Help

We all know that taking out any form of loan is a huge financial commitment.  No more so than when it involves your home.  It doesn’t matter where you are in this, whether you are a first time buyer, current home owner looking to get a better deal, or you are considering moving home.  Good mortgage advice is vital.

Of course there are many places you can go for that advice. From the man in the pub that you met to a personal recommendation from a friend. From your own investigations on the comparison websites, to properly researched advice from a professional FCA Regulated Mortgage Advisor.

There are many reasons to consider the Mortgage Advisor route, none more so than they are properly qualified and regulated by the Financial Conduct Authority to give mortgage advice (FCA).

Other reasons not to be missed include:

  • Their job is to find you the best deal for your circumstances.
  • An experienced broker knows which deals you are eligible for.
  • The broker is on YOUR side.
  • They will have access to specialist lenders not on the comparison websites.
  • And often have exclusive deals not available through the banks own branches.
  • They have access to the whole of the market and not just the range that a single bank or building society will offer you.
  • A good broker will work with you, the lender, your solicitor and other linked parties to a satisfactory completion.
  • Their mortgage advice will be independent of everyone else in the process, i.e. any estate agent and the lender.
  • Your circumstances will be matched to the correct lenders.  Avoiding unnecessary searches and damaging declines on your credit report.
  • A good mortgage broker, with industry experience, will guide you through the ever changing rules regarding criteria and affordability.
  • You are protected from the mortgage advice through recourse to the broker directly or via the Financial Ombudsman Service.
  • They will advise you of any extra protection you should consider such as life assurance, payment protection or building and contents insurance for the property.

To name but a few!

If you would like to start the process of seeing what solutions are available to you, and your own personal circumstances, please get in touch.

Your credit score is often clouded in mystery.  Everyone has one and nobody can really tell you how it is calculated.  In fact, the credit score you can obtain from credit reference agencies, such as Experian and Equifax, is different to the one that the individual lenders calculate themselves.

What is common between them all is the information that they are using to make their assumptions.  Your outstanding credit commitments like credit cards and loans together with any previous bad credit are used in the calculation.  Your previous use of credit and how this was conducted will also play a major factor in this.

You should take time to understand your credit file and manage the best way to boost or repair anything that doesn’t give you a perfect or ‘excellent’ rating.

There are paid services online that allow you to look as often as you like at what information they are holding.  We are also starting to see ‘free’ reports that again let you pick up and correct anything you do not agree with before any companies use the information.  Important, as it is this information, that will greatly dictate whether to lend to you.

Speaking to a regulated advisor before you make any applications is often the best thing to do.  They are going to be able to work with you to see what, if anything, on your credit file is going to hinder you.

If you have entries due to previous adverse history, such as defaults and CCJ’s, then they know to only speak to those lenders that will show flexibility in those areas.  If the adverse is more recent, then they will work with you to get your situation back to the point where an application is more likely to receive a positive response.

You can of course do a few things to help yourself and your credit file.  If you think that you are going to need an organisation to lend you money in the not too distant future then.

  • Avoid pay day loans.  Other lenders can consider these as an example of poor money management.  Remember, you are asking to borrow money from them; you don’t want them thinking you a bad risk.
  • Make sure you are on the voters role.
  • Try and reduce other debt that may affect your affordability for the new loan.
  • Make sure that your current outstanding credit is up to date and paid on a regular basis.  Missed payments don’t look good.
  • Check your credit file is accurate and that there is nothing on there that shouldn’t be or that is wrong.
  • Too many credit searches in a short space of time that also are a negative.  Each search footprint can reduce your score and chances of being accepted.

Finally, the advisor you speak with will, in many instances, be able to find out if you are eligible for the money by doing what is called a soft foot print.  Many lenders now offer this service where only you, they, and the credit reference agency, can see the search has been carried out.  You can check this at the time of application.

You have been with your current lender for a few years now, paid your monthly repayment on time, and thought no more about it than when you first received your mortgage offer.

Should you be looking to review your mortgage?

When your original mortgage deal ends, it is likely that the lender will put you on to their standard variable rate, or SVR.  This varies from lender to lender and is often higher than the rate you have been paying.  Every lender should warn you that you are going on to this and many will offer you a new rate from what they currently have available for existing clients.

Why do they do this and why don’t they just leave you on the SVR?

Probably the main reason is that by offering you a new deal, they are locking you in to a further period of being a client of theirs.  A further period that may attract a heavy redemption penalty were you to try and leave during the term of the new deal.

Lenders are also hoping that customer apathy and the idea it is a hassle to remortgage, will leave borrowers with them far longer than they need to be.

Of course if the lender is offering you a fantastic deal to stay with them, why wouldn’t you.  Sadly this is often not the case.

Does it pay to review your mortgage on a regular basis?

The simple answer is yes.  If your current mortgage isn’t as competitive as the other deals on the market at that time, then you are looking to be able to save hundreds, if not thousands of pounds by having a shop around.

When is the best time to shop around and start looking for a better deal on your mortgage?

The experts are often in agreement that the best time to be looking around for a new deal is:

  • 2 to 3 months before your current deal comes to an end.  If you time this right then your new mortgage is going to start around the same time that your current deal comes to an end.  And also just as you are being moved over to a potentially higher interest rate.
  • The new mortgage offer will also be valid for at least 3 months so you can be flexible in your timing.
  • Many mortgage brokers would recommend you look at your mortgage whenever there is an interest rate change.  If you are on the SVR that we mentioned above, then your monthly payments are going to be affected.
  • If you have previously chosen to stay on your current lenders standard variable rate then check in at least once a year.  This will give you the chance to see how the current interest rate you are paying is comparing to what else you could get in the market.
  • If you think future changes in your own circumstances may affect the choice of mortgages available to you, then have a look early to give yourself plenty of time to get things sorted.

Where to get great mortgage advice?

Speak to one of the qualified mortgage brokers, that we work with, is one way of ensuring that you have access to some of the best deals available.

There are many reasons to consider the Mortgage Advisor route, none more so than they are properly qualified and regulated by the Financial Conduct Authority (FCA).

Other reasons not to be missed include:

  • Their job is to find you the best deal for your circumstances
  • An experienced broker knows which deals you are eligible for.
  • The broker is on YOUR side.
  • They will have access to specialist lenders not on the comparison websites.
  • And often have exclusive deals not available through the banks own branches.
  • They have access to the whole of the market and not just the range that a single bank or building society will offer you.
  • A good broker will work with you, the lender, your solicitor and other linked parties to a satisfactory completion.
  • They will be independent of everyone else in the process, i.e. any estate agent and the lender.
  • Your circumstances will be matched to the correct lenders.  Avoiding unnecessary searches and damaging declines on your credit report.
  • A good mortgage broker, with industry experience, will guide you through the ever changing rules regarding criteria and affordability.
  • You are protected from the advice through recourse to the broker directly or via the Financial Ombudsman Service.
  • They will advise you of any extra protection you should consider such as life assurance, payment protection or building and contents insurance for the property.

There are going to be arguments and reasons why someone would rather rent the property they live in rather than own it. Many feel it gives them short term flexibility and freedom, whilst others don’t want the feeling of paying a landlord money that they will never see again.

Here are the top 7 reasons why you may want to consider being on the property ladder.

  1. Many home owners feel that they are investing their money by buying the property that they live in.  With your money going each month in to paying off the mortgage, you can actually start to plan for the day when you can live rent and mortgage free.
  2. Spending money on the property and improving it can improve its value.  If you are doing this in your own home, not only are you going to see the financial reward, but you can do so without needing to speak to your landlord.
  3. A really important reason that many people find is that it is actually cheaper to buy the property that they live in than to rent it. Renting over longer periods of time will mean you will see a rise in your rent payments.  If you are purchasing your property with a repayment mortgage, you should see your monthly payments reduce as the amount you owe the lender decreases.
  4. Your house, your rules.  If you own it, you chose the colour on the walls, the furniture, what the kitchen looks like and whether you have a pet or not.
  5. One that is often forgotten is those companies offering credit, love homeowners.  Your credit report will show you have a mortgage, and your monthly payments being made on time, will show financial responsibility that will put you in good favour for future credit purchases.
  6. A build up of equity in your property, the difference between the property value and your mortgage, can be used at a later time.  Your mortgage lender, or other loan companies, will consider lending against this equity.  Money you can use for further home improvements, debt consolidation or other purchases you may be considering.
  7. Many renters leading a nomadic lifestyle of 6 and 12 month rental periods, often find it difficult to enjoy an area and its community.  Buying your home allows you to put down roots and be more active in enjoying what is around you and your home.

Sitting down and working out the pros and cons of owning your home is vital.  As is good advice on whether you can afford it, or whether you need to be doing some more planning and saving before you take the plunge.

The use of a good Mortgage Broker can help with this.  They will work with you to make sure you are fully aware of what is involved and provide help in finding a lender for the money you need to make your purchase.

Don’t give up because you have been told you can not be helped!

If the statistics are to be believed then 1 in 4 of us has some sort of black mark on our credit file.  This can be as simple as a late payment, through to missed mortgage payments, defaults and country court judgements or CCJ’s.

Many of the high street lenders will not allow for this sort of bad credit entry and concentrate only on those borrowers that are showing them a perfect credit score.  Sometimes an unfair approach as the reasons for the entry is varied and often there through no fault of the borrower.

So what options do you have when you need a mortgage and you are unsure who to approach?

The simplest solution is to speak to a Mortgage Broker.  It is their job to stay on top of each individual mortgage company and their lending criteria.  They can then easily match you to the one that best suits your situation and will speak to them on your behalf.

Why should I just not go direct to a lender?

  1. The lender you need to speak to will depend on what is actually on your credit file and their lending criteria. Get this bit wrong too many times, and you are going to see unnecessary credit searches dramatically reducing your score at a time when you need it to be as high as it can be.
    Many people give up once being told ‘no’ by their own bank.
  2. Often the lender that is going to do this for you is one of the specialist lenders that you can not approach direct, only via a Mortgage Advisor.  These banks will have mortgages that allow for all forms of adverse credit such as defaults, CCJ’s, missed or late payments, even debit management plans.
  3. Specialist Brokers should be able to speak to the Underwriter who is going to be making the decision directly.  This is invaluable if your own situation is a bit different from the norm and it is important that all the facts are in front of the decision maker.
  4. If you are unfortunate enough to be in a position where there is no current lender able to help you, they will work with you to get yourself back to a position where you can apply and be accepted.  It may be that just waiting a few months will bring you back in line with their requirements.
  5. Taking some initial advice from a specialist advisor leaves you under no obligation to take the enquiry any further.  Of course, you are probably going to want to continue to consult with them if they look like the solution to your need for a mortgage.
  6. The rates a Mortgage Broker can get for you can be exclusive and not available on the high street.
  7. A Mortgage Broker should be impartial and not tied to any one bank or other lender.  This should give you the best advice, and in turn, the best deal.
    The Teams that Openmortgages work with specialise in helping people with less than perfect credit scores.  Their experience in this part of the market makes them a good bet for being able to point you in the right direction when it comes to matching you to a mortgage.

Take a minute to complete the online contact form and they will be in touch to discuss what options and solutions you have available to you.

Every mortgage lender will have a different way that they underwrite your mortgage application.  Many customers immediately get turned down because they are talking to the wrong lender and their situation was never going to match the banks criteria.  Here we will show you a few of the main reasons that customers are given when the bank says no.

You have previously had bad credit

Things like missed payments on credit agreements, defaults on loans and credit cards, county court judgements (CCJ’s), are all items that are going to show on your credit report.  Lenders are going to see this and if their lending criteria doesn’t allow for it, you are going to be declined.
The good news here is there are lenders that will offer mortgages when you have previously had problems.  A good mortgage broker will have access to these lenders and will quickly tell you your chances of being accepted.

You have limited credit history
Banks and other lending organisations like to see that you have a good history of borrowing money.  They like borrowers who have borrowed before and paid back every month without fail.  If you have managed to get this far in life with limited borrowing, you may find reluctance from some mortgage lenders to be the first one to lend you money.
Using a credit card, and paying it off each month in full, is one way to build up some history for another bank to see.

Lots of credit searches on your credit file

Too many credit searches in a short period of time will some times go against you.  Lenders will think you are credit hungry and looking like you are building debt which they do not like.
A credit search is unavoidable when you are looking for a mortgage.  Every lender is going to want to take a look at your credit file to form an opinion on whether you are the sort of risk that they want to take on.  By using a good mortgage broker, you can limit the chances of unnecessary searches because they are only going to go to those banks where you stand a good chance of getting a positive response.
If you find you are being turned down, stop making applications until you have taken some professional advice.

Are you on the electoral roll?

The stability of living in the same property for a number of years is a positive tick when it comes to lending money.  A mortgage lender will use the electoral roll to prove where you have been living as part of the application process.
If you are not already registered it is advisable to do so before you start looking for a decision.

They don’t think you can afford it

One of the first things you can expect when you are speaking to a Mortgage Broker is that they are going to do an affordability check on you.  This is done to make sure the amount you are looking to borrow is achievable within the individual lenders own calculations.
Every lender has a different way of working affordability out, and a good mortgage broker will know which ones are going to give you the best deal for your own situation.
Thinking about what you are currently spending your money on will give you an idea of what is left towards your new mortgage.  Look at utility bills, clothing, eating out, current outstanding credit such as credit cards and loans.  Even how many people are going to be living at the property and their contribution to the household income will be taken in to account.

Your income isn’t acceptable to them

If you have only been in your new job for a few months, and still in a probation period, then you may find you have to wait a while longer before making your new application.
Also, the self employed can also find they are unable to get accepted until the business has been running a number of years, and the company accounts can support the affordability calculations mentioned above.

Speak to a mortgage broker early in your planning process and allow them to work with you to make sure you have done everything you can to improve your chances of being accepted.

If you have previously been declined don’t let this put you off making applications in the future.  It may be that you were just speak to the wrong lender for your situation.

Have you had your mortgage refused and now you are wondering what your options are? In this short YouTube clip Experian discuss what options could be available to you.

If you would like to discuss your own situation with one of our Mortgage Broker partners, please complete our enquiry form and we will get someone to contact you.

Knowing your options is often half the battle.

Most people are familiar with a mortgage; it is a term for a loan given to allow someone to purchase their property.   If a mortgage is a loan taken on the value of your home with the promise to pay back each month until the end, there remortgaging is best described as the attaining of a mortgage on the property after you have already have one.

What are the types of Remortgages?

Remortgages can come in a variety of schemes.  The most common is the Standard Variable Rate (SVR). A Standard Variable Rate is where the interest rate floats upon the market rate.

The other major type of product is a Fixed Rate Mortgage. Fixed Rate Mortgages differ from SVR’s insofar as the interest rate is determined and remains fixed from the beginning.  This type of loan is more popular as you know exactly what your payments will be from start to finish. Some may see this as more risky as you may end up paying more if rates fall (or too little if they rise).

There are also a wide variety of intermediary remortgaging options.  Lending options like capped rate and tracker. These are variations on remortgages which blend some aspects of variable rate and fixed rate mortgages.

Why would you consider a Remortgage?

Remortgages can be seen in many ways identical to a standard mortgage.  It involves the process the process of you presenting your financial circumstances, your borrowing need, and your property to a lender.  Borrowers must state why their loan is a good risk for the lender.  But unlike mortgages, where the reason for the loan is to purchase a home, the reasons for taking a remortgage can be quite varied.

To Save Money

The main reason why individuals remortgage is to take advantage of lower interest rates.  Many borrowers can get a lower interest rates either because the interest rates have fallen across the industry, their own personal credit and financial situation has improved, or because the equity in their home has reduced the total exposure of the loan and made the loan less risky for the bank.

To Raise Money

The second major reason why people remortgage is to raise money from the property.  This means attaining a new loan for the full amount of your home.  You can then use the money that you receive to pay off the remaining portion of your existing mortgage keeping the difference.

To Improve Your Home

Another reason why people remortgage is to free up some cash for another reason.  This involves taking out a smaller loan against the value of your home which will give you money for home improvements.

To Consolidate Other Debt

The final major reason for remortgaging is to consolidate debts.  Often borrowers have other debts from a variety of other sources, credit cards, car loans, store cards etc.  These loans can be difficult to stay on top of and many often carry high or varying interest rates.  As a result many individuals can find savings as well as convenience in putting all of these loans into a payment as part of their mortgage.

Bad Credit is another way of describing a negative credit score. A credit score can be either good or bad and is used by lenders to determine whether you are likely to be able to keep up the payments on something like a mortgage.

Your credit score is calculated using a mathematical formula and information from banks or lenders from who you have had a loan of some sort. The formulae and reports consider your bill-paying (credit) history and compare it alongside the credit history of millions of other people. The resulting figure is used as a ‘risk assessment’ by potential lenders. This in turn can have either a negative or positive effect on your future borrowing.

A good credit score will typically be given when someone has borrowed money, but made all the payments back and on time, without any defaults. This person will be looked at as a potentially desirable customer as there is little risk involved in their paying back the loaned money. Applications for loans, or remortgage and mortgage applications, should be approved relatively quickly and a good rate of interest offered.

A bad credit score will typically be given to someone who has been unable to make payments on time in the past. They may have defaulted on a loan, had a County Court Judgement made against them or even been declared bankrupt. Credit cards, existing loans and other indications of your bill-paying history can be taken into consideration, generally over a two-year period, although bankruptcy can influence a credit score for much longer.

Current and potential earnings are also factors that help determine a credit score. Lenders for such things as a mortgage or remortgage will view anyone with bad credit as a potential risk and the interest rates offered will usually reflect that risk by being much higher. Some applications may even be turned down.

Some lenders specialise in bad credit mortgage arrangements or remortgage schemes for those with bad credit histories. Often they can be accessed through a mortgage broker who will access your circumstances to the criteria by which the bank is looking to lend.

As the credit score is based on ever-fluctuating factors, it is possible for someone with bad credit to alter their score over a period of time and affect it positively, thereby lessening themselves as a risk in the eyes of lenders. Careful financial management is required: the meeting of repayments on time, paying off outstanding debts and generally ‘keeping an eye’ on all things financial can raise a bad credit score into the positive bracket.

A copy of your current credit score is obtainable and it should be checked to see that the information determining a score is accurate. Some people with bad credit may be suffering unnecessarily under the influence of debts that have actually been paid off or even discover themselves to be the victims of identity theft, where someone else is using their bank details for their own purposes – consequently damaging their credit score as well as stealing from them.

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