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.
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.
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.
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 There are no limitations once you’ve withdrawn that equity.
Some choose to use it to fund the deposit of another mortgage. In comparison, others might decide to use it for a dream holiday. There are no limitations once you have withdrawn that equity.
Be aware when releasing equity within your home is not always an easy process. Speaking to a Specialist Mortgage Advisor in Lincoln will benefit you along the way.
One of the many perks of using a Mortgage Broker in Lincoln like ourselves is that our advisors have access to a large panel of lenders to find you the most suitable deal for your individual circumstances.
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.
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.
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.
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.
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.
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.
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:
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.
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.
Following on from the infamous UK credit crunch in 2007-08, the government needed a way to try and bring some life back to the mortgage market.
In order for them to achieve this, they set about introducing new ways to help first time buyers get onto the property ladder. They called these Help to Buy Schemes.
There are a large variety of different Help to Buy Schemes that are available out there to customers. You may find that whilst you match with some of them, you also may not match with others.
Here is a list we have compiled, summarising each of the Help to Buy Schemes and a bonus scheme we feel would be beneficial to some customers out there.
The Help to Buy Equity Loan is by a country mile, the most popular of all the schemes out there. If you are a first time buyer in Lincoln and are looking to set your mortgage process in motion, then this scheme could be just what you need.
First of all, in order to make use of this scheme, you must be a first time buyer, with the property in question being a new-build property. You will be required to have at least 5% saved for a deposit.
This scheme works in a way that allows you to use your own funds, as well as the governments, to give you access to a better deal.
You will put down your 5% deposit (or more if you have it) and then the government loan you 20% to bring the total up to a 25% deposit.
So, if you have saved up a 5% deposit, they will loan you 20%. If you have managed to save for a 10% deposit, they will loan you 15%, and so the cycle goes on.
Overall this means you’ll be left with a 75% mortgage to pay off, as well as the government equity loan. This equity loan is interest-free for 5 years.
After those first 5 years, if you haven’t paid it back, interest will build up. The interest rate for this starts at 1.75%.
As a dedicated, fast & friendly mortgage broker in Lincoln, we know that balancing your mortgage payments and the equity loan repayment alongside each other can be quite a challenge.
There are ways to combat this. An example of this would be that you can sometimes remortgage to raise capital for this loan, although this will also increase your monthly mortgage payments.
The Help to Buy Shared Ownership Scheme was brought into the mortgage world with the intention of allowing applicants to purchase a percentage of a property and then pay off the rest of the cost as monthly rent.
For the most part, the percentage of the property that is owned tends to be between 25-75%, though this can differ.
The percentage that is left over will more than likely be owned by the local housing association. If you come into more money at a later date, you can increase the percentage of which you own.
Your payments will be a combination of both your mortgage payments plus your rent. This means you are more or less paying 100% of the ground rent and service charge on your home.
Even if your share is the minimum amount, this is still the case.
The Armed Forces Help to Buy Scheme was brought forward in 2014 coming hot off the heels of the success that the Help to Buy Equity Loan Scheme had achieved.
This scheme worked in a similar way to its predecessor, though solely targets members of the Armed Forces.
If you are eligible for the criteria of this scheme, it could be quite the difference maker in your mortgage goals, especially with the government extending the scheme until December 2022.
We sincerely hope that this mortgage scheme stays around, as the Help to Buy Armed Forces Scheme is a massive help to existing members of the Armed Forces who need a boost to get onto the property ladder.
The Lifetime ISA is often a scheme left out of the conversation. It’s not everybody’s cup of tea, though it is handy to keep yourself aware of its existence, as it can help you secure your dream home as a first time buyer in Lincoln.
The Lifetime ISA is basically a fancy savings account where your money can grow free of tax. The government provides a nice little boost to your savings, giving you an extra 25%.
This means that if you are able to meet the £4,000 maximum amount, you will receive a pretty handy bonus sum of £1,000.
There is a catch of course, and it’s that you will have to pass specific criteria in order to utilise this scheme. You can find more information about this scheme on the Lifetime ISA website.
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, home mover or looking to remortgage, this will never change. Furthermore, they won’t just ask for your bank statements, they’ll ask for various pieces of evidence to support your mortgage affordability.
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:
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?
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.
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:
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.
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.
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 get in touch. Alternatively, you can book your own mortgage appointment online. We can’t wait to hear from you.
When customers get in touch with us for Mortgage Advice in Lincoln, more often than not, the first thing that we get asked, especially when we are speaking with First Time Buyers in Lincoln, is “How much can I borrow for a mortgage?”
Let’s reflect upon the background of affordability assessments and how they apply to the mortgage world post-2014.
Prior to the methods of modern credit scoring, your mortgage would’ve been manually assessed by your local building society manager. Lenders gradually moved towards more uniformed methods of income assessment, in order to provide a consistent approach as we headed into the 1990s.
Maximum lending “caps” were introduced to prevent customers from borrowing any more than three to four times their annual income. As we grew closer and closer to the infamous credit crunch in the mid-to-late 2000s, these income multipliers were relaxed, with lenders being more generous.
A handful of those mortgage lenders were allowing their customers to “self-certify” their incomes without subjecting them to any background checks, such as an analysis of their payslips. This, as you may be aware, caused the market to crash and getting onto the property ladder from 2008-2010 was quite difficult.
Lenders very quickly battened down the hatches and created a massively careful (arguably over-corrected) lending environment. No matter if you were directly approaching a lender or opting to speak with a mortgage broker in Lincoln, the outcomes would mostly always be the same.
The Mortgage Market Review (MMR) was introduced off the back of the market recovering after the credit crunch. From here, lenders were given a new set of guidelines that they had to follow. The income multiplier methods of yesteryear were phased out and replaced with new, more complicated affordability calculators.
These new calculators gave the lenders a more detailed analysis of an applicant’s spending habits and net disposable income. What this meant, was that the lender could take a deeper look into your bank statements to make sure that unaffordable mortgages were not given out to customers as they had been in the past.
There is still a “lending cap” in place and it is roughly about 4.75 times your annual income, but your expenditures will also be looked at. Something that is worth noting, is that lenders seem to penalise low-earners and even things like gambling can have an adverse affect on your chances of being able to borrow.
When it comes to your bank statements, mortgage lenders will keep an eye on various factors, so during the months leading up to your application, be careful as to what exactly your expenditures are. Occasionally lenders take pension contributions as a fixed outgoing so would often lend to, for example a public sector worker with a big pension deduction less than a private sector, and things of a similar ilk.
If you are looking to maximise your borrowing capacity in order to help your mortgage application, then we believe you’ll benefit from speaking to a Mortgage Broker in Lincoln.
You’ll receive a free initial appointment, where a Mortgage Advisor in Lincoln will take some information, before heading off to research the market on your behalf, working to find a deal that best suits your needs and circumstances.
Getting Mortgage Advice in Lincoln before taking out a mortgage could be crucial in helping you understand the mortgage process better. By speaking to a mortgage broker like us, you will have your own Mortgage Advisor in Lincoln who will explain how everything works and support you from the beginning, right through to the end of your mortgage journey.
The majority of people out there maybe only think about their mortgage goals or existing mortgages every few years. Here at Lincolnmoneyman, we think about mortgages every day.
There is never a minute of our working hours where we aren’t engrossed in a case, working hard to try and help someone find a favourable outcome.
Because of the time and effort we put into being so efficient and valuable to the customer, we are well versed in lender criteria, understanding which of those on our panel would be most likely process your mortgage application.
We also like to ensure you are on the best rate available to you, eliminating any stress and long delays as best as we can.
Here are the 3 main advantages of seeking mortgage advice in Lincoln:
Long before you could just Google the answers, comparing mortgages was a long and tedious process. Customers would use up their Saturday mornings going from bank to bank, to building society and so on, looking around to try and find the best deal on offer.
Although most of this can be cut out now, it’s still not completely straightforward, especially for those who are maybe first time buyers in Lincoln. With all the fees and charges and exit penalties from existing deals, it can be very confusing.
We use daily-updated mortgage sourcing software so that your dedicated mortgage advisor can recommend the most suitable mortgage for you, the customer. It’s our goal as a company, as a team, to save both your time and your money.
You may be able to source a good deal, but it’s an entirely different ball game when it comes to actually being accepted for that deal. It’s not as simple as finding and asking for it, as you’ll have to match the lenders criteria for it.
There are lots of different reasons why people get declined for a mortgage nowadays, including low credit score, length of time they have been employed or self-employed (self-employed mortgages in Lincoln are always becoming more popular, so it’s important to do research ahead of time if you are your own boss), and failing the affordability calculator.
There are even more than that, but what is important to take away from this, is it is not something to be taken lightly. If you jump into the unknown, unprepared and ultimately unmatched, this could lead to a damaged credit rating. Every time you apply for a deal, the mortgage lender will carry out a credit search.
Too many applications to deals you don’t qualify for can come across to other lenders like you’re constantly being declined for something, which in turn could lead to the right lender with the right deal declining you as well. Your best bet is to speak with us first, so we can try and match you up with the right lender the first time.
It has been said that other than dealing with the loss of a close family member or going through a divorce, that moving house is the most stressful experience you will face in your lifetime. This is especially the case if you’re selling a property and trying to complete your new purchase at the same time.
It’s our job to reduce your stress levels and work hard to make sure your mortgage application runs as smoothly as it possibly can. The best advice we can give, is to suggest getting in touch and speaking with a mortgage advisor in Lincoln, prior to finding a new home. In doing so, you will know roughly how much you are able to borrow and what your monthly mortgage repayments will be.
There’s a lot to work through with the legal aspects of your property purchase, packing and dealing with estate agents. We regularly hear from customers that they were glad to have a Mortgage Advisor in Lincoln by their side throughout the mortgage process. Get in touch and we’ll see how we are able to help you!
Regardless if you are a First Time Buyer in Lincoln with a keen eye on the property market or you are a Home Mover in Lincoln looking to sell your existing home and settle down in another, over time it will likely have become common knowledge that estate agents and builders have a reputation for driving a hard sale.
During your process, they would much rather that you use their in-house mortgage advisor and any other services they have to offer.
Throughout our tenure as a longstanding, hard working mortgage broker in Lincoln, with zero ties to estate agents, banks or building societies, we regularly find that those who get in touch have been pressured by an estate agent at some point during their process, trying to get them to use their in-house financial services.
Here are just some of the stories we have heard from customers;
Though it may seem shocking to hear, there have been a lot of instances with estate agents out there refusing to put through an offer forward, specifically if you opt to use an external mortgage broker, rather than using the estate agents’ in-house advisor.
They have also been known to refuse putting offers forward to the vendor, because they have received an offer from someone else who did in fact use their in-house services.
Something else that we hear all too often, is estate agents quoting largely overpriced conveyancing fees to their customers. We have seen many of our customers over the years come forward to say they have been subject to that same tactic
One customer we had was quoted more than £1,500 for a basic, straightforward purchase with an estate agent. By enlisting the help of one of our dedicated mortgage advisors, we were able to recommend another conveyancer in the nearby area and get the cost down to £750.
That figure is exactly half of the quoted price from the estate agent, showing the difference between going in-house and exploring your options.
Let’s say that you have made an offer and are waiting to see if a seller will accept your offer. Generally, you’d expect a phone call either saying yes or no – that would be the logical outcome. Instead, what we often see happen with some cases, is the estate agent will call up and demand you tell them who you went with for conveyancing.
What happens following that, is the estate agent may even refuse to take the property off the market, unless you agree to use their in-house service. As touched upon earlier, their quotations will be tremendously overpriced and completely unfair, but they will apply the pressure and make you feel like you’ll lose the house if you don’t.
As a trusted and loyal mortgage broker in Lincoln, these kinds of scenarios are definitely something we can help you prepare for. So then the questions that remain are…
No, all of these tactics are highly illegal. You have the freedom to go with any company you choose when it comes to your mortgage process. Use any broker, any conveyancing, any solicitors that you want to use.
At the end of the day, it’s your choice and you are under no obligation to use the estate agent’ services. Their main purpose is to simply foresee the sale between yourself and the seller of the property in question.
Please consider, when negotiating on the price you wish to pay for, is it really within your best interests for the person handling the sale to know your financial situation and the amount you may be able to borrow? This is something they could use against you down the line when trying to convince you to use their services.
Keep on your toes and make sure that if you really don’t want to use it, you stand your ground and don’t give in to their pressure. It’s your mortgage, your offer, and if all goes well, your future home. Please Get in Touch with a trusted mortgage advisor in Lincoln today, and we will ensure you are prepared for these tactics ahead of your mortgage process.
To help first-time buyers get the most out of their mortgage process, we have put together a list of the 10 steps involved for first-time buyers in Lincoln. It is our hope that with this, you can be as prepared as possible ahead of your own mortgage journey.
There are 10 main steps you’ll go through in the process of buying a home and obtaining a mortgage. These are as follows;
So let’s say you’ve decided to take that next big step in your life and purchase your very own home, taking out a mortgage as a first-time buyer in Lincoln. It probably goes without saying that this will probably be the biggest financial choice you ever make. Once you realise this, the concept can be a little daunting, especially when you have no experience in any of this.
It’s at this point where a dedicated mortgage broker in Lincoln may be able to step in and provide assistance to you. We always strive to take the stress away from our customers, working hard to make sure they all are all happy, have a favourable mortgage deal and their very first home.
Once you Get in Touch with a dedicated mortgage broker in Lincoln, we’ll book you in for a free initial mortgage consultation with an experienced and loyal mortgage advisor. From here, we’ll take some details from you and take a look at your plan, before we eventually kick off your mortgage process.
During your free mortgage consultation, a trusted mortgage advisor in Lincoln will be able to run through a Mortgage Affordability Assessment. The process for this is pretty quick and is very important, as this is where your dedicated mortgage advisor will run through your monthly income with you, looking at your regular expenditures.
This basically just means looking at what you spend your money on, and is done so they can determine whether or not you are financially capable of affording the monthly repayments of the mortgage amount you’re looking to borrow.
The reason we look to get this done prior to putting you forward with a lender, is to give us a level of confidence in you regarding your ability to afford your repayments. In doing this, we can try to avoid the risk of arrears and any future repossessions that may crop up, as this is something the lender will definitely want to avoid if it can be controlled.
A Mortgage Affordability Assessment will also usually be taken out by the lender themselves, so the initial checks we undertake will help save the lenders time, our own time, but most importantly of all, your time. The last thing any of us need is an application that may be declined in the future due to failing on affordability.
The following step in your mortgage consultation will be to get a hold of, on your behalf, a document called an Agreement in Principle. If you have done some of your own research on mortgages before receiving first-time buyer mortgage advice in Lincoln, you may come across this under a handful of different names.
Standard names used for this can include ‘Decision in Principle’, ‘Mortgage in Principle’, as well as ‘DIP’ & ‘AIP’. These are all exactly the same thing; the only difference is the name people may choose to use.
The reason you will need to have obtained an Agreement in Principle is to demonstrate that you have passed a lenders initial credit scoring system, either by way of a hard credit search (this leaves a credit footprint) or a soft credit search (this generally does not leave a credit footprint).
Even though this does help a great deal, there is still no guarantee you will be accepted for a mortgage. Still, it is a necessary and incredibly beneficial step to take, as it will also show the seller of a property that you are making a serious enquiry, possibly creating room for any potential negotiations with them when it comes to your offers.
The standard length of an AIP is usually anywhere between 30-90 days, and once it has expired, a mortgage advisor can easily renew this for you. Our brilliant team can usually get one of these turned around for you within 24 hours of your primary appointment with a dedicated mortgage advisor in Lincoln.
After you have gotten an Agreement in Principle, you will need to start looking for a conveyancer to help you with the legal dealings of homebuying. The term conveyancing is the name for the transfer of legal ownership of property between the different parties, whether you’re either the buyer or the seller.
Your conveyancing solicitor will handle the contracts for you, provide you with any necessary legal advice, conduct local council/authority searches on your behalf, help make arrangements with Land Registry and lastly transfer the funds you have acquired, so that you can pay for the property. As is likely evident from these tasks, this is a vital role in your process, so you must choose the right one carefully.
Something else you should know here, is that licensed conveyancers are property specialists and can’t deal with more complex legal issues, whereas a more general solicitor will be able to offer a full range of services, which can make them sometimes seem more costly. Whilst we do not offer these services directly, we do have an internal list of trusted companies that we will happily refer you to, if you need us to.
Once you have spoken to a fast & friendly mortgage broker in Lincoln, have passed the Mortgage Affordability Assessment, gotten your Agreement in Principle and carefully found yourself a trusted conveyancing solicitor to help process the legal elements of your home buying experience. This means you’re halfway to the finish line! Your next step is to make an offer for your desired home.
As touched upon earlier on, with an Agreement in Principle now in your possession, you will have better success in negotiating with the seller regarding price. Be sure not to make an offer that could insult the seller, but also don’t be afraid to try and negotiate for a lower price.
Knowing you have an AIP, you are more likely to have an offer accepted, as you are prepared for the process, rather than someone who is willing to pay the asking price but hasn’t even gotten themselves in a position to start their mortgage journey.
Worst case scenario, the seller will say no, but it’s at that point you can either come to an agreement on a better price or walk away and find yourself another property with a price that suits you a lot better. Once you’ve had an offer accepted, it’s time to get back in touch with your mortgage advisor and move onto the final steps of your mortgage journey.
A step now that is crucial to the process; submitting the required documents to go ahead with a mortgage. As can probably be expected when it comes to such large financial commitments, a lender will not just give money to anyone who gets in touch, wanting a mortgage. This has happened in the past and if you cast your minds back to 2007-08, it was disastrous.
The mortgage lender will require lots of different documentation to prove that you are who you say you are, your current income amount, where you live at the moment and how well you conduct your finances on a monthly basis. If you’re applying for a joint mortgage, they will need this same documentation from all involved.
The types of documents you will need to submit to the lender, include; proof of identification, proof of address, the last 3 months’ of your pay slips and latest P60 (employed), proof of any income such as state benefits or maintenance, proof of deposit, the last 3 years’ proof of earnings and Tax Year Overviews (self-employed in Lincoln) and the last 90 days of your personal bank statements.
Now that you’ve had your mortgage agreed in principle, and had an offer accepted from the seller, we can go ahead and submit your full mortgage application. At a point where you’re now prepared and everything has been checked by your mortgage advisor in Lincoln & their team of mortgage administrators, we are ready to submit your application to the lender, hopefully obtaining you a mortgage.
Your advisor will send off all the collected evidence for this, and then it is just a matter of waiting for them to respond with either an accepted application or a declined one. Whilst there isn’t a specific time frame, our team will be able to chase the lender and find out an answer for you, until it has been made clear.
In-between your mortgage application and being offered a mortgage, the lender will need you to have a property valuation survey taken out. This will usually be carried out by accredited companies nominated by the lender (someone that the lender knows they could trust).
The reason they do this is to gain an understanding of the true value of the property, against what you’re paying for it. If you’re paying above its market value, the lender may be less willing to lend to you. This is because if any arrears were to occur at a later date, they would lose out on their money. The act of refusing based on its actual value is usually referred to as a ‘down valuation’.
There are many different types of survey available, with differing prices on each of these. Some will just want to check how much the property is worth, whereas some may let you know of any structural concerns, as well as possible repairs that may be worth looking out for in the future. Your mortgage advisor in Lincoln will be able to give you a good indication as to the right property survey to have done.
We’re almost at the end now. Your lender has analysed your case and performed an assessment of all the documented evidence. Once this has been done, you will receive a mortgage offer.
Our caring and committed mortgage advisors and administrators in Lincoln, that you’ve surely gotten to know fairly well throughout your mortgage process, will check over the offer on your behalf to ensure everything is correct and as you wanted it. After your mortgage offer has been received, it’s down to your conveyancing solicitor to take your purchase all the way through to completion.
A big congratulations to you, you’ve now officially gone from first-time buyer in Lincoln to a first-time homeowner in Lincoln, with their own name attached to a property. At this point we hope your worries are now firmly behind you, and that you’re both happy and ready to begin your new life in your very own home.
All that is left is for you to get your keys and start moving in! We hope you enjoyed speaking to our team along the way and were given a fast & friendly mortgage advice service. If you have chosen a fixed rate mortgage, we will Get in Touch towards the end of your journey to help out with your remortgage!
If you are a first time buyer in Lincoln and have some money to spare every month then maybe you could consider making overpayments to your mortgage. Looking to make additional payments on your mortgage can make a significant difference overall to the amount of interest you will be paying back over the term of the mortgage.
The sooner you begin overpaying the better, as the extra payments have a longer period of time to have an effect.
Some homeowners cannot afford to make extra payments. We feel that the reason is that for many, life simply gets in the way. We know overpaying is the “right” thing to do but let’s face it, there’s always something else you can be spending your money on and plenty of those things are more exciting!
The best approach is probably not to make ad-hoc additional payments. (You will likely not get round to it or miss months of additional payment). Take action today and plan ahead. I would suggest setting up a standing order, payable to your mortgage lender each month. Set up the standing order to go out on the same day as your regular mortgage payment. E.g. your mortgage payment is, say £500pm and is collected on the 1st of the month. You can afford to pay an extra £75pm, so set up a standing order for £75pm to go out of your bank also on the 1st.
The reason for the above is that very quickly you will start to “feel” that your mortgage is actually £575pm and you will get used to that within a matter of months.
The beauty of doing a standing order is that unlike a direct debit, a standing order is controlled by the payer, not the receiver. That means that if you have a financial emergency you can quickly log into your online banking and cancel the standing order so that it doesn’t go out next month.
Whilst it would be regrettable to have to stop overpaying, at least you would have benefited from the overpayments made up until that point. Some mortgages will even let you make reduced payments or take a payment holiday if you have been overpaying for a while. Before taking a payment break though it’s important to check with your lender. Make sure that you are eligible to do so to avoid a negative mark on your credit report.
Overpaying your mortgage is a great habit to get into. You don’t need to go hell for leather at it unless you feel so obliged. Even shaving a year or two off will be very welcome when you near the end of the term.