Even though there have been wage increases over the years, property inflation has had an effect on First Time Buyers in Lincoln affording current property prices. As a countermeasure, applicants may have the option of buying with someone else, if it is appropriate to do so. Lenders can take into account the two incomes when calculating your maximum mortgage amount, which may increase your chances of being offered a mortgage.
Even though it’s beneficial because you have someone to share costs with, it’s not as straightforward as you think. You can’t just move in with your partner, friend, or family member that easily.
Below are some questions that we get asked regularly as a Mortgage Broker in Lincoln, when it comes to applicants looking to move into a property with someone else:
Lenders are known to allow up to four people to jointly co-own a property. You have to remember that the more people that co-own a property, the likelihood of someone backing out can increase. In the case where one of the borrowers drops out of contributing towards mortgage payments, any joint owners will have a legal right to remain inside the property, except if a court rules otherwise. This is why you need to be sure about who you are buying with.
There is an option to increase your mortgage at a later date if you prefer, however, all borrowers will need to agree. Therefore, you need to think about your future as well as establish how long you are looking to stay within the property.
Joint tenancy is an option we commonly see married couples or applicants go for. This means that in the unfortunate case where either applicant passes away, the property’s ownership would pass on to the other owner.
In the future, if you decide to remortgage or sell the property, both parties need to agree to the decisions before you proceed with anything.
If the applicants are relatives or friends that have bought together, ‘Tenants in Common’ is a potential option to go for. This is when you both equally own the property, however, you aren’t obliged to do so in shares. This circumstance can occur when one party is making a larger financial input than the other. If you are a ‘Tenant in Common’, you can act independently. For instance, you are allowed to sell or give away your share of the property to someone else.
It’s required that all borrowers meet their mortgage payment when they sign on for a joint mortgage. In the case where one party decides to stop paying, the other individuals on the joint mortgage will have to pay in order to make up the shortfall and prevent the mortgage from falling into arrears. These arrears can become a risk of you not getting another mortgage in the future.
The best way to think of it is that you don’t own 50% of the property, you own 100% jointly.
It can be a challenge to remove a person from a mortgage. Lenders will need to know that you will be able to afford mortgage payments on your own before allowing you to remove a name. As you can see, making changes to a huge financial commitment at a later date is not as simple as it sounds.
Furthermore, proving to your lender that you have been consistent with your payments since your ex has moved out doesn’t always mean that they will agree to your request to put the mortgage into your sole name. Lenders prefer having multiple incomes on the mortgage to reduce the chances of arrears.
As well as this, lenders will carry out an affordability assessment before anything is allowed to go ahead. This is where they assess your personal and financial situation to decide if you will be able to maintain your payments. This assessment is also done at the point of purchase.
Get in touch with a mortgage advisor in Lincoln if your request is declined by your lender, as they may be able to help. As a mortgage broker in Lincoln, we will work hard to find you a lender that will suit your circumstances. In some cases, seeking Specialist Mortgage Advice in Lincoln could be very beneficial, especially in complex situations.
Talking to a family member to see if they can support and help you out might be a good idea. They could help by taking your ex’s place with your mortgage or gifting you a lump sum to reduce the amount owed.
In the instance where you and your partner split up and you are the person to leave the property, it’s still your responsibility to pay your part of the mortgage despite you and your ex agreeing that they will make the payments.
Removing your name off a mortgage is just like removing an ex off a mortgage. Therefore, your name can be removed only if the lender can be sure that your ex can afford the payments on their own. Again, they will perform an affordability assessment to check this.
You need to watch your credit report if you are sending your partner money each month. This ensures they are paying the mortgage as the risk of the payment defaulting could affect your score.
If you plan on moving home into another property and need a new mortgage, but you are still tied into the joint mortgage, your commitments will be taken into account. This means that lenders may unfortunately not lend as much as you would prefer.
People’s circumstances change all the time, which is why buying a property with anyone is always a risk. That’s why it’s good to keep an open mind when entering the home buying world by accepting that things may change unexpectedly, but understanding there is usually a way to work around them. Get mortgage advice in Lincoln if you are in a difficult situation with your joint mortgage.
The mortgage journey can sometimes come with its difficulties and can be challenging to those who haven’t gone through the process like First Time Buyer in Lincoln. This is understandable with the vast amount of lenders in the market offering varying mortgage criteria which homebuyers will need to meet.
Through our 20 years of experience as a Mortgage Broker in Lincoln, we have gained encountered many mortgage situations and have rich knowledge in providing support to customers through the process. We pride ourselves on top-level service to every customer.
Our experience has allowed us to help many customers overcome most mortgage hurdles. Here at Lincolnmoneyman, we love challenging ourselves to achieve mortgage success for our customers. Therefore, if we encounter an event we haven’t encountered before, there is a chance we have come across something similar before.
Whether you are a First Time Buyer, looking to Move Home in Lincoln or are Self Employed in Lincoln, our team can provide you with expert Mortgage Advice in Lincoln you need to guide you through the mortgage journey.
Generally, the mortgage process can go pretty smoothly, however, sometimes it can have its challenges.
Here at Lincolnmoneyman, we have a team of expert Mortgage Advisors in Lincoln who will be by your side throughout the mortgage process and will work hard in overcoming any mortgage obstacles. Here, we have collated a list of the most common situation our team have experienced when dealing with customers who are finding it challenging to be accepted for a mortgage.
One factor lenders will definitely look to determine whether you can manage your monthly repayments for your mortgage is looking at your income. This is done by carrying out an affordability assessment which will include the lender looking at your income and outgoings to see if that mortgage is fitting for you.
In the case where your mortgage lender will not accept you for a mortgage on the amount you desire, you may need to put down a higher deposit. With this, you can reduce the amount you need to borrow which gives you the opportunity to pay a lower amount in monthly repayments.
As mentioned, you may not be able to save enough for the initial deposit. Usually, you will need to have at 5%-10% deposit to have a chance of obtaining a mortgage, however, you can go higher which can is advised.
Having a higher can open a door to a lot more favourable deals offered by a range of mortgage lenders. Furthermore, you will be in a much better position compared to others.
This isn’t always the case for everyone due to finding it difficult to save the right amount, this would obviously put a pause on your plans for the foreseeable until that amount is saved. There are a number of options, that could benefit homebuyers, especially First Time Buyers in Lincoln.
Referred to the ‘Bank of Mum & Dad’ a gifted deposit can be a brilliant way to help young people get their step on the property ladder. The person providing you with this gifted deposit will need to provide a written statement to the lender declaring that this is a gift and not a loan also they will need proof of deposit.
Another helpful option available to first time buyers is the government-run Help to Buy Equity Loan Scheme. The scheme was designed to provide financial support to first time buyers by boosting their deposit up to 25% via a loan from the government.
If you have saved up 5% by yourself, the government will loan a supplemental 20%. It will always sum up to a 25% amount, therefore, you may want to put down 10% which means the government will loan you 15%. Because it is a loan, you will need to pay it back.
Struggling to save up the deposit itself can be a challenge itself, however, there is the possibility that you can get a mortgage, especially if that is the only hurdle and everything else is all good.
One of the most common issues people encounter when getting a mortgage is credit score. You may have a poor financial record of managing credit through getting defaults and missing payments, or you may have not built up enough credit score (likely found amongst younger applicants), which can cause hurdles.
Here at Lincolnmoneyman, we have a large variety of specialist lenders available to us. Therefore, if your case is a little more complex, don’t panic, there may be an option out there for you. This may involve putting down a larger deposit, however, around the 20% mark.
Not only are defaults and missed payments can affect your credit score, but there are also additional factors that can affect this like not having all your addresses correct and in line.
All addresses should be updated to your current address and registered on the electoral in order for lenders to have visual confirmation that you’re living where you say you are. An important factor to keep in mind is to not apply for too many mortgages yourself and speak to an expert first.
One thing that can have a seriously negative impact on your credit score is applying for lots of mortgages by yourself and getting declined each time. It’s likely that one of these mortgage lenders will have been assessing you using a hard credit score.
Different to a soft credit search, a hard credit score is more intense and detailed as well as leaves an obvious print on your credit file. Reducing this risk can be done by getting in touch with a Mortgage Broker in Lincoln who can help you with finding the right lender for you.
Through our time as a fast & friendly Mortgage Broker in Lincoln, we have gained extensive experience and rich knowledge when it comes to understanding what lenders are looking for in mortgage applicants.
When you get in touch with us, we can help you by explaining the best steps to take towards having a successful mortgage application.
Going through these steps is straightforward to do. Getting in touch with a knowledgeable Mortgage Advisor in Lincoln could put you in the right direction for getting a mortgage deal.
We offer all our customers a free mortgage appointment which will be perfect for you to kickstart the process of obtaining a mortgage and getting the keys to your dream home.