Most people can attain a mortgage, there are varying factors that may prove a problem such as age, credit history/score, income, required deposit, address history, interest only. Give us a call if you think you have an issue, we can usually find a solution.
Yes, lenders are usually quite happy to lend more than your current mortgage if it's for home improvements. You do still need to meet the criteria; you cannot borrow more than your house is worth and they will work off the current valuation not the expected valuation after the work has been completed.
1) Affordability & Initial Investment 2) Decision In Principle (DIP) 3) Make an offer on a property 4) Choose a Conveyancer / Solicitor 5) Apply for a Mortgage & Insurance 6) Conveyancing, Valuation/Survey & Searches 7) Exchange Contracts & Start Insurance 8) Complete & Move in
Most lenders want residential mortgages to be repaid before the applicants retire or reach 70. Some will go beyond this if the circumstances are reasonable. Where retirement income is received at application the term can be much longer.
There are 3 main types of valuation/survey when you are buying a home, Mortgage/Basic Valuation, a Homebuyers Report and a Building Survey. The Mortgage/Basic Valuation is the minimum required for a mortgage and is arranged by the lender; many lenders will provide these free of charge but will often not provide any information to the applicant which can be a problem if issues are picked up as it can be difficult to prove. With this type of valuation, it may be carried out as a computer-based decision known as an AVM (automated valuation model). They may also arrange a desktop valuation which is where a surveyor uses a computer to complete the valuation, with these two types the property is not physical viewed so issues may be missed. They may also arrange a drive-by valuation which is where a surveyor simply drives past the property to assess from the outside, this too may miss issues that may be within the property. Lastly there is a physical valuation where the surveyor may not spend much time in the property. With these the contract is between the surveyor and the bank, not the applicant. Even if the applicant has paid for the work. If a report is provided it may be 2-3 pages of information, much of which would already be available online on websites such as Rightmove or Zoopla. The Homebuyers Report is always a physical inspection, the surveyor will spend some time in the property looking for faults and potential issues, these reports are typically 20-30 pages. With this type of report the contract is between the buyer and the surveyor. Some lenders will allow the buyer to upgrade from a basic valuation to a Homebuyers Report. In this event the basic is still completed for the bank but they are not provided a copy of the Homebuyers Report, only the applicant will automatically receive a copy. The Building Survey is far more in-depth and far more costly than the previous two. Many lenders do not get involved with these. It is the most in-depth of the three and is typically arranged for very old properties, those that have been extensively extended and developed, listed buildings or those that are of non-standard construction. The price is typically associated with the size, age and cost of the property.
Generally, yes, undischarged bankrupts cannot, but for most other circumstances there is often a lender that will consider the application if you have sufficient deposit. Most will want a certain period of time between the issues ending and the application, typically 2-3 years. Some lenders will consider applications with issues within that time frame but they usually need to be minor or a notable lifetime event beyond your control. If you don't meet that criteria then there are specialists who may still consider the application but they are usually very expensive, it is often more suitable to clear the adverse credit and wait for the issues to become less of a factor.
This is debatable, whilst technically you do not need a decision in principle to look at houses, estate agents like to know you are able to attain the funds to buy the house otherwise the viewing could be a waste of time.
Interest only mortgages do exist, they're readily available for buy to let properties but are typically difficult to attain for residential properties. Most lenders need both a cast iron repayment strategy and a significant wage at application as their standard criteria.
Yes, in isolation ill health should not stop you attaining a mortgage. To use earned income banks may want to see evidence you have returned to work, usually by means of a latest payslip. If you have not been able to keep up with your financial commitments your credit history may show adverse credit which could be a factor.
Offset mortgages are where a savings account balance is used to offset (reduce) the interest payable on a mortgage balance. For example, with a mortgage balance of £100,000 and a savings account balance of £75,000 the mortgage would only charge interest on the £25,000 difference.
When you remortgage the existing lender will continue to take payment until they have been able to update their systems that the account has been settled. They should then credit you any monies owed back to you within 10 days of the mortgage being redeemed. The new lender will then write to you before the new payment is taken confirming the date and amount of the first payment. As with a purchase the first payment can be higher depending on the period of time you are being charged for.
Guarantor mortgages are available but in a different format that isn't as straight forward, Joint Borrower Sole Proprietor mortgages are the new way for somebody to help support a mortgage. With these types of mortgages, a person can add an additional person(s) to their mortgage to help with affordability. There are complications and risks with this type of mortgage and independent legal advice may be needed for the 'helper'. A benefit to this type of mortgage over simply going on the mortgage is that it can be used to avoid the higher rate of stamp duty as they are not on the deeds of the property. We can help you through each stage of the application.
There are too many variables to cover here in simple terms. For solicitors a standard purchase will cost around £1,000-£1,200, a standard sale is around £700-£800. Additional fees will apply for leasehold properties and other elements, these should be queried before instruction to avoid shock and unexpected additional costs. An estate agent will typically cost a minimum of £1,500 up to 1.5% of the sale price plus VAT whichever is higher. Before instructing an estate agent you may want to clarify in writing (or in the contract) what work they are going to do, some agents do not complete all of the standard tasks which can prove a nightmare. If the fee is less than £1,500 you may want to check the small print for hidden fees and clauses. When we arrange a mortgage there may be no or only minor fees. Some lenders will arrange the standard valuation for free, we do not charge for arranging the mortgage and a lot of mortgage deals do not have product or booking fees. With all of the above if you are selling and buying you could be looking at a minimum combined cost in excess of £3,500.
The first payment can be higher depending on when you complete and when you make your first payment. If you complete in the middle of the month you may find your first payment is to cover 6 weeks, therefore the payment will be prorated accordingly by the bank. They will confirm in writing before the payment is taken, when and how much the first payment will be.
Adding or removing somebody from a mortgage is called a 'transfer of equity', whereby someone is added or removed from the deeds.
We can assist with arranging mortgages to buy or remortgage properties to rent them out. You should speak to an accountant beforehand so you are aware of any tax liability, advantages and disadvantages that may apply. Higher levels of stamp duty may apply when buying them and there is also the possibility of buying them in a limited company which can have tax advantages. If you want to buy a property but can't or don't want to sell, you can remortgage your own residential house onto a rental basis and borrow more money for the deposit of a purchase, this is called a Let to Buy.
These stand for 'Decision in Principle', 'Agreement in Principle' and 'Mortgage in Principle'. They are all one in the same just with different names. It is effectively a theoretical agreement to lend money to the people named on it. As the application has not been underwritten, documentation assessed and the property not valued, they aren't worth a lot but it does give an indication of the holder's ability to attain a mortgage at the figure stated.
A house purchase will typically take 8-12 weeks from start to finish in normal circumstances, from our experience where online estate agents are involved these usually take around 4-6 months even if there is no chain.
You will if you need a mortgage to buy it, the banks will not entertain issuing a mortgage without a solicitor they have on their panel making sure everything is done properly. This applies to every type of mortgage transaction whether it be a purchase, remortgage or a buy to let. This process is known as conveyancing, a conveyancer is a specialist who handles the legal aspects of buying and selling a property. Product transfers with the same lender do not require a solicitor.
Yes, whether as a buy to let or as a second home for yourself or a family member this a possibility. You will be liable for a higher rate of stamp duty if you are buying subsequent homes which is a factor to consider when looking to buy additional properties.
Help to Buy is a Government Scheme for first time buyers to help them buy new build properties. In simple terms the buyer must put down a minimum of 5% deposit and the government provides an equity loan of up to 20%. It's interest free for 5 years, after that you start paying interest on the loan. Before you buy with Help to Buy you should consider how you are going to pay it back, people often don't have an exit strategy and end up selling. It is possible to remortgage to encompass the loan into your main mortgage but you will have the meet the minimum equity and affordability requirements, quite often people look to use Help to Buy because they cannot afford the property without it, in which case this may not be the best option for you. Contact us for more information.
In simple terms, we collate your information and documentation, assess affordability and criteria. We then make a recommendation and look to apply for the products.
This isn't a straight forward answer as your credit score is made up of a multitude of variable factors. A good way to start is to sign up to a credit reference agency or a third-party app like Credit Karma or Clearscore. All accounts should be at the correct address, your name should be spelt correctly on every account, make sure you do not miss payments; setting up a direct debit is a good way to avoid this. Having credit is good for your credit score, if you haven't had credit you don't have a record of managing it. Avoid using a high percentage of your credit limit, this reduces your score. Make sure you are on the electoral roll, even if you don't want to vote.
Right to Buy is where a tenant buys their council house, right to acquire is where a tenant buys their housing association house. A discount is provided which can be used as the deposit.
Debt consolidation is generally frowned upon in the industry as there are many issues surrounding it, such as making unsecured debt (e.g. credit cards) secured (against your home) which can increase your chances of being repossessed. As your mortgage will typically last a lot longer than a credit card or loan would and it could cost you more in the long term to add it to your mortgage. There may be more cost-effective methods available, even interest free arrangements that may be a more suitable option. If it is for a credit card you may want to consider a balance transfer.
Like all brokers we are paid a procuration fee by the lender for arranging your mortgage which is why we don't need to charge our clients.
A bank will only be able to offer you their core deals, a broker will usually have access to multiple lenders. Here at Financial Options we are whole of market so we can arrange a mortgage from the whole of the market place. Some lenders even offer us more competitive exclusive deals that aren't available in their own branch. You may also find it easier to get hold of ourselves than a bank advisor.
People often think it is difficult to attain a mortgage when self-employed, this is a misconception. Most banks want 2 years trading, others more. Some lenders will allow an applicant to proceed with only 1-year trading. The banks typically work off an average of the last 2 years of the salary and dividends. Some will take the latest years; some will use the share of the net profit. There are different ways to approach a lender when proving self-employed income, full accounts, accountants' certificates, tax calculations (SA302's) and tax year overviews are the typical approach. Those with CIS payslips can apply simply using their payslips and contractors may be able to apply using a copy of their contract.
Most lenders want the applicants to have 3 years address history in the UK, some lenders will allow you to proceed with less.
People who do not hold British citizenship can still get a mortgage; lenders will typically want to see a visa with a minimum amount of time left. For EEA Nationals some lenders will require settled or presettled status and will need to obtain a "share code".
Some lenders will allow for incomes paid in foreign currency, mainly the stronger currencies such as Dollars, Euro's and UAE Dirham.
Decreasing insurance is a policy where the cover amount reduces over time in line with a repayment mortgage, this keeps the premium down. Level term assurance is a block of cover that will pay out the same amount irrespective of the date, this is ideal for a lump sum protection for family or an interest only mortgage.
People often don't know the difference between the illustration, decision in principle and mortgage offer. The illustration is merely a quote and does not mean anything has been assessed in regarding to affordability or criteria, for example it would be relatively easy to attain an illustration to borrow £1,000,000 but it doesn't mean it's achievable. A decision in principle is an indication that a lender will issue a mortgage to the person(s) based on the information input, it has not been underwritten or documents assessed. For further information see section 'What is a DIP/AIP/MIP?'. The Mortgage Offer is the final mortgage document, it means the application has been fully submitted, documentation assessed, valuation completed and it has all been given the green light. There can be special conditions attached to an offer, such as debts to be repaid, or structural works completed. When the offer is issued a copy is sent to the advisor, applicant and solicitor/conveyancer.
Terminal illness is typically free with life insurance, it typically pays out when somebody is given less than 12 months to live. Critical illness is either a separate or add on policy which typically pays out on diagnosis of a specified condition such as cancer, heart attack or stroke.
A deposit is nearly always needed when buying a house, there are very few circumstances where they aren't. On a remortgage the equity in the property acts as the deposit. Evidence of the deposit is important for meeting money laundering regulations and must be provided as it is a legal requirement. The estate agents, solicitors and ourselves will need this on our files.
Shared ownership properties are where part of the property is owned by someone else, typically a housing association. Whilst the rules differ between housing associations, owners can generally buy more of the property this is called 'staircasing'. Some allow you to buy all of it, others cap the amount you can buy. Rent is charged on the remaining share of the property by the housing association. As you buy more of the property the rent charged is reduced. We will need to know what percentage staircasing is available before submitting the application as many lenders do not accept shared ownership properties when the staircasing is capped. Some may consider them if there is a 'mortgagee in possessor clause', this is where a lender who has had to repossess may be able to buy the whole property to sell it like a normal sale to avoid the complications of the shared ownership element.
Stamp Duty is a tax paid by the buyer on completion of the purchase of a property, it is not paid by the vendor on the sale. Contact us for more information or try the following websites. https://www.gov.uk/stamp-duty-land-tax https://www.stampdutycalculator.org.uk/
Whilst solar panels can reduce your bills, some people do not like them and having them installed can make a property less desirable to some. If there is a lease on them there can also be legal complications with buying, selling and remortgaging them. The solicitor/conveyancer will need to check the lease and check with the lender if they will accept it. It's worth finding out early on if there is a lease on the panels and if so, who it's with.
The two main ways of owning property are freehold and leasehold. Freehold is generally the preferred option as it means you own the property and the land it stands on. With leasehold properties it means you have a lease from the freeholder for a number of years. From new they are usually between 99-999 years, as the remaining lease gets shorter it may become difficult to sell or mortgage. You can extend the lease but this can be expensive, if you're buying a leasehold property with a short lease it might be worth trying to get the vendor to extend the lease before you take ownership. Once the lease runs out, ownership reverts to the freeholder. There is usually a management company that looks after the property which can include some services, maintenance and buildings insurance. This is usually either an independent company or a company owned by the leaseholders. With a leasehold property there is usually ground rent and service charges to pay, these can be notably different between properties but the services included can vary significantly. For example, some may include heating, electric, cleaners, window cleaning, gardening, CCTV or a security guard. Some may have a lift and the service charge pays for the running costs and maintenance.
A warranty is typically required for the mortgage when you buy a new build property or a recently converted property e.g. a barn conversion. The most common is the NHBC but there are other versions too, including an architect's certificate. Whilst the NHBC is generally accepted by all lenders, the other versions might not be. Such warranties are often overlooked when properties are being converted which can make them very hard to mortgage. The warranties typically last 6-10 years, for some lenders they might only need something in place for the initial 2 years from the first occupation since it has been built or converted, others may require something for the first 10 years. If there is no warranty, its expired or is not accepted by the lender you may be limited to the options to buy the property.
The APRC or Annual Percentage Rate Charge is a percentage cost of the whole deal, based on the initial product, then the standard variable rate for the remaining term and fees included. It does however assume that you go onto the standard variable rate for the rest of the term and that it never changes. On a short-term loan or mortgage it's more relevant over a long term e.g. 35 years it's not a realistic expectation that the variable rate will never change.
The total amount payable, like the APRC assumes you take the deal, go onto the variable rate after the initial deal ends and that the variable rate never changes. It also assumes you never make a change or make overpayments. So whilst on some level it is important, it is important to recognise that it may not be a true indication of the total you are going to pay.
The early repayment charge is a charge by the lender for paying off the mortgage at a rate faster than was agreed with the lender. Most deals allow overpayments of up to 10% of the balance each year, overpayments on top of this may incur a charge. The early repayment charges are typically a percentage amount, they are typically more expensive the longer the rate is tied in. There are deals that have no early repayment charges, standard variable rate mortgages typically don't have early repayment charges. It differs from lender to lender but if this is something you require; we can assist in arranging this kind of mortgage.
LTV or Loan to Value is the basis the lenders tend to work off to determine the rates available for the application. A 90% loan to value means a 10% deposit. The deals typically work in 5% intervals so as the loan to value brackets drop you should find the rates will drop in turn.
Financial Options (Selby) Ltd
24, Finkle Street, Selby, North Yorkshire, YO8 4DS
