If Covid has left your finances in a state, is remortgaging the answer to getting things back on track?
If the past few months have left debts creeping up, the news of a second lockdown was probably the news you’ve been dreading. So how should you approach your mortgage in the current environment? Here’s some Key advice…
The simple rule of thumb right now is that, whilst there is some help available from lenders, you should only take it if you really need it. The government asked lenders to ensure that taking a mortgage payment holiday wouldn’t affect credit ratings, and lenders agreed. But there is some suggestion that taking a break could affect you when you come to remortgaging. That’s especially true if you’re planning on remortgaging soon. So if you can pay, pay
You can usually manage your mortgage payments perfectly well, but perhaps you’ve been furloughed or work has dipped over the past few months and you need a break to keep things on track (and keep mounting debts at bay). Now may be the time to consider a payment holiday.
All lenders are offering holidays and the news of the second lockdown also brought news that the arrangement has been extended for a further six months. Once the holiday is over, your payments will be recalculated over the remaining term – so your monthly payment will go up. If you haven’t already had six months of holiday, you can ask for them now (usually in two blocks of three). If you don’t need a full holiday you can ask for fewer months, or you can take the full holiday and pay off an amount you can afford each month.
*BUT, and this is really important, there’s an issue with payment holidays and it all depends on your circumstances. If you know your current change in circumstances is temporary and things will be back to normal(ish) post-Christmas, a holiday may work for you assuming you can resume payments at the increased rate.
If, on the other hand, you already suspect that you won’t be able to pay the full monthly mortgage repayment come the end of the holiday, then taking the break may not be the best solution.
That’s because a payment holiday won’t bring your payments down for the long term – it will put them up. But a remortgage could be the answer, and help you put a stop to rising debts.
There’s lots to recommend remortgaging right now. If you are struggling to meet your outgoings, remortgaging could help you by:
This is where the payment holiday issue can come into play. Any lender is going to want to know that you can afford your repayments. A recent payment holiday could increase the level of lender doubt. Even if it doesn’t affect your overall chances of approval, it might mean you can’t access the very lowest rates.
On the positive side, lenders are offering good rates on mortgages with a loan to value (LTV) of 85% or less (that is, your mortgage is at or below 85% of the value of the property). With house prices shooting up over the past year, most homeowners have found their LTV improving, which should make remortgaging easier.
Mortgage lenders won’t usually agree a mortgage where you don’t currently have an income. If you’re struggling to pay your mortgage and have already had your six month payment holiday the FCA is advising homeowners to talk to their lender about a tailored support plan.
Not without checking the rest of the market first. Often, people assume that, because they already have a mortgage with a lender, they’ll have some sort of advantage in the application process. But that’s not the case – every mortgage application is taken as a fresh start and it doesn’t matter whether you’ve been with a lender for 15 years or five minutes.
It’s also worth remembering that independent mortgage advisors like Key Mortgage Advice can access rates the general public can’t. So even if your current lender is offering what looks like a great deal, the chances are we’ll be able to better it.
To find out whether remortgaging could work for you – and to increase your chances of being accepted for the lowest possible interest rate, talk to us.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage
The UK economy has been badly affected by Covid. So why are house prices still rising? We look at the factors and ask whether now is the right time to buy.
On the face of it, it really doesn’t make sense: coronavirus has left many businesses struggling. Redundancies are rising. These are uncertain times and perhaps not the obvious moment to make big financial decisions.
And yet, the average price for a house in Britain just hit a record high. During September, prices rose in every region of England and Wales except the South West and the North East (where they held steady). In a year, UK prices have risen by 2.5% and in the North West that rise is even greater at 3.5% (making it one of the most buoyant regions of all right now).
As you might expect, there seem to be several factors at play.
Pent up desire: The three months of near total lockdown earlier this year put the brakes on virtually everyone’s moving plans. Once restrictions began to lift, people resumed their house hunting. Only now, with lots of people squeezed into the market at once, demand rose – and so did prices.
Race for space: The pandemic has clearly changed the way some people have felt about their previous living arrangements. After three months effectively locked in their homes, some have realised that it’s not the home for them. They are looking to move so that, when the next pandemic arrives they have more space inside and perhaps some space outside too. Some have even made the decision to switch town for country.
We’ve certainly spoken with many more people who have found themselves reassessing their life goals in the light of the past few months. Where they choose to live is, of course, a crucial element in that.
Independent living: Lots of young people raced back to mum and dad’s at the start of the lockdown seeking company, security and (almost) rent-free living. Post-lockdown, many of those same young people are now eager to have their own space again.
Boosted savings: 2020 was the year holidays went unbooked, big celebrations were postponed till next year and money that would usually be spent wasn’t. For some people saving for a deposit, that meant savings grew far quicker than expected.
Low interest rates: Interest rates have been low for a long time, so we can’t say they are a new factor in driving rising house prices. But what is different is that there is little ‘noise’ about rates rising anytime soon. In fact, we’ve recently seen the Bank of England exploring the idea of negative interest rates. That doesn’t mean we’ll see them, but it does indicate there’s no major desire to see rates rise. And the longer they stay low, the more affordable your mortgage is.
Stamp duty freeze: Last year, if you had bought a house for more than £125,000, you would have paid Stamp Duty Land Tax on it. Rates increase depending on the cost of the house. For a £300,000 house, for example, you would have paid £5,000 in duty. Right now, however, the freeze means you pay no stamp duty on a first home up to the value of £500,000. This arrangement ends on 31 March 2021, however, further encouraging buyers to buy now.
Stability and security: We won’t revisit the renting vs owning arguments here, but it’s certainly true that the past few months have left more people feeling as though they want greater stability and security, and they are looking for that by buying rather than renting.
Buying in a booming market doesn’t sound like a great idea, but this market isn’t like any other. The stamp duty freeze combined with low rates may offset some or all of the increased price you pay for any property. Buying habits are continuing to change and, whilst none of us has a crystal ball, what may seem like an inflated price right now may look like great value in just a few months’ time – especially in the areas that have been most sought after.
And if you are eager for more space, independence or security following the past few months, chances are you’ll be willing to stand an additional percentage point or two, providing you can find an affordable mortgage to help you buy.
And for that, talk to us.
Income protection covers a percentage of your salary if you are off work poorly or injured and can help pay the bills and living costs until you go back to work.
Just fill out the form below and we'll get back to you asap with a quote!
A product transfer is when you move from the mortgage deal you’re currently on to a different one with your existing lender. It’s a simple, quick process that could save you a lot of money in the long run, and now is the perfect time to switch!
If you’re thinking about switching and you’re also planning on contacting your bank about taking a payment holiday, please contact us as soon as possible before contacting your bank, as you’ll need to switch first!
A product switch is a quick and easy process, and you don’t need to leave your house or undergo an interrogation to make it happen.
Just fill out the form below, and we’ll send back details of rates available to you. Once you’ve made your decision, the rate can be put in place within 24 hours with no fees to pay or documents to sign!
With everything that’s going on right now, we wouldn’t blame you if your mortgage wasn’t really top of your priority list. If you’re worried about your finances taking a bit of a hit over the coming months, though, remortgaging could be the perfect way to ease your financial burden.
We have same-day and next-day appointments available, and we’re able to do all appointments over the phone.
We don’t need your original documents or ID. Everything can be emailed to us or uploaded to our client portal, so there’s not even a trip to the post office involved.
That’s right: you don’t even have to change out of your pyjamas.
Interested in remortgaging? Book your free consultation with our expert team today!
Did you know that 50% of all homeowners say they found the process of buying a property confusing? And over 60% admit to not fully reading their mortgage agreement before they signed it?!
Crazy!
A mortgage will likely be your largest financial commitment, which means it’s vital to ensure that you’re happy with the terms of your mortgage agreement before you commit to it.
Here are a few things you should always review before signing:
Before you put pen to paper, take some time to read through the details of your offer to make sure they're correct. Once you've signed, it's too late!
The most important things to look out for are:
If your mortgage repayments are vulnerable to interest rate changes, your mortgage agreement may include risk warnings. These warnings are to inform you of potential situations you may find yourself in, in the future. You should discuss these with the lender or a mortgage advisor, so you're sure you'll be able to make the repayments, even if circumstances change.
Every lender has their own set of general mortgage conditions. Some (such as the requirement for buildings insurance) are standard but most will depend on the lender, and as such, you should review them to make sure they meet your needs.
If you're in a position to make overpayments on your mortgage, make sure you'll be able to do so without incurring fees.
Most fixed deals allow you to overpay by 10% of your outstanding balance each year. This is great, as any overpayments will shorten the overall mortgage term and reduce the interest you pay to the lender.
You might not be thinking about it right now, but what if you want to move home within your mortgage term?
You can avoid paying early settlement fees by moving your mortgage over to the new property, if this is something the lender allows. Even if you're not actively considering moving again, it's worth checking as it could save you money down the line.
When the introductory period of your mortgage ends, you'll be switched onto the lender's standard variable rate (SVR). This often means that your monthly repayments will increase drastically, so make sure you know when to start looking for a new deal.
If you keep on top your mortgage as you would your energy bills or car insurance, you'll never pay more than you have to again!
Remember: a mortgage offer is a binding contract between you and the lender, so it’s essential you read and review everything in the document to make sure it’s correct. If you’re unsure of any details or the language used in your offer, speak to an advisor or the lender before signing it.
More and more lenders are adding 95% mortgages to their range of available loan products. In fact, 95% mortgages are the only product which has increased in availability so far in 2019.
As a result, those looking at loan-to-value ratios of 90% and below now having fewer deals to choose from than they did last year.
But what does borrowing 95% of your home's value mean in the long term? And is it worth it to get on the property ladder faster?
A 95% mortgage allows you to borrow up to 95% of the purchase price of a property you want to buy and put down just 5% as a deposit.
Only needing a 5% deposit means you don't need as much cash to hand and can shave years off the time you need to spend saving up.
Typically, the best mortgage deals are reserved for borrowers with big deposits of 40% or more, but there are plenty of competitive rates available to buyers with just 5% to put down.
As more lenders look to enter the market, competition should mean that rates for 95% mortgages stay low, at least for now.
Having a bigger deposit will allow you a wider choice of mortgages, usually at lower rates. So if you're not in a rush, saving for a little while longer will usually mean you're better off in the long run.
However, if you're renting while saving, there's a good chance you feel like you're wasting money - especially with interest rates being relatively low. It's also worth noting that if property prices were to rise, you may end up having to save for even longer.
It's worth considering all your options and weighing up the pros and cons of each strategy, before deciding on your next move.
Lenders will take your income, outgoings and credit score into account when deciding how much they’re prepared to lend you. These factors will also influence whether they're prepared to offer you a 95% mortgage or not.
An independent mortgage advisor can tell you how likely you are to be accepted before you apply. This will save your application being rejected, which can hinder future attempts to secure a mortgage loan.
When choosing a 95% mortgage, you’ll have fixed-rate and variable-rate deals to choose from:
A fixed-rate mortgage usually has an introductory term of between two and five years, during which time your interest rate (and therefore your repayments) will stay the same. This is a popular option as it offers peace of mind, in that you don't need to worry about rates going up.
At the end of your introductory period, you will be switched onto your lender's standard variable rate (SVR), which is almost always higher. This is often when people look to remortgage.
There are two main types of variable-rate mortgage - tracker and discount mortgages. Tracker mortgages follow the Bank of England's base rate and discount mortgages offer a discount on the lender's standard variable rate. When it comes to discount mortgages, the rate you will be offered will depend upon your circumstances and the lender's individual criteria - this will vary from lender to lender.
The government has several schemes in place for potential first-time buyers, all of which can be a huge help if you're struggling to save a big deposit.
From the Help to Buy ISA to the shared ownership scheme, you'll find all the information you need here.
There are a lot of 95% mortgage products on the market and more being introduced every month. This can mean it gets a bit confusing when it comes to deciding which one is best for you.
If you're struggling, an independent mortgage advisor can offer you expert advice on which products offer the best value and which you're most likely to be accepted for.
Even better, if you get in touch with Key Mortgage Advice, we'll guide you through the process for free!
Guarantor Mortgages are a way of securing a mortgage loan when you don't have a deposit or your credit history is putting lenders off. Someone agrees to act as guarantor for you, committing to make the repayments on your mortgage if you fail to do so. This is most commonly a parent or grandparent, which is why these products are often referred to as family-assisted mortgages.
A guarantor owns no share in the property purchased, nor are they named on the deeds. They simply sign a legal document stating that they agree to cover the mortgage repayments if the borrower cannot pay themselves.
To act as a guarantor, lenders usually require that you meet the following criteria:
A guarantor must possess sufficient assets to offer as part of the legal guarantee to the lender. Acting as a guarantor on a mortgage may mean you have to sign over a charge on your own property, giving the lender the authority to repossess it if repayments are not met.
If a guarantor doesn't own a property or has enough put away, cash savings can be offered as a guarantee. The agreed funds are put into a savings account with the lender and are released once a specified portion of the mortgage has been paid off. Typically, a guarantor is released from the mortgage agreement once the loan-to-value (LTV) has been reduced to around 80%, although it will vary depending on the lender and the applicant's circumstances. During this time, the guarantor will not be able to access the funds. They will usually, however, be eligible to earn interest on them.
Missing a mortgage repayment is never ideal, but with guarantor mortgages, it's especially important that you're aware of the consequences.
Each lender will have their own policy, but there are several things that could happen:
If you continue to miss repayments, the lender may take further action:
If you still owe the lender money after the property has been repossessed, they may go on to take further action to recover what they are owed.
Be honest. It's important that the borrower and guarantor are open with each other and consider all possible outcomes before entering into a contract.
Set boundaries. If you're acting as a guarantor for someone, it's important to remember that the property will be the borrower's home. Relationships could be damaged if you try to impose rules or have a say in matters beyond the mortgage agreement.
Seek professional advice. Financial matters can be complicated and entering into a mortgage agreement is a big deal! Formal agreements remove any grey areas and could save you from running into difficult situations in the future.
Think a guarantor mortgage might be the right option for you? Key Mortgage Advice can guide you through the process for no fee! We have offices in Southport, Preston and Garstang, or we can assist you over the phone if you prefer. You can find all of our contact details here.
Whether you're a first-time buyer, moving home or looking to remortgage, sifting through the thousands of available mortgage deals can seem daunting. If you’re feeling overwhelmed, it might help to talk to a mortgage broker.
A mortgage broker (or mortgage advisor) will search the market for you. They're there help you to choose the best possible mortgage deal. While banks will only offer you a mortgage loan from their own range, an independent mortgage advisor will look at all available options from hundreds of lenders, ensuring you get the best rate according to your circumstances.
Yes; with thousands of mortgage deals on the market, it can be hard to work out which one is right for you. Therefore, it's a good idea to speak to a mortgage broker at the beginning of your search.
A good broker will be able to look at your financial situation and sort through the deals available to you. They'll be able to find the ones which best match your needs and also be able to tell you which of the deals you're most likely to be accepted for - this can be advantageous, as a rejection can mean that you have to wait a period of time before you can apply again, which can significantly hold things up.
Once you’ve found the mortgage loan that's right for you, a mortgage broker can also help you with the application process. They'll make sure you fill out the forms right the first time and let you know what paperwork you'll need to complete your application.
Some advisors will offer additional services for a fee, even negotiating the purchase price for you in some cases.
A good mortgage broker should also be able to offer advice on other products, such as home and life insurance.
There are three main types of mortgage broker:
Tied: Brokers offering mortgages from a single lender
Multi-tied: Brokers offering mortgages from a particular group of lenders
Whole-of-market: Brokers offering mortgages from the entire market
If a broker says they are "independent", they should be offering you a whole-of-market service.
It is usually better to go with a whole-of-market or independent mortgage advisor as they have access to the widest range of products, missing out on only the direct-only deals offered by some lenders.
As well as finding out whether they are whole-of-market or tied to certain lenders, you should also check your chosen mortgage broker is regulated by the Financial Conduct Authority (FCA). This will ensure you receive a certain standard of advice. It will also mean you're able to complain to the Financial Ombudsman should anything go wrong.
Finally, make sure you ask how your broker will be paid.
All mortgage brokers will need to give you a document called a Key Facts Illustration (KFI) about their services. This document will detail how your broker will get paid, usually one of two ways:
Fees: Some brokers charge a fee for their services. They can charge a flat fee or an hourly rate, which will be agreed beforehand.
Commission: Others provide their services free of charge and receive a commission from the lender.
It’s best to ask up front how much you’ll be charged or whether the broker will receive a commission, so you can plan your finances accordingly.
Still unsure? Get in touch or drop into our offices in Preston, Garstang or Southport for more information on what an independent mortgage broker could do for you!
Buying a house is often cited as being one of the most stressful things you’ll ever do. So it's no surprise that most people want to get things completed as soon as possible once an offer has been accepted. The mortgage application process can take some time, but there are some steps you can take to speed things up...
An agreement in principle (sometimes called a ‘decision in principle’ or a ‘mortgage in principle’) is a written estimate from a lender as to how much you can borrow. Having an agreement in principle will help speed up your mortgage application once you’ve found a property you want to buy. It will also give you a good idea of how much money you can borrow, meaning you won’t waste time looking at homes that are out of your price range. An agreement in principle is usually valid for between 60 and 90 days. Some estate agents will only let you view their properties once an AIP is in place, so this is usually the best place to start.
People often underestimate the time it can take to get a mortgage offer. Many also make the mistake of thinking that an agreement in principle is the same as an offer; it isn’t – you can only make your full mortgage application once you have had your offer on a property accepted. You’ll then need to send off the relevant documentation and the lender will carry out a valuation of the property. Only then will you know for sure whether or not you’ll be granted a mortgage loan, so the sooner you begin the application process the better.
An independent mortgage broker like Key Mortgage Advice will help to find you the best deal in the early stages and submit the application on your behalf. This will speed things along, reduce the risk of any errors, and generally make life easier for you. A broker is also on hand if you have any questions or require advice along the way, and because they have established relationships with lenders, it’s likely they’ll be able to iron out any difficulties faster than if you go it alone. Find out more about our services here.
If you aren’t using a mortgage broker, you will need to complete and submit your application to the lender yourself. In both cases, you will need to provide certain documents. Make sure you have these in order in advance – you don’t want the whole process to be held up because you can’t find your latest payslip! You’ll usually have to provide the following for each person applying:
Don’t be afraid to chase up the different parties involved, like making sure the estate agent is allowing the lender access to the property as early as possible in order for the valuation to take place. If you opt for the Mortgage Plus service from Key Mortgage Advice, we will take care of this and liaise with the estate agents, lenders and solicitors on your behalf, so you only need to deal with one person throughout. We’ll also fast-track your mortgage application, so you can be in your new home as quickly as possible.
If you would like to discuss this topic in more detail or speak to one of our independent mortgage advisors about your application, you can find our contact details here.
New research by consumer group Which? has found that less than half of UK homeowners know the exact mortgage rate they are paying. Over a third of those surveyed had no idea at all what rate they were on. Only 27% of people were able to recall their exact mortgage rate and 25% were found to be on SVR mortgages - a statistic which is worrying, at best.
SVR mortgages (standard variable rate) are mortgage providers' standard deals, which you are put on once the introductory period of your mortgage comes to an end. The rate varies from lender to lender and is affected by changes to the Bank of England's base rate, among other things. Most importantly, however, it is almost always significantly higher than the rate you were originally paying. The survey by Which? gave Clydesdale Bank as an example. They offer a market-leading initial rate of 1.79% during the introductory period, but then the rate jumps up to 5.2% (variable). That stands above the average SVR mortgage rate, which (according to Moneyfacts) is 5.11%.
Researchers looked at what this would mean for a person who bought a house at the average UK price (£231,422) on a 90% LTV mortgage. Paying back a £208,279 loan over a 25-year term, they could pay as much as £347 a month more once the introductory period is over and they lapse onto the SVR. This would cost them more than £4,000 extra per year!
Anyone who has come to the end of a fixed term (usually 2 or 5 years) and hasn't remortgaged is likely to be on their lender's SVR. A shocking generational disparity shows that almost twice the number of those in the 60-69 age category were on SVR mortgages (34%), compared to just 18% of 25-34 year-olds.
Our Director, Sharon Duckworth, says: "It's worth checking to see if you're on an SVR mortgage, as you could be wasting money. The market is very competitive at the moment and there are some fantastic mortgage deals for homeowners to take advantage of."
Which? found that, of those who had had their mortgage for more than 5 years, only 50% said they were happy with their deal. Alarmingly, 41% of all homeowners on SVR mortgages said that they would be "unlikely to switch if they came across a cheaper deal today". Reasons given for not switching from SVR to a better deal were that “it wasn’t worth the hassle” and “they hadn’t thought about it”. However, only 17% though that it "wasn't worth their time".
Today, other types of mortgage deals offer much lower average rates, including fixed (2.98%) and tracker (2.81%). Compared to the average SVR (5.11%), they offer exceptional value.
If you're thinking of remortgaging, it's worth speaking to a whole-of-market advisor, who will have access to all of the best available deals. Key Mortgage Advice are one such advisor, with offices in Preston, Garstang and Southport. You can arrange a free mortgage consultation with us via phone, email, or by popping in to see us. All of our contact details can be found on our Contact Us page.
Trying to get a mortgage can be a daunting proposition, however, it’s not that difficult and there are several things you can do to improve your odds of being accepted. To have the best chance of securing the cheapest deals, you’ll need to have your finances in order before you apply.
Lenders all have their own set of criteria and what makes you attractive to one may not satisfy them all. Generally, they look at the following:
If you’re not registered to vote, you’ll find it very difficult to get a mortgage, even if you meet all the criteria. Lenders use electoral roll data to run identity checks: to check you are who you say you are, that the address you give them is legitimate and that you’re not laundering money.
Check with your local council if you’re unsure. If you’re not registered, get yourself on the electoral roll as soon as possible.
Lenders check your credit report to ensure that you’re financially responsible. They need to know that you're able to pay back what you borrow. Your credit report shows any overdrafts, credit cards, loans, and mortgages you’ve had in the last six years. It may also include any mobile phone contracts you’ve had and some utility accounts. You can access your credit report for free via Experian, Equifax, or CallCredit.
If there are any errors in your report, talk to the lender(s) associated with the erroneous data and they should be able to amend it for you. If that doesn’t work, contact the free Financial Ombudsman and they will step in to order the necessary changes.
If you’re always in your overdraft, lenders may see this as a sign that you’re not financially responsible. Some lenders may not accept you if you’ve been in your overdraft at any time within the last three months, so it’s best not to dip into it at all, if possible.
As for your credit cards, lenders prefer you to be using less than 50% of your available limit. Yet, they may also penalise you for having too much available credit, as there’s a chance you could suddenly spend it and rack up debt. Try to strike a balance; if you have £5,000 available credit, stay below the £2,500 mark. If you have £10,000 available credit and aren’t using any, consider reducing it a little to reduce the perceived risk to potential mortgage lenders.
Each time you apply for a new line of credit, the provider searches your credit file and this search is registered on your report. Having lots of searches on your file may look like you’re desperately trying to borrow money, and this will turn lenders off. If you must apply for credit, you’ll probably get away with one application, as long as it’s affordable. Don’t use payday loan companies, as some lenders will decline your mortgage application if you’ve used such a company within the last year.
If you have old, inactive credit accounts, these can be seen as a fraud risk. It’s worth closing any account you haven’t used within the past twelve months.
Long-term, stable credit relationships are seen in a positive light by lenders. So, if you’ve had a credit card for a while but recently stopped using it after getting a new one, it’s probably best to keep the account open until after you’ve applied to get a mortgage, as it could be giving your credit score a boost.
This might sound obvious, but did you know that missing just one payment will count against you for at least a year and will be visible on your credit report for the next six?! This could make it extremely difficult for you to get a mortgage.
Set up direct debits for all your accounts to make sure they’re always paid on time. If you’re struggling to keep up with payments, contact the lender before the next instalment is due and often they’ll be able to help and save you from defaulting.
Lenders need to see proof of your income before they can offer you a deal. They may want to see all or any of the following:
Lenders often want original bank statements (not copies printed out at home) so go into your local branch and ask for originals. These can take a couple of weeks to arrive, so it’s best to do this in advance.
It makes sense to have all these things ready to go, as it will save you time and reduce the number of people your application is reviewed by.
Make sure your application form is filled out honestly and accurately. Declare all your debts and give your exact income (don’t round up), as dishonest answers will mean a rapid decline of your application.
For example, if you have £20,000 to put down on a property worth £100,000 (making your loan-to-value 80%), it may be worth coughing up an extra £100 as it will make you more attractive to potential lenders. All mortgages have a maximum loan-to-value. Borrowing just below this will boost your chances of being accepted and may give you access to better rates.
If you get rejected, don’t apply for another mortgage straight away. As with applying for credit, more searches on your credit file will reduce your chances next time and you could end up making the problem worse. It’s best to contact the lender and find out their reasons for rejecting you. They may have their own reasons, but if it was your credit file, go through this guide again and tidy it up before trying to get a mortgage again.
Key Mortgage Advice are an independent mortgage broker with over 17 years’ experience in the market. We can help you through every step of your application and give you the best possible chance of being accepted for a loan. Contact us via the button below to arrange a free consultation. We’ll assist you in getting the key to your dream home:
Insurances are usually the last thing people think about when buying their new home and often there is some confusion around which are required, and which are optional.
Contrary to popular belief, life insurance is not a legal requirement when getting a mortgage. The only insurance you must have by law is buildings insurance.
Buildings insurance covers your home against any structural damage, i.e. damage to the walls, floors, or roof. It does not cover the contents or furnishings. If you want to cover the items inside your home in case of flooding or a fire, for example, additional contents insurance is required.
Lenders need to know that they can recover the value loaned to you should be unable to pay your mortgage. Without buildings insurance, if damage occurred to your property and you were unable to afford to have it repaired, the value of your home would decrease. This would leave the lender out of pocket, as they would be unable to recover the amount they loaned you to buy it. This is why buildings insurance is a legal requirement, but it’s also a good insurance to have anyway since your home is likely to be your most valuable asset.
The most common reason people opt to get life insurance is to ensure that their family could continue to pay the mortgage in the event of their death. To lose a family member would be bad enough, but to be forced to leave the house you shared with them would be doubly devastating. Life insurance protects your dependents from this awful scenario by providing them with the means to pay the mortgage if the worst should happen.
Income protection insurance is another common form of cover which protects your income if you are unable to work. If you would struggle to pay your mortgage and/or bills in the event of losing your wage, income protection insurance is worth consideration. In the event that you are unable to work through illness or injury, it ensures that you still receive an income until you are well enough to return to work. This could be a lifesaver during what would already be an incredibly stressful time.
People sometimes think that their employer’s sick pay would be enough to survive on, but what if you were unable to work for a long period of time? Most sick pay is limited to a certain timeframe (the length of which should be highlighted in your contract), whereas income protection insurance can pay out for years, providing significantly more peace of mind.
At Key Mortgage Advice, we cover a whole lot more than just mortgages! In fact, we can advise you on all the mentioned insurances, and even help you to find the best deal from thousands of available products. If you’re unsure as to which insurances you need, or what type of cover is best for your circumstances, use the button below to arrange a free consultation and we’ll talk it through with you!
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To save time and make it easier for you to find out if we can help with what you're looking for, we thought we'd list our services in a handy little blog!
For our new followers, keep reading to find out how Key Mortgage Advice can help you with finding the best possible deal, whatever your needs and circumstances:
Whether you’re looking for your first or fifth property, we can help you get the right mortgage. Every lender has a unique set of policies and criteria, which must exactly match the circumstances of the borrower. Therefore, arranging a mortgage has never been more complex. Our wealth of experience and knowledge of the underwriting criteria for each individual lender allows us to successfully direct applications and complete on over 95% of all mortgage cases. We have access to the whole market of mortgage products, meaning we are truly independent and will help guide you to the most competitive and suitable mortgage product for your circumstances.
Many lenders now offer discounted interest rate deals for an introductory period – normally for two, three or five years. At the end of the introductory period, they’ll usually revert to a higher rate. However, that doesn’t mean you have to stick with the higher rate; like most things nowadays it is important to shop around to see if you can save some money. If you want to know more about how we can help you to save money on your monthly mortgage payments, or to swap to a better interest rate, then contact us and we’ll see if we can get you a better deal.
If you’re a homeowner, you may have seen the value in your home increase over time. Lifetime Mortgages allow you to tap into some of this value and release a cash sum. A lifetime mortgage is designed for people over the age of 55 and allows clients to either buy a new home or release money from their current property without the need to make any monthly repayments during the lifetime of the loan. This is because the loan and interest are rolled up and repaid by the sale of your property when the plan ends; this is normally when you die or move into long-term care.
In many cases, we can visit you in your own home or, if you prefer, we can provide a telephone consultation. If you wish to proceed with a recommendation, we offer full support with the mortgage application, legal forms and completion matters to ensure the process is as straightforward as possible. In addition, we will offer you our full support going forward, should you require any further advice.
Buy-to-let mortgages are specifically designed for investors who want to buy a property and rent it out. These are usually more expensive than normal mortgages, but they could help you to become a property investor. If you don’t own your own home outright, or with a mortgage, finding a buy-to-let mortgage may be difficult.
Most buy-to-let mortgages are interest-only, meaning that you won’t be paying off the mortgage itself and you’ll have to pay the outstanding capital at the end of the mortgage term. The other key differences from normal mortgages include:
However, any rental income you earn from a property can be offset for tax purposes against the interest only mortgage payment, so owning buy-to-let properties can be a tax-efficient investment product.
Since March 2016, buy-to-let mortgages have come under greater scrutiny. New affordability tests were implemented which mean that older home-owners may struggle to get a buy-to-let mortgage as lenders often require borrowers to repay the whole loan back before they retire.
Obtaining a commercial mortgage relies heavily on the attractiveness of the proposition to a lender. Therefore, the involvement of an experienced and well-connected advisor is hugely important. As independent specialists, we negotiate business mortgages with a range of lenders including major banks, commercial building societies, regional and local building societies, and specialist commercial asset lenders. The appropriate commercial lender is purposefully selected to meet your needs. Terms for business mortgages are not set in stone and our role in the transaction is to negotiate the best mortgage rate and terms. Our wealth of experience and market knowledge means we understand what is likely to be achieved given a specific set of circumstances. We are able to assist with transactions for purchasing premises to trade from or for investment opportunities for commercial landlords.
In addition to the services listed above, we can also assist and advise on a whole host of other products, including:
If you need expert advice on any of the above, click the button below and book a free consultation with one of our expert advisors:
You may have seen the term "mortgage prisoner" used in newspapers recently, to describe unfortunate homeowners who want to remortgage but do not meet the criteria to be accepted for a new loan.
Back in 2014 and 2016, changes were made to the way lenders assess mortgage affordability. Rather than being based on multiples of your income as it was previously, lenders now look at your income and your outgoings, assessing your ability to keep up repayments should interest rates go up or your personal circumstances change. This means that some people who took out a mortgage loan before the criteria changed, now find that they are not eligible for a new deal. They then get moved onto the lender’s standard variable rate (SVR) when their current deal ends, which is typically more expensive. Hundreds of people have found themselves in this position – paying more than they need to and sometimes struggling to keep up with the increased payments.
There are many reasons you might want to consider remortgaging. Maybe your existing deal is about to end, you might want to borrow more, or you might just want a better interest rate. However, you may find that it’s a struggle to find a new deal, for several possible reasons.
We’re a leading mortgage advice service in the north-west, with offices in Preston, Garstang and Southport. We’re a completely independent mortgage advisor and we have access to the whole of the mortgage market. Even better, in most cases, our advice is completely free!
So, whether you’ve found yourself to be a mortgage prisoner or you're just looking for a great deal, get in touch and we’ll help you!
Around one in three of all mortgage loans taken out are for the purpose of remortgaging – A remortgage being the acquisition of a second mortgage loan, often used to replace an existing mortgage or borrow money against the value of a property.
The most common reason for someone to consider remortgaging is that they could be saving money by switching to another mortgage provider. However, many people are still reluctant to shop around for a new mortgage, despite it often being their biggest financial commitment. That being said, there are certain circumstances which regularly prompt people into action:
If you took out a fixed-rate mortgage when you purchased your property, the end of your initial term is the perfect time to consider remortgaging. The initial term will end after 2, 3, or 5 years, depending on the deal you agreed with your lender. Once it has ended, you will be switched to your lender’s standard variable rate (SVR) which could see you paying a higher rate than you were before. If this is the case, it’s worth shopping around to find a cheaper deal.
You might be considering a remortgage because you’ve seen better rates advertised. It’s important to bear in mind that some mortgages have early repayment charges (sometimes called exit or admin fees), which may well offset any savings you’ll make by switching. Remember to take any additional charges/fees into account when calculating savings, and to contact your lender if you’re unsure as to whether you’ll be charged.
This should be possible without the need to remortgage. In most cases, your lender should be happy to arrange this for you if you contact them. Problems would only arise if you wanted to switch to an interest-only payment plan after agreeing terms for a repayment mortgage; in that scenario, your lender would likely be less accommodating. Either way, remortgaging is an option if your lender is unable to offer you the deal you’re looking for.
Sometimes, circumstances change and we find ourselves in a better position then we might have expected. If you’ve received a promotion or found a better-paying job, it makes sense that you might want to pay off your loan a little faster. However, not all lenders allow this. If this has happened to you, you may well be considering a move to a more flexible mortgage. Take into account any early repayment charges or exit fees on your current deal, and if it still seems viable, a remortgage could be the solution.
The Bank of England increased the base rate in November 2017, meaning those with tracker mortgages and those on SVR deals saw their rate rise by at least 0.25%. With talk of further increases to the base rate in the future, anyone wanting to avoid them might see this as a good time to find a fixed-rate deal. Remortgaging purely to avoid a speculated rate increase is somewhat of a gamble, it is recommended to speak with an independent financial advisor.
If you want to borrow more money but your current lender has denied your application (or offered terms you find unacceptable), remortgaging could be a good way to borrow more at a better rate. However, don’t forget to take into account those early repayment charges/exit fees. The new lender will want to know why you’re looking to borrow more, with home improvements and debt consolidation being the most common acceptable reasons. Be prepared to be asked for proof in the form of workman’s receipts or loan statements if you’re asking for a large sum.
If any of the above applies to you, or you’re unsure of whether you’d save money by remortgaging, contact us via the button below and we’ll talk you through it! We have access to the whole of the mortgage market and are positive that we can find you the best possible deal!
Many people start to think about getting a mortgage as they approach retirement, perhaps to downsize from their current property, possibly as an investment. Often, they get put off because they assume it will be a lot of hassle. However, that couldn’t be further from the truth.
It’s actually relatively easy to acquire a mortgage loan, right up to the age of 80. So, to answer our title question, “Can I get a mortgage if I’m retired?” – Yes, you absolutely can!
There’s no hard-and-fast age limit for getting a mortgage loan. The maximum age of applicants varies from lender to lender, but most tend to have an upper limit of 60 to 80. This means that you can potentially acquire a new mortgage loan as long as you will be 80 years old or younger when the policy is due to begin.
Most lenders also set a maximum age limit for the end of the loan period, too. So, although you can get a loan up until you’re 80, you’ll have less time to repay it if you wait until that age. Most lenders set the maximum age upon settlement between 70 and 85.
If you’re already retired, you should know how much you get per month from your pension. This will be taken into account along with any income from other investments you’ve made, such as property or shares.
If you’re still working but plan to retire before the end of the mortgage, you’ll need to contact your pension provider. They should be able to give you information on your retirement date and the expected income from your pension – Your potential lender will then make a decision based on this information.
There are plenty of different mortgage options available to retirees. There are many fixed-rate loans on offer, as well as mortgages which track the base rate. In addition, there are often cashback, offset, stepped, and discounted mortgages available at any given time. It will depend on market conditions when you apply, but you won’t be short of choice!
By searching for “retirement mortgages” online, you will be able to find some available deals from reputable lenders. However, we recommend speaking with an independent advisor who will have access to the whole market and may be able to find you a better deal. Key Mortgage Advice offer free consultations, where we’d be happy to discuss your circumstances and options, with no obligation.
To book an appointment with one of our independent advisors in Southport, Preston, or Garstang, simply click the button below and send us a message, and we'll be in touch as soon as possible!
Finding a mortgage deal when you’re self-employed can be tricky. As many as 71% of self-employed people said they felt discriminated against due to their employment status when applying for a mortgage, according to a recent survey.
Traditionally, mortgage lenders would require you to have been trading for at least three years before you could be considered for a loan. This is because it is more difficult to establish a person’s income without this information, and consequently harder to assess the level of risk involved in lending to them. However, it’s now entirely possible to find a mortgage deal, even if you’ve been self-employed for only a short period of time:
It used to be that only a select few lenders would offer loans to self-employed buyers, however, more and more lending organisations are now considering them. These range from well-known high street lenders to smaller, more niche companies. The lenders likely to accept your mortgage application will vary depending on your personal circumstances.
Many mortgage lenders will consider applicants with as little as one year’s accounts, provided that they have completed and filed a tax return for their first year’s business. However, if you’re still in your first year of trading, it may still be a good idea to apply; decisions on mortgage applications can take up to three months to complete, so applying early is an option. If you apply before the end of your first year, lenders will use your projected income to determine how much they are willing to lend you. Whilst not wholly accurate, this will give you a good idea of the amount you’re likely to be able to spend on a property.
Self-employed buyers can borrow roughly the same amount as those who are employed. This is usually around five times your annual income. There are some lenders who may be willing to increase the maximum amount available to you, but this will be dependent upon your personal circumstances and proven affordability.
Provided that the property you’re looking at is deemed to be affordable to you by the lender, you should still be able to secure a mortgage offer, even with a poor credit rating. However, you will almost certainly need a healthy deposit to put down (usually around 15%). The only issue will be if you have CCJs or mortgage arrears within the last two years, as this will severely hinder your ability to acquire funding.
If you're self-employed and looking to secure a mortgage, we can help you find the best deals. Key Mortgage Advice have access to the whole of the mortgage market, so whatever your circumstances, your best offer is here with us! Book a free, no-obligation consultation today:
