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After saving for years and months, you’ve finally reached the point where you are ready to make a deposit on a property. Whether you have had some help from “the bank of Mum and Dad” or have entirely relied on your own funds, it’s time to get the ball rolling!
This may be your first experience as a first time buyer in Grimsby or your second as a home movers in Grimsby, either way, we are here to give you some top tips on how to get prepare for a mortgage:
As a Mortgage Broker in Grimsby, we always recommend in getting Mortgage Advice as early on in the process as possible. This way you will know how much you can borrow for a mortgage and how much it will all cost. There is nothing better than having a professional Mortgage Advisor in Grimsby by your side to help guide you through the whole process.
Obtaining an up to date credit report should also be at the top of your list, you want to know exactly where you stand in terms of your credit score. You don’t want anything holding you back from buying a home. Taking the above two steps will give you a good insight into how possible this is going to be and what your budget is.
Your Mortgage Broker in Grimsby, like us, will be able to obtain a fully credit-checked agreement in principle on your behalf. In order to get this, you will have to provide some proof of who you are to us, this includes your name, where you live and how much you earn. There is a lot of paperwork for you to get together so it’s a good idea to open a file for yourself and start collecting everything in advance.
In terms of proving who you are you’ll need to produce some photo ID such as a Driving license or passport.
In addition to the above, you’ll need to prove where you live. You’ll need to produce a utility bill or original bank statement dated within the last 3 months.
The analysis of your spending habits is one of the most important determining factors in whether you’ll qualify for a mortgage or not. Lenders need to ensure that you’re going to be able to meet your mortgage payments every month. Your bank statements should evidence your income and monthly expenditures. Lenders will not be too happy to see gambling transactions on your account, neither will they like it if you go over an agreed overdraft limit or if your direct debits bounce regularly.
You will have to provide evidence that you have the funds in place for the deposit, this is also for anti-money laundering purposes. Try not to move monies around your various accounts too much as it will make evidencing the audit trail much more difficult. All lenders will like to see that your savings account has been built up over time in order to afford the deposit. It shows you are taking this seriously and managing your money well.
Gifted deposits are becoming increasingly more popular, we are seeing that most of our applicant’s 5% deposit is made up of these. These gifted deposits are often gifted by family members or friends. These funds can’t just be handed over, they need to be evidenced; meaning the “donor” will need to sign a letter to confirm that this is a gift and not a loan.
In terms of affordability, the most important thing is to be able to prove your income. If you are employed this tends to be by way of your last 3 months’ payslips and most recent P60. Lenders can take into account regular overtime, commission, shift allowance and bonus. If you are self employed in Grimsby then you’ll need your accountant’s help. This will be to request your tax year overview.
You should put some time aside to do some research and make a note of an estimate of your anticipated outgoings after you move house. You can work out an idea of how much the council tax and utility bills will be. In addition to that, you can work out your regular expenditures, such as food and drink. This will demonstrate how much disposable income you have available to pay your mortgage from.
When applying for a mortgage, to save things from getting complicated, you should get help off a specialist. Having a Mortgage Advisor in Grimsby by your side could prove extremely beneficial. You want to do your best to impress your lender and show them that you have done all you can within your power to get everything ready for your mortgage application. Grimsbymoneyman can help you with this and depending on your circumstances, we could have everything arranged within 24 hours of your free mortgage consultation. Get in touch today, we can’t wait to hear from you!
Once you are all ready to make your first offer on a property, it is important that the seller or the estate agent knows all about your personal and financial circumstances. Telling them all of your details give you a higher chance of being accepted.
99% of the times, you will never beat a cash buyer, lenders love less paperwork and a quick home buying process, which wouldn’t be the case if they had accepted someone wanting a mortgage. If you can’t afford to go down this route, to improve your chances of being accepted for a mortgage, you should get a mortgage agreement in principle prepared before you make your offer.
Having a mortgage agreement in principle at the ready shows that you have planned ahead and really want to secure this property. Whereas, if you don’t have one, your lender will know that you weren’t prepared and that you aren’t fully aware of how to apply, which could go against you.
This is why approaching a Mortgage Broker in Grimsby could really benefit you during the home buying process. Once you find a property that you are interested in making an offer on, Grimsbymoneyman can quickly get you together with a mortgage agreement in principle. Depending on your situation, we can sometimes offer the same day service.
Buying a property is a negotiation process. If your first offer gets rejected, don’t worry, it’s perfectly normal to not be accepted first time round, you will get another chance to increase your original offer.
If your increased offer is also rejected, you may have to raise your offer again to match the asking price. If the property has just been listed on the property market, it’s unlikely that the seller is going to budge from their asking price. If you aren’t prepared to match their asking price, you may have to walk away and start looking for more properties.
To get a rough idea of what you may have to pay for your property, you should check out Zoopla and Rightmove and take a look “sold” prices of houses that are similar to the one that you are looking at. These prices are pulled from the Land Registry so they are reliable and can be used as a comparison.
You will sometimes see that some houses end up selling for less than their actual worth and this is because they could’ve been repossessed, sold to a tenant at a discounted price or an inter-family sale.
If you are still unsure about how to make an offer on a property and need help getting on the property ladder as first time buyer in Grimsby, you should get the help from an expert Mortgage Advisor in Grimsby. They will do all they can in order to try and get that dream home of yours secured.
We are available from 7 days a week, so if you ever have any mortgage questions, you know who to call. Receive a free mortgage consultation today with your expert Mortgage Broker in Grimsby.
Whether you’re a first time buyer in Grimsby looking to step onto the property ladder or someone who’s moving, you’ll soon discover that there’s a diverse array of mortgage types available. Some are widely known and readily accessible, while others are more niche. To help you better understand the variety of mortgages at your disposal, we’ve compiled a list of the most common options offered by lenders. We’ve also created informative videos for each mortgage type to make them more comprehensible, as some can initially appear quite complex.
A fixed-rate mortgage is quite straightforward. With this type of mortgage, your monthly payments remain constant for a predetermined period that you agree upon with your lender. Typically, people opt for fixed-rate mortgages with durations of 2-5 years, but you can choose longer terms, such as 10 or even 15 years.
It’s essential to consider that long-term fixed-rate mortgages lock you into the same payments for an extended period, and significant changes can occur over 10 or 15 years. The economy and interest rates are unpredictable over such extended periods. To potentially save money in the long run, opting for a 2-year fixed-term mortgage and renewing it with a different rate every 2 years could be a more flexible and advantageous approach.
A tracker mortgage is where the interest rate closely mirrors the Bank of England’s base rate. Unlike fixed-rate mortgages, the lender doesn’t set the interest rate but ties it directly to the Bank of England’s rate. Your interest rate is usually expressed as a percentage above the Bank of England base rate. For instance, if the base rate is 1% and your tracker mortgage is set at 1% above the base rate, your effective interest rate would be 2%.
During periods of high Bank of England interest rates, lenders may be less inclined to offer tracker mortgages since they can result in higher interest payments for borrowers. Fixed-rate mortgages tend to be more popular in such circumstances because they provide stability and protection from rising interest rates. If you choose a tracker mortgage when the Bank of England rates are high, it may lead to higher mortgage payments over time, which might not be suitable for borrowers seeking predictability and affordability.
When you have a repayment mortgage, you’re making monthly payments that cover both the loan’s interest and principal. If you consistently make these payments throughout the mortgage term, you’ll ensure that the loan balance is fully paid off, and the property becomes entirely yours.
Repayment mortgages are the most secure way to repay the borrowed capital. In the early years, the majority of your payments go toward interest, causing the balance to decrease slowly, especially if you’ve chosen a longer-term mortgage, such as 25, 30, or 35 years. However, this pattern changes in the last decade of your mortgage, where your payments start to pay off more of the principal than interest, resulting in a quicker reduction of the remaining balance.
While many buy to let mortgages in Grimsby are commonly structured as interest-only, obtaining an interest-only residential property mortgage has become considerably more challenging. Lenders are now less inclined to offer interest-only products. However, there are specific situations in which this option may still be available.
Such situations include downsizing in later years or having alternative investments earmarked to repay the principal. Lenders have become much stricter in their criteria for offering these products, and the loan-to-value ratios are significantly lower than in the past.
An offset mortgage involves the setup of a linked savings account alongside your mortgage account by the lender. The concept is simple: if you have a mortgage balance of £100,000 and maintain £20,000 in your linked savings account, you only pay interest on the reduced amount, which is £80,000 in this scenario. This approach can be highly effective for managing your finances, particularly if you fall into a higher tax bracket.
Whether you are a first time buyer in Grimsby searching for a perfect home or current home-owner wanting to move house, we can help! You may be looking to remortgage, interested in buy to let mortgages, need mortgage advice in Grimsby. Guiding you through these situations is what we do best and it is our service to you as our consumers.
One of the most common questions we get asked from customers like first time buyers in Grimsby is “How much can I borrow for a mortgage”. Let’s look at the background of affordability assessments and how they apply post-2014.
Back in the day before credit scoring, mortgages were manually assessed by your local building society manager. Lenders moved towards more uniform income assessments to provide a consistent approach in the 1990s.
Maximum lending “caps” were brought in so that customers couldn’t borrow more than 3-4 times their annual income.
At the time of the credit crunch in the 2000s, these income multipliers kept becoming more and more generous. Of course, some lenders allowed their customers to “self-certify” their incomes with no background checks such as payslips.
This went horribly wrong and it was a struggle to get onto the property ladder from 2008-2010. This is because lenders battened down the hatches and created a cautious (over-corrected) lending environment.
In 2014, the Mortgage Market Review (MMR) was introduced once the market had finally recovered. This brought a new set of guidelines for lenders to adhere to. The old income multiplier method was scrapped and replaced with new, more sophisticated affordability calculators.
These new calculators gave a closer look into an applicant’s spending habits and net disposable income. This meant that the lender could have an in-depth look into your bank statements to ensure that unaffordable mortgages were not granted as they were before the Mortgage Market Review was introduced.
To this day, there is still a “lending cap” in place at about 4.75 times your annual income but your expenditures are also analysed. For example, lenders seem to penalise low-earners and even things like gambling can sometimes affect your chances of being lent the money. Some take pension contributions as a fixed outgoing so would often lend, say a public sector worker with a big pension deduction less than a private sector and so on.
If you are looking to maximise your borrowing capacity to obtain the home you want to buy then we would advise you to speak to a Mortgage Broker in Grimsby, like us. A Mortgage Advisor in Grimsby will research the property market on your behalf and try to find a lender that will lend you the right amount that you need.
Before you take out a mortgage you should sit down and have a chat with an expert Mortgage Advisor in Grimsby and work out your finances together to ensure that the repayments feel comfortable to you.
Throughout our time working as mortgage advice experts in Grimsby, we have seen all kinds of first time buyers in Grimsby who have found their footing on the property ladder by purchasing the home they are renting privately from a landlord in Grimsby. This process is called buying as a sitting tenant.
As a private tenant, you may find that your landlord will eventually offer you the “first refusal”. This is what we call the process of a landlord allowing the tenant who is living within their property, to purchase it directly from of the landlord, before it is put onto the open market.
If this is something that you would like to do and you have not been offered first refusal or are not sure whether or not this could be an option for you, we would definitely suggest getting in touch with your landlord and at least asking the question.
One of the main reasons that we have seen tenants purchasing from their landlord becoming more popular, is because of changes in government policy. Buy to let mortgages in Grimsby, in previous years, could benefit from government tax relief. This now no longer applies to landlords.
What this means, is that many landlords are now paying higher tax bills. When viewed as long-term investments, buy to let mortgages in Grimsby can be a fruitful endeavour. Even taking away these tax advantages, it can prove to be profitable.
That being said, the investments can end up being quite costly for the investor, which can sometimes lead them to sell their buy to lets in Grimsby and move on to pastures new. Because of this, you may find yourself being offered the chance to buy their property from them.
Regardless of their reasons for doing this, whether it is a personal reason, a financial reason or something else, there are many different positives to selling directly to a tenant, instead of selling to the open market and using an estate agency to help you do so.
When a landlord instead goes directly to the tenant for a sale, they can find themselves saving a large amount of money that would, the landlord can end up saving a good amount of money. That money would have most likely gone on estate agency fees otherwise.
If the landlord were to put the home up for sale on the open market, potential property buyers will have to schedule times to go and view the property. This would be quite a difficult aspect if the tenant were still living within the property.
Since the landlord will be directly selling the property to their tenant whilst they are still staying within the property, there will be no need for the landlord to do any further work on the property. This means you won’t need to pay for cleaners, make any major or minor repairs, or even repaint.
Of course these types of things would be very appealing to potential property buyers who are seeing it for the first time, but you don’t need to impress the tenant who has already lived there, no doubt made it their own and fallen in love with it. They’ll be happy to take it as is.
By putting their home on the open market and getting the tenant to leave (or if they leave by their own volition), the landlord will find themselves with a rental void, a period of time in which they will not be making any money from the property.
There is no guarantee you will find a buyer immediately. If the property were to take months to sell, you would be going months without additional income and need to be able to make up your monthly payments on your mortgage still, until your sale completes.
Selling to the tenant, however, means that you retain a flow of income until your sale is completed and the property becomes theirs.
You have spent years living within your home, you have grown to love all of it’s quirks inside and out. There is no element of surprise, you everything good and bad about it.
Buying a property that you have already been living in can let you make all of the changes that you had been hoping to make. If you were looking to perhaps take out some features and put new ones in, use paint more to your liking, or anything else, you have the freedom to do so.
Since it is very likely that your landlord will be saving money in selling you the property, you could find (at least we have seen) that they will offer you a discounted property price, as opposed to the price that would otherwise be available on the open market.
Property chains can become quite problematic for home buyers and home movers, making the process longer and more stressful. You’re basically waiting for one person to move out, so that you could move in, whilst that person themselves could be waiting on another person.
This can make it all a very difficult situation for all involved and has caused a lot of property sales to struggle because of it. Sitting tenant purchases, however, will not need to worry about any property chains, as you already live there! All you need to concern yourself with is mortgage lender criteria.
Research from Legal & General has shown an increase in gifted deposits from parents now more than in any recent years. If the “Bank of Mum & Dad” was an actual bank it would be one of the top 10 biggest lenders in the UK.
£24,000 is the average for most Parental Deposits which are provided within the UK. Extended family members, including grandparents, are also seen to be the common benefactor of Gifted Deposits.
It is only because of the re-enforcement of the income and support from their families that thousands of home-buyers every year are only just able to get their foot firmly on the housing ladder. In fact, without these gifts, the market would turn out very differently within a short period of time.
According to the survey, almost 20% of parents who choose to help their children financially did so due to parental responsibility.
The distance between Property prices and wages over the recent years has grown vastly, further distancing a first time buyers in Grimsby successful chances to owning their first property, especially if there is only one level of income slowing down the process of building savings.
Renting also affects the progress in saving for a reasonable deposit. This often leads to the majority of individuals moving back in with their parents to give them extra time to save and get them on the right track to securing a home.
But the transference of funds from the older relatives could foresee a possible backlash and could affect the parent’s quality of living in retirement.
Based on their survey of 1600 parents who had helped out their children, most gifted deposits were withdrawn from their own personal savings such as pension schemes. Overall, it seems this is just an early inheritance where beforehand the parents help and advise where it’s spent.
When customers like first time buyers in Grimsby have an offer accepted on a property your next job is to arrange a property survey. This will establish the condition of the property and ensure that it is worth what you are going to pay for it. If something is found on the survey you are then in a position by law to approach the seller to negotiate a price for the works required.
Here’s a short video from the Royal Institution of Chartered Surveyors (RICS) that explains the different types available to you.
There are 3 main types of property survey available to you:
A basic valuation is the cheapest option and you will be required to have one of these before you receive your mortgage offer. Please don’t confuse this with a full survey. The mortgage valuation confirms to the lender that the property is worth at least what it is lending you.
Your mortgage lender may even offer you a free basic valuation as part of your deal.
A Mortgage Valuation will not highlight any repairs that are needed. However, it may point out any obvious defects and recommend that you investigate further.
A Homebuyer’s report will cover structural safety and highlights problems, including damp, as well as anything that doesn’t meet current building regulations. This kind of report will give you an independent report of your property by an expert.
To ensure you are not paying for two surveys it is advisable to ask the mortgage companies surveyor to carry out this report for you – it will usually take a couple of hours to complete.
A Full Structural Survey is advisable for older properties and those of a non-standard construction.
Depending on the property size and type – a full structural survey can take as long as a day to complete.
A full structural survey provides a detailed report on the condition of the property and highlights issues that should be investigated further before going ahead with the purchase, providing you with peace of mind about the condition of your property.
You can find a surveyor to carry out a Homebuyer’s report or building survey through the Royal Institution of Chartered Surveyors.
Whether you are a first time buyer in Grimsby actively viewing properties or a home mover with your house on the market, you may have noticed that some of the larger estate agents and builders are very keen for you to use their in-house mortgage advisor and conveyancing services.
Being part of a stand-alone mortgage business we receive lots of feedback as to what sales tactics can be used, examples of this are:
“Keeping everything under one roof is easier with one point of contact”
“If you use our services it will give the vendor peace of mind that everything will go through smoothly”
“You need to come in and see our mortgage advisor for your offer to be qualified”
“Your offer is more likely to be accepted if you use our mortgage advisor”
“We get better deals than most brokers”
“Everything is likely to go through quicker if you use us”
“We will do all of the chasing of the solicitors for you and they’ll be more responsive to us due to the amount of work we send them”
“We’ll give you a free carpet/washing machine if you use our (extortionately priced) recommended conveyancing service”
Remember, when negotiating a purchase price, do you really want the seller of your property having access to your personal financial situation and potentially knowing your maximum borrowing?
Mortgage Protection Insurance is a term used to encompass various types of cover designed to protect borrowers from events which could severely impact their ability to maintain mortgage payments.
There are different variations but when connected to a mortgage they are all there to provide peace of mind and usually fall into the following categories:
As a rule, if the policyholder dies within the term, then the sum assured should be enough to pay off the outstanding mortgage balance and ensure the borrower’s dependents aren’t left with a debt they might not otherwise be able to manage.
Our advisors can run through all the different types of life cover and recommend the most suitable plan for you, having cover is really useful for first time buyers in Grimsby.
Critical Illness Insurance works in a similar way to Life Assurance, in that it is usually taken for a specific term of years and can have different options such as level/increasing etc. It is designed to pay out a lump sum and, like Life cover, for borrowers, it is typically taken on a decreasing term basis in line with the reduction of your mortgage balance.
The key is that the benefit is paid if you fall victim to one of a number of specified critical illnesses and pays out whatever the long-term prognosis of that illness. The type of illnesses covered vary from company to company, that’s why this type of insurance cannot be solely price-driven and advice is recommended.
In practice many companies will offer Life and Critical Illness Critical cover as a combined policy and would usually payout on the “first event” i.e. whatever happens first – either death or a serious illness – the pay-out is made. They can also be written on a single or joint life basis.
Whereas Life and Critical Illness cover pay out a lump sum, Income Protection pays out a monthly sum designed to replace your wages in the event of you being unfit to work. Unlike Critical Illness cover, there are no restrictions on the illnesses or injuries covered, the only factor being whether they make you unfit to work. There are however restrictions on how much you can cover and how quickly benefits would start to be paid.
Like Life and Critical Illness cover, these policies are underwritten based on your health and lifestyle at the time you apply. All income protection policies are written on a single life basis.
Probably the least common of the mortgage protection type policies but can often be valuable – particularly for those with young families. These plans can be taken to cover Life and/or Critical Illness and are underwritten on application in the same way as mentioned above.
However, unlike the traditional forms of policy, rather than pay out a lump sum, the cover would pay an annual or monthly income for the remainder of the term of the plan. Thus, it can replace the income of the main breadwinner for a number of years, dependent upon a particular client’s circumstances and, because of this would usually be written on a level or basis, or an index-linked basis designed to keep up with inflation.
There’s an adage that says you can never have too much insurance. Certainly, many people have one or more of the different types of policy and it would be wrong to think of Mortgage Protection Insurance as just an “either/or” choice. However, in the real world, affordability plays a massive part, so whilst it would be fantastic to cover yourself for every potential opportunity, a good advisor will sit down with you and tailor the type of cover to be the most suitable combination to your family’s priority and budget.
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Grimsbymoneyman.com & Grimsbymoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.
Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk
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Grimsbymoneyman.com & Grimsbymoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.
Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk
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