering moving home. Of course, it helps if you have an idea as to the approximate price of properties you’re looking at, however the sooner you get your decision in principle, the better! It’s important that you know how much you’re going to be able to borrow so that you can start hunting for your dream home and know you’ve got a mortgage offer in place so you’re able to make an offer straight away.
Our top tip here is to take the time to sit down with a specialist mortgage broker. In most instances, it won’t cost you a penny to receive invaluable professional advice which will help you to ensure you end up with the right mortgage which is right for your personal financial circumstances both now and moving forwards.
2. Put Your Home On The Market
Whilst there’s nothing to stop you looking for your new home straight away, it’s important that you get your home on the market as soon as possible. The sooner you’ve accepted an offer on your house, the quicker the chain can generally move and, as such, the sooner you’re in your new place. The estate agent who you choose can play a huge role in how quickly your home sells and it’s important you take the time to shop around and speak with a number of local options as well, of course, as looking at the online alternatives. North-West based V-Move’s Victoria recently offered her top tips in a blog post on the ‘Staging Secrets To Getting Sold’ and suggested, “Create balance in your bedroom. Our eyes love symmetry, it makes us feel relaxed, it’s easy on the eye. To achieve this, two of the same bedside tables and matching lamps really helps.”
This goes to show that as well as choosing a great estate agent, it’s important that your home looks it’s very best and makes potential buyers desperate to put in an offer.
3. Find Your Dream Home
With your own home on the market, it’s time to start checking out what’s for sale and setting about finding your dream home. Whilst some of you are bound to want to up-size, there’s likely as many of you who want to downsize, however regardless of what you’re looking for in a property, the approach is generally the same.
Long gone are the days of walking round all of your local estate agents offices thanks to the likes of Rightmove, OnTheMarket.com and Zoopla. From the comfort of your own home, you can browse all of the properties for sale in the areas you’re looking, sorting by the number of bedrooms, price and a whole host of other variables. Money Saving Expert offer their own top tips on finding your dream home, with one of our favourite being, “before putting in an offer to the estate agent on any property you’ve viewed, pose as many questions as possible – and get important answers in writing.”
Once you’ve found your dream home, however, it’s time to set the wheels in motion and put in your offer – an exciting yet nerve-wracking time for many!
In part 2, we’ll take a look at our top tips for the run up to the big move once your offer has been accepted!
It’s a widely known fact that, specifically over the past 12 months, the ropes have tightened when it comes to getting approval on a mortgage, especially as a first time buyer (yet thousands of home owners are also seen as trapped, unable to get a mortgage to allow them to move) and, as such, many are finding that lenders are turning them down left right and centre.
Don’t let this be you! By taking your time to understand why lenders are turning applicants down, you can ensure you meet their criteria and that you aren’t struck down at the first hurdle. Whilst much of it is common sense, you’d be surprised at how many first time buyers jump straight into a mortgage application without really taking the time to speak with a mortgage broker, consider how much they can really afford to borrow or have even failed to make sure they’re on the electoral roll!
Here are five reasons why you might be turned down for a mortgage and guidance and what you can do about it to ensure you’re not the ones whose application is unsuccessful!
1. You Can’t Afford To Borrow
Whether you’re sitting down with a mortgage broker or applying directly to a lender, one of the first things which they’ll do is carry out an affordability check. At the end of the day, all lenders want to ensure that they’re not taking a risk lending and, as such, will want to know a full breakdown of monthly incomings and outgoings covering everything from your bills through to what you spend on clothes and nights out.
When considering a mortgage application, lenders want to make sure you’re able to comfortably afford repayments each month and, as such, it’s important that, when you provide bank statements, it’s clear that this is the case. If you’re finding you’re spending every last penny each month, maybe it’s time to cut back on the luxuries and keep a little spare in the bank to demonstrate you’re able to budget properly and make your money last.
It’s not uncommon, in addition, for first time buyers to be aiming a little too high and to be applying to borrow more than they can comfortably afford. Of course, the higher your deposit the more you’ll generally be able to borrow, however if you’re working on a lower deposit, that may mean the house you want isn’t necessarily the house you’ll be able to get.
What Can You Do?
If you’re worried that you may not be approved for a mortgage on affordability grounds, take a look at what you’re applying for in the first instance. Are you looking at houses which are a little out of your league at the moment? If so, consider looking a little lower on the property ladder. Maybe that means you’ll have to do a bit of work to modernise a house or maybe even sacrificing that spare bedroom or garden which you wanted, however if it means you get approval on your first home, it’s one worth making!
On the other hand, if you feel your outgoings are a little high, do your best to stick to a budget. Take a look at Rightmove’s ‘Cost Of Buying’ guide to get a feel for costs involved as well as Money Saving Expert’s Budget Planner.
2. You’ve Not Got A Credit History
You may wrongly assume that just because you don’t have a bad credit rating, you’ll have a good one but that isn’t necessarily the case. For many first time buyers, there really is such as thing as having no credit history. We all know that applying for too much credit can be a bad thing, however so can applying for absolutely no credit at all.
You may feel that, by being careful with your money and not spending on credit cards that you’re showcasing you’re no risk, however lenders want to see that you repay money you’ve borrowed on time. The bottom line is that lenders want to see you making repayments and that you’ve borrowed before – they don’t want to be the ones who take the risk on someone taking credit for the first time, one who doesn’t have a track record of making payments on time.
What Can You Do?
It’s important that you make every effort to build up a strong credit history and one of the best ways to do this can be done is by using a credit card. You don’t need to spend a fortune on your credit card each month and so long as you repay on time, you’ll pay no interest, but it’s absolutely essential that you become aware that this will help your credit rating considerably and that it’s something which can significantly increase your chances of being approved for a mortgage.
3. You’ve Not On The Electoral Roll
Lenders all use the electoral roll to check that you live where you say you do and, as such, it’s absolutely essential that you’re on it! It’s hard to believe that something so simple could be the decision point on a mortgage being approved or declined but again, it all comes back to lenders wanting to ensure they’re lending to the right people who they can be sure will make repayments on time. Given that getting on the electoral roll (if you’re not already on it) costs absolutely nothing, it’s strongly suggested you double check and register if you’re not.
Given that lenders like stability, it’s also advisable that you try and remain at the same address consistently and, if at all possible, avoid flitting between addresses on a regular basis.
What Can You Do?
If you’re not on the electoral roll, register today! You can register for free here and you’ll be pleased to know it only takes about 5 minutes from start to finish!
4. You’ve Got Too Much Debt
In some ways, this comes back to the first point about affordability, however it’s important to understand that debts are a serious concern to lenders. Some lenders will look simply at the level of debt you have at the moment (including credit cards, loans and other such borrowing but not including the likes of student loans) whilst others will consider the level of debt you could have if you maxed out your credit cards and overdrafts, even if you have no intention of doing so.
As such, it’s important that, prior to applying for a mortgage, you do your best to reduce debts as much as possible. In some instances, you may well find that you’re more likely to be approved for a mortgage with a slightly less deposit yet lower levels of debt than higher debts and a higher deposit.
What Can You Do?
If you’ve got old credit cards, store cards or accounts with overdrafts which you no longer use; close them! If a lender is looking at the potential level of debt you could have, these could well contribute to a declined mortgage application. On the other hand, do your best to settle debts as soon as possible and make payments as high as possible each month to reduce debts quicker.
5. You’re Self Employed
Unfortunately, self employment can alert lenders to a higher level of risk and it can, at times, be difficult for those who work for themselves to get approved for a mortgage straight off. This is to do with the fact that income can be less stable for those who are self employed and lenders want to ensure that they’re going to receive repayments on a monthly basis and that an unstable income can be a sign of missed payments.
Of course, this doesn’t mean to say that you can’t get a mortgage if you’re self employed, it often simply takes a little more planning ahead. As an example, lenders will often want to see at least three years worth of accounts (although a number are starting to take applications with just one years) and that you’ve had a regular income across this period.
What Can You Do?
If you’re working for yourself, it’s important that you understand the need to keep accounts and that these are as in-depth as possible. It may be that you simply have to accept that it will be another 12 months until you’ll be approved for a mortgage, however having a regular income in place can help considerably. Focus on building your business and ensuring you’re able to showcase to lenders that you earn a stable income and that you’re financially stable.
At the end of the day, there’s a number of reasons why mortgage applications are declined, however in many instances, they’re common sense and if you ensure you’re able to budget, reduce debts and focus on building a strong credit rating, you’re increasing your chances of approval considerably.
Whilst it may come as a surprise to some, to those who have already taken the plunge and bought their first home it’s a reality; the fact that, for many, they’ll be financially better off if they buy their own home using the Help To Buy scheme than they would be renting.
Data provided by Moneyfacts.co.uk suggests that, on a 95% mortgage alongside the Help to Buy scheme, the average monthly repayments for a first time buyer are £753 or £9,036 annually. In direct comparison, the average monthly rent currently stands at £768 per month. This, of course, shows that, by purchasing your own home using the Help to Buy Scheme as opposed to privately renting, you could be, based upon this example, an additional £180 per year better off whilst also paying off the mortgage as opposed to lining a landlords pockets with your rent payments.
It is important that those currently making the decision between buying or renting understand that, in the long-run, buying will always be the most logical approach and given that it currently seems to be financially attractive to buy rather than to rent, we’re seeing a surge in applications for those wanting to make the jump and purchase their first home.
Of course, common questions asked by first time buyers are generally surrounding affordability and whether or not they’ll get accepted, however it’s important to understand that help is at hand! Going back to the Help to Buy scheme, this is intended to allow first time buyers to purchase with just a 5% deposit whilst receiving an additional 20% from the government for 5 years to help keep repayments low. In addition, we’re set to see a dedicated Help to Buy ISA launch later this year which will see money saved for a deposit topped up by 20% up to £3,000 – as far as we’re concerned, this really is a completely free £3,000!
On the other hand, when it comes to getting ready to buy, it’s important to take the time to speak to a dedicated mortgage broker who can not only find you the best deal but also ensure you’re taking out the right mortgage and that you’re applying within your affordability range.
Above all else, it is generally accepted at the moment that it’s far better in the long-run to buy and with so much help available, it’s finally becoming easier for first time buyers to get onto the property ladder!
13 April 2015 | By Paul Thomas
UK house price growth is set to outstrip London for the first time in six years, says the Centre for Economic and Business Research.
The housing market analyst forecasts a 1.5 per cent rise in house prices across the UK this year, an improvement on the 0.6 per cent decline it predicted in January.
But it believes house prices in the capital will shrink by 3.6 per cent in 2015, mainly down to the potential of a mansion tax, reduced overseas interest and increased stamp duty rates for more expensive properties.
Cebr economist Nina Skero says: “Outside of London, the outlook for house prices this year has improved after a few months when the market appeared to be coming off the boil. December’s stamp duty changes, as well as rising household incomes, are lifting prices in many parts of the UK.
“In London, however, we expect prices to decline by 3.6 per cent, driven by a significant weakening at the prime end of the market. A potential mansion tax, reduced overseas interest and hefty new stamp duty rates have hit demand for high value property.”
UK prices are expected to grow by 2.3 per cent in 2016, followed by 4.3 per cent growth in 2017, 3.8 per cent in 2018, 3.6 per cent in 2019 and 4 per cent in 2020.
In London, prices are expected to return to growth in 2016, with prices forecast to rise by 2.7 per cent. Prices in the capital are then forecast to rise 6 per cent in 2017, 5.5 per cent in 2018, 3.8 per cent in 2019 and 4.7 per cent in 2020.
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A Quick Guide To Help To Buy ISAs
Whilst the announcement was made back in March in the budget, there’s been a wealth of talk surrounding Help To Buy ISAs over the past few days; largely to do with the fact that, with the Conservatives winning the general election, it’s something which first time buyers can start to get excited about. The question which many have, however, is what exactly is a ‘Help To Buy ISA’ and how can they help those saving up to buy their first time as opposed to using a traditional ISA?
We’ve put together our own quick guide to Help To Buy ISAs below which will answer hopefully any of the questions which you may have:
1. What Is A Help To Buy ISA?
Set to launch this Autumn (2015), the Help To Buy ISA scheme will allow those saving up for a deposit to put down on their first home to save up to £200 per month and receive a 25% top up (£50 on £200) from the government. It will also be possible to add an extra £1,000 when the ISA is first opened, enabling £1,200 to be saved in the first month and be topped up to £1,500. Essentially, a Help To Buy ISA will make it that little bit easier for first time buyers to save up a sufficient deposit, essentially allowing them to save from pre-tax income.
In order to receive the bonus, a minimum of £1,600 will need to be saved (which equates to a £400 bonus) and the maximum which the government will add will be £3,000 (which would be from you having saved £12,000).
In short, the Help To Buy ISA scheme is a fantastic way for first time buyers to top their deposit fund up by up to £3,000 by simply saving, as they would be any way. It’s part of the governments dedication to helping people to become homeowners and to get themselves onto the property ladder.
2. Where Will Help To Buy ISAs Be Available?
As with all ISAs, Help To Buy ISAs will be available through both banks and building societies, with interest rates being set by them just as with any other ISA. Interest will be paid on savings in addition to the government bonus being given so it pays to shop around and find the best rates once the scheme launches in the autumn.
3. Can You Contribute To A Help To Buy ISA & A Cash ISA In The Same Year?
Unfortunately not. If you’ve already contributed to an ISA in the past month (since 6th April 2015), you’ll have to wait until next tex year before you can open a Help To Buy ISA. If you haven’t already contributed to an ISA this year it may well pay to consider waiting until Help To Buy ISAs launch in the autumn if you’re saving up for your first home.
4. Who Can Open A Help To Buy ISA?
Anyone who is a first time buyer(meaning they’ve never owned a home before) and over the age of 16 will be able to open a Help To Buy ISA this autumn. If you’re buying joint with someone who has previously owned a home you’ll still be able to open one, however it just means they won’t be able to. Those on any income will be eligible to open one so long as they’re buying for the first time.
5. When Does The Help To Buy ISA Scheme Launch?
The Help To Buy ISA scheme is set to launch this autumn and following this, you’ll be able to open one for four year until autumn 2019. Once open, you’ll be able to pay into the ISA for as long as you need to in order to save up for the deposit for your first home.
6. Can You Have More Than One Help To Buy ISA?
No. An individual is only able to open one Help To Buy ISA unlike is the case with a Cash ISA. If you’re buying as a couple, however, you would both be eligible to open one.
7. How & When Will The 25% Bonus Be Paid?
The 25% bonus which is added by the government will be paid when you buy your first home and will be supplied in the form of a voucher which will go straight to your mortgage lender. As such, you won’t actually see the money in your account to ensure it is used to purchase a home. If you did not end up buying a home, you would not see the bonus but would, of course, still have your savings. You will, however, see the benefit when you purchase as you’ll have up to an extra £3,000 for your deposit.
8. Can Any Home Be Bought Using The Bonus?
The bonus under the Help To Buy ISA scheme can be used to buy any house up to the value of £250,000 (£450,000 in London) however this is the only restriction. You can purchase either a new build or an existing home.
9. Can You Take The Bonus At Any Time?
It will take approximately four years to save up £12,000 which is what is needed to get the full £3,000 bonus, however you are able to claim this once it is at least £400. As such, once you’ve saved £1,600 you could, if you wanted to buy sooner rather than later, claim the voucher for an additional 25%. This would take three months if you added the extra £1,000 in the first month or eight months at £200 a month.
10. Is A Help To Buy ISA Better Than A Cash ISA?
Whilst you can only put £2,400 into a Help To Buy ISA each year, compared to £15,240 in a Cash ISA, it’s important that you consider the bonus. If you’re saving for your first home, that £2,400 each year would turn into £3000 – a bonus of £600. Even if you were to save the full £15,240 each year in a Cash ISA, you would need to be getting an interest rate of around 4% to receive the same. At this moment in time, however, even the best ISA rates are no more than 2% in most instances when fixed in for five years or around 1.5% for easy access. As such, for first time buyers, this will be a far preferential scheme and any tax payable on interest on additional savings will be far outweighed by the bonus.
Whilst many of the finer details are still to be confirmed surrounding Help To Buy ISAs, on the outset they look to be a fantastic way for first time buyers to top up their deposits and encourage regular savings towards this goal whilst receiving a sizeable bonus of up to £3,000 upon the purchase of a property.
Of course, when the time comes to buy your first home, you’ll still need to arrange a mortgage as normal and, as such, it’s strongly recommended you take the time to speak with a professional mortgage broker to ensure you’re getting the very best deal as well as invaluable advice and support.
Let’s face it, it’s common knowledge that getting a mortgage can be difficult, however at the end of the day, it’s important to remember that easier than the press would like to make us believe. The bottom line is that lenders need to ensure that they will receive their monthly repayments and interest in full. In addition to this, government legislations are in place to try and make sure that only those who can truly afford to take out a mortgage are able to do so and that high-risk lending and borrowing is ruled out.
Of course, for most people, getting the approval for a mortgage isn’t as difficult as some think, you just need to ensure that you’re presented to lenders in the very best possible light and that they see you as the perfect candidate to lend money to.
With that in mind, there’s plenty of things which you can do to help increase your chances of getting a mortgage and we’ve outlined a number of these below:
1. Clean Up Your Credit Score
Before you even consider applying for a mortgage, it’s important that you know your credit score and how potential lenders will view your credit history. You can get a copy of this through the likes of Experian and Equifax and it’s strongly advised that you do so as soon as possible. If you’re applying for a joint mortgage, make sure you request a copy of each individuals credit score to ensure you know the full picture of what lenders will be looking at.
If, upon receiving a copy, you find that your credit score isn’t as great as you’d have hoped, don’t worry. There’s a number of things which you can quickly do to boost your score such as making sure you’re on the electoral roll or closing down old credit cards which you no longer use. You can find a full list of ways to improve your credit score over at the Money Advice Service.
2. Clear Debts
If you’ve got any significant debts, it’s strongly suggested that you clear these before applying for a mortgage. Potentially the worst thing as far as lenders are concerned is seeing outstanding amounts on loans and credit cards and paying these off (or reducing as much as possible) demonstrates that you’re able to manage your money. The less debt you have, the better position you’ll be in and the stronger chance you’ll have of securing a mortgage. In addition, in terms of affordability, having less debt will often mean you’ll be able to borrow a higher amount.
3. Ensure You Have Proof Of Income
It’s important that you’re able to demonstrate your income and having the evidence prepared in advance can help. You’ll generally need your annual P60 as well as six month’s worth of bank statements and possibly pay slips. Above all else, lenders will want to see what you have going in and going out on a monthly basis to assess whether you can afford to take out a mortgage.
On the other hand, if you’re self employed, you’ll often need at least three years accounts, however a number of lenders are starting to accept just one set. Whilst this can prove problems for those who’ve only just set up in business, lenders want to know that they’re lending money to those who can afford repayments.
4. Save Up A Bigger Deposit
Even though it can be difficult to save at times, especially if you’re renting a property, saving up a bigger deposit is one of the best ways you can increase your chances of securing a mortgage. Lenders will always give priority rates to those who can afford to place down a bigger deposit which means you’ll have access to lower monthly repayments as well. If you’re struggling, asking parents to help out is often an options – you’d be surprised at how many will happily put in a little and don’t forget that it all adds up.
5. Seek Expert Advice From A Mortgage Broker
It can be difficult at times to know the right way to go about applying for a mortgage and it’s not uncommon to hear so many conflicting things from friends and family. In many cases, by far the best thing you can do when considering applying for a mortgage is to seek expert advice from a mortgage broker. Whether you’re not sure which is the best mortgage to apply for or how to get the best deal, you’ll find a broker is able to offer you invaluable advice which can turn a difficult decision into an easy one. In addition, they’ll be on hand to walk you through the whole process and even do a lot of the hard work for you, preparing your application in a way which ensures you tick all the boxes before submitting.
At the end of the day, so long as you’re not in thousands of pounds of debt, have a poor credit history or no deposit, getting a mortgage really doesn’t have to be as difficult as some would like you to think, so long as you’re prepared to do your bit to make yourself as attractive as possible to lenders and convince them that their money is in safe hands with you.
We are pleased to announce the opening of our Bristol branch and that we are now offering NO BROKER FEE mortgage advice to those in the South West of the UK. Following our expansion into London, Liverpool, Birmingham and Leeds over the past two years, we were missing a base in the South West.
Our Bristol mortgage brokers are available 7 days a week between 8am and 10pm to speak with those looking to take out a mortgage, ensuring you’re in the very best possible position to be accepted and be well on the way to owning your dream home.
Fee Free Mortgage Advice
Unlike many other brokers, Search Mortgage Solutions still offer completely FEE FREE advice to those looking to take out a mortgage regardless of whether you’re a first time buyer, a home mover, are looking to remortgage or wish to apply for a buy-to-let mortgage.
Why not give our Bristol based advisors a call today on 01179 595555 who will be only more than happy to chat on your circumstances and arrange an in-depth consultation to allow us to proceed to the next step.
We’re here to help you become the owner of your dream home!