Five tips to help secure the best mortgage for you.

As experienced mortgage brokers we’ve spoken with many people with very different financial situations. There are five things that everyone should do, regardless of how deep your pockets are, to maximise your chances at getting the best mortgage.

  1. Save the biggest deposit you can: Mortgage lenders reserve the best rates for people who can deposit the largest amount.  The loan-to-value is the proportion of the property’s value that you are borrowing. Mortgages are priced by the loan-to-value – the higher this figure is, the more expensive the mortgage will be. E.g. If you can put down a 15% deposit, instead of a 10% deposit you may be rewarded with a lower mortgage interest rate. To get the most competitive mortgage deals on the market, you will usually need a deposit of 25% upwards.
  2. Know your credit score: When you make an application for a mortgage, lenders will refer to your credit score. This is to help them decide if they think you’re a risk worth taking – as a borrower, they need to assess as a borrower you will be a responsible and reliable and likely to repay the debt. Usually, a higher score means you’re seen as lower risk – the more points you score, the more chance you have of being accepted for a mortgage, and at better rates. If you have a low credit score there are things you can do to improve it, we can advise and guide you to get your score back up to where it needs to be.
  3. Pay off unsecured debt and closed unused accounts: If you’re not using an account or credit card it is worth closing it. Lenders will look at the total amount of current and available debt and deduct any credit you have open – even if you aren’t using it.  Because you have the potential to use the credit or an overdraft facility they have to take this into account and this could reduce the amount they will lend you for your property purchase. Additionally leaving open old accounts that you aren’t monitoring could mean that you be a fraud risk, and could also mean some of your details may be out of date which can affect your credit score.
  4. Get on the electoral roll: Lenders need to identify you.  The easiest and more reliable way they can do that is by checking the electoral roll. Your mortgage application may well be refused if you are not registered on the electoral roll at your current address. This is easily remedied. Contact your Local Authority and ask for a registration form or sign up online.
  5. Be prepared with all your documents: A mortgage lender will also require further identification to prove who you are, so make sure you have a current passport and that the address on your driving licence is correct. Other documents you will need to provide include payslips and bank statements for the last three months. You will also need P60s for the last two years, and for employees who receive a bonus must provide evidence of this too. If you receive any other income, such as benefits or maintenance payments, you’ll also need documents to prove this.  If you bring these documents (or send secure copies) to your meeting it means we are armed with all the information we will need to move forward quickly with finding you the best mortgage.

We hope you found those tips useful, if you have any questions or want more information contact us directly or visit the website.

James Hammond

Managing Director

Limetree Financial Services

01223 266140

jhammond@limetreefs.co.uk

Posted in First Time Buyers, Mortgages, Next Time Buyers, Remortgaging, Uncategorized

As borrowing drops in July, is this the start of Brexit blues?

It’s now nearly three months from the shock result of UK to leave the EU. We’ve been told that “Brexit means Brexit”, but for the time being, nobody seems to know exactly what will happen next – politically or economically.

In terms of property, such uncertainty breeds uncertainty – and borrowing has dropped considerably. According to data from the Council of Mortgage Lenders, total borrowing by house owners was £10.6 billion in July 2016 – down 13% compared to the previous month and a 12%.drop compared to the previous year. At 58,100, the total number of loans taken out by homeowners was also down 14% month on month and 13% year on year. First-time buying also took a hit – down 19% month on month and 6% lower than June 2015.

So should we be worried about a slowdown? A drop in borrowing can suggest a cooling off in the market, but there may be factors other than the referendum result at play here.

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Posted in Market Watch, Mortgages, Remortgaging, Uncategorized

Good news for older borrowers

If you’re an older borrower, trying to securing a mortgage can feel like a near impossible business.

Many high street lendersapply a maximum age of between 70 -75. And, although age is never cited as the reason for turning down an application (it’s illegal for lenders to discriminate against borrowers on that basis), some older borrowers can still find themselves locked-out because they don’t meet their lenders’ narrow ‘affordability’ criteria.

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Posted in Mortgages, Remortgaging

Get Ready to Beat the Rate Hikes

Last month Mark Carney warned that a base rate increase is likely towards the end of this year or very early in 2016. Although it’s expected to be a minor increase, it’s the general trend that home owners need to prepare for – it may be worth taking steps soon to get ahead of the game.

With lenders also expected to up interest rates on mortgages, making monthly mortgage payments more expensive, it makes sense to start looking for new fixed-rate deals before banks and building societies take action.

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Posted in First Time Buyers, Mortgages, Next Time Buyers, Remortgaging