Agreements in Principle

Posted on April 18th, 2019

First time buyers (FTBs) are typically asked by estate agents to provide an Agreement in Principle (AIP) before viewing properties. However many FTBs are unaware of the implications of a hard or soft check towards a customer’s credit score.

Most first time buyers will want ‘peace of mind’ and soft credit checks are typically preferred due to not leaving hard footprints on credit files which can impact on credit scores. High street lenders that already conduct soft credit checks at the AIP stage include HSBC, Barclays, Halifax, Santander and TSB. All of them use hard credit checks at application stage.

Due to individual circumstances and lenders criteria in some instances a hard search maybe necessary ie with Coventry, NatWest or Virgin.

Multiple hard searches can impact on your credit rating so it is always advised to speak to an adviser who can search the market and advise you correctly.

The adviser will need to assess the client’s overall circumstances, including income details, employment status, and expenditure such as loans, credit cards and child care commitments to be able to assess affordability.

Each lender has individual affordability calculators and your adviser will know where best to fit you. Credit history will also influence which lenders are suitable as a low score may limit lenders. Further impartial information on credit history can be found at https://www.moneyadviceservice.org.uk/en/articles/how-to-improve-your-credit-rating.

Mortgage deals may not be available and lending is subject to individual circumstances.

Lenders that offer Agreement in Principle certificates alongside a soft check are normally advisable and can put First time Buyers in better buying positions with the estate agent.

A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.


Buying with friends

Posted on April 2nd, 2018

With the average first time buyer now in their 30s it’s not surprising that some buyers decide to team up with a friend of relative to get on the property ladder. Raising a deposit as a pair or a group is much easier than doing it on your own, as too is managing mortgage repayments.

If you’re thinking of buying a property with a friend here are some things you need to know.

How many people can join forces to buy?

Legally a property can have four joint owners.

What type of joint ownership are there?

There are essentially two types of join ownership. Joint tenancies are usually used by married couples or people in relationship. Tenancies in common on the other hand tend to be used when friends or relatives buy together.

What’s the difference?

A joint tenancy means, as suggested, nobody owns a share of the property but rather it is owned as a whole jointly. This means if one of the owners were to die, the property would belong to the surviving owner.

A tenancy in common sees the property divided up into shares and not all shares have to be equal. If a tenant in common died their share of the property would pass to whoever they had left it to in their will.

How will the mortgage work?

While up to four people can buy a property together, the lender may only consider the two highest incomes when assessing how much you can borrow.

Despite this, all of the owners will likely be classed ‘jointly and severally’ liable. What this means is should one of the group stop paying their part of the mortgage, the rest of the group will have to cover the shortfall.

As such it’s always a good idea to have a ‘contract’ or agreement drawn up which details what happens should someone stop paying or want to move out of the property. This agreement should cover things like how the property is sold and whether the rest of the group should be given the chance to buy out the person who wants to leave.

A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage.


How to improve your credit rating

Posted on March 15th, 2018

When you apply for a mortgage, the lender will want to make sure you’re able to afford the repayments and can manage your finances well. One of the things they’ll look at will be your credit score. You can check your credit score for free via sites like Experian. If yours isn’t as good as it could be there are some easy steps you can take to improve it.

One: Check it’s correct

It sounds simple but checking your credit report is accurate could help to improve your score. Simple mistakes such as an incorrect address or listing accounts as open that you have closed could be having a significant impact.

Two: Be careful of hard searches

When you apply for credit, the lender or provider will perform a search of your credit report. This is known as a hard search. If you apply for lots of loans or credit cards over a short period of time, your mortgage lender will see this on your report, and it may set off alarm bells.

Three: Register to vote

Yes, registering to vote at your current address can add points to your credit score. If you’re not registered to vote, do it now!

Four: Add an explanation

If you have a valid reason why your finances took a turn for the worse at some point in your past you can include a note on this, called a notice of correction, in your report. If you were ill for a period, for example, and fell into the red, you can explain this.

Five: Don’t miss payments

It’s the simplest advice but also the most important. When you apply for a mortgage, the lender wants to know you can manage the repayments. If you’ve missed lots of loan or credit card repayments in the past, it won’t look very good. Do your best to make your repayments on time and within the calendar month. Another tip set your direct debits to first of the month and not last day of the month.

If you need Mortgage advice, please call us and book in for an appointment in our Manchester Piccadilly office.

We Know Mortgages Ltd do not provide a Credit Repair service, the information provided is for general use only and so for further guidance we recommend you read the more exhaustive information provided by The Money Advice Service.

A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage.


Should I use an estate agent’s broker?

Posted on February 7th, 2018

Getting a mortgage is probably the biggest financial commitment you’re ever likely to make so it’s understandable that you want to get it right. The best way to do this is to seek the advice of a professional who will be able to guide you through the products on offer and find the correct one for your circumstances.

If you opt to take out a mortgage without the advice of a broker – say, for instance, you choose to go direct to a lender – you won’t be able to compare all of the products available to you and while you might get the best product on offer from that lender it won’t necessarily be the best on offer in the market as a whole.

Comparison sites, meanwhile, will present you with a list of options but the site can’t come up with a bespoke solution based on your situation.

Those people who do use mortgage brokers tend to find them themselves – we’ve all got pretty good online presences as well as high street branches like our office in Piccadilly. However, some will be encouraged, by the estate agent selling the property they want to buy, to use an in house broker – in other words a broker who works within the estate agent branch.

There are pros and cons to doing this. It’s certainly efficient if your broker is based in the same place as the agent selling your dream home.

However there are some downsides too. The estate agent may not be whole of market which means they can only source mortgages from a select panel of lenders. Furthermore, giving all of your financial information to a broker based within an estate agent can cause something of a conflict of interest. The estate agent works for the seller whereas the broker should work for you, the buyer. You could lose your bargaining power if the agent is fully aware of your financial position.

Getting professional advice when taking out a mortgage is always a better option than going it alone but make sure you choose a broker who can offer the very best service and the very best products.

Call us today to find out how we can help you.

A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage.


Stamp Duty cut already helping FTBs

Posted on January 23rd, 2018

It’s been less than two months since chancellor Philip Hammond announced Stamp Duty was to be scrapped for first time buyers of properties up to £300,000 yet the initiative is already having a considerable impact, according to the government.

A statement released by Downing Street revealed over 16,000 first time buyers have already saved thousands of pounds since the changes took effect in November, with over a million first time buyers set to benefit in total over the next five years.

Of course, Stamp Duty isn’t the only cost first time buyers need to consider when getting on the property ladder. Aside from the actual cost of the house (which I’m sure you’ve already considered!) buyers will also find themselves faced with conveyancing (or legal) fees to the tune of £800 to £1500.

You’ll also need to pay out for surveys and valuations – not just to secure the mortgage but also to let you know of any problems in the house that might impact the price of it or that you may want to owner to address before the sale goes through. Depending on what type of survey you have this could cost anything from a couple of hundred pounds to over £1000.

Add to that the removals costs if you’ve furniture to move and the potential cost of decorating the new house and it’s clear to see why moving house can be an expensive business.

Luckily though, there are experts on hand to make sure your mortgage doesn’t cost the earth. Come visit us today or give us a call to find out how we can get the best mortgage deal for you.

A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage.


Is now the time to fix?

Posted on December 20th, 2017

It’s one of the most difficult decisions to make when taking out a mortgage – should you fix or not? There are of course benefits to both. Fixing your mortgage rate gives you the security of knowing what you’re paying each month, making it easier to budget and plan ahead. Meanwhile opting for a variable rate often means you’ll get a better rate – albeit with the risk that it might change.

Over the last few years borrowers opting for variable rates have certainly benefited from doing so. Rates have been at a record low for a decade. Indeed, last month saw the first interest rise since 2007. That’s mean those borrowers whose mortgage rates track the Bank of England base rate have seen their mortgage repayments fall.

That being said of course the record low interest rate environment has meant even fixes have hit rock bottom levels.

But with rates not on the rise – albeit slowly – is now the time to fix for a longer period?

While some economists are predicting we’ll have several more rate rises in 2018 the Bank of England has made it clear it’s not in a hurry to raise rates again. The general consensus is we shouldn’t see another rise until perhaps next August or September and any rise will again be modest.

Despite this fixes are certainly becoming more popular. According to Paragon Mortgages almost 90% of all mortgages cases are fixed rate products and the amount of five year products reached an all-time high, at 39% of all mortgages written.

If you’re looking for security and stability now could be a good time to tie in to a good deal.

Call into see us at We Know Mortgages to see how we can help you find the perfect mortgage for you.

A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage.


What the Stamp Duty changes mean for you?

Posted on December 6th, 2017

Last month chancellor Philip Hammond announced during his Budget speech that Stamp Duty would be scrapped for first time buyers purchasing a property up to £300,000. Furthermore, first timers looking to buy in more expensive areas will pay no duty on the first £300,000 of properties up to the value of £500,000.

This is big news for first time buyers, many of whom often cite Stamp Duty as a hurdle in their plans to get onto the property ladder. Buying a property is an expensive business and having to come up with a few extra thousand pounds is often a step too far for many buyers.

Before these announcement buyers purchasing a property up to £300,000 would pay £5,000. That’s a fair chunk of change to save!

Following Mr Hammond’s announcement we’ve seen lenders quick to react. Indeed, one high street lender recently made a return to the 95% LTV market. Its clear lenders are expecting the number of first time buyer borrowers to surge and are aiming to cater for them.

If you’re looking to get onto the property ladder and you’re not sure what options are available to you or how much you can borrow come and speak to us today.

A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage.


Stamp Duty Hopes

Posted on November 20th, 2017

With just days to go until Chancellor Philip Hammond unveils his Budget speculation is mounting that a Stamp Duty holiday may be on the cards. The Chancellor is under pressure to cut the tax for first time buyers in order to help more borrowers get on the property ladder. And several recent studies have shown just how much of an obstacle Stamp Duty actually is.

A report by the Centre for Economics and Business Research revealed Stamp Duty is preventing a staggering number of house purchases a year.  The study claimed an extra 146,000 sales could have taken place over the past five years had buyers not been deterred by the tax.

Meanwhile a study by the specialist bank Aldermore found one in five people who have bought a house within the last three years would be willing to buy again if Stamp Duty was cut. House movers are essential for the success of the housing market because, as people move up the property ladder, they free up more first time buyer friendly homes for new buyers. If Stamp Duty is making people stay put this will be having a huge impact on the market.

All eyes are on you Mr Hammond. We watch with baited breath!

A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage.


What’s happening with larger landlords?

Posted on November 16th, 2017

There have been plenty of changes in the buy to let world over the last few years and for landlords the market is now very different to what it once was. Perhaps the biggest change to the sector came in last year when the roll out of a new system for tax relief came into effect which essentially limited the amount of relief a landlord could claim on the money paid as interest on their mortgage. That, coupled with the 3% surcharge in Stamp Duty on investment properties and second homes hit the sector hard, financially. But the latest round of regulation in the sector could cause problems in other areas – namely time.

The property investment world moves quickly and as such landlords often need fast decisions on finance applications. However, the latest rules to come into play from the Prudential Regulation Authority (PRA) have meant the application process for landlords with large portfolios can be quite cumbersome.

Under the new rules lenders must obtain the financial details of every property in a landlord’s portfolio when he or she applies for a new mortgages and doing so can take some time.

If you’re a landlord and you’re looking to increase your portfolio or remortgage your current properties call in and see us at We Know Mortgages and we’ll help you navigate the changes with as little disruption as possible.

A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage.

Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from taxation, are subject to change.

The Financial Conduct Authority does not regulate most forms of buy to let mortgage.


Interest rates rise

Posted on November 7th, 2017

For the first time in 10 years, the Bank of England base rate has risen and, understandably, consumers are feeling a little concerned. So what does it mean for you?

Well, that all depends on what type of mortgage you have.
If you have a fixed rate mortgage you won’t see any change. As the name suggests fixed rate mortgages are set at a certain rate for a fixed period of time and are therefore unaffected by the rate rise. Once that term expires however you’ll revert to your lender’s Standard Variable Rate (SVR).

SVRs and tracker rate mortgages are affected by the Bank of England base rate. When the base rate rises so too do mortgage rates and when it falls mortgage rates fall too. The rate rise means anyone on their lender’s SVR or tracker mortgage could see their mortgage repayments increase. You may have already been contacted by your bank to let you know of any changes.

Despite the rise there are still some very attractive mortgage rates on offer so if you’re concerned about your mortgage now would be a great time to contact an experienced broker, like the team at We Know Mortgages, to find out if you could be on a better deal.

A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.