Mortgage Top Tips

Not having your documents in order can cause you to lose out on your perfect home or miss that rate on a remortgage. This is because when you apply for a mortgage, you have to prove who you are, where you live and what you earn. If your documents aren’t registered to your current address, many lenders won’t accept an application from you.

All your documents must be registered to your current address and in your legal name. This goes for your bank statements, payslips, passport, driving licence and any other document a lender might request.

It’s essential that your driving licence is registered to your current address because if it isn’t, the DVLA can fine you £1000. Did you know that if your car insurance isn’t registered at your current address, your cover may be invalid

For example – don’t leave bank accounts and payslips registered at your parents address if you’ve moved into a rented property, and always ensure you register on the electoral roll.

Most lenders use the electoral roll as part of their identity check, and being on the electoral roll also increases your credit score.

How Much Can You Afford

When you’re searching on property portals looking for your first or even your next home, it’s essential to keep a sense of perspective about what you can really afford.

We’d all love to live in the big house with the south-facing garden and bi-folds onto a beautiful patio; however, that all comes at a price.

Don’t torture yourself by looking at properties you might not be able to afford yet. Believe us when we say it’s so important to really drill down into what you can afford from day one because that can help you search for properties within your budget.

Remember – the size of the mortgage you can achieve isn’t simply a multiple of your salary. Mortgage affordability is based on your income, how long you intend to take the mortgage over, your current credit commitments such as personal loans, credit card balances, and car finance costs. Even things like student loan payments and pension contributions factor into your borrowing. Don’t forget if you have children; lenders will take them into consideration as to how much you can borrow. They’ll want to know what childcare costs you might have and also build in the costs of feeding and clothing children too.

Don’t forget all lenders have different mortgage affordability calculators and assess income in their own unique way. For example, some lenders will take commission, overtime and bonuses into account, while some will only use a proportion. Some lenders will consider child benefit or perhaps maintenance if you’re a single parent.

Mortgage affordability is far more complex than you might realise, so the first step should always be to speak to a broker and understand your options.

The Right Solicitors Matter

When you’re buying, selling or remortgaging a property, you will need the help of a specialist property solicitor called a conveyancer. They deal with the legal aspects of buying a property and ensure everything is above board.

A good quality conveyancer can make everything much easier, and a poor one can ruin a purchase by making mistakes or taking too long.

Don’t forget buying a home is a significant legal and financial transaction, and a lot of complex land, property and financial law needs to be considered.

To help your purchase or remortgage smoother, you must have a good conveyancer in your corner. The hard part is knowing which one to choose.

We can help, and we often recommend and instruct solicitors on your behalf because of three reasons. Firstly, we know what good looks like; secondly, we know what bad looks like. Finally, we can get involved and assist you if you’re stuck on something or if the conveyancer needs specific information to help your transaction along.

The legal process can be a minefield, so it’s best not to scrimp on this aspect because it’s so important to get it right.

The Difference Between A Valuation And A Survey

If you’re buying or remortgaging a property, then the mortgage lender will want to establish how much the property you’re buying or remortgaging is worth. After all, they’re the ones that are lending the money.

It’s important to understand that an estate agent appraises the property – this means they set a price on what they believe it’s worth in the current market. However, if you’re buying with a mortgage, it’s the lender’s surveyor that determines the value.

Most, but not all, mortgage lenders offer free basic mortgage valuations. However, this is because it’s for their benefit, not yours. What they want to know is if they need to repossess the property, will they be able to sell it and get their money back?

Also, the surveyors instructed on the lenders’ behalf don’t work for the lenders. They usually work for surveying companies, and lenders have agreements that they’ll value the properties on the lender’s behalf.

However, buying a home, as you will know, is an expensive business, and the last thing you want is to buy a home riddled with costly problems that you must pay to have fixed.

This is why it’s a great idea to get your own more in-depth survey done so that you’re going into the purchase with your eyes open. Yes, there’s a cost to it, and yes, it’s you that will have to pay for it. However, isn’t it better to spend a few hundred pounds and dodge buying a money pit that might cost you thousands in the long run?

There are different levels of surveys to choose from. However, we can help you decide which is appropriate for you and the type of property you’re buying. We can also instruct a surveyor for you and then help you understand the results of the report when it’s been completed.

Be Careful Who You Listen To

We’ve seen it a thousand times. “My dad/mate/aunty/sister has said I should do….xzy.”

It’s understandable to want to listen to people you know and trust; however, you must remember that some people won’t have an in-depth understanding of the mortgage or property market.

What may have been the case for them doesn’t mean it’ll be the same for you. The mortgage and property markets are dynamic. They change over time, sometimes very quickly and unless the people giving you advice work in the sector or have been a mortgage broker, there’s a good chance their knowledge is either out of date or, in some cases, just wrong.

By all means, listen to what they’ve got to say, but remember they’re not qualified to give advice; we are.

Buying a home is a big step and a significant financial commitment. You need to understand what you’re getting into and have all the facts, which is where we come in. So if you’re feeling like your heads spinning and you don’t know what to believe, then get in touch, and we’ll be able to provide clarity and help you understand.