Lee Underwood, Author at Lincolnmoneyman

Do Gambling Transactions Look Bad on My Bank Statements?

Why does the lender need my bank statements? 

Whatever the mortgage route that you choose to take, you will always be asked to provide a copy of your bank statements. Whether you’re a First Time Buyer in Lincoln, looking at Moving Home to Lincoln, or wanting to know your Remortgage Options, this will never change. Furthermore, they won’t just ask for your bank statements, they’ll ask for other pieces of evidence to support your mortgage affordability, and calculate the maximum amount you can borrow for a mortgage.

There are multiple different reasons why your lender will want to see your bank statements. They need to know whether you can afford a mortgage or not, make sure that you’re reliable, and know if you’re someone who manages their finances responsibly.

Planning your mortgage journey is essential. As a mortgage broker in Lincoln, we always recommend that applicants think about their bank statements and what’s going to show up on them a few months before their application. When a lender is looking at your bank statements, one of the main things that they will look for is gambling transactions, and here’s why.

What has it got to do with the lender whether l gamble or not?

We are not saying that it’s illegal to gamble during the upcoming months of your application, however, lenders do seem to judge applicants less favourably if they can see large amounts of gambling transactions on your bank statements.

Spending a little bit here and there on your gambling app won’t make a huge difference to your mortgage application. It can start to impact your application when you are consistently gambling and putting in large amounts of money each time. The number one rule is to always remember to ‘gamble responsibly’.

A mortgage broker in Lincoln like us, nor a lender/building society can tell you how to live your life. We can give you advice though. All we can ask of you is to be careful as lenders do have a duty to lend responsibly. 

Lenders need to prove to their regulators that they’re lending to responsible applicants. If you’re a frequent gambler and losing out on money every so often, they may not think that you fit into the ‘reliable category’. They want people to take good care of their finances. Would you lend to someone who is a frequent gambler or someone who hardly gambles?

Will gambling affect my chances of getting a mortgage?  

Moreover, infrequent gambling transactions are unlikely to your ability to get a mortgage. It’s all down to the size of the transactions and how frequent they are.

A big factor is how these transactions affect your overall account balance. Does gambling result in you dipping into your overdraft? Are you borrowing money to gamble/gambling money that you don’t have?

Acting irresponsibly with your money during the lead up to your mortgage application may put off a lender. Lenders notice gambling transactions straight away.

What will lenders be looking for on my bank statements? 

It’s not just gambling transactions that lenders will look for on your bank statements. Here are a couple more things that they’ll be looking for:

  • Loan repayments
  • Exceeding into your overdraft
  • Other current accounts
  • Credit cards
  • Recurring payments

They need to be certain that they’re lending to a reliable applicant. From monitoring your accounts to asking you questions about your transactions, lenders need to know that they can trust you.

On the contrary, if you do fall into your overdraft now and again, it shouldn’t cause too much detrimental effect on your mortgage application. When you are always dipping into your overdraft or struggling to get out of it, that’s when it may hurt your mortgage application.

What can I do to show the lender I am reliable? 

Every lender will look for someone who is reliable and sensible. Get ahead of the game, plan your mortgage application nice and early in the process.

Since you’ll be asked to provide bank statements (typically 3 months’ worth), you could make them appear the best that they can. Ensure that these bank statements make you look reliable. A way to enforce this could be to reduce gambling and outgoings for these three months.

If you gamble regularly, it could be an idea to stop for a little while. There are usually spending limits on betting apps; this could be something to look into. As well as helping your mortgage application, this may also be good for your mental health. 

Get in touch with a mortgage broker in Lincoln

Our job as a mortgage broker in Lincoln is to hold your hand through the entire mortgage process. We will be with you from the very start! Firstly, we’ll take a look at your evidential documents with you, making sure that you are presenting yourself in the best way possible in front of a lender.

Our mortgage advisors in Lincoln are available 7 days a week, so don’t hesitate to book your free mortgage appointment today. They cannot wait to hear from you.

A Guide to Remortgages in Lincoln: Top Reasons to Consider

Our Guide to Remortgages | MoneymanTV

Remortgage Advice in Lincoln

Buying a home is likely to be the biggest purchase you’ll ever make, and a mortgage will be your largest debt. Nevertheless, your mortgage journey will have its ups and downs, but you will end up with one potential outcome once your term ends.

Either you will have a home to settle down in, a property that you can use as leverage to get a better property, or an investment to help boost your income. You will reach a point where your term is coming to a close, and you need to consider your options.

While some look to sell their home and upsize/downsize into a new property. Others may sell their portfolio to the tenant or another buyer to look for alternative ventures. However, we often find that people decide to Remortgage their property instead.

What is a remortgage?

Remortgaging means switching your current mortgage deal to another mortgage deal. You can choose to remortgage with either your existing lender or a different one. Your new mortgage will then replace your old one.

Utilising over 20 years working in the mortgage industry, the “Moneyman” himself, Malcolm Davidson, put together a helpful Remortgage guide for those looking at what they can do next when their term is ending.

Remortgage for Better Interest Rates

Generally speaking, your mortgage deal will last around 2-5 years and feature low and potentially discounted fixed rates. Although, you may find yourself placed onto a tracker mortgage, which will follow along with the Bank of England’s base rate.

A standard variable rate (SVR) is an interest rate set by your lender. It is the default interest rate that you move onto when their initial deal ends. If you choose not to remortgage, you will automatically move onto your lender’s SVR.

In most cases, the SVR can be considerably higher than the interest rate you were previously paying, so your monthly repayments will rise. Because it is a variable rate, your lender can also change the SVR at any time.

Compared to a tracker mortgage, a Standard Variable Rate will not follow the Bank of England’s base rate.

Remortgage for Home Improvements

Having adjusted to being a homeowner for several years, you might feel like something needs changing. Some might want an additional room or more living space, a new kitchen, an office to work from home, or even a loft conversion.

Rather than find a bigger home to move into, many homeowners preferably look at releasing their equity with a Remortgage to cover the costs of home improvements.

Once you have obtained planning permission and funding/managing, it can be a pretty stressful experience. However, most homeowners would agree that it’s a lot more rewarding at the end than it would be trying to get a new property and looking to move elsewhere.

Remortgaging for home improvements has many benefits, as opening up lots of space within the property and having a high-performance home is likely to increase the property’s value. Which can help if you ever decide you want to sell up or turn it into a rental property.

Remortgage for Changes to Your Term

Sometimes some homeowners look to Remortgage in Lincoln to gain access to a better mortgage term, whether this is achievable by decreasing the length of the term or switching to a more manageable mortgage product.

By reducing the length of your term, you are cutting short on how long you pay back your mortgage so you aren’t tied down. However, this means that your monthly repayments will be higher.

The longer you set your term for, the lower your payments will be.

In some cases, homeowners choose to take out a more flexible mortgage term when looking to Remortgage as a means to gain the benefits they may have for doing so.

For example, you may be able to overpay with this mortgage, leading to your mortgage paid off a lot quicker and being able to take the same mortgage and rates with you across to another property if you ever do decide to relocate.

Some felt like a flexible mortgage sounds more suitable, though they tend to be tracker mortgages, which, as we have stated before, will follow the Bank of England base rate.

This means your payments could vary depending on interest.

Remortgage to Release Equity

Everyone will have some amount of equity existing within their property. You can work out the amount by looking at the difference between what’s left on the mortgage and the properties current value.

Most homeowners choose to use the equity to fund home improvements. However, you can use the money for other things. Some choose to use their equity to cover costs, go on holiday, pay off an interest-only mortgage, or give them some additional spending money.

We tend to see Buy to Let landlords using a remortgage to release equity to cover their deposit for buying another property to expand their portfolio.

Equity Release in Lincoln is something that homeowners who are aged 55+, with a home that is valued at least £70,000, may be able to use. Explore your options by getting in touch with an expert later life mortgage advisor who can go into more detail about this.

Remortgage to Consolidate Debt

On the subject of Equity Release, we also find that many people will pay off any unsecured debts they may have gained over time.

Debt Consolidation may look like a straightforward process, but there are many factors in the amount you owe, how much the property is worth and the state of your credit rating, thus limiting the amount you can borrow.

To pay off any previous mortgage and debts, you need to borrow a much higher amount than your mortgage, making your monthly repayments much higher. Though it isn’t great, at least you know there are some options should these problems arise.

If you have a ruined credit rating, there may be options out there for you, and you are best speaking with a Specialist Mortgage Advisor in Lincoln before you go ahead with these. But keep in mind even talking to a Mortgage Advisor, you are still not guaranteed to get a mortgage.

We always recommend to all that you get professional Mortgage Advice before you look to consolidate and secure any debts against your home.

Speak to a Mortgage Advisor in Lincoln today

If your mortgage term is coming to an end and you would like to know your Remortgage options, get in touch to speak with one of our Mortgage Advisors in Lincoln and book yourself in for a free mortgage appointment.

We will take a look at your situation and look at your best options to see the next step of your mortgage journey. We aim to ensure that your mortgage process this time around is a lot smoother and quicker than previously.

Can You Have Two Mortgages in Lincoln?

Mortgage Advice for Homeowners in Need of Multiple Mortgages

Can I Have Multiple Mortgage? | MoneymanTV 

There are multiple reasons why some homeowners in Lincoln may look to obtain a second mortgage. One example of this would be if you are looking to expand your property portfolio and you need to obtain a mortgage to do this.

Alternatively, you may find that you need to take out a second mortgage if you have a family member who is unable to qualify for a mortgage themselves, obtaining a mortgage in your name and allowing them to live in the property.

If the lender can see that you cannot afford the costs involved with a second mortgage, then your application will be denied.

Why would I want a second mortgage?

As a trusted Mortgage Broker in Lincoln, we have seen people apply for a second mortgage for all kinds of different reasons. Here are a few reasons to consider one.

Raise Money

If you are over five years into your mortgage term, then by now, you should have built yourself up a reasonable amount of equity in your home.

This situation is known as a further advance. A further advance is when you borrow more from your current lender to fund something like home improvements or a second mortgage.

What you do with that money is completely your choice, after all, it’s the equity you have built up in your own home. Some people use it to fund the deposit of another mortgage, whilst others may use it to take their dream holiday. There are no limitations once you’ve withdrawn that equity.

The amount that you can borrow from them will depend on the amount of equity in your property. Your lender will need strong evidence to prove that you can afford both mortgages. Our mortgage advisors in Lincoln can access competitive second mortgage deals and options through our large panel of lenders. 

Rent Out a New Property (Buy to Let)

Whether you are a landlord with experience within the market already or someone new looking into making their first investment on a property, you will need more than one mortgage to achieve your goals.

Buy to let landlords will likely use a suitably extensive portfolio to the process of getting more than one mortgage. For those starting as a landlord, sometimes you need Mortgage Advice in Lincoln to make sure everything gets sorted.

Second mortgages work similarly to other mortgages. You still need to put down a deposit (usually around 15%-25% of the property) and pass the lenders’ affordability checks. Affordability does not always come down to your income, and some lenders will look into the predicted rental income.

No doubt, once the landlord has found tenants and they have moved in, the costs of your mortgage payments should be sufficiently covered. Initially, though this might prove challenging, you need to cover the expenses until the income starts to flow.

For Buy to Let Mortgage Advice in Lincoln, please feel free to book yourself in for a free mortgage appointment to speak with one of our Mortgage Advisors here at Lincolnmoneyman.

Rent Out an Existing Home to Purchase a New One (Let to Buy)

This sort of process is what is known as a let to buy mortgage. Some homeowners will have an option to get a second mortgage on a newly purchased home, allowing them to rent out their current home and move into a new home for themselves.

Let to buys are of course very similar to buy to lets, it just works a little bit differently. In this case, you need to find a tenant for your current property, in order to move out yourself. Landlords may do this if they want to move into a bigger family home.

Our buy to let Mortgage Advisors in Lincoln have a lot of experience and knowledge in working with let to buy mortgages, so get in touch if you would like an advisor to help you with a let to buy second mortgage.

Purchase a Home For Your Children/Family Member

If you have any children or other family members who are having some difficulty getting themselves onto the property ladder, you may have the option to take out a mortgage in your name and allow them to move into it as their new home.

Going down this route will likely land you with a guarantor mortgage. Another popular option that some people go with is to gift the person in need their deposit. Gifted deposits are crucial to the property market and are always a fond option for helping a loved one find their footing on the property ladder.

Are you named on an existing mortgage and want to buy a new home?

There are various reasons why you can be listed on two mortgages. Sometimes it’s something you’ve planned for, but in other cases, it can be completely unintentional.

Through our work as a mortgage broker in Lincoln, we regularly find that one of the most common reasons for someone taking out a second mortgage is divorce or separation.

The tricky part here is that it can be hard to remove your own or your ex-partner’s name from the mortgage you share. Once again, this is down to affordability and to both parties having to agree mutually. Though it may come with challenges, obtaining a mortgage post-divorce or separation is not entirely impossible.

If you have your name on an existing mortgage for a home you no longer live in, we recommend you look at getting your name removed sooner rather than later.

Having any financial ties to someone may lower your overall credit score, especially if the other person is terrible at managing their finances and getting into arrears regularly.

Newly Qualified Teachers Mortgage Advice in Lincoln

Can newly qualified teachers get a mortgage in Lincoln?

Congratulations! You have passed all the necessary exams and are now a newly qualified teacher. If you haven’t already found a suitable teaching position, you now need to start searching to gain some experience.

As a Mortgage Broker in Lincoln, we find that newly qualified teachers are First Time Buyers, however, If your new teaching position requires you to Move Home in Lincoln we can help you with that too.

If you are a First Time Buyer in Lincoln, you’ll be needing a new home to start a life in. Once here, you’ll be trying to balance the struggle of homeownership whilst finding comfort within your newfound role in the education system. This isn’t something you’ll be alone in, as we’ve dealt with many customers who have felt the same way.

How a Mortgage Advisor in Lincoln Could Help

Hopefully, with the help of a dedicated Mortgage Advisor in Lincoln, your process will go a lot smoother and quicker, reducing your stress.

The process of finding a lender who will be willing to offer a mortgage to newly qualified teachers can prove to be a little challenging. This is due to having little to no work history or being on a temporary contract.

Even though this is the case, you can worry less knowing that you may still be able to obtain a mortgage as a newly qualified teacher.

Some lenders may even offer good deals with those working within the teaching industry. The key to this is finding the best lender for your personal and professional circumstances.

This is usually the tricky part. By getting the help of a Mortgage Advisor in Lincoln, you will be working with someone who can search thousands of deals and match you to the suitable lender’s criteria.

What are my mortgage options as a NQT?

You won’t fit into every lender’s criteria. Typically the main types of mortgage available for newly qualified teachers usually include:

Here are some things that lenders may consider during your process:

  • No previous employment history is required.
  • A 12-month first post-contract can sometimes be treated the same as a permanent role.
  • Mortgages are available up to one month before starting the first contract (so you can apply in August, just as an example).
  • Up to a 95% loan to value.

Speak to a Mortgage Broker in Lincoln

Our team of Mortgage Advisors in Lincoln have a lot of experience working in this industry, helping various people with the situations they are in relating to their mortgage.

During your process, you will find there are lots of different benefits to using a Mortgage Broker in Lincoln.

To take a look at your mortgage options, get in touch, and our team will take some details from you to decide whether or not you have the possibility of obtaining a mortgage suitable to your personal and financial circumstances.

Shared Ownership Mortgage Advice in Lincoln

Shared Ownership Schemes for First Time Buyers in Lincoln 

The Pro’s & Con’s of Shared Ownership Mortgages | MoneymanTV

Off the back of the Credit Crunch, the government introduced various schemes under the Help to Buy Umbrella one of these schemes is Shared Ownership. Shared Ownership was introduced to help First Time Buyers in Lincoln struggling to put their foot onto the property ladder.  

How the scheme works is that you own a percentage of a property (usually between 25% and 75%), and then you pay rent on the remaining share.  

Who can qualify for the shared ownership scheme? 

The good news is if your household income is less than £80,000 then you are eligible to buy a home through the scheme. The shared ownership scheme is only available to either First Time Buyers in Lincoln or those in the process of selling a property. You must not own any other property at the time you buy your new home. 

You will need to be able to prove you’re not in mortgage or rent arrears, that you have a good credit history and that you can afford the costs of buying a home under the shared ownership scheme. 

Am I able to sell the property? 

If you achieve full ownership of your home, you can choose to sell the property yourself. However, the housing association has the right to ‘first refusal’ for a certain number of years after you first purchased your home. After this period, you can sell the property to anyone of your choice. 

If you don’t own 100% of your home, the housing association can choose to find its buyer. 

We hope this information was helpful. If you have any further question or need Help to Buy Mortgage Advice in Lincoln, don’t hesitate to get in touch with our friendly advisors, who are available from early until late, seven days a week! We also offer a free mortgage consultation to every customer, no matter their mortgage situation. 

The Pros and Cons of Using a Mortgage Broker in Lincoln

The Pros and Cons of Using a Mortgage Broker in Lincoln

Why Should I use a Mortgage broker in Lincoln? | MoneymanTV

Deciding to buy your first property is a challenging task. Therefore, you must take your time, look around for various options thoroughly and make an informed decision.

As you might anticipate, we believe there are some excellent reasons to use a mortgage broker in Hull. Whether the brokerage service is online, you can still pay a visit directly to the lender. Even in technological advancement, we find that most people still refer to a mortgage broker. Hence, we will take you through the pros and cons of both methods.

Advantages and Disadvantages

Firstly, a well-versed mortgage broker will take the time to have an initial conversation with the applicant to help him decipher if you are mortgage ready to make an application. When contacting us and gathering the necessary details, one of our mortgage advisors in Lincoln will make sure to shop around and get the best deals possible.

One of the most notable advantages of going with a mortgage broker is valuable expertise in the home buying or refinancing process. Mortgage brokers have ample industry experience to lean on when offering mortgage solutions to their customers.

Similarly, our mortgage broker in Hull also has access to try and find wholesale rates on home loans. These rates can be lower than the retail interest rates, helping borrowers save a substantial amount of money over the life of a home loan.

Most importantly, a Mortgage broker can be your point of contact from the time you first call them right up to when you finally get the keys of your house in your hands, and we will guide you through the entire process.

Bank vs Broker

On the contrary, going to a bank helps save you a broker fee, saving yourself a reasonable amount. In earlier years, another significant advantage of a bank was that the branch manager knows an individual’s finances in and out. However, that all went by the wayside when credit scoring came in and is no longer the factor.

Likewise, some Lenders offer exclusive ‘direct-only’ deals that a broker would not have any access. Lenders do this to attract a wide range of applicants to make a good spread of business from consumers and brokers alike, turning exclusive products on and off when deeming necessary. On the other side, some products may only be available via the broker and not direct with the lender.

From 2014 onwards, lenders got restricted to sell mortgages on a non-advised basis to just anyone. Up until that point, many applicants felt like the non-advisors had been trying to force actual advice on them. They weren’t able to benefit from some consumer protection that goes with mortgage sales conducted by professionally trained mortgage advisors.

Lenders were coming to terms with and hence the issues present in these services led to a significant shift towards more applications getting made via mortgage brokers who are quick enough to offer you same day mortgage service.

You also need to check carefully if a lender is willing to lend you a considerable amount of money. It does not matter how good a lender’s deal might seem, but he should lend a significant amount. For this reason, people opt to go to an apt and professional mortgage broker in Lincoln.

Handling Difficult Cases

Nowadays, mortgage applications are no more straightforward. Many factors make a case more complicated. A few of the examples are as follows:

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

In the past years, lenders could stand out from the competition by offering a better deal to the applicants. In the current era, this is different because the lending criteria vary from one lender to another. Some lenders lend more to Self Employed applicants or take a more empathetic view of their credit report’s previous discrepancies.

When you explain your case to an experienced mortgage broker in Hull, there is a possible chance that they have encountered the same thing earlier in the past, allowing them to personalize their service and help you through the process. With extensive experience in the field, your mortgage advisor will hopefully be able to recommend the most suitable lender for you at the lowest rate possible.

More than that, it is not just about getting the Mortgage. Even if the application itself is self-explanatory, we offer extensive experience and knowledge to our clients. For example, we will discuss how much we will deliver on the property they are buying. Our team of mortgage advisors in Hull can recommend other professional services such as Solicitors and explain the different types of protection and survey available.

Responsive Service

Another significant advantage of using a mortgage broker is that the brokers are far more responsive than some lenders. Delivering personalized service is the differentiating factor between the broker and a lender.
Besides, another significant reason for hiring a mortgage broker is that it helps you save time. Most customers prefer a broker because they are too busy nowadays. they might need a mortgage but have no time to get it done so that our advisor will take the weight off for you.

You only need one application with a mortgage broker rather than individually filling out forms for every lender. Your mortgage broker can also provide a comparison of any loans recommended; guiding you to the information that accurately portrays cost differences, with current rates, points, and closing costs for each loan reflected.

How to Improve Your Credit Score in Lincoln

Mortgage Advice Lincoln

How to Improve Your Credit Score UK | MoneymanTV

We advise all our customers new/existing customer, especially First Time Buyers, in Lincoln the importance of having a ‘good’ credit score. Potentially the higher the score, the better of a chance of getting accepted and being successful with your application.

However, you need to be aware that Lenders have their internal scoring system meaning you might not be guaranteed acceptance.

Every lender has their criteria which they have developed over the years. Don’t waste your time troubling if you’ve been unsuccessful with one lender. Other mortgage lenders might be willing to be more relaxed.

It is down to our Mortgage Advisors in Lincoln to match you with the lender that is right for you. End of the day we want the same thing as you – to get the best deal accessible to you.

There are several credit reference agencies in the UK; these include Experian and Equifax. It’s a good idea to look into many of these agencies as possible in advance, to give you a more particular view of your credit score.

Furthermore, it is also plausible that some of these agencies hold inaccurate information. Therefore, by checking with multiple agencies, you can be sure that your information gets appropriately amended.

Keep Credit searches to a reasonable amount

Numerous credit searches can have a negative impact on your credit score. Be on the lookout of using price comparison websites which are known to be significant credit culprits searching on individuals.

If you are applying for a mortgage soon, it may be wise to apply for additional credit afterwards.  Whilst having some credit and paying it back is a good thing for your score in the long run. Lenders prefer to see you control your borrowings right before setting up a mortgage application.

Check you are on the Voter’s Roll

Make sure that you have remained enlisted on the electoral roll, and it improves your credit score. It implies stability which lenders like.

Ensure your name spelt correctly and that it’s your current address which is registered online. If you aren’t registered, it’s straightforward and comfortable enough to do this online.

Know your Maximum Limit:

If you reach your peak your card each month, your score will get reduced. Using a credit card to keep on top of your payments each month is a preferred approach.

It is a good indicator of your lender that you are good at controlling your money. The main red flag in a lenders eyes is if you go above an agreed card limit or overdraft. The reason lenders watch over this is because they want to know you’re able to take your finances responsibly.

Check your Address History gets input correctly:

You might notice on your credit report that you are living in two different places at the same time if providers have yet to get informed that you have moved houses.

It is pivotal that the addresses which you’re updating get spelt correctly; If you have been residing in a flat, this can be a bit more complex as these address can get formatted in different ways.

Keep up to date with Credit Accounts:

If you no longer use individual store/credit cards, you should get into contact with the providers to close the account for extra security. In the short term, this could be seen as having a brief impact on your score as the lender can’t tell who’s closing the account, e.g. you or the provider, but this will be for the better and an advantage to you in the long run.

It’s a great thing to do to reduce your chance of becoming a victim of fraud if you don’t notice you have a lost a card which you may use regularly.

Look out for Financial Links to others:

By having, family members or ex-partners connected to you financially could mean that they’re affecting your credit score unknowingly. However, you won’t be able to get the financial association removed if the account is still active though.

To remove the links between you and another individual, you should contact the reference agencies and make a request. The sooner you do this, the more beneficial it will be.

Many consumers feel that credit scoring is an unfair way of applications getting evaluated, Lenders themselves are indifferent to this idea as it makes their overall job more manageable.

It is more expenditure for them to operate this way, and computers give secure outcomes. On the other hand, some lenders do still do it the old-fashioned way but still apply the same rules about the number of defaults and CCJ’s they will allow.

When setting up your application, be sure your report is up to date to increase your chances of being accepted the first time. The more in-depth information which your Specialist Mortgage Advisor in Lincoln has at hand, the better.

Mortgage Advice in Lincoln | Mortgage Payment Holidays

At the start of the Coronavirus pandemic, the Government promised that all borrowers would be allowed a three-month mortgage payment holiday on the condition that 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 felt 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 agreements you make with your bank, building society or mortgage lender, allowing you to take a break from your monthly mortgage payments for a set period. In the case of the current COVID-19 crisis, homeowners are being granted 3-months relief.

The 3 months will be added on at the end of your term or your payments will be recalculated at a slightly higher level, meaning you will still have to pay those 3 months back eventually.

Your interest, however, carries on as normal, meaning you’ll technically be paying an additional 3 months of interest on top of what you’ve paid already.

Most lenders would likely prefer to not extend your mortgage term, as you may end up going beyond their standard retirement age. There’ll be more information on this over time.

Depending on the mortgage deal you have in place, you may be able to pay off a lump sum later on in the year to bring your mortgage in line with where it would’ve been had you not taken a holiday.

Mortgage Payments Holidays are available for those with residential mortgages and Buy to Let mortgages, meaning landlords will also have help if their 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 they are impacted by COVID-19.
  • This means that lenders will not complete an income and expenditure assessment, or an assessment 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 the operation of collections teams made be also impacted by COVID-19.
  • 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.

Mortgage Payment Holidays: How do I apply?

To discuss your options for Mortgage Payment Holidays, we would recommend speaking to a Mortgage Advisor in Lincoln to start with and not jumping straight into taking a holiday.

We’ll be able to take a look for you first and see if this option is something worth your time. Lenders will no doubt be facing an influx of calls, needing to be free to speak with the most urgent matters over everyone else.

We’ll look through your personal situation and see if there are any other options for you first before you decided to take a Mortgage Payment Holiday.

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

  • The customer would contact the lender and inform them that they are impacted by COVID-19.
  • The lender would accept these details from the customer and offer an automatic 3-month mortgage payment holiday.
  • No evidence will be sought from the customer.
  • The lender makes the customer aware that interest will accrue and will be contacted at the end of the three months to complete an assessment of the customer’s circumstances.
  • At the end of three months, an arrangement to pay will be agreed with the customer according to their circumstances to recover any shortfall, while ensuring that the mortgage remains affordable and sustainable.
  • The lender notifies the customer that if they wished to complete a full assessment now, there may be other forbearance options more suitable to the customer.

Mortgage Payment Holidays – What does this mean for my Credit Score?

Generally, these can show up on your credit score as a negative mark, but most lenders have said if your case is linked to the virus, they’ll make sure it doesn’t affect your credit score at all.

It’s important that you speak directly with your lender to ask them this, recording their response. Also take the date and time, as well as the name of who you spoke to, to avoid any confusion later on. Different lenders will handle these things differently than one another.

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

Controversial for some, but there is now evidence that lenders are asking borrowers to try and not make changes to their mortgage whilst within the holiday period. This means, for the time being, you can’t take out a remortgage or product transfer.

In simpler terms, borrowers reaching the end of their current product may be forced to move to the higher lenders variable rate. This means many borrowers who act too quickly could find themselves on a Mortgage Payment Holiday that gains interest on a more expensive variable rate.

This is another reason why we highly recommend speaking to a Mortgage Advisor in Lincoln first, to determine the right path for you to take. If possible, try arranging a transfer prior to asking for a holiday, as that seems like a more sensible option.

What “Other Options” are available?

Some lenders are offering a temporary switch to interest-only, in order to reduce monthly payments by a large amount, while not adding on any further amount to the loan, by still servicing the interest each month.

You may not need to convert the entire mortgage to an interest-only mortgage and it may be that putting only a portion of this mortgage on that basis could give you room to breathe.

Those who have savings may prefer remortgaging onto an offset basis. This would reduce their monthly payments whilst keeping their savings safe and intact.

For example, someone with a £500,000 loan and £100,000 in savings would only pay interest on £400,000 reducing their payments accordingly.

For others, remortgaging onto another lender, calculating the cost of any early repayment charges, maybe all you need to ease the pressure you currently face. You could also simply extend your current term, thus spreading your payments across a longer time frame.

To discuss any of these options, or to just have a helpful chat about your current situation please contact us and we’ll see how we can be of assistance.

How Long to Fix Your Mortgage in Lincoln

Fixed-Rate Mortgage Advice in Lincoln

Generally, the longer you look to fix your mortgage the higher the interest rate is. Therefore, if you are looking for the lowest rate possible then it’s short term fixed rate you need. The downside is your mortgage will be up for renewal quicker and when you come to remortgage your payments might increase.

Why Choose a Fixed Rate Mortgage

On  variable rate, your monthly repayments are subject to change when interest rates change. Many people worry about interest rate rises, particularly after such a long period of low rates. Many people expect a rise in the near future. As such looking to a fixed-rate mortgage deal offers the certainty of monthly outgoings,  with no sudden rise in the monthly mortgage repayment

Medium-Term Fixed Rate Mortgage

If you don’t like the idea of sorting out a remortgage so quickly then a medium-term fixed rate would be the way to go. Five year fixed rates are popular and you have certainty that your monthly payments cannot increase in the foreseeable future. There is a risk that interest rates might drop meaning you are paying more than you might have been had you fixed for a shorter period.

There are only a limited number of 7 and 10 year fixed rates mortgage deals on the market. These have always been the least popular. Customers tend to feel this is too long to fix in for as a lot can change in a decade! These are the most expensive fixed mortgage products available.

Choose Your Mortgage Deal

When choosing your mortgage deal be careful to watch out for booking and arrangement fees. A booking fee is payable up-front and an arrangement fee is payable on completion. Some people add fees to their mortgages, but this increases the total amount repayable as interest accumulates on the fee.

If you are taking out a small mortgage then it is more likely that you would want to take out a mortgage with no fees, even if a slightly higher rate of interest applies. The opposite applies if you are taking out a medium or large mortgage, your Advisor will help you with this tricky decision.

Choosing a mortgage requires consideration. There is no one mortgage product that suits everyone. Your selection will depend on your personal circumstances. For example, if you think you may be moving in the next two or three years you may wish to choose a fixed deal for that period. (It is possible to ‘port a mortgage’ but you may be better discussing this with your mortgage advisor in advance). If this is your final move, perhaps a longer-term fixed rate may be more suitable.

Open & Honest Mortgage Advice in Lincoln

Business as usual

COVID-19 has had a noticeable effect on the mortgage market thus far, but that won’t stop us from providing the same level of Mortgage Advice in Lincoln our customers know and love. At Lincolnmoneyman, we are still working the same way we were before these hardships.

We still have hardworking Mortgage Advisors working remotely from their homes in order to answer all of your mortgage questions. Our number one aim is to ensure all customers have the option to speak to a Mortgage Advisor in Lincoln if they need to.

Recurring situations

You may be worried you’re unable to meet your monthly mortgage payments or you’ve reached the point where you are looking for a better remortgage deal. We have noticed that these two situations have been mentioned by quite a few customers.

As a Mortgage Broker in Lincoln, we would highly recommend speaking with one of our advisors before you go directly to the bank or lender. We’re able to assess your personal and financial situation, in order to recommend the best route for you to take.

We’ll do our best to help all those who come to us for help with their mortgage during these difficult months. We’re all in this together and look forward to you getting in touch.

Customer service

We’re still working through various different situations every day, keeping our business flowing as usual. We won’t let anything get in the way of us providing expert Mortgage Advice in Lincoln.

Customers have still been leaving excellent reviews over the last few weeks, something we’re incredibly proud of. We take great pride in our work and it warms our hearts to know that as a Mortgage Broker in Lincoln, we’ve done right by our customers.

Here is what a few customers have recently said about our service here at Lincolnmoneyman:

“Absolutely fantastic service from Chris setting up my application, to Kayleigh sorting out the right remortgage for me, nothing was too much trouble. Cannot recommend them enough for sorting this out in a timely manner and during this pandemic. Thank you to each and every one of you.” – Mandy H

“Brilliant service from Jonathan and Megan, very smooth process and they have secured me a great mortgage deal. Will highly recommend Lincolnmoneyman. Thank you.” – Daniel D

Speak to your Local Mortgage Advisor in Lincoln

Remember, we’re still available for you to get in touch 7 days of the week. Sincerely from everyone here at Lincolnmoneyman, we hope you’re safe and well. We look forward to hearing from you soon.

We won’t let anything get in our way, especially during the COVID-19 outbreak. It’s still our aim to help with all your mortgage problems, it wouldn’t be fair to just leave you confused and concerned. We’ll do our best to get you over these hurdles and through the mortgage process with ease.

Mortgage Advisor in Lincoln

Lincolnmoneyman.com & Lincolnmoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.

Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk

The information contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.
Should you have cause to complain and you are not satisfied with our response to your complaint, you may be able to refer it
to the Financial Ombudsman Service, which can be contacted as follows

The Financial Ombudsman Service, Exchange Tower, London, E14 9SR
www.financial-ombudsman.org.uk

© 2022 Lincolnmoneyman

Lincolnmoneyman, Commerce House, Outer Circle Road, Lincoln, LN2 4HY.

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