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.

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.

In recent months, we have seen a rise in the number of interest-only mortgages available to those in retirement age. This has made a huge impact for those looking for mortgages in retirement.

This is a huge change given that interest-only mortgages practically disappeared from the market several years ago following the European lending rules

The Financial Conduct Authority (FCA) has delivered on a promise to relax the strict lending rules, and as a result, lenders are now offering retirement interest-only mortgages.

This is great news for retirees needing to clear interest-only debs, wanting to move during their retirement years or even wanting to pass early inheritance to their family.

What’s changed?

In September 2017, the Financial Conduct Authority (FCA) reviewed the European rules given that thousands of credit-worthy older borrowers were coming up against virtually impossible lending conditions.

To qualify for an interest-only mortgage, borrowers needed a capital repayment strategy in place by way of savings, investments or other property to fund downsizing. However, they were unable to use selling their home when they died or moving into full-time care as a repayment strategy. This meant that even though borrowers could meet their repayments, they could not extend their mortgage term if they were relying on their property sale to repay the outstanding debt. This resulted in lenders insisting they sell up to repay the outstanding capital.

The FCA has now announced that these repayment methods can be accepted by lenders, changing the landscape of lending in retirement. Several lenders have already announced new products for retirees.

The current situation

There are many people retiring with outstanding mortgage debt. In fact, last year the FCA revealed that there were 1.67 million full interest-only and part capital repayment mortgages outstanding in the UK, making up over 17% of all outstanding mortgage accounts. An increasing number of these will require repayment in the next few years.

In addition, 70% of these mortgage accounts are held by customers over the age of 45 and 1 in 9 mortgage holders aged over 65 have an interest-only mortgage and many of these people have no idea how they will repay these mortgages.

Talk to us

Speak to one of our independent mortgage advisors for impartial help and advice on mortgages in retirement, 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 Mortgages in Retirement  appeared first on The Mortgage Hub.

It makes a lot of sense then to think carefully about which type of coverage best suits you and your family. To that end, here’s a quick guide to the basics of insuring your home.

What is Building Insurance

Building insurance is a form of coverage for your home. If your property needs particular repairs or to be rebuilt following damage, your building insurance will cover the cost of completing that work. The most common types of damage that building insurance covers include things like subsidence, fire and natural disaster damage (eg. by storms, earthquakes and floods etc.)

If you have a mortgage on a property, it’s compulsory to have a building insurance policy. If don’t have a mortgage, building insurance isn’t compulsory but it is strongly recommended: a good rule of thumb is that if you can’t cover the cost of rebuilding your home from scratch, you’ll need insurance.

Types of building insurance available

There are lots of different types of building insurance out there. The most basic forms of cover will just protect you for the value of rebuilding the physical structure of your home.

Other more comprehensive policies over contents insurance too, covering both the cost of rebuilding your home and the cost of replacing the possessions, furniture and appliances in it. These insurance policies obviously vary in price, depending on what your specific coverage needs are.

Usually the cost of rebuilding a home from scratch is slightly lower than what your property is worth on the market. This means you should take special care that the building insurance you get doesn’t over or under-insure the cost of rebuilding your home. If you over-insure, you could lose unnecessary money. If you under-insure, you could be find you can’t cover the cost of repairs in the case of an emergency.

Particular quirks of your property can increase the cost of insurance policies in some cases. Geographical risks such as flooding, being below sea level can increase the cost of building insurance, as can the risk of subsidence in your area. Having a heritage property that is listed or has a thatched roof can also increase the cost of your policy in some cases.

If you’re looking for building insurance, we can help. The Mortgage Hub are experts when it comes to providing the perfect insurance policy for your needs. Get in touch with our team today on 01698 200050 to find out how we can help you.

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 A Guide to Building Insurance appeared first on The Mortgage Hub.