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When you buy a house, you need to decide if you will live in it or if you have the intention of letting it out. You must declare the truth as otherwise you might end up with the incorrect mortgage type or worse, in breach of a mortgage agreement and in big trouble! In general, a residential mortgage means you have to live in the property and a buy to let mortgage means you should not live in there but others can rent it from you. Can you let your home if it is on a residential mortgage then?! Yes, there are ways to do this, but it will depend on some specific aspects of your case! First of all, it will depend on whether your current lender can give you a consent to let. You have to ask for this and not just assume that the lender will be fine with you moving out and letting other people live in the house! Secondly, if you have got lender’s consent, you must let your home insurance provider know as your policy could go void if you don’t. If you live on your own and have a spare bedroom, there may be an option to let it to a lodger. There are lenders that will allow you to let to a lodger but some lenders won’t, so you need to ask the lender for permission and, as above, let the insurance firm know. There are certain rules around having lodgers so look out for another article on this. Finally, if you know you need to permanently move out of your residential house, then best look into transferring a residential mortgage into a buy to let one or to carry out a let to buy transaction. Whether you qualify to do this may be dependent upon many things so one thing you should do before you take any other steps is to speak to a broker! We encourage you to listen to an adviser rather than a neighbour, friend or other people who may not be suitably qualified to give advice. They may have some experiences, but these may not necessarily reflect what lenders allow. If you want to do things right, book an appointment with a broker. If you have any questions, do not hesitate to contact us.

The Internet is a very powerful and helpful tool when it comes to many things in life. More and more lenders offer online calculations, quick decisions in principles and quoting systems so what could go wrong if you wanted to sort out your mortgage this way?! In many cases it may be possible to get an online indication of a mortgage affordability or to check interest rates but, unless you wish to take all responsibility for any issues in the application process, and, unless you are absolutely sure you have a thorough understanding of lenders’ requirements and criteria, you may get a very unpleasant surprise and not quite the outcome you want. Buying a house is a serious financial transaction and perhaps best to leave this to a qualified advisor to deal with the mortgage application. By doing your mortgage application yourself, you might end up with a more expensive rate, you might lose money and time by going for the incorrect lender and getting declined, you might damage your credit score and finally you might completely jeopardise your purchase. You would probably not extract your own tooth as certain things be best left to professionals;) Nowadays when lenders keep changing criteria and when nothing is guaranteed to not change unexpectedly, it is too much of a gamble to Do It Yourself. If you have any mortgage related enquiries, do get in touch and we will be happy to help.

Buying a house is surely something that we plan well in advance rather than a spontaneous shopping spree. Of course, one can browse through properties online but, to make an offer, one should at least first have a consultation with a broker to know how much they can afford to borrow, to check their credit report and to know that their deposit is enough. These are all individual factors that need to be taken into consideration before making an offer. Having no time to discuss your purchase is a very poor excuse which can cost you not only losing a dream home but can give you lots of stress and disappointment. More often than not, estate agents want to see us as serious buyers who are prepared in advance and they expect us to present them with a decision in principle document on making an offer. Best leave the preparation stage to a professional rather than DIY this step as you may harm your credit score and have no gain anyway. A broker knows all lenders and their criteria and will carefully select the one that meets your needs. As market is very busy, there is lots of competitive buyers who may have already seen a broker and who are better prepared. Be one of them, be wise! If you wish to discuss your circumstances in preparation for buying, feel free to contact us.

Is it easier to get a mortgage if you apply through the bank where your personal/business account is? We are often asked this question and there is common perception that loyalty to your own bank pays off. Whilst it can be worth checking their best products, it is very important to compare it to other lenders to see if it is indeed the best deal you can get. Lenders may have exclusive products for their own customers, but it is not a guaranteed option. Often, another lender may have a better interest rate for you and be sure that no lender will ever tell you that their competition may offer you something much better Each bank will only offer the best they have but is it the most attractive option you can get?! If you contact a broker, they can collect all the details needed to do a thorough research to see how your bank’s deal compares to others. Also, although verification checks may be easier sometimes with the bank where you have your own account, many lenders now access systems which can identify customers very quickly. Don’t assume that your own bank will be less thorough with their checks as any regulated lender has to do the due diligence checks to make sure customer’s circumstances meet their criteria. Before you decide which mortgage lender is best for you, always speak to a suitably qualified broker. Should you have any questions, do get in touch.

Have you heard that getting a credit card can help your credit score? Before you do anything, read this article. When you want to apply for a mortgage, your credit worthiness is looked at by the lender. They score you and search through your credit history to see if you are a good candidate to lend to. If you have never had any financial liabilities, your credit history may seem a little flat…. Indeed, one way to build up your credit history may be by sensibly using a credit card. There is a special, score building credit card type, and by using it and regularly repaying it, you build your credit worthiness. Be careful though, as using up too much of your card’s balance may cost you interest as well as it may affect how much the lender would offer you when taking a mortgage. Also, remember to pay it on time each month – it is very important. Before you decide to get a new credit card, always first speak to a broker! Opening any new line of credit may lower your existing credit score and it may lower the amount you will be able to get from the lender! This is surely not the outcome you want! A broker will look at your credit score and your credit report and will be able to tell you if you need to work on it or if it is good enough for mortgage purposes. If you have any questions, feel free to contact us.

One thing is certain: in most cases, when buying a house, you will be required to have a deposit. So what should you do if you want to buy but don’t have enough deposit? Would taking a loan or borrowing from other people be a solution We have been recently approached by some customers who had borrowed so they have a deposit and they were very disappointed to learn that this would not help them! First of all, whilst lenders usually accept a gifted deposit (parents, siblings, grandparents can gift), on condition it is not repayable, only a very limited number of lenders would consider if the deposit was borrowed from a third party or from another lender. By taking this step, you are going to limit yourself extremely in terms of lenders’ choice. Secondly, a loan for deposit may not only lower your credit score but it will also affect your affordability so the amount you could borrow as mortgage may get reduced! Deposit coming from a borrowed amount is one of most common issues we see daily. Remember, before you take any financial decisions, you should speak to a broker first. Otherwise, you might end up with a loan but with no mortgage in the end! Contact us if you have any questions.

What could be better than boosting your savings by further 25% when you are planning to buy a house? Could you benefit from a Lifetime ISA? Here’s a couple of facts about a Lifetime ISA (LISA): A Lifetime ISA can be opened by anyone aged over 18 and under 40 Savings made before 50 attract a 25% bonus from the Government (capped at £1000 per year). This bonus is paid monthly, so interest can be earned on the bonus too. A maximum of 4000 can be saved per tax year with no monthly limit. Savings can be used to buy a first home, to provide benefits in retirement from age 60, or in case of a terminal illness with less than a year to live. If savings are withdrawn for any purpose other than those stated above, a 25% charge is applied. If you have both a Help-to-Buy and Lifetime ISA, the benefit from only one of these can be used for a first home purchase. To be able to buy your first home with LISA savings and bonus you must meet the below conditions: the property costs £450,000 or less you buy the property at least 12 months after you make your first payment into the Lifetime ISA you use a conveyancer or solicitor to act for you in the purchase you’re buying with a mortgage If you have any other questions about buying a house, get in touch with us!

Re-mortgage can be an opportunity to review your strategy and to see what can be done to start building your investment property portfolio . Our success story this week is of clients who bought their first home with very little deposit 2 years ago and, on re-mortgage, we have now managed to get a deal that will let them borrow extra £30k to invest in their first property to let! This is a great outcome after only 2 years when they first bought a residential house. Property values have increased over the last year and, despite all Covid related distractions, the market is very busy. It may be a good thing if you want to borrow extra capital on your home. Every time your property grows in value, you gain more and more equity (ownership) which can mean benefits like: an option to borrow more, option to renegotiate your interest, or option to reduce the term of the mortgage. Remember, every case is different and it has to be assessed on its own merit but when you are planning your re-mortgage, you should not just assume that switching product with the same lender is the only option available for you. Have a chat with a mortgage adviser to discuss what can be done.

If you had bought your house with the Help to Buy Loan and you would like to borrow extra on Re-mortgage to be able to clear that loan, it may be possible but you need to bear in mind that there are a couple of requirements you need to meet: You will need your house valued by a RICS Certified Surveyor – this valuation is only valid for 3 months so plan the process in advance. You need to pay for this survey. You could repay your equity loan in full or in part You will need to complete a redemption form and send it to Target together with an administration fee of ca. £200- £250 You will receive a redemption quote based on the amount of loan you wish to settle (full – 20% of property value, or partial – 10% of property value) You will need to appoint a solicitor to deal with the Help to Buy loan repayment process, so bear in mind the extra cost for legal fees and solicitor fees as well. You will need to check whether you can actually afford to borrow more so before you do anything at all, contact a mortgage broker to check your affordability and credit worthiness. There are other ways to settle the Help to Buy loan so if you need more information, check it here: https://www.gov.uk/.../how-to-repay-your-equity-loan...

Have you heard of First Homes Scheme launched on 4th June? From 4th June, new Government scheme has been introduced offering local First Time Buyers a discount of at least 30% of the market value! The programme aims to support first time buyers, especially key workers like NHS staff or Veterans so there is a benefit to the local community for generations to come. When the house bought under the First Home Scheme will be sold in future to another first time buyer, the same percentage of discount will be passed on to them. These homes will be made available across the country with the first ones launched as a pilot in East Midlands. It is fabulous news especially given the constantly increasing house prices! Further information can be found here: https://www.gov.uk/.../discounted-homes-for-key-workers...

What is Basic Mortgage Valuation? When you are in the process of applying for a mortgage, a lender will want to know that the house is worth the price you have agreed to pay for it and that it is in an acceptable condition to lend on it. They send a suitably qualified surveyor to check these aspects and do a report which helps them take a decision whether or not to offer. This process is called Mortgage Valuation. Who pays for Mortgage Valuation Report? Many lenders offer this report free of charge or for an agreed fee and if they do charge, then it is the buyer who will have to pay. Will I get a copy of the report? Usually, lenders keep it to themselves only, so buyers do not get a copy. It is a report that is done for the benefit of the lender to see if it is worth lending on the property. What report can I get as a buyer? As a buyer, it is recommended that you engage a surveyor to carry out so called ‘Home Buyers Report’. It is a more detailed document about the condition of the property. How can a Homer Buyers Report help me? Once you have done this type of report, you will have a more detailed view on potential future repairs and on existing condition that might cost you in the long run. This, in turn, can help you re-negotiate the price or take an informed decision on what value for money you are actually getting. What does a Home Buyers Report check? It normally looks at internal and external features of the property and checks things like heating system, drainage, water services, energy efficiency rating, roof, windows, damp, insulation etc. How will I know something needs attention? Homebuyer’s report is colour coded so if anything is marked amber or red, should get your attention as it will indicate there is an issue that might be faulty or in need of repair. Do I have to do Home Buyers Report? No, it is not obligatory or required by lenders, but it is recommended if you want to know more about the condition of the house you are buying. Who pays for this report? You, as a buyer will need to pay for it, and its cost varies so best get a few quotes to compare. Will I get a copy of this report? Yes, you do get a copy of this report, but you don’t need to show it to the lender. When should I consider a Building Survey? This type of report is usually recommended to be done on older or larger properties or the ones that you plan to do major building work on. This is the most detailed, most comprehensive and most expensive survey done out of the ones mentioned here. Where do I find a surveyor qualified to carry out a Home Buyer Report or a Building Survey? Some lenders offer discounted price for surveys done by their designated surveyors so you may want to discuss this with your broker or, if a lender you are using doesn’t offer this option, then you will find a suitably qualified surveyor under this link: https://www.ricsfirms.com/ We hope you find this article helpful and if you have any mortgage or house-buying related queries, do contact us and we will be happy to help.

Would you believe that a lender can refuse to mortgage a house if they have already offered on too many in the area?... Yes, it really can happen! Lender does a post code search and they can decide that they have so called ‘overexposure’ in the area and so they will not want to take any more risk there. Overexposure is often an issue on new build development sites and it is very frustrating! But it may also happen for older properties where lender sees too much risk in the particular area and they simply stop offering there. There are many aspects related to property where even the most perfect case scenarios can go wrong. A very important factor is the condition of the house you will be buying, whether it is in a habitable and approvable condition. Also, if property is of a non-standard construction, or if it is in the area where for example there were mineshafts historically, a lender may refuse to mortgage on it. Best thing you can do is to discuss the property you are buying with a broker who will have access to lenders offering on even the quirky builds or construction types. Don’t think the only aspect of your mortgage offer is around your affordability! Property plays an important role here too. If you have any questions, contact us for help.