Guide to Mortgage Hurdles in Lincoln
Every now and again we encounter hurdles that our customers are faced with, whether they are a first time buyer in Lincoln or looking to remortgage in Lincoln.
Though these potential qualms can lead to some slight disruptions in the process, perhaps halting any further action until they’re ironed out, the process doesn’t necessarily need to end there.
In utilising the experience of a trusted and knowledgeable mortgage broker in Lincoln, you have the best possible chance of overcoming these hurdles, hopefully being able to once again proceed with your mortgage goals.
Below we have put together a list of the 5 most commonly encountered hurdles we have faced, when either helping customers to buy their property or remortgage their home.
Divorce/Separation
When relationships come to an end, it can be awkward enough making arrangements between you, without having to factor in a mortgage as well.
If you made any joint financial commitments during your time together, such as your mortgage, you need to cut these ties as quickly as you can, to avoid running into any trouble.
Customers regularly ask us the following 3 questions when it comes to divorce and separation.
- How can I remove my ex’s name from my mortgage?
- How do I remove my name from my ex’s mortgage?
- Can I have 2 mortgages in Lincoln?
Removing your own name or your ex’s name is imperative, as failing to do so could see your credit score drop if you move out and they handle their finances poorly.
The key to achieving this is to prove affordability, as the mortgage lender will be hesitant to lend to one name, when they previously had the security of two names. If you can afford it on your own and your ex agrees to leave the mortgage, it should theoretically be smooth sailing.
Affordability is also a factor in whether or not you can have 2 mortgages, as you will need to have enough income to live, but also afford two different mortgage payments.
The best way to determine your affordability is to speak with an experienced mortgage advisor in Lincoln. We have spoken to many customers in situations like these, so will do our best to help you overcome this issue.
Childcare Fees
In our experience as providers of mortgage advice in Lincoln, we find that families are typically not turned down for a mortgage because of childcare costs, though you may be offered a lower mortgage amount.
The reason for this is because with parents often working and forking out for childcare, their outgoings can often be in the hundreds of pounds on a monthly basis.
Many mortgage lenders would consider this type of cost as an outgoing, much as they would for a car loan or hire purchase agreement.
Even taking away the element of nursery fees that a parent may pay, parents are still generally offered less of a mortgage amount than their contemporaries, who perhaps have no children of their own running up costs.
The good news, however, is that if you have any childcare costs regularly going out, you may be in receipt of tax credits. There are mortgage lenders out there who will bear this in mind, along with child benefit too.
There are other mortgage lenders out there with an alternative approach, not treating childcare costs as a specific outgoing and relying more so on Office of National statistics data for typical outgoings and this often leads to a higher maximum mortgage amount.
New Job
Usually if someone is starting a new job, they will be in receipt of a bigger salary, being able to put their additional income towards a new or existing mortgage.
That being said, if there have been any gaps in employment, a new job can present itself as more of a problem than a blessing for some mortgage lenders out there.
Luckily there are a selection of mortgage lenders out there who will be able to work with a newly signed employment contract, even if you are only a month into your job or are yet to start. Probationary periods are usually also okay.
Benefit Income
Benefit income and how much of it can be assessed will be entirely dependant on the mortgage lender, as many of them take different views towards this type of income.
On a positive note though for customers with this type of income, benefits such as child tax credit, working tax credits, disability benefits, pension income can usually be taken into account by a mortgage lender.
It is in situations like these where speaking to a reputable and experienced mortgage broker in Lincoln will be of benefit to you, as they will be able to take a look at your case, review your circumstances and look to find you a mortgage lender where you are more likely to achieve mortgage success.
Evidencing Your Deposit
For any type of purchase, all mortgage lenders and mortgage brokers alike will be required to evidence the source of all of the borrowers’ (the person buying a house and/or looking to take out a mortgage) deposit funds.
This is done in order to satisfy UK Anti-Money Laundering Legislation, which is incredibly strict and designed to protect against fraud. Additionally, your solicitor and estate agent may ask for evidence of your deposit.
It’s the belief of our team, that this is often one of the most complicated parts of the mortgage application process.
Whether you have put down a deposit from savings, premium bonds, the sale of another property, gifted from a family member or friend, from overseas family, or from taking out a personal loan, you are required to have the paper audit trail to show exactly where these funds came from.
Book a Free Mortgage Appointment
In order to be best prepared for your mortgage in Lincoln and to reduce the risk of potential hurdles, it is recommended that you speak with a mortgage advisor in Lincoln.
They will be able to best advise on how to handle your situation and will search through 1000s of mortgage deals to match you up with the most appropriate one.
Book a free mortgage appointment today and get started on your mortgage journey.
Please note that the above information is for reference purposes only and is not to be viewed as personal financial or mortgage advice.
Date Last Edited: December 11, 2023
