Overall the popularity that surrounds taking out an offset mortgages has dipped since the rise of that mortgage type during the 1990s, though thankfully for customers who want this, they can still be a great option for home buyers.
They can especially be useful if you believe that you are due to receive a lump sum at any point in the near future, perhaps from say an inheritance.
When your offset mortgage begins, you will have a savings account opened in your name by the mortgage lender, with the aim of that being to run alongside your mortgage and help to pay it off. Rather than garnering any interest, it will instead offset your savings against the balance of your mortgage.
To provide an example of how this might work, let’s say that you had a mortgage that is worth £100,000 and you have saved up £15,000 with your savings account, then you will only pay interest on the £85,000 that is remaining on your balance.
Offset mortgages are considered to be much more flexible options for home buyers. The reason for this, is that until your mortgage has been completely offset, you are able to take out and put in as much into your savings as you see fit.
This provides you with an emergency backup, as you are able to take out funds at any point if you need to do so, though it’s important to note that withdrawing money will increase your balance, thus increasing your overall cost.
One of the positives around offset mortgages, is that it saves interest, as opposed to adding it on, so you won’t be paying any tax on any amount of funds that you put into your savings. Higher rate taxpayers are a big fan of these types of mortgages!
If you are due a lump sum at any point, such as an inheritance through perhaps a family member’s equity release, an offset mortgage can be a really great option. This is because it allows you to store your funds until you want to do something with it, free from interest.
You may also want to put any annual or quarterly bonuses you receive from your job into your savings, if you have no dependance on them. The more that is sitting in your savings, the better off you will be throughout your mortgage.
Thanks to the flexibility of this mortgage, you can freely dip into savings if you need extra funding, whilst leaving some still in to offset against your mortgage. It’s crucial to remember that you will need a substantial amount of money in there, to make an offset mortgage worth it.
An offset mortgage is a great choice for first-time buyers in Lincoln who are planning on overpaying their mortgage throughout their term. Looking ahead to the future, once you have finished your current mortgage period, overpaying could potentially allow for reduce interest rates or monthly payments.
With other mortgages that you could take out, any money that you put towards your mortgage cannot be taken back out once it has been paid. At this point, you may have limited mortgage options. This is certainly not great if you change your mind once you have overpaid or need emergency funds.
Of course an offset mortgage counters this, due to the freedom you have to put in and take out funds. So if you’re looking to overpay on your mortgage, this could also come in really handy.
Before diving into a mortgage, it is important to consider all of the options you have available. Speaking to a qualified mortgage advisor in Lincoln is a great way to make sure you are on the right path when it comes to your mortgage.
We often find that any customers who opt for an offset mortgage, are more likely to continue with said mortgage, as opposed to remortgaging like other homeowners at the end of their fixed period.
As an open & honest mortgage broker in Lincoln, you will be assigned a dedicated mortgage advisor who will show you the impact of offset mortgages and how it could possibly save you money over the duration of your mortgage term.
For further questions regarding offset mortgages, or if you would like to remortgage in Lincoln, feel free to book online today and take advantage of the free mortgage appointment we offer to all customers, no matter their situation.
As a first time buyer in Lincoln taking on your first ever mortgage process, you will probably want to do a bit of research first. During that research, you will quickly realise the variety of options at your disposal.
Below you will see a list of the most popular types of mortgages available on the market and hopefully, our short MoneymanTV videos will give you a better understanding of what each option has to offer.
If you have any questions regarding any of the below mortgage options, then please do not hesitate to get in touch and we will do our best to help.
A fixed-rate mortgage will mean that you will benefit from having consistent mortgage payments for a duration of your choosing. Typically first time buyers in Lincoln will select somewhere between 2 to 5 years.
The reason for this, is if interest rates were to drop below what you’re paying and you’re still tied in for a few more years, you could be paying more than you would need to, without a way to get out early (unless you were to pay a charge).
The good side is that no matter what happens to inflation, interest rates or the economy you know that your mortgage payment, which generally speaking is your biggest outgoing, will stay the same.
A tracker mortgage is a type of mortgage wherein the interest rate will follow alongside the Bank of England’s base rate.
So in other words, the mortgage lender that you are with will not be setting the interest rate themselves. Typically you will instead be paying a percentage above the Bank of England base rate.
For example, if the base rate is 1% and you are tracking at 1% above base rate, that means you will be paying an interest rate of 2% on your mortgage.
These were much more popular back in the mid-2000s, due to the interest rate only being a fraction above the Bank of England base rate.
They aren’t as popular as they used to be, though it is important to remember that it is a variable rate mortgage. This means that if the Bank of England base rate goes up, your mortgage payments will increase.
When you take out a repayment mortgage, you will be paying both capital and interest combined on a monthly basis.
So as long as you maintain your monthly payments for the duration of your mortgage term, the mortgage balance is guaranteed to be paid off at the end, with you retaining full ownership of your property.
This is considered to be the most risk-free way to pay your capital back to the lender.
Early into your mortgage, it is mainly the interest that you are paying and your balance will reduce very slowly especially if you have taken out a 25, 30 or 35-year term.
This situation works differently in the last ten years or so of your mortgage in Lincoln, where your payments are paying off more capital than interest, and the balance will come down much quicker than it otherwise would’ve.
Whilst you will find that a lot of buy to let mortgages are set up on an interest-only basis, it is much more difficult to get a residential property on this type of mortgage in Lincoln.
Back in the ’80s and 90s interest-only mortgages were a lot more prevalent. As the name suggests, you would only be paying back the interest per month, which creates lower monthly repayments.
The idea was that you would take out a separate investment vehicle, such as an endowment policy or pension, in order for you to pay the balance back at the end of the mortgage term.
Whether or not there is going to be enough money to pay the balance of your capital will depend on the performance of your investment vehicle.
During the 00s some of these investments didn’t perform as well as people may have expected them to and some borrowers were left with a shortfall.
It is much less likely for lenders to offer an interest-only product to a residential purchaser nowadays, however, there are certain circumstances where this can be an option.
For example, if you are going to downsize when you are older or have other investments what you will use to pay the capital back, an interest-only mortgage may be viable for you.
Mortgage lenders are very strict when it comes to offering these products now and the loan-to-values are a lot lower than they were in years gone by.
With an offset mortgage, the lender will set you up a savings account that will be left to run alongside your mortgage account.
How this works is that let’s say you have a mortgage balance of £100,000 and you were to deposit £20,000 into that savings account. You would actually only pay interest on the difference, so in this case £80,000.
This could actually end up being quite an efficient way of managing your money, especially if you are a higher rate taxpayer.
It is also very useful if you are looking at reducing your mortgage term, because your mortgage term will shrink as the money sits within your savings account.
Importantly, if you remove any funds from that savings account (which you are allowed to do at any point), your balance will go back up.
What this means, is if you deposited that £20,000, then paid off a further £5,000, bringing it down to £75,000 left to pay, then you drew out £15,000 for something, your balance would go all the way back up to £90,000, no matter what you have paid back.
This mortgage option was popular in the late 90s and early 00s, originally coming from Australia and becoming very popular in the UK when introduced by mortgage lenders.
Currently, however, this is not a very popular mortgage option. This could arguably be down to people not saving up as much money anymore. That being said, in the right circumstances, this could be a great option for you.
One of the more frequently encountered questions we hear from prospective first time buyers in Lincoln, is them wondering how much their mortgage process is going to cost them.
To answer this, we have compiled a short list of all the fees you can expect to pay when you are looking to purchase a new home, and when they will become payable.
This will only apply if you are selling your home. With a surge in popularity of online estate agencies, you can be looking at the mid-to-low hundreds for a standard website listing.
That being said, for a more localised service, you could be looking at a fee around 1-2% of the property price.
Your mortgage lender will need you to have a valuation carried out on the property you are purchasing to ensure that the property is worth the amount you are looking to borrow from them.
Prices for a property survey can vary anywhere from nowhere (for a basic valuation with some lenders) up to several hundred pounds for a much more in-depth Home Buyers’ Report, maybe even more than that for a Full Building Survey.
The key to working around the cost, is that you always have an element of choice in the level of detail your survey goes into, with your decision depending on the age and property type, as well as any concerns you may have.
Sometimes you may have a product with a cheaper rate, but the benefit can be outweighed by the payable arrangement fee to the mortgage lender.
This cost doesn’t exist with every mortgage lender, so you may not have to pay anything at all, though in some cases it could be upwards of 3 figures, depending on the mortgage lender in question.
You may find that these costs can be paid upfront, though you may also be able to add these onto the balance of your mortgage. It is worth noting though, that this would mean incurring further interest charges.
As a team of expert mortgage advisors in Lincoln, helping with first time buyers and people moving home in Lincoln alike, we are able to compare deals for you in order to find a suitable one for your needs.
You will need to hire the services of a qualified solicitor. The cost of this service can be quoted very differently depending on the firm you are speaking to. An estimation for a straight forward purchase with a local company is likely within the mid-hundreds.
You will need to give the property address, whether it’s leasehold or freehold and how much you are purchasing it for, in order to receive accurate quotations.
The key points to cover when asking for a quote are:
In addition to the costs and disbursements involved in paying your solicitor, depending on your circumstances, you may also be required to pay this tax which the solicitor collects on completion of the property purchase.
This doesn’t apply to everyone. The government have been known to change the criteria on Stamp Duty, with the latest change being in favour of first time buyers in Lincoln. The latest Stamp Duty updates can be found here.
A mortgage broker in Lincoln will typically charge for their service. The cost of this will vary from company to company.
In our case, your dedicated mortgage advisor in Lincoln will discuss this in more detail with you during your free initial mortgage appointment.
We would definitely recommend choosing a local company such as ourselves, rather than a big organisation. They are more likely only to charge on completion, as opposed to any application fees and additional costs that could be incurred.
Of course if you are moving home in Lincoln, the cost of doing so in regard to the actual moving aspect, can be quite costly. This will depend on the level of service you are looking for.
Hiring your own van and doing the work yourself can be quite cheap. Opting for a local man with a van can be only slightly more than hiring your own van. A professional van service can be in the high hundreds, early thousands.
To further discuss the costs involved in buying a home, including anything we may have missed, book your free mortgage appointment today. A trusted mortgage advisor in Lincoln will be more than happy to discuss this with you.
Every now and again we encounter hurdles that our customers are faced with, whether they are a first time buyer in Lincoln or looking to remortgage in Lincoln.
Though these potential qualms can lead to some slight disruptions in the process, perhaps halting any further action until they’re ironed out, the process doesn’t necessarily need to end there.
In utilising the experience of a trusted and knowledgeable mortgage broker in Lincoln, you have the best possible chance of overcoming these hurdles, hopefully being able to once again proceed with your mortgage goals.
Below we have put together a list of the 5 most commonly encountered hurdles we have faced, when either helping customers to buy their property or remortgage their home.
When relationships come to an end, it can be awkward enough making arrangements between you, without having to factor in a mortgage as well.
If you made any joint financial commitments during your time together, such as your mortgage, you need to cut these ties as quickly as you can, to avoid running into any trouble.
Customers regularly ask us the following 3 questions when it comes to divorce and separation.
Removing your own name or your ex’s name is imperative, as failing to do so could see your credit score drop if you move out and they handle their finances poorly.
The key to achieving this is to prove affordability, as the mortgage lender will be hesitant to lend to one name, when they previously had the security of two names. If you can afford it on your own and your ex agrees to leave the mortgage, it should theoretically be smooth sailing.
Affordability is also a factor in whether or not you can have 2 mortgages, as you will need to have enough income to live, but also afford two different mortgage payments.
The best way to determine your affordability is to speak with an experienced mortgage advisor in Lincoln. We have spoken to many customers in situations like these, so will do our best to help you overcome this issue.
In our experience as providers of mortgage advice in Lincoln, we find that families are typically not turned down for a mortgage because of childcare costs, though you may be offered a lower mortgage amount.
The reason for this is because with parents often working and forking out for childcare, their outgoings can often be in the hundreds of pounds on a monthly basis.
Many mortgage lenders would consider this type of cost as an outgoing, much as they would for a car loan or hire purchase agreement.
Even taking away the element of nursery fees that a parent may pay, parents are still generally offered less of a mortgage amount than their contemporaries, who perhaps have no children of their own running up costs.
The good news, however, is that if you have any childcare costs regularly going out, you may be in receipt of tax credits. There are mortgage lenders out there who will bear this in mind, along with child benefit too.
There are other mortgage lenders out there with an alternative approach, not treating childcare costs as a specific outgoing and relying more so on Office of National statistics data for typical outgoings and this often leads to a higher maximum mortgage amount.
Usually if someone is starting a new job, they will be in receipt of a bigger salary, being able to put their additional income towards a new or existing mortgage.
That being said, if there have been any gaps in employment, a new job can present itself as more of a problem than a blessing for some mortgage lenders out there.
Luckily there are a selection of mortgage lenders out there who will be able to work with a newly signed employment contract, even if you are only a month into your job or are yet to start. Probationary periods are usually also okay.
Benefit income and how much of it can be assessed will be entirely dependant on the mortgage lender, as many of them take different views towards this type of income.
On a positive note though for customers with this type of income, benefits such as child tax credit, working tax credits, disability benefits, pension income can usually be taken into account by a mortgage lender.
It is in situations like these where speaking to a reputable and experienced mortgage broker in Lincoln will be of benefit to you, as they will be able to take a look at your case, review your circumstances and look to find you a mortgage lender where you are more likely to achieve mortgage success.
For any type of purchase, all mortgage lenders and mortgage brokers alike will be required to evidence the source of all of the borrowers’ (the person buying a house and/or looking to take out a mortgage) deposit funds.
This is done in order to satisfy UK Anti-Money Laundering Legislation, which is incredibly strict and designed to protect against fraud. Additionally, your solicitor and estate agent may ask for evidence of your deposit.
It’s the belief of our team, that this is often one of the most complicated parts of the mortgage application process.
Whether you have put down a deposit from savings, premium bonds, the sale of another property, gifted from a family member or friend, from overseas family, or from taking out a personal loan, you are required to have the paper audit trail to show exactly where these funds came from.
In order to be best prepared for your mortgage in Lincoln and to reduce the risk of potential hurdles, it is recommended that you speak with a mortgage advisor in Lincoln.
They will be able to best advise on how to handle your situation and will search through 1000s of mortgage deals to match you up with the most appropriate one.
Book a free mortgage appointment today and get started on your mortgage journey.
Please note that the above information is for reference purposes only and is not to be viewed as personal financial or mortgage advice.
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.
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 book your free mortgage appointment today. They cannot wait to hear from you.
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.
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!