Obtaining a mortgage in Grimsby occasionally be quite challenging, especially for those who have never done so before. There are hundreds of different mortgage lenders out there all with their different lending criteria that you need to match up against.
We have been working within the mortgage industry for well over 20 years now, learning in that time the best ways to help a customer save both their time, and their money. After all, customer satisfaction is at the heart of what we do.
As a trusted and experienced mortgage broker in Grimsby, we have the knowledge to overcome most mortgage hurdles. We love taking on a good challenge, so even if it’s a situation we haven’t directly come across, it’s likely we’ll have gone through at least something similar before.
We specialise in providing expert Mortgage Advice in Grimsby. No matter if you are a First Time Buyer in Grimsby, looking at Moving Home or wanting Self-Employed Mortgage Advice in Grimsby, we are here to help you in any way we can!
Whilst it can go fairly smoothly for some, there are instances where obtaining a mortgage may become a challenge.
Our dedicated team of mortgage advisors in Grimsby will always work hard, using their knowledge to overcome as many mortgage hurdles as we can. Below we have put together a list of the most common situations we encounter with customers who are struggling to be accepted for a mortgage.
A mortgage lender will always want to know that you have a suitable income and are able to afford the monthly repayments on your mortgage. They will perform affordability checks, reviewing your income and outgoings, to make sure that a mortgage is right for you.
If a mortgage lender isn’t willing to accept you for a mortgage on the amount you need, you may need to look at putting down a higher deposit. Doing so will reduce the amount you need to borrow, possibly allowing for lower monthly repayments over a longer term.
Relating to the previous point, you may not be able to save enough for the initial deposit. Generally speaking, you will need between at least 5-10% to be in with a shot at obtaining a mortgage, though if you can go higher, this would be recommended.
The reason we recommend a higher deposit, is because it can open you up to much better deals, with a wider variety of mortgage lenders. Doing so will put you in a much better position than you otherwise would be.
Unfortunately not everyone can save the right amount, which will obviously put a halt on plans for the foreseeable, until that amount is saved. There are a few saving graces though, especially for first time buyers in Grimsby.
The first of these is the Bank of Mum & Dad, otherwise known as a gifted deposit. This is a gift, donated from a family member (typically parents, adopted parents, carers or legal guardians), allowing their loved one to get onto the property ladder.
This is an increasingly popular option, being a large factor into so many young people getting onto the property ladder these days. You must remember though that this is gift and not a loan, something which the lender will need to see in writing, along with proof of deposit.
The other helpful tool for first time buyers, is the government Help to Buy Equity Loan Scheme. The aim of this scheme is to boost a first time buyers deposit up to 25%, with a loan from the government.
So long as you have saved up 5% by yourself, the government will loan an additional 20%. This works within that 25% amount, so if you have 10%, they’ll loan you 15%. This too is a loan, and will need to be paid back.
Not having enough deposit initially can create challenges, but with the right help you may be able to still obtain a mortgage, especially if that is the only hurdle in your way and the rest of your case looks fine.
Credit score is one of the biggest factors in obtaining a mortgage. Whether it’s from a poor track record of handling credit, obtaining defaults and missing payments, or from simply not having enough of a credit score (common in younger applicants), this can present challenges.
We have a large panel of specialist lenders on panel, so even if your case is a little more complex, there may still be mortgage options for you, though they will often require a more substantial deposit from you, closer to at least 20%.
It’s not just things like defaults and missed payments that affects your credit score, as there are other aspects that may affect that also. Making sure all your addresses are in line is a common one some applicants forget about.
You should update all addresses to your current address and register on the electoral register, so that lenders are able to confirm you’re living where you say you are. Also, avoid applying for too many mortgages yourself, without speaking to an expert.
If you are applying for mortgages by yourself and constantly getting declined, this can seriously harm your credit score. There is the potential that one of these mortgage lenders will have been assessing you using a hard credit score.
A hard credit score, unlike a soft credit score, is a lot more in-depth but also leaves a visible footprint on your credit file. A mortgage broker in Grimsby will match you up with the right lender, so you don’t run the risk of this happening.
As an experienced and reputable mortgage broker in Grimsby, we have lots of valuable experience and we know exactly what lenders are looking for in mortgage applicants.
We can talk you through some simple steps you can take to improve your chances of your mortgage application being successful.
These steps can be very simple and easy to do. Speaking to an expert mortgage advisor in Grimsby could get you a couple of steps closer to securing a mortgage deal.
Book your free mortgage appointment today and we’ll get the ball rolling on achieving mortgage success for you and your future home.
By the time your mortgage ends, you will have ended up with one of these outcomes; a dream family home, a stepping stone property you’ll later leave to climb the property ladder, or a buy to let investment property.
No matter which path you took primarily, soon enough you’ll find that your fixed period is ending. At this point you might be wanting to look at the options you have for moving into a bigger or smaller home. Sometimes a landlord may look to sell up their portfolio.
As a mortgage broker in Grimsby, however, we tend to find that most people will look to take out a remortgage.
Before we get on with the topic, let’s look at the definition of a remortgage in Grimsby. To summarise, a remortgage is the process of using funds that you have raised from taking out a new mortgage, to pay off an existing mortgage in your name. .You can do this a lot of different ways and there are a lot of different benefits to each.
The “Moneyman” Malcolm Davidson (host of MoneymanTV, our YouTube Channel) has well over 20 years of experience in the mortgage world. Using his knowledge, we have compiled a helpful guide to all the remortgage options that a homeowner may have access to.
Your fixed period will usually last within the range of 2-5 years. The fixed rates or potential discounted rates here tend to be lower. Depending on the situation you are in, you may even find yourself placed onto a tracker mortgage, which will fluctuate based on the Bank of England’s base rate.
Once you reach the end of your fixed period, you will most likely be put onto the lenders Standard Variable Rate (typically shortened to SVR). In simple terms, an SVR is a mortgage with an interest rate that can completely change depending on what the lender wishes to charge.
Whilst this mortgage type does not change with the Bank of England’s base rate as a tracker mortgage would. These changes often occur at times when the base rate or the market changes. For example, if the base rate goes up, your lender may choose to increase their rate too.
Because of this, Standard Variable Rates are often considered to be pretty expensive choices to stick with, which is why a lot of homeowners often choose to remortgage their property for better rates. The hope is that this will save you money down the line.
A couple of years into occupying your property, you may have something different in mind. Rather than finding a new place to live that covers what you would like in a home, many homeowners instead prefer to remortgage to release equity, in order to cover the costs of upgrading their current home.
We hear of customers looking to achieve all kinds of things in their homes. Some like to create more space to live in. Others are unhappy with their kitchen and would like it refurbishing. An increasingly popular one is converting the loft into another room or something else.
The prospect of planning and managing your own project, as well as getting permission from the authorities when necessary, can seem daunting. That being said, a lot of customers who have done just that would argue it’s a lot less stressful than finding a new house, and is a lot more rewarding.
This may benefit you further down the line too, as creating more space and having a solid, well built home is something that will likely increase how much the house is worth. In the event you did decide to sell up and move home, this would come in handy.
Depending on the situation you are in, you may just prefer to take out a remortgage in Grimsby in order to access a better mortgage term. This can be achieved either by reducing how long your mortgage term is or by switching onto a product that is more flexible.
When you reduce your mortgage term, you won’t be paying back, nor will you be restricted for as long. That being said, it tends to mean higher monthly mortgage payments for you. The longer you make your mortgage term, the less you’re likely to have to pay per month.
A lot of the time, customers may choose a more flexible mortgage term at remortgage time. This may give you the option to overpay more than usual (this comes with a cap typically), meaning you could pay your mortgage off quicker. Also if you wish to move, you may be able to carry that mortgage onto a new property.
Though this could be the best route to take, they will typically come in the form of tracker mortgages. As we looked at before, this will correlate with the Bank of England’s base rate. This means your monthly payments could be a little unreliable, as they may change.
Unless the country were to experience another serious market crash, every homeowner will have a certain amount of equity existing within their home. This can be worked out with the difference between what you still owe on the mortgage, and the value of the property.
As mentioned previously, people usually look at taking out a remortgage to release equity as a way of assisting with the funding of home improvements, though you may have something else you wish to use this for.
Popular choices include to cover long-term care costs, provide an income boost, cover the costs of a large holiday, pay off an interest-only mortgage or to simply free up some extra disposable income.
From time to time, we also find that Buy-to-Let landlords will look to remortgage to release equity from one of the properties in their portfolio, as a way to cover the deposit for a future purchase.
Following on from the latter section, some may remortgage to release equity, to pay off any built up, unsecured debts.
Though it sounds simple, how much you can borrow for a debt consolidation remortgage depends on how much you owe a creditor, the value of your home and the current state of your credit rating. This means you could be limited in how much you are allowed to borrow.
In addition to this, in order to pay your previous mortgage off entirely, as well as the debts you have accrued, you will have to borrow more than you actually require for a mortgage. This will most likely mean higher monthly payments.
It’s not at all an ideal situation, but you’ll at least have comfort in knowing that should you find yourself struggling, there are some options out there that you can take.
If you have a damaged credit rating, you’re not completely out of options. That being said, it will be a challenge and you will require specialist remortgage advice in Grimsby before you can go forward with it. Even then, you are not guaranteed to get a mortgage.
Homeowners should always seek out the advice of a specialist mortgage advisor in Grimsby before they consolidate any debts against their home.
If you are reaching the end of your initial fixed period and wondering what your options may be for a remortgage in Grimsby, please do get in touch.
Book your free remortgage review to speak with an open & honest mortgage advisor in Grimsby today. We work around your schedule, so you can speak to someone at a time that is convenient for you, whether it be early in the morning or later in the evening.
A trusted mortgage advisor in Grimsby will be able to go over your case and any plans you may have, in order to create a suitable plan of action for your mortgage journey. We always aim to make sure that this time around is as quick, if not quicker than your last process.
A 95% mortgage is as simple as the name would suggest; you are borrowing against 95% of the price of a property, and then you are covering the remaining 5% with your deposit. An example of this is if you looked at buying a property that was worth £150,000 with a 95% mortgage, you would be putting down £7,500 as your deposit and borrow the remaining £142,500 from the lender.
Off the back of the March 2021 Budget, Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, making 95% mortgages more readily available from the bigger high street banks.
This is fantastic news for First-Time Buyers and Home Movers alike, as this scheme will continue running until December 2022. Certain terms and conditions will apply though, which is something your Mortgage Advisor in Grimsby will be able to look at, to see if you qualify.
All our customers who opt to Get in Touch will receive a free, no-obligation mortgage consultation where one of our dedicated mortgage advisors will be able to make a recommendation on the best possible route for you to take.
95% mortgages are usually accessible by both First Time Buyers in Grimsby & those who are Moving Home in Grimsby. Whilst saving for a 5% deposit sounds like a pretty straightforward concept, you’ll still need to have an acceptable credit score and prove that you are able to afford your monthly mortgage repayments, in order to access a 95% mortgage.
A good credit score is essential in the process of obtaining any mortgage, especially a 95% mortgage. Things like paying any current credit commitments on time, ensuring your addresses are updated and checking that you’re on the voters roll, can all help with your credit score.
Affordability is another one that is important to take note of. By giving the lender details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments, your lender will be able to get a general overview of whether or not you are able to afford this type of mortgage.
Nowadays we see lots of family members helping each other get onto the property ladder, especially parents looking to further their children’s lives. The way this usually happens is by gifting the person looking to find their home, the deposit required. Known through the industry as the “Bank of Mum & Dad, Gifted Deposits are only intended to be a gift, and not as a loan. The lender will need proof that this has been agreed upon before it can be used towards your mortgage.
When looking for a 95% mortgage, you want to make sure you have the right type of mortgage. Each mortgage type works differently, with that choice allowing you to find one that is most appropriate for your personal and financial situation.
Some homeowners and homebuyers prefer Fixed Rate or Tracker Mortgages, mortgage types which mean you either keep interest rates at a set amount for the term given or have your interest rates tracking the Bank of England base rates.
Alternatively, you might find that Interest-Only or Repayment Mortgages are more your style. Interest-Only allows cheaper payments until you need to pay a lump sum at the end (mostly now used for Buy-to-Lets), whereas a Repayment mortgage (a normal mortgage if you’d like) means you’ll be paying interest and capital combined per month.
Seeing as a mortgage is such a large financial outgoing, you need to be prepared and need to be aware. You might find things like higher interest rates, remortgaging difficulties due to less equity and then negative equity all cropping up if you’re not.
There is no need to worry though, as all these can be avoided if you’re savvy enough with your process to begin with. The more deposit you put down for a property, the less risk the lender will see you as.
A larger deposit, of say 10-15%, would not only reduce the rates of interest by a noticeable amount but would also give the property more equity and reduce the risk of negative equity, thanks in part to you borrowing less against the property.
So, whilst the risks may seem intimidating, planning ahead and saving for a bigger deposit to access something like a 90% or even an 85% mortgage will be a massive help in your mortgage journey and something you’ll be able to reap the rewards from in the future.
Rishi Sunak’s second Budget as Chancellor brought two pieces of welcome news for the property sector as the Government attempts to transform “Generation Rent” into “Generation Buy” to help stimulate the UK economy, namely the new 95% Mortgage Guarantee and an extension of the Stamp Duty Holiday.
The name of this scheme is misleading as not everyone that applies is guaranteed to be offered a mortgage, it is still subject to affordability and credit score. The “guarantee” itself is that the Government will ensure Lenders don’t stand a loss if they grant a 95% mortgage to a customer who then subsequently falls into arrears and is repossessed leaving behind negative equity.
This scheme should in theory give Lenders more confidence to lend even though the applicant only has a smaller deposit to put down. Of course, Lenders never want to repossess someone’s home unless it is the last resort, but if that happens then the new scheme would cover any shortfall.
Lenders have been worried about the prospect of home values decreasing so this measure should alleviate that concern although of course, the chances of negative equity occurring will naturally reduce should property prices increase as a result of these announcements!
The scheme is available to both 1st Time Buyers and Home Movers, it’s available on any property (not just new build) and will run until December 2022. Some major High Street Banks have already signed up to the scheme and it’s likely more will follow later on. It’s still a big challenge for Lenders to cope with the demand they are getting for mortgages due to the difficulties training and supervising staff working from home but they will want to offer as many of these mortgages as they can.
When the Stamp Duty Holiday was launched last year we all hoped life would be very much back to normal by the cut-off date of 31st March 2021 but things didn’t pan out that way as we know. Solicitors are struggling to keep up with the workload and if lots of chains had collapsed then it would have partly defeated the object of the exercise.
Therefore it was good to hear the scheme has been extended to 30th June for purchases up to £500,000 and 30th September for purchases up to £250,000.
The Government certainly sees the property sector as an area that can play a big part in our economic recovery and if you are looking to buy a home or remortgage this year please reach out and we will be happy to advise you.