26 July 2018
An Independent Mortgage Adviser will review the whole market for you, not just a limited few lenders.
With technology taking over the world, and so many transactions taking place over the internet, it might be easy to be attracted to products online. There is so much information readily available and over 11,000 mortgage products to choose from, but these types of things can get lost in translation. Therefore, seek advice! Yes, it may cost you a small fee to have someone research the market on your behalf and make recommendations, having first assessed your short to long term needs and requirements. More importantly, it could save you thousands in the long run, versus choosing the wrong products yourself. In addition, any professional will probably seek to build a long term relationship with you and contact you at the time your current rate is coming up for renewal to ensure you have the best rates available.
It doesn't matter whether you are experienced, or if this is your first time. Property ownership can be complicated, so explore all the options and do your homework. There are a huge number of lenders available to you and all have competitive edges and good criteria options for the right customer. Make sure you understand everything at the outset so that you don't regret it later!
A good independent mortgage adviser will be able to review the whole market for you and can identify the best lending options and then deal directly with the lenders central processing units, speeding up the process from application to offer. That said, even in this area we know of at least one lender that is thirteen days behind on post or electronic updates! An experienced adviser will listen to your specific needs and timescales and ensure that they line you up with a lender who will match both. So, if speed is crucial, then you may need to consider working with a lender where the rate may not be the keenest on the market, but they will get the deal to completion within your target timescales to ensure you get the property of your dreams. Remember, make sure you adviser looks at the whole market, and not just a limited panel of lenders ensuring that you get the widest choice of lenders and products available to you.
19 July 2018
Looking at purchasing your first property? Then this week’s column should be of interest as there’s a number of ways to help you get on to the property ladder that may not be widely known.
First Time Buyers will usually require a minimum 5% deposit, but product availability increases with a 10%+ deposit. Some lenders will allow a 5% builders deposit, but this must be confirmed as a gift and non-repayable. Some lenders will allow the deposit to come as a gift from the Bank of Mum and Dad, or an immediate family member. This can include step family, aunts and uncles and is acceptable for first time and subsequent buyers. The money must be a transparent gift that has originated in the EU and can be easily traced back to the originating source. A letter from the family member will usually be required and needs to advise the gift amount, relationship the person gifting the monies is to the applicant, confirmation that it is a gift and not a loan and therefore is not repayable, confirmation that they do not currently own the property being sold and that they will not live in the property or have any interest in the property post completion.
Some lenders may allow a loan of up to 100% of the property value if parents or another immediate family member will act as guarantor or provide additional security. Those guaranteeing, in the main, will need to show evidence of affordability for both their current residential mortgage and the one they are intending to guarantor and possibly allow a charge to be taken on their own home.
All positive indeed and that’s not even touching on the number of Help to Buy, Right to Buy and Shared Ownership schemes available.
Rates have reduced lately in a bid to assist this underserved market segment and criteria is definitely more accommodating. Income multiples tend to be between 3.75 to 4.5 x joint income and terms and conditions always apply! However, Lenders are showing a willingness to assist First Time Buyers and in the current market, that can only be a good thing.
12 July 2018
I start this week with some fantastic news in the AToM’s chairman Vic Jannels was awarded his second accolade of the year as he picked up ‘Service to the Industry’ at last week’s Specialist Finance Introducer Awards 2018. The event, held at Madison in St Pauls, London, was attended by over two hundred of the industry’s finest and hosted by Homes Under the Hammer and I’m a Celebrity’s Martin Roberts. AToM’s system, OMS (One Mortgage System), also picked up ‘Best use of Technology’ and ‘Product Innovation’. Awesome news and well done team!
The market is pretty quiet currently, apart from the odd ‘cabinet reshuffle’ here and there and at the time of writing, we’re about to get our 17th housing minister in 20 years! Mind blowing.
What we are seeing, despite heavy rumours of a bank of England base rate increase possibly as soon as August, is lenders reducing their current rates. The holiday period is inevitably quieter, although add this to an already quiet market, and lenders need to attract customers to keep on track to hit their annual targets.
Just in the last week, we’ve seen Halifax, NatWest, Platform and TSB all reduce selected rates and our friends at Secure Trust launch a 90% LTV product that caters for those who have had a credit blip in the past. There are some great rates and options around currently.
Finally, valuations on properties to be mortgaged come in various guises. Every mortgage lender will require a valuation on the property although, in some cases, they will not actually visit. This is because they can often access detailed information electronically. Remember that this fairly basic valuation is for the lender, at your cost, and should not be relied upon as a guarantee that the property is sound and fit for purpose. Seek a more detailed survey if you have any doubts. Recently, and with a lack of stock readily available, we are seeing valuers ‘down value’ a property. Just because it’s been sold at £330k, does it mean it’s worth that price or has it been sold to the highest bidder. Always do your home work before the valuer goes out, as if he says its only worth £300k, then you’ll have to find the difference from your own pocket as the lender will only lend against the lower of the purchase price or valuation.