In 2014 and 2016 new mortgage lending rules were put into place to ensure that lenders assess a borrower’s affordability before they were offered a mortgage. Beforehand, your borrowing was based on your earnings but it’s now based on what you’ve got coming in verses your monthly expenditure. Lenders will also be looking at what costs you will have in the future, and if you could cope if interest rates went up or your income went down.

For those who took out mortgages some time ago and want to move onto a new deal could find themselves unable to meet the lending criteria today. This means that they could be forced onto the lender’s Standard Variable Rate (SVR), which is invariably higher than a fixed or tracker rate deal. As a result, those who are on the lender’s SVR deal are unable to move to a new one, which means they are paying more than they need to.

In addition, some people have found that their personal circumstances have changed, for example they may have a larger family and increased childcare and living costs.

Alternatively, you could be self-employed which can make it more difficult to obtain a mortgage as will be asked for firm evidence of past, present and future earnings.

Finally, it could be something as simple as your age! Traditionally mortgage lending went up to around age 65, but nowadays many people need to borrow much later  – even into retirement, which carries more risk for lenders in terms of income, and a 25-year mortgage may be harder to come by.

How can you change the situation?

There are several ways you could get out of being a mortgage prisoner. First, if you have a good credit score and payment history with no late or missed payments your lender will see that you are a reliable borrower. This can really work in your favour when it comes to remortgaging, so it’s essential to keep your credit score healthy.

 Second, try and look at how you can reduce your outgoings. For example, do you need to pay a gym membership? How much do you spend on luxuries that you can cut back on? By cutting back and building up savings for a few months you can protect yourself against any monthly increases and appear to be less risk.

Talk to an independent mortgage broker who can look at your circumstances and look at the whole of the market to find the right deal for you, and assess whether or not you are likely to be offered a mortgage. They can also advise on what to do going forward in preparation for applying for a mortgage further down the line. 

Speak to one of our independent mortgage advisors for impartial help and advice, as well as access to the widest selection of competitive mortgage deals in the UK.

The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.

The post Are You Trapped in Your Mortgage? appeared first on The Mortgage Hub.

By using a mortgage broker, you will have a qualified expert looking at the whole of the market and comparing the different deals that are available. They will not only compare the interest rates on offer, but will assess any arrangement fees and find a deal that works for your individual circumstances. Given that they have relationships with the various banks and building societies, they can not only give you an idea of whether your application will be approved, but will also ensure that your mortgage application is processed smoothly and efficiently.

Here, we take a look at the main advantages of using a mortgage broker:

Protection

When you receive mortgage advice, your mortgage broker has a duty of care to you. They have to recommend a suitable mortgage and be able to justify why the particular mortgage they have chosen is right for you.

If you go directly to a high street mortgage lender without independent legal advice and end up with a mortgage that becomes unaffordable, there may not be the same level of  legal recourse. However, it’s worth noting that under the rules of the Mortgage Market Review, it’s the lender’s responsibility to ensure. Nevertheless, a mortgage broker can still offer a valuable layer of protection.

Qualified, expert advice

When it comes to choosing the right mortgage, there’s a lot to consider. It’s not just a case of finding the cheapest fixed or tracker rate. A mortgage broker must be qualified to be able to give you mortgage advice, whereas you may not get the same level of knowledge by going direct to a lender.

A broker is working for you, not the bank

An independent mortgage broker will look for the best mortgage for you – they aren’t working for the lender, and so will give you sound advice on far more products that are available to you. You’ll receive unbiased advice and can choose from a range of lenders and subsequent products, rather than being restricted to the single range from one lender. A broker will also be aware of little-known lenders that you may not know about when searching for the best deal yourself.

They know the industry

Mortgage criteria has tightened over the last few years, with the Mortgage Market Review being the latest, and arguably widest-ranging, development. It is designed to ensure borrowers can prove that they can afford the repayments, even in the event of a rate rise, and these extra checks have lengthened application times.

That’s why it’s important to know what’s happening with your application and to have someone who can understand all aspects and break it down for you. A broker deals with lenders on a day-to-day basis, so they know what the application process is like for each lender and can tell you which one will process your application with minimal delays.

It’s worth remembering that because a mortgage broker can put a lot of business to a particular lender, they can go some way to exert influence and chase things in a way you just can’t do by yourself, and this can be invaluable should things get held up.

Other products

A mortgage broker won’t just advise you about your mortgage, they also look at related life insurance, payment protection and buildings and contents insurance and recommend the best product based on your new mortgage arrangements.

Speak to one of our independent mortgage advisors for impartial help and advice, as well as access to the widest selection of competitive mortgage deals in the UK.

The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.

The post Why Use a Mortgage Broker? appeared first on The Mortgage Hub.

There are several lending options available to you if you are a business owner or self-employed. Every lender will have its own criteria and will asses your unique situation, and you may find that there is more flexibility or discretion taking into account any other factors that may affect the amount you can borrow, for example your credit score, the deposit you can put down and the accounts available to use as evidence in your application.

Difficulties faced by business owners

The days of self-certification mortgages are long gone. This type of mortgage required little or no proof of income, making it a very straightforward process. The rates were competitive, and although they were aimed at the self-employed, the ease at which these mortgages could be obtained was a contributing factor to the financial crisis, and they were dubbed as ‘Liar Loans’. Self-certification mortgages are no longer available and this has left those who are self employed or running their own business excluded from a portion of the mortgage market.

Although it’s not impossible to secure lending if you are a business owner or self- employed, it’s certainly a much more difficult process as lenders need to carefully assess the risk of those with a non-standard income.

Partnership

Partners in a business are usually treated the same way as those who are self-employed. Lenders may also look at your share of net profit when calculating how much you can borrow.

Director

A director of a limited company may have income from both a basic salary and dividend payments. Lenders will consider both of these elements depending on your share of the ownership.

A director of a limited company may have retained the profits within the business, rather than taken out as salary or dividends and some lenders may be prepared to consider some retained profits.

Self-employed

In theory, self-employed borrowers have access to the same range of mortgage products as everyone else provided you have the necessary deposit and can prove they will be able to meet the repayments.

There are a handful of specialist lenders who offer products designed specifically with the self-employed in mind. Mainstream mortgage lenders routinely lend to the self-employed too, so you may not need to use a specialist. 

If you are self-employed, you will need to prove your income by way of supporting accounts or an accountant’s reference prepared by a qualified accountant. The standard requirement is 2-3 years’ proof of income, but in some circumstances you may find some lenders will accept one year. Most lenders will take self-employed earnings into account if you can produce a SA302 (tax return) form which you will have if you file your taxes by self-assessment. If you have permanent employment, but have additional income, this could be classed as self-employed income and is likely to be treated in the same way.

If you are a business owner or self-employed, it’s beneficial to do the following:

• Keep all accounts up to date
• Use a certified accountant to file your accounts
• Ensure you have your SA302 to hand – hard copies can take few weeks to arrive. Lenders will now accept accountants tax return and online print off of your tax year overview that can be obtained from the HMRC web portal.
• Retaining too much profit within the business could restrict the amount you can borrow so try and plan ahead when considering the dividend payment. Most lenders will take an average of the last 2 years’ income.
• Switching from a sole trader to limited company can have an adverse effect, so get advice before you do this. Some lenders will accept this however they are likely to request a full years accounts on the limited company to be produced.
• Keep an eye on your credit rating and make sure you retain a good score.

At the Mortgage Hub we can search the market to find a the right mortgage deal for you, and can look at the more complicated affordability calculators that lenders use to work out how much a self employed person or business owner can afford to borrow.

Speak to one of our independent mortgage advisors for impartial help and advice, as well as access to the widest selection of competitive mortgage deals in the UK.

The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.

The post Securing a Mortgage if You Are a Business Owner appeared first on The Mortgage Hub.

When money is tight, it’s good to have some support. However, it pays to be smart and to avoid some common pitfalls when your finances become closely linked especially if you hit troubled times as a couple or even separate.

Here are our tips to help you live in financial harmony with your partner. It pays to be smart!

Be transparent

Honesty is the best policy, so make sure you tell your partner if you have any debts, assets and savings and ask them to do the same. It’s better to be honest from the start so that you have a true, honest picture of your financial life together.

Make sure you have a valid will in place

While many people, especially those who are in their 20s and 30s, put off writing a will, it’s essential that you do this regardless of your relationship status. As well as considering any joint or lone assets, it’s important that you have nominated beneficiaries of your pensions and if you have children, who will take care of them if you are no longer around.

If you die without leaving a will, the law will decide who gets what and how much regardless of what your relationship with those people was like when you were alive. By leaving a will, you’ll prevent any unnecessary distress at a difficult time for friends and family. This is especially important if you have bought a property with your partner as they could suddenly find themselves having to sell up if nothing is stipulated in a will.

Check your credit score

If you or your partner have a poor credit score, this can negatively impact the other party. When couples apply for a joint finance product such as a mortgage, bank account, credit card or loan, their credit reports become linked. If one has a more positive score than the other, it could mean that the partner with poor credit is looked upon more favourable and find it easier to secure better lending rates. Similarly, if one of you has a very poor credit score and has previously been bad at managing debt, this can have a negative impact on any lending rates offered to both of you.

Don’t forget, if you and your partner go your separate ways, it’s essential that you ‘disassociate’ with credit reference agencies and ‘uncouple’ your credit reports in the eyes of lenders, especially if your partner’s credit score could have a negative impact on your credit rating.

Think carefully about joint bank accounts

It might seem like a good idea to have a joint bank account and to combine your money, but there are some things to consider.

Do you have the same attitude towards money and spending? If not, this can cause problems in a relationship, especially where one partner is thrifty, and one has a more relaxed attitude towards spending. You need to decide whether these differing attitudes towards money are going to cause problems further down the line.

If one of you has a poor credit score, the other may suffer as a result, as their credit score may be downgraded following this type of association.

Remember that if the account is overdrawn at any time, regardless of who made the transactions, both parties are liable. If the relationship does end, the joint account could be used by one account holder to take any funds, leaving the other without any access to money and no way of recouping these funds.

If you are concerned about this happening, your bank may be able to impose a requirement that account holders need to give permission for any spending that sits outside the normal standing orders and direct debits.

Purchasing a home

Buying a home with a partner is a huge commitment so it’s essential that you have all the information and facts before taking this step. Mortgage lenders will ask that borrowers are ‘jointly and severally’ liable for the outstanding mortgage, which essentially means that the lender can seek full repayment of the mortgage from either or both parties.

Each mortgage borrower will need to be able to meet the lender’s requirements, although it’s much easier to do this when pooling wages and deposits to secure a mortgage offer. Lenders will look at the monthly outgoings and income jointly when deciding how much they can borrow. It’s essential that you both work out a budget to set realistic expectations of how much you can afford to repay each month, and accounting for any rate rises.

Speak to one of our independent mortgage advisors for impartial help and advice, as well as access to the widest selection of competitive mortgage deals in the UK.

The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.

The post Make Sure You Live in Financial Harmony with Your Partner appeared first on The Mortgage Hub.

This dynamic market requires sellers to be prepared to avoid anything happening that could cause your sale to fall through. Although some delays are outwith your control, if both you and your solicitor get the relevant documents together at the very beginning of the selling process, you’ll avoid some of the most common delays.

Documentation required

It’s essential that you have gathered all the relevant documents you need when selling your home. This includes your mortgage loan information, the sale agreement from when you bought your home, a copy of the deed and title report, property tax information including recent bills, any appliance or home structural building warranties, survey reports and details of your home insurances.

Property alterations

If you have carried out any work to your home, such as an extension, layout change, cavity wall insulation or even treatment for dry rot, it’s important that you have the guarantees to hand – these would have been given to you when the work was completed. Your solicitor will need these so it’s a good idea to get everything in order to save trying to get copies when time is of the essence.

With structural alternations, you’ll need proof of consent i.e. planning permission documents. You should also be able to show a building warrant, completion certificate along with the approved plans for all structural alterations that have been carried out in the last 20 years. If you don’t have these, or they were never given to you, make sure you let your solicitor know as soon as you can. There are ways to remedy the situation but it can take some time and it’s best to start sourcing these as early in the process as possible.

Title Deeds

It’s essential that you know where your title deeds are. The likelihood is that if you have a mortgage, your lender will have them. However, it’s important to double-check where these are and who holds them if it’s not you. If your title deeds are with the lender, your solicitor will need details of your lender and account number so that they can request a copy. Some lenders can take weeks to get this information to your solicitor, so the sooner you do this the better.

Fortunately Glasgow was one of the first regions to register property in the Land Register, so it’s likely that your solicitor can download a copy of the title deed whilst they wait for the principal deed.

Talk to us

Speak to one of our independent mortgage advisors for impartial help and advice on gathering the correct documentation to avoid any delays to your property sale, and for access to the widest selection of competitive mortgage deals in the UK.

The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.

The post Save Valuable Time – Get Your Paperwork in Order! appeared first on The Mortgage Hub.

Arrange your mortgage

Unless you’re a cash buyer, it’s crucial that you secure a great mortgage deal before making an offer on a property. You don’t want to find yourself in the awful situation of setting your heart on a particular home, making an offer that is accepted, and then finding out that you’re unable to complete the purchase. Get all of your financial ducks in a row before taking any steps toward buying a property, then you can start searching for your dream home!

Speak to one of our independent mortgage advisors for impartial help and advice, as well as access to the widest selection of competitive mortgage deals in the UK.

Research the area

With demand far outstripping supply in the UK property market, sellers are in a really strong position. This is why it’s important to have a good understanding of the local market to determine trends and know what you’re up against. If a particular street or neighbourhood is consistently popular, chances are that competition will be high.

Gaining local insight will help you to decide what you can afford to buy and what kind of offer to make. We have connections to a number of local estate agents and can request for up-to-date information and see what is coming on the market.

Play it cool

If you view a property and instantly fall in love with it, put on your best poker face and try to play it cool – at least until you’re out of sight! It’s easy to become overly excited, but this will give the homeowner the upper hand. If it’s obvious that you’re desperately in love with the property, it’s clear to the seller that you’re willing to pay whatever it takes to secure it. This will make it extremely challenging for you during the negotiation process because the seller may refuse offer after offer until you’re paying way above the odds.

Let us do work for you

Before making an offer on your dream home, speak to our helpful staff as we can do all the nerve wrecking negotiations on your behalf. We will find out how long the property has been on the market and liaise with the estate agents to organize the best possible terms for you as a property buyer.

We ask the seller’s agent how much interest there is in the property and if any offers have been made. The agent is not legally permitted to reveal the amount of any offers made, but they may be able to give you some clues and indicate whether these bids are within the range of the offer you plan to make.

We will also be able to assist with timescales. We will find out how quickly the sellers are hoping to move. Have they already found their next home and want or need to sell quickly? Sometimes sellers will choose a slightly lower bid because the buyer can move in quickly or is not in a chain. This type of information is useful and can be of great benefit to help you make the right offer.

Stick to your budget

Prior to searching for your dream home, you should set your budget. Choose the absolute maximum that you can stretch to – and do not go above it. Doing this before setting your heart on a property will help you to avoid making emotional decisions, rather than sensible, financially-savvy choices! Finding the perfect home is great, but it will soon become the bane of your existence if the cost of owning it has a negative impact on your life.

The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.

The post Making an Offer on Your Dream Home appeared first on The Mortgage Hub.

According to recent trend reports, mortgage lending for first-time buyers, home movers and remortgages increased in February 2018 compared to the previous year, with the total homeowner purchases, which combine both home movers and first-time buyers, reaching 50,000 across the UK, at the highest level for February since 2007. (source)

In Scotland, as reported by RICS (Royal Institution of Chartered Surveyors) in their latest UK Residential Market Survey, the demand is fueling competition amongst buyers and as a consequence is driving prices upwards with the average price increase of property (6.2% in February 2018 compared to last year) outpacing the average UK rates (4.4% on the previous year).

Which means that most likely if you are selling this spring you will achieve a good price on your property, as we see many of our clients’ homes going to closing dates and selling above Home Report values.

RICS expect property prices as well as the number of sales to continue to rise not only over the next three months but also for the entire rest of the year.

If you are looking into helping children or other family members step up the property ladder, you should also read this recent blog post guiding you through the various options for raising the required deposit.

The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.

The post Local Property Market Update appeared first on The Mortgage Hub.

Help Children Save with a Lifetime or Help to Buy ISA

When helping first-time buyers build their deposit it is worth looking into Lifetime or Help to Buy ISAs. With the Help to Buy ISA, you can save up to £1200 on the first month and up to £200 in the following months and the government adds 25% tax-free on top of your savings plus interest (up to £3,000). It is by far the first port of call for anyone looking into saving for a deposit on their first home.

Last year the Lifetime ISAs have been introduced, that allows you to save up to £4,000 a year and offer a 25% bonus on everything you save each tax year.

Reduce Mortgage Payments with an Offset Savings Account

With the minimum deposit of 5%, repayments can reach a rather high amount. That is why the family can land a helping hand by setting up an offset savings account. The way it works is that you put your savings in an offset account and while the money does not incur an interest they will be deducted from the total mortgage amount when calculating interest. To give you an example, for a £100,000 mortgage with an offset deposit of £20,000 your children will only pay interest on the remaining £80,000.

While the money in the offset savings account still belong to you, they help by reducing interest payments

Guarantor Mortgages

As a parent or family member, you can help younger relatives by guaranteeing their mortgage debt.

There are other solutions available – like joint ownership or flexible family mortgages and new financial products come to the market all the time. If you are wondering what the best solution for you and your family could be, please get in touch with our friendly advisors. Our team have helped many first time buyers achieve their dream to secure the first step up the property ladder so we can offer you impartial advice on what the most suitable solution is for your circumstances and needs.

The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.

The post Help Children Purchase Their First Home appeared first on The Mortgage Hub.

Advantages of overpaying on your mortgage

Overpaying on your mortgage has a number of advantages for many homeowners. The interest you pay on your mortgage is significant, and often higher than any possible returns in savings – even long-term ISAs and bonds. So it makes sense to allocate funds to mortgage overpayments before savings accounts.

The majority of lenders will allow you to overpay up to 10% of your outstanding mortgage balance each year, provided you are still within the introductory fixed-rate or tracker period. If you have passed this period and have a standard variable rate (SVR) mortgage, you should be able to make additional overpayments whenever you wish. In all circumstances, however, do be sure to check with your lender before making any overpayments because these rules are not universal.

Overpaying on your mortgage means that you’re getting rid of the debt from buying your home in less time – the quicker you pay it off, the more money you save. Furthermore, you won’t pay interest on any amount that you overpay. Whilst you may have to tighten the purse strings for a while, the long-term financial gains from overpaying on your mortgage are huge.

Potential disadvantages of overpaying on your mortgage

Before making any overpayments on your mortgage, you must read the small print to ensure that your lender and particular mortgage agreement allows you to do so. The penalties for paying too much into a mortgage can range from 1% to 5% of the overpayment sum.

It’s also important to take other debts into consideration before allocating additional funds to mortgage overpayments. Clearing the most expensive debts first is crucial. If you have loans and credit card debt, for example, check the interest rates that you’re paying on these. If any of the rates are higher than your mortgage, which they likely will be, clearing these high-interest debts before making overpayments on your mortgage makes sense.

Planning for a rainy day is also something you should bear in mind before overpaying on your mortgage. As soon as you pay additional funds into your mortgage, the cash is no longer available for any emergencies that may arise (unless you have a flexible mortgage with a borrow-back facility). If all of your spare cash is tied up your mortgage, you may have to borrow more money from elsewhere – or be left without sufficient funds to make your minimum mortgage payment – when the unexpected happens.

Mortgage overpayments vs Savings

Provided your mortgage lender allows you to make overpayments on your current deal, you’re debt free, and you have planned for the unexpected with an emergency fund, overpaying on your mortgage could be the best decision – and will lead to greater gains than putting this additional cash in a savings account. Make an appointment with our friendly team and we will be happy to help make plans for paying off your mortgage early!

The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.

Anchor text: consult an independent financial advisor

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The post Should I Overpay on My Mortgage? appeared first on The Mortgage Hub.

For many years the most competitive products had a minimum deposit requirement of 25%, so the new announcement really is something to write home about.

The new 80% loan to value options are designed to help landlords with smaller deposits and provide extra choice for expanding portfolios. 

We believe this is part of a greater trend in offering better financial products to the Buy to Let market, which is great news for landlords and property investors across the board.

If you are looking into investing in Buy to let, further read into our previous post on Buy to Let Mortgages in Scotland or give our friendly team a call today and we will endeavour to find the most suitable product for your circumstances.

The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.

The post 20% Deposit Buy to Let Mortgage Announced appeared first on The Mortgage Hub.