Every now and again we come across a customer who would like to remove someone else’s name from a mortgage. As a mortgage broker in Cardiff, the main reason we hear for this is divorce or separation.
When encountering an instance such as this, sorting out your joint financial commitments should be your primary focus, to prevent any challenges down the line. Unfortunately, they’re often left until last.
Doing so makes the process a lot more difficult, stressful and much more time-consuming, so you should always do this ahead of time. Speaking to a mortgage broker in Cardiff is a good way to get on top of this.
Leaving your name tied to someone else financially can be problematic for you in the long run, due to a few reasons.
The first being that because your name is still tied, you will still be chased for missed mortgage payments, whether you live there or not. There is no getting out of that situation once you are in it, as you are legally responsible until removed.
Additionally, your credit score will also be affected by the financial association. If the other person’s credit score drops, so too will yours. Furthermore, if you were looking to take out a mortgage of your own, in your own name, you would be finding yourself in a difficult process.
For one, it will affect your affordability, as the mortgage lender will see it as an already large financial outgoing. This means you will not be able to borrow as much for your property purchase.
On top of this, you could be faced with higher Stamp Duty tax implications because you will be purchasing a new property whilst technically still owning one already. This can end up being quite costly.
All in all, it is best practice to remove your name from someone else’s mortgage as soon as you possibly can.
If you are the person who will be taking on the property and full responsibility for mortgage payments, the first step is to find out whether or not you are eligible for a remortgage onto a new deal as a sole name applicant.
Speaking directly with your mortgage lender/building society or getting in touch with a mortgage broker in Cardiff will help you to determine this.
Prior to removing someone else’s name from a mortgage, it is important that you both agree who will be getting the property. If you disagree, you may end forking out on court costs to come to some sort of decision.
If you are currently experiencing divorce or separation, it will definitely be worth your while in seeking specialist mortgage advice in Cardiff. An expert mortgage advisor in Cardiff will be able to help you with your mortgage process.
If you require any help removing someone else’s name from your mortgage, it is absolutely worth your time getting help from a specialist mortgage broker to help you remortgage in Cardiff.
We are here to provide expert mortgage advice in Cardiff, 7 days a week including weekends and some bank holidays, to provide support and guidance throughout your remortgage process. Book your free remortgage review today and we will see how we can help.
As an experienced and hard working team of mortgage advisors in Cardiff, we always aim to make sure that our customers are kept informed, up-to-date and prepared for the mortgage journey that lies ahead.
In this article we have put together a detailed list of the 10 steps that First-Time Buyers in Cardiff will go through during their mortgage process. It’s our hope that in this, you are closer to being ‘mortgage ready’.
There are 10 steps in the process of buying a home and obtaining a mortgage;
After putting in some very careful thought and consideration, you’ve now decided to take on the world of properties and purchase your very first home, obtaining a mortgage as a First-Time Buyer in Cardiff.
We can say with near certainty that this is going to be one of the most important decisions you ever make regarding your financial state. Once you come to terms with this, it can be anxiety inducing, especially when you are inexperienced with this sort of thing.
It is here where a dedicated mortgage broker in Cardiff can help you with the oncoming mortgage process. We always work hard to reduce our customers stress, doing everything that we can to ensure you come out the other side with a mortgage, positive and ready to enjoy your new home!
Once you have booked your free mortgage appointment with one of our open & honest mortgage advisors in Cardiff, we’ll gather some information from you and take a look at your future plans, before starting off your mortgage.
Whilst your free mortgage appointment is underway, your trusted mortgage advisor in Cardiff will take the time to go through a Mortgage Affordability Assessment with you.
This is generally a fairly quick process. Here your dedicated mortgage advisor will take a look at your monthly income, analysing any of your regular expenditures (the things that you spend your money on), to gain a better understanding of whether or not you are financially capable of paying back a mortgage.
This is crucial to your process and is something we must do before presenting you to a lender, as we need to be completely confident that you are able to afford your monthly repayments. This helps you to avoid potential debts and any future repossessions that could occur. Your mortgage lender will really want to avoid this too if they can.
A Mortgage Affordability Assessment will typically be taken out by a lender too, so our initial checks help to save the lenders time, your time and ours, from an application that could be declined if you happen to fail their affordability checks down the line.
Once this has been done, the next step in your free mortgage appointment will be helping you to obtain a very key document called a Mortgage Agreement in Principle.
If you have been looking up mortgages prior to enquiring for First-Time Buyer Mortgage Advice in Cardiff, it is likely you will have heard of this, albeit under a few different names.
Some of these include ‘Decision in Principle’, ‘Mortgage in Principle’, as well as being shortened to ‘DIP’ & ‘AIP’. Don’t worry about this, as although it may be confusing at first, they are all actually the same thing.
The reason why making sure you have a Mortgage Agreement in Principle is so important, is because it proves that you have passed a lenders primary credit scoring system, whether that be from a hard credit search (this leaves a footprint on your personal credit file) or performing a soft credit search (which typically does not leave a footprint on your personal credit file).
Having this still doesn’t mean you are 100% going to get a mortgage, but it is definitely a step you will have to take on your mortgage journey. Another reason why it could be so beneficial, is that it shows the property seller that you are very serious, possibly leading to price negotiations when the time comes to make an offer.
Generally speaking, you will find that an AIP tends to last somewhere between 30-90 days. If your Agreement in Principle expires before you have chance to use it, we can easily renew this for you. Our expert team of mortgage advisors are usually able to obtain this for you within 24 hours of your mortgage appointment.
After you have obtained an Agreement in Principle, the next step will be to find yourself a Conveyancer who can help you with the legal aspects of home buying. The term Conveyancing is the term that is used for the process of transferring of legal ownership for a property between two parties, from seller to buyer.
Your Conveyancing Solicitor will help you out with contracts, provide you with any required legal advice, conduct local council or authority searches, deal with Land Registry arrangements and finally, the most important part, the transfer of the funds to pay for the property in question.
As you are able to see from the above information, this is a very crucial role in your mortgage process, so it’s important for you to decide carefully on who you use.
Another important thing to bear in mind, is that Licensed Conveyancers are property specialists and are not able to deal with more complex legal issues, whereas a more general Solicitors will be able to offer a wide range of services, though as such may appear to cost more.
Whilst we do not offer any of these services in-house, we do have some select companies that we know and trust, and will gladly be able to refer you to them if you would like us to.
Up until this point, you’ve now spoken to a Mortgage Broker in Cardiff, passed the Mortgage Affordability Assessment, obtained an Agreement in Principle and found an appropriate Conveyancing Solicitor to help with arranging the legal side of your purchase. You’re almost done now, all that’s left is to make an offer!
As previously touched upon, with an Agreement in Principle to your name, you will be in a much better place for making any property price negotiations with the seller. Don’t be afraid to ask for a lower price, but be wary not to insult the seller with a price that is too low!
If the seller knows that you have an AIP to your name, they will be much more likely to accept any offers you make that are slightly lower than they might receive from someone who is quite happy to pay the asking price but hasn’t even started the mortgage process yet.
If you look at the worst case scenario here, the seller might say no, but it’s here where you can take a step back and either discuss a reasonable offer that you can both agree on, or take a step back and find a more affordable property that you wouldn’t mind calling home.
Once you have had your purchase offer accepted, it’s back to your mortgage advisor and onto the final few steps of the mortgage journey!
The next step you will be taking is very important. Every step of your journey is important anyway, but this one is especially, as you’ll be submitting the necessary documents to be able to continue with a mortgage.
As can probably be expected when you are dealing with such a vast amount of funds, a mortgage lender will be incredibly meticulous as to who they will lend money too, and we can’t blame them for it. There have been lots of different instances in the past where lenders were a little less strict on the rules and it didn’t go well for them.
Your mortgage lender will require you to give them the proper documentation to prove your identity to them. They will also need to see your current earnings, where your current place of residence is and how well you are handling your finances on a regular basis.
If you’re obtaining a joint mortgage, the mortgage lender will require the same documentation that you will be providing, from the other applicant as well. This is to once again confirm their identity, address and earnings.
The types of documents that a lender will need to see include; proof of ID, proof of your home address, the last 3 months’ of your pay slips and latest P60 (employed).
They also need to see the last 3 years’ proof of earnings and Tax Year Overviews (if you are Self-Employed in Cardiff), proof of any additional income such as state benefits or maintenance, proof of your deposit and the last three months of your own personal bank statements.
When you have had your mortgage agreed in principle, and you have also had an offer accepted, we are now able to go ahead and help you with submitting your full mortgage application to the mortgage lender!
With everything checked and prepared by your dedicated Mortgage Advisor in Cardiff & their trusted team of Mortgage Administrators, we are ready to put forward your application to the lender and begin the waiting process of (hopefully) receiving confirmation that the mortgage is good to go.
Your mortgage advisor in Cardiff will send the lender all of the evidential documentation they have collected for this, and then all that is left is to wait and see what the outcome of this whole process is going to be!
Whilst there is specific time frame of which you can get a response, our Mortgage Administration team will be able to chase the lender to find out the answer for you, keeping on until we know for sure whether or not you have the mortgage.
In-between the point where your mortgage application is submitted and when you are offered a mortgage, the lender will need you to have a valuation survey taken out on the property. These types of service tend to be carried out by accredited companies nominated by the lender (someone that they trust to be fair and honest).
The reason they do this is to accurately figure out how much the property is actually worth overall, compared to the amount that you have agreed to pay for it with the properties seller. If the lender believes you are paying more than the properties true value, they may be less likely to accept your offer.
This is because in the event of arrears and repossession, selling the property would result in them being out of pocket, as they’d be making back less than they had let you borrow in the first place. This is known in the world of mortgages as a ‘Down Valuation’.
There are a lot of different property survey types available, with the prices of these varying on which one you choose.
Some will just look at the properties value, whereas some will also document any structural concerns that you perhaps should look at, as well as any potential repairs that could require your attention down the line. Your trusted Mortgage Advisor in Cardiff will help you to decide on the right one.
Now it’s time to face the moment you have been waiting patiently for. Your mortgage lender has thoroughly gone over your case and performed an in-depth assessment of all the evidence that was documented. You are now ready to be presented with your formal mortgage offer.
Our fast & friendly team of dedicated Mortgage Advisors and Administrators in Cardiff, that you have conversed with frequently and surely gotten to know quite well over your mortgage journey, will review this offer on your behalf to ensure that nothing is wrong and as you want it.
The next step after your formal mortgage offer has been received, will be for your Conveyancing Solicitor to take your purchase all the way to completion.
A big congratulations is in order, you have gone from an unsure and inexperienced First-Time Buyer in Cardiff, all the way to confident and mortgage ready First-Time Homeowner in Cardiff!
From this point forward, we hope that your worries are eased and that any past anxieties and concerns you had have been put to rest. With sincerity, we hope that you are thrilled with your new home and excited to start the next chapter in your life.
The only thing left for you to do is to grab your keys and start moving in your possessions! We genuinely hope you received a top tier Mortgage Advice service in Cardiff and enjoyed speaking to our team throughout your mortgage journey.
If you have opted to go forward with a fixed rate mortgage, at the end of your particular fixed period, we will Get in Touch once again to assist with either your remortgage, or any future property plans you may have!
If you are a member of any form of military personnel, there is some great news for you, courtesy of Army Families Federation Defence Secretary Ben Wallace.
The current Help to Buy Scheme that was created with the purpose of helping out military personnel to find their place on the property ladder, has been extended to a later date.
The scheme originally came into the world way back in 2014, with the £200 million scheme being put out with the aim to provide a boost to anyone who is a member of the forces and is in need of help buying their own property.
Though created for great reasons, the project was not created to be around for a long though, originally slated to end in December 2019.
As opposed to just bringing it to an end though, to give out a thank you to the forces’ commitment to their Queen and country, the UK government made the decision to extend this scheme further, right up until the end of 2022.
If you have served in the military at some point in the past and you are able to meet the right criteria, you will be able to utilise this government scheme, which will allow you to borrow a deposit that is up to half your annual salary (with a maximum of £25,000), without additional interest on top.
You will be able to use this scheme as a way of buying your first home or to cover the costs of a new property to move into. You could argue that the most appealing aspect of this, is that you are not required to have any current savings in order to make the leap onto the property ladder.
The funds that you will be able to use is raised from the Forces Help to Buy loan and you are able to use it for pretty much anything, from your deposit on a property, to any other costs that come up.
These costs may potentially include, but are not limited to, the costs of stamp duty, estate agent fees or even the costs of locating a suitable solicitor.
This government scheme is considered to be a little more relaxed than the other schemes available to home buyers, as the Forces Help to Buy loan can be taken out and paid back over a 10 year term. This allows you to breathe and not feel like your impending payments are breathing down your neck every month.
Bearing this in mind, the Forces Help to Buy loan can be an incredible lifeline to those who never even thought the prospect of owning a home would ever be a reality.
Once again, remember that you will still have to qualify for eligibility, the terms of which are based on if you have served your country and are able to meet the necessary criteria (length served, service term left and medical categories).
Click here to read further details on this helpful scheme from the government.
By enlisting the help of a dedicated team of mortgage advisors in Cardiff, your journey to mortgage success may go quicker and smoother than it otherwise could have done.
Your assigned advisor will guide you throughout every part of the process, ensuring you are taken care of and well informed.
From the beginning of your journey, until your mortgage completes and beyond, your trusted mortgage advisor in Cardiff will be by your side, hopefully allowing you to end up with a favourable outcome.
We’re proud of the reliable and efficient customer service we provide, always working hard to reduce customer stress and most importantly, show love and respect to our nations forces.
Book your free mortgage appointment online today and we will see how we can help.
Note; the Forces Help to Buy is not the same as the standard government Help to Buy Scheme.
If you have your heart set on a property and are ready to make an offer to purchase it, you may be left scratching your head, unsure of what exactly you should do next.
It’s not as simple as just approaching a seller and asking to buy the property, there is a lot you need to do ahead of time in order to prepare for this step.
Obtaining an Agreement in Principle is a key part in the process of buying a home. It is a written statement of approval from the mortgage lender that confirms that in principle, they are willing to lend you the desired amount to purchase the property, subject to further checks.
It’s for this reason why you will need to make sure that you have one to hand, as a home seller or estate agent will want to know that you actually have the funds to proceed, avoiding any possible wasted time on both their end and yours.
During the COVID-19 lockdown periods in 2020, you even needed an Agreement in Principle to view a property, let alone buy it. This was to limit the viewings only to people who could proceed there and then if they wanted to make a purchase.
As an experienced mortgage broker in Cardiff, we always recommend preparing ahead of time and putting yourself in a better position than other buyers, by obtaining an Agreement in Principle as early as you can.
In most cases, you will never be able to compete with a cash buyer of a property. Lenders love it when someone can make a payment on the spot, without having to wait for a mortgage to complete.
That being said, by obtaining your AIP, you may be able to increase your odds against cash buyers and even other possible home buyers.
If you have an Agreement in Principle to hand, you are demonstrating to the seller that you are very serious and do have the funds to proceed.
It also puts you in a higher position than other buyers who maybe do have the funds, but haven’t gotten an AIP of their own.
This is one of the benefits of getting in touch with a dedicated mortgage broker in Cardiff. Our dedicated mortgage advisors in Cardiff will be able to obtain one of these within 24 hours of your initial free mortgage appointment.
Buying a property is all a matter of negotiation. If the offer that you put forward to the seller is rejected, you will be asked about potentially increasing your offer.
If you believe that the property is indeed worth the increase and you want it, you may have to be prepared to spend a little more than you had planned.
Don’t be worried though if your first offer is declined, this has happened to lots of First Time Buyers in Cardiff in the past and they are still able to secure a property down the line at some point.
If your second offer is also declined, you possibly have to be prepared to pay the asking price. This is where it pays to make sure that you have done plenty of research ahead of time.
Before you make any offers, you should always have a look at the other properties in the local area and see what they are selling for on sites like Zoopla or Rightmove. This may give you a general idea of what to offer the property seller.
You should also look for how long the property has been on the open market. If it is a new listing, the seller may want the asking price, whereas if it’s a long-time listing, the seller may accept a lower offer just to have it taken off their hands.
If you come across houses that have gone for amounts that are less than they are worth, there is usually a very good reason for it. It may have possibly been repossessed, sold to at a discounted price to a residing tenant or an inter-family sale.
For any mortgage advice relating to this specialist subject, feel free to contact our expert mortgage advisors in Cardiff today.
If you are in need of any help with making an offer as a First Time Buyer in Cardiff or perhaps just want a mortgage advisor in Cardiff to walk you through it and get a great deal, we’ll always be on hand to guide you throughout the process.
Our team of mortgage advisors in Cardiff are available all throughout the week, so book your free mortgage appointment online and get your journey started today.
When you’re inexperienced as a first time buyer in Cardiff and have never taken that initial step onto the property ladder, the process can sometimes be a stressful one. Luckily for you, it doesn’t have to be like that. To help put you in the best position for your next house viewing and to get ‘mortgage ready’, we’ve put together a list of nine questions that you should always ask when buying a house as a first-time buyer in Cardiff.
Taking out a mortgage will more than likely be the biggest financial commitment you ever make in your life. As such, you may find yourself wishing to take some time to think about your options and what you really want to do.
In enquiring with the vendor or estate agent about the amount of viewings that have taken place at the house, you’ll be able to more accurately predict how much time you have to properly think this through, before you make a definitive decision. Of course, if the property is receiving lots of interest, you need to be ready to make a final decision as soon as possible, so to avoid losing out to another buyer.
A property being tied up into a property chain can have a huge influence on how your mortgage process will go down the line.
If there’s no onward chain (e.g. new home, bereavement or emigration), you’ll more than likely be able to move fairly quickly, especially if you’re not part of a chain either. If there is no requirement for you to sell your own property in advance, then you’ll have more leverage as a buyer, as you won’t be holding up the home buying process for anyone else.
Be sure to use this to your advantage when entering into property price negotiations.
If you’re not buying a new build property, then the previous homeowner may have left some items behind when they moved out. We often hear about white goods (which can include things like washing machines, fridges, freezers etc.) or even garden sheds being left behind for the next person who moves in.
For home buyers this can be fantastic, as it can not only save you money on buying those same items, but it can also save your time, as you won’t need to spend time finding these items and awaiting delivery.
On the flip side of this, if you don’t want or need these items, you will have to factor in the costs and time of disposing them. If you are buying a new build property, you might find that there are optional extras you can buy which will be ready for you on the day you move into your new home.
When moving into an area that you don’t have any familiarity with, it’s worth doing some research to see what the neighbours are like, as a good or bad neighbour experience can often be the deal breaker in what your experience of living in the property is like.
That being said, if you’ve had the opportunity to move into a new housing site that has been or is being developed, you will be creating an entirely new neighbourhood with people who are more than likely unknown to you. This itself can be a risk, as you cannot prepare for what the locals will be like ahead of time.
The running costs of a property can significantly differ, depending on the house and the location, so it is very important to do your research on these and ask the right questions.
Make sure you find out how much the Council Tax is, along with how much on average you might be spending on utilities, by asking the seller or doing some of your own research online. Obtaining this information can help you budget for each property you have viewed accordingly.
This may seem like a bizarre one, but it can be an incredibly important factor to many people. If you are fond of relaxing in the garden on late summer evenings or reading books with a good source of natural light, you need to find out which way the property is facing.
What’s unfortunate here is that through looking for this, you’ll often pay a sizable, more premium price for a south-facing garden, due to the fact that they receive the most sun during the daytime.
This is again something that can have quite the impact on your budget. You should always look to see if there is any work required in the property for improving energy efficiency, changing any decorations and addressing any problems with damp that exists in the property.
Getting started on negotiation discussions for a property you’d like to buy is a pretty common home buying step. As such, it’s important to make sure you are as prepared as you possibly can be to make an offer on a property that you are interested in. Once you are ready for this, the next step is for you to go and start making offers on a property.
It is also worth initiating a conversation with the seller or estate agent to figure out roughy what the seller of the home you are after may consider to be a lowball amount, as well as find out the maximum amount it is worth. You should also look to find out if any other offers have been made and rejected prior to you making your offer.
By picking a date in your diary that you ideally would like to move at, you are able to plan your other jobs around that date. This will be tasks such as instructing a conveyancing solicitor, packing up what you own ready to move and arranging a removal van to bring your belongings to your new home.
Depending on the situation you happen to be in, a second mortgage may be a possible option for you to look at utilising. There are two different methods this can be achieved.
You may be able to obtain a Second Mortgage for buying an additional home or taking out a Buy to Let, allowing this to run alongside your existing mortgage. Alternatively, you may have the option of a Second Charge, where you take out an additional mortgage amount against the same property, with a different mortgage lender.
Below we’ve put together a guide on where this could be applicable, as well as a helpful video guide where Malcolm talks about the significance of taking out a second mortgage in Cardiff.
There are various different situations where someone might find themselves needing to have more than one mortgage. Through our experience as mortgage advisors in Cardiff we’ve heard of some fairly common recurrences, with these including, but not limited to;
1) Wanting a second mortgage to raise money for your existing home.
2) Looking to rent out your existing home and purchase a new one.
3) In the market to buy a new property with your name on another mortgage already.
4) Looking to help your children out with a second mortgage.
5) In need of a second mortgage to purchase a buy to let property.
Looking at the latter one, we feel it’s important to let you know that we have a vast wealth of knowledge on Buy to Let mortgages in Cardiff, having worked with many lenders including very specialist ones, all with their own unique lending criteria.
We also have a long history of helping Buy to Let Landlords with their properties. For more information on being a Landlord, please check out our Buy to Let Mortgage Advice in Cardiff page.
If you have equity in your home, you could have the option to take out a Second Charge to release this equity and fund the deposit for a potential additional purchase. It can also be just generally used for any purchase, such as a new car, a holiday or something else.
The way a Second Charge works is that if you still have equity sitting in your property, you may be able to take out a mortgage with a second lender, in order to release some of the equity in the property.
Usually, if you are on a lenders Standard Variable Rate, we are able to shop around for you and find a more competitive deal whilst also releasing Capital. A further advance with your existing lender may also be an option available to you.
In some cases, homeowners may be looking to keep hold of their existing property, with the intention of renting it out a taking out a second residential mortgage on a new property. This process is known as a Let-to-Buy Mortgage and has become increasingly popular over the last decade.
Sometimes your Children or even Grandchildren may be struggling to find their footing on the property ladder. As such we regularly see homeowners using either a Second Charge to release some equity to gift their loved one either a portion of, or the full amount of deposit.
We find that there are many landlords looking to purchase additional Buy to Let properties to add to their portfolio, by taking out a second mortgage. Our team are able to use our expert knowledge to recommend the most suitable Buy to Let mortgage product based on your personal circumstances. You will be asked to produce a higher deposit for this mortgage than a typical residential mortgage.
If you are currently named on another mortgage and unable to get your name taken off of it, you may still want to try your luck and apply for a mortgage of your own. This is a situation we come across often and have experience helping many different customers with.
No matter your situation, if you are looking to get a second mortgage, we may be able to help. As a fast & friendly mortgage broker in Cardiff, our Advisors are able to search thousands of mortgage deals on your behalf, following up with a recommendation on the most suitable product for you based on your personal situation.
For more information get in touch to book your free initial mortgage consultation, and speak with a dedicated mortgage advisor in Cardiff.
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 Cardiff 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 Cardiff & those who are Moving Home in Cardiff. 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, 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 home buyers 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 a 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.
Being self-employed can often be perceived as a hurdle to getting a mortgage, but with an experienced Mortgage Broker in Cardiff working with you, you may possibly be able to overcome these hurdles.
The first thing that you need to be aware of is that there are no specific lending criteria for sole traders and Limited Company Directors that everyone follows. Each lender has their own individual policy and the amount they will allow you to borrow can be incredibly varied.
Let’s have a look at sole traders (or partners) first. The amount you are able to borrow for a mortgage will be based on your net profit which can be confirmed by obtaining your Accountant or direct from the Inland Revenue.
Most lenders average your last 2 or 3 years’ net profit but there are lenders that may still consider using your latest year. If your net profit has decreased the lender will usually base everything off the latest year and require an explanation as to why it has dropped.
If you are a Limited Company Director who owns 20-25% or more of the shares in the business then the lenders will deem you as self-employed and regarding averaging, the same rules will apply. The figure that they tend to average will be your salary (generally this can be equivalent to the tax-free allowance) + declared dividends,.
At some points in time, a Limited Company may be performing well in terms of net profit but the Directors are not drawing their dividend – these type of applications can be disadvantaged in terms of maximum borrowing capacity because they aren’t able to declare as much income. This is not the end of the road, however, because there are lenders out there that will consider using your share of the net profit, as opposed to salary + dividends.
The minimum trading period for Self-Employed or Limited Company Directors is one year, although you may find that there are lenders out there who want longer than that. If you have recently formed a Limited Company after a period as a sole trader under the advice of your Accountant, then there are various available lenders who can look at this, providing it is in the same line of work.
As you can see from the above, Self-Employed Mortgages in Cardiff are often quite complex, so if you would like to talk about your situation please feel free to Get in Touch and we’ll talk you through your process. We can also send you a form for your Accountant to complete, which will help us tailor-make a recommendation designed to meet your personal situation.
After the perilous financial crash in 2008, known as The Credit Crunch, the government brought in some backup to try and provide a much needed boost the mortgage market. They brought in new ways to help First-Time Buyers get onto the property ladder, with these being called Help-to-Buy schemes.
There are a number of different Help-to-Buy schemes available in the market. Some you may be able to match with and some others maybe not so much. Here is a list of the Help-to-Buy schemes and some other similar schemes that you may have access to.
The Help-to-Buy Equity Loan is the most popular of the various schemes. If you are a First Time Buyer in Cardiff and want to get your mortgage process rolling, this could be the ideal way for you to do so.
Firstly, you have to be First Time Buyer to be able to access this scheme, as well as only being able to purchase a new-build property too. A minimum of a 5% deposit is also a necessary requirement.
The way this scheme works is that you put down a deposit of 5% or more and then the government loan you rest to make up a total of a 25% deposit. Two examples of this would be if you have a 5% deposit they will loan you 20% or if you have a 10% deposit, they will loan you 15%.
This will leave you with a 75% mortgage and the government equity loan which you will have to pay off. You will get a period of 5 years to pay off this equity loan interest-free. If you are unable to meet the 5-year cut off point, you will start building up interest on the amount of the loan that is remaining. This interest rate starting point is 1.75%.
As a dedicated Mortgage Broker in Cardiff, we know that it can be quite difficult to balance your mortgage payments and the equity loan repayment alongside each other. There are ways around this, such as being able to remortgage to raise capital for this loan. This one, however, will increase your mortgage payments.
The Help-to-Buy Shared Ownership scheme was introduced as a means to help applicants to purchase a percentage of a property and then pay the rest back on rent over time.
The percentage of the property that you own in your name usually has to be between 25-75%. The remaining percentage will most likely be owned by the housing association. This share can possibly be increased at a later date, maybe at a point when you have more money.
The way that your payments work is that you have to pay your mortgage as well as your rent. So what this means is that you are basically paying 100% of the ground rent and service charge on the property. This is still the case, even if your share is the lowest available amount.
The Armed Forces Help-to-Buy scheme was introduced in 2014 following the previous success of the Help-to-Buy Equity Loan scheme. This scheme had the same concept of the prior version, however, this one was specifically for members of the armed forces.
If you match the criteria of the scheme, it could be a great option for you to take. The government has now extended the deadline/review date of the scheme to later in time at December 2022. Here at Cardiffmoneyman, we are hoping that it stays around, as the scheme is incredibly helpful for existing armed forces members who really need that extra help with getting onto the property ladder.
The Lifetime ISA is often a scheme that is forgotten by homebuyers. It’s not a go-to scheme, however, it’s still very useful to be aware of it, it can help you secure a new home as a First Time Buyer in Cardiff.
A Lifetime ISA is basically a savings account where your money grows, free of tax. The government will also give you a nice little top up of your savings by an extra 25%, so if you meet the £4,000 maximum amount, you will receive a pretty handy bonus of £1,000.
You have to pass certain criteria in order to gain access to this type of mortgage scheme. All of these details are available on the Lifetime ISA website.
When it comes to purchasing a home, whether you’re a First Time Buyer in Cardiff or have been in this business before, the process can sometimes be stressful and rather costly. It starts to cost even more when you are buying and selling at the same time. Here is a helpful breakdown of some of the expenditures you will need to consider when exploring your avenues in buying a new home.
You should know that you only need to use the services of an estate agent if you are looking to sell a property. The price of these agents can vary, so you must make sure that you look for the best price and leading service before diving headfirst into anything. The cheapest estate agents tend to be online ones who don’t have to maintain the costs of running an office.
If you are not too worried about fees and you are interested in a more personalised and accessible service, you may have to pay an extra 1-2% of the price of your sale.
The fees are usually negotiable, especially when you’re in a “seller’s market”. What this means is that agents are fighting to get your instruction because of the lack of houses on the property market.
If you are in the market for taking out a mortgage, then the lender needs to know whether the property is worth the amount that you’re paying for it. If you are lucky, your lender may offer you a free service, although they may not send you a copy of the report.
Occasionally the Lender may not offer a free valuation, in this case, you may need to pay a few hundred pounds for the costs of one. Roughly, you can expect to pay double the aforementioned amount if you would like to upgrade to a more in-depth Homebuyer’s Report. The top of the range survey is the most expensive option and you can expect to pay a four-figure sum for those types of survey.
If you want to find out what each different survey consists of, you can ask your Mortgage Advisor in Cardiff, who will advise you and help you make an informed choice. If the property is old or not in the best shape structurally, you should consider upgrading the property survey so you can receive more details of what may need repairing or replacing and when the time comes to move in.
If you are looking for an experienced and dedicated Mortgage Advisor in Cardiff that provides Expert Mortgage Advice, look no further! Get in touch for a free mortgage consultation.
We often find that the cost to upgrade a property survey is a lot less than what it would cost you for repairs over the years. So rather than buying a property without knowing what you’re getting, you could upgrade and end up saving yourself a lot of money in the future.
Generally speaking, the mortgages with the lowest interest rates tend to be accompanied by the highest fees. It can occasionally cost you a fair amount to set up mortgages, with the fee ranging anywhere from zero to a few thousand pounds. Your Mortgage Advisor in Cardiff will recommend the cheapest and most appropriate product to meet your personal circumstances, calculating the total amount to pay over the product term including all fees.
If you are borrowing a larger sum of money, it is very likely that you will want to keep the interest rate as low as you possibly can. However, some may prefer to borrow a smaller amount of money. If you are in this boat, then you should know it’s usually cheaper to take out a mortgage without fees as a rule.
Lender arrangement fees can often be added onto your mortgage total. If you proceed with the choice of adding a fee, then you will be charged interest on the fee which can start to add up over the course of the mortgage term.
You will require the services of a solicitor to carry out the legal aspects of your property purchase. They need to go over a lot of different things, such as; does the seller actually own the property; who is responsible for maintaining adjoining fences and walls, and whether anyone has lodged any plans (for example to build future links for transport). These things could affect your ability to sell the house on later down the line.
When comparing solicitor’s fees (which could range anywhere around a thousand pounds depending on various factors) you need to make sure you look at whether the quote includes VAT and local searches.
We would recommend that you to be careful when trying to find yourself a solicitor, as not all of them are “on panel” for all lenders. A dedicated Mortgage Advisor can help you decide upon and recommend a solicitor that is best-suited for your circumstances.
Some purchases are subject to Stamp Duty which is a tax that you will pay to the government. The rules, on which purchases are captured by this tax, tend to change on a whim, so you should always check on the government website to see if this is payable.
Full details can be found here: https://www.gov.uk/stamp-duty-land-tax/
If Stamp Duty is due you will normally pay this at the time of completion, to your solicitor who will make the payment to the government on behalf of yourself.
Most mortgage brokers will charge you for their hard work, and that amount of the fee will often be a percentage of what the lender pays the broker for the work they do in their name. Most trusted mortgage brokers will only seek to charge you if they are successful in obtaining a formal mortgage offer for you.
Often, people tend to think that hiring a van and moving their furniture out themselves is easier than receiving help from a removal company. We can say for certain that from our experience, removal companies really are experts at manoeuvring furniture around. With that in mind, it is actually easier and less stressful to get them to help you out rather than trying to do it all yourself.