If you are struggling to make up a deposit for a property as a First Time Buyer in Cardiff, you may be looking at ways to help you build it up. There are ways to help you get onto the property ladder, such as the Help to Buy Equity Loan, Lifetime ISA, Shared Ownership scheme etc. However, if you are offered a gifted deposit, you may not need to utilise a scheme and can use this instead.
This article covers the most common questions regarding gifted deposits and how receiving one could benefit your mortgage application.
A gifted deposit is a lump sum of cash that is given to you to use towards or cover your mortgage deposit.
More often than not, homebuyers combine their savings with their gifted deposit to try and access competitive loan-to-value products. These products may also include better rates of interest.
A gifted deposit is strictly a gift and cannot be a loan. When accepting a gifted deposit, the person gifting you the deposit will need to sign a declaration form stating that is not a loan, it is a gift.
Usually, it will be the applicant’s parents/carers, family or friends that offer gifted deposits. Depending on the relation to the applicant, it will be down to the lender as to whether or not the gifted deposit is allowed.
If the person gifting the deposit is over 55, they will have the option to take out the equity in their home to use as a gift. If this is the route that the gifter is taking, it is important that they opt for Equity Release advice in Cardiff before doing so.
We’ve seen many cases where First Time Buyers are struggling to save for a deposit and they don’t realise that their parents can help them out or they don’t want to ask. In truth, most parents are more than happy to offer a helping hand and want to help them get onto the property ladder.
Depending on your personal and financial situation, buying a property may be more beneficial for you and could save you money in the long run. If this is the case, your parents may prefer you to be in this situation rather than you waiting longer to save for a deposit.
In most cases, you will not be able to use a loan as your deposit. There are rare cases where this is allowed, such as when you use the Help to Buy Equity Loan scheme.
If you take out a loan and try to use it as your deposit, your lender will be able to see this. They will view it as another large financial commitment in your name. This is also why a gifted deposit has to strictly be a gift and not a loan. If you received a gifted deposit due to struggling to save up for a deposit, you are likely to struggle to pay back two sets of loans.
There is no limit to how much you can receive as a gifted deposit. Remember, a higher deposit can often lead you to access better rates of interest due to your loan-to-value lowering.
Most applicants receive an average 5% gifted deposit or less. Usually, this is also combined with the applicant’s current savings to boost their overall amount.
Mostly, it is only First Time Buyers in Cardiff that we see with a gifted deposit. However, it is not uncommon to see those moving home with deposits in place too.
If you don’t receive a gifted deposit, remember that there are also schemes in place to help you boost your mortgage deposit, e.g. Lifetime ISA.
You will always need evidence of where your deposit has come from when applying for a mortgage. This works the same with gifted deposits.
You may also need to provide additional proof of ID or bank statements. Your lender and Mortgage Broker in Cardiff will ask for this upon your inquiry.
We would also advise that you keep the gifted deposit inside of the gifter’s account until you start your process. Lenders do not like seeing lots of money being transferred between accounts; especially during the months leading up to your mortgage application.
When it is time to prepare your mortgage application, you must consider your credit file and how it will look to a lender. Remember that a lender is looking for reliability; someone who will be able to meet their repayments.
It’s not just reliability that lenders are looking for though, they will also be looking at your credit file, and even more specifically, what is linked to it. This includes credit accounts, store cards and even your Amazon account! What all of these have in common is they hold your personal details, such as your address. And, believe it or not, lenders pay very close attention to this address…
Lenders want all of your addresses to match across all of your credit accounts, store cards, billing information, etc. They will look at this once you have submitted your mortgage application.
A wrong address linked with a credit card will be more serious than your billing information on your amazon account, as it could be a sign of identity theft.
They also want to know that you are reliable and you are who you say that you are. If you have your name registered to different addresses, then how do they know you live where you say that you live? It will appear to them that you are living in two places at once.
As a first time buyer in Cardiff, if you are still living with your parents/carers, lenders will expect all of your addresses to link back to their home address.
If you are a tenant, you are expected to have updated your address to your current rented property. You should have done this upon moving into the new property.
As a mortgage broker in Cardiff, we often find that the majority of people that slip up on this are home movers.
We find that it is those moving home that are most affected by an old address on their application. This is because the applicant is likely to have their addresses registered to the property before their current one. This could be their parents’/carers’ address, and they have forgotten to update their details since moving into their first home.
For example, if a bank card is still registered to your parent’s address, your parent’s address will not match the current address on your bank statements. Lenders will pick up on this.
Yes, having fewer addresses on record is better overall, however, do not make this a reason to not change your details to your current address before moving.
If you are moving home in Cardiff, remember to double-check that you updated your details before submitting your mortgage application.
As a Mortgage Broker in Cardiff, our job is to guide you through the mortgage process, even helping you prepare your application. We will check over your credit file and make sure that everything is aligned.
We will alert you of any bits that need changing out that will boost your chances of being accepted by your lender. Remember that it’s not just your credit file that lenders will look at. For example, lenders will analyse your bank statements, payslips and your most recent P60. They will also need photographic identification to support that you are who you say that you are.
You can book a free mortgage appointment online via our ‘get started’ form. There are plenty of appointments available, 7 days a week. We have appointments early in the morning and late in the evening.
Get in touch as our team can’t wait to help you!
If you are only planning on living for a short period, renting makes more sense. However, if you are going to stay in a particular area for a long time, saving for a deposit and buying would be more suitable.
If you had parent(s) who took out a mortgage, this might encourage you to be a first time buyer in Cardiff once you saved enough for a deposit. This article will take a look at the benefits and drawbacks of buying a home.
The property market fluctuates, leaving people unsure whether when is the best time to start putting your foot onto the property ladder. Before committing to a purchase, you should speak with a mortgage advisor in Cardiff to discuss all your options.
With that said, this is more than just an investment. It’s a home. The most important factor is finding the most suitable one for your circumstances.
More often than not, your repayments on the mortgage can sometimes be cheaper than rent. Interest rates tend to fluctuate, too, meaning your mortgage payments can do the same. Alternately, you could look a taking out a fixed-rate mortgage.
A fixed-rate mortgage will ensure your payments remain the same for a set period. On the flip side, rental properties typically see prices stay the same or increase.
Owning a home creates a sense of stability for them and their families. Providing you can keep up your payments, nobody can force you to leave your home if you don’t want to.
As a tenant, you get some protection with things like how much notice you need to be given, and if they want the house back, your hands are firmly tied. However, when you factor in family, work or schools nearby, this isn’t ideal for you.
At times, Landlords give their tenants the first refusal to buy the property if they are selling, as this saves them on Estate Agent fees.
Renting can be a more flexible option than owning a property. There’s nothing to stop you from giving your landlord notice if you want to leave for a job in a different area.
As a homeowner, this becomes awkward as you have to decide whether or not they want to rent out your home or sell it. The process of selling a home and buying a new one is both expensive and time-consuming.
If you’re unsure of your commitment to a set area and feel you may move again, you should consider whether or not it’s worth buying a property. It should be viewed as a long term investment.
Landlords should be responsible for all major repairs that a tenant needs. Some are better than others when it comes to this, and you still might end up doing some repairs yourself.
If you are a homeowner, then all of this is down to you, ensuring the property (a condition of any mortgage you take out).
Contrary to popular belief, owning your own home is not for everyone. If you are young and moving in with a partner for the first time, renting may very well be the perfect option for you.
There’s nothing wrong with renting for a while. However, life is unpredictable, and for one reason or another, you may need to remove someone’s name from a property, which can be difficult on a mortgage.
There are not many more extensive financial commitments than buying a home, so everyone should consider the options before diving in. If you decide to rent through, it may take you much longer to save up for a deposit.
Overall, most folks tend to decide on buying over renting. However, no matter whether you’re paying rent to a landlord or paying for a mortgage, you’re still making monthly payments to live somewhere.
The consensus is that people would much rather their payments go towards their benefit than someone else. It’s often just a matter of timing and being in a better financial position.
Home movers in Cardiff are often in two minds whether to move or not (e.g. “I like my neighbours, but I’d like an extra bedroom). However, most potential first time buyers in Cardiff, if asked, would likely say they want to be on the property ladder.
They are often unphased by and disinterested in external factors such as ongoing political events. So whilst the housing market does go through fluctuations, this hardly ever puts people off wanting to get onto the property ladder.
It should always be classed as a long-term investment, and whilst it might not be ideal if your home drops in value, history suggests that when that does occur, the prices go back up in the long run.
95% mortgages are an option if you fit the criteria, if you are more than halfway to having the 5% deposit available, it’s worth trying to get an Agreement in Principle in place. To make sure you are eligible for a mortgage when the time comes.
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!
There’s a high chance that you could encounter difficulties during your mortgage application. This could be anything from failing to match lending criteria to your application being affected due to a divorce/separation.
Mortgages are complicated! You won’t be able to obtain one just like that. Firstly, you’ll have to pass lender credit checks and affordability assessments to show that you’re eligible for a mortgage. If you encounter a hurdle during these stages, you may need a mortgage specialist to help progress your application. If you are a First Time Buyer in Cardiff, these problems may seem complex; we can explain these problems and will try to help you get by them.
Here is a list of the most common mortgage hurdles that home buyers come across during their mortgage process.
It’s very unlikely for you to be turned away due to you having children, however, your overall offer may be a little higher than if you didn’t have them.
When assessing your affordability, lenders will factor childcare costs into your expenditures. They have to be sure that you can afford a mortgage, therefore, they have to consider all of your outgoings. Childcare costs (depending on how many children you have) can run into the hundreds each month, and they don’t go down! They’ll treat these costs as recurring payments and will treat them as they would treat a car loan or hire purchase agent.
Even if you don’t pay for childcare, such as a nursery, you still may be offered less than other buyers who don’t have children.
It’s unfortunate when it happens, but when you and your partner decide to call it a day and you’re both linked to a mortgage, you may need to solve your financial problems first. Things can get complicated the longer that you leave it.
Lenders may struggle to progress your application if you’re still financially linked to someone else, especially you’re linked through a mortgage. This would mean that you would be accountable for two sets of mortgage payments each month, which could be too much for you to manage.
When customers in this situation come to us for Specialist Mortgage Advice in Cardiff, we are usually asked the same type of questions:
If you are asking these questions, it may be best to try and speak with a professional advisor who may be able to assist you with these problems. A situation like this is already stressful enough, never mind the worries of your mortgage.
Different lenders will have different views on benefit income and will assess it differently. Other benefits that could be assessed include child tax credit, working tax credit, disability benefit or pension. Each lender will differ with what they choose to assess.
We have access to many different specialist lenders that each have their own unique lending criteria and will measure different types of income. These types of lenders could help you with your case.
When you get a new job, more often than not, it will come with a higher salary. This would mean that you have more money for things like a new mortgage. You would also think that because of your new higher salary, you should be able to get a mortgage easier, however, this is sometimes not the case.
Some lenders may consider probationary periods as an issue (depending on the likelihood of you staying on), whereas others may not be bothered at all. They will also look at your previous line of work and see whether you were employed for a while before your new job or if you were jumping in and out of work. Lenders need to make sure that you are a reliable applicant and not someone who will be unemployed within months. Gaps in employment can negatively impact your chances of being accepted.
On the other hand, some lenders may even qualify you before you’ve even started the job. This will be no more than a month in advance.
In Cardiff, when you’re applying for a mortgage, you need to correctly evidence your deposit and show exactly where you obtained it from. If you’ve simply built it up over time, you will need to evidence this through your bank statements and if you’ve received a gifted deposit, the person gifting you the money will have to prove where they have got the money from.
This is all for anti-money laundering purposes and so that your lender knows that the funds have been legally raised. Your solicitor and estate agent may also ask for this evidence.
Applicants can easily slip up on this part of their mortgage application. If your funds have not been evidenced correctly, your lender could start to question where the money has actually come from. If you use a Mortgage Broker in Cardiff like us, we will help you evidence your deposit correctly. We can go through this step with you so that you have the best chance of being accepted by your lender.
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.
Shared Ownership is a help to buy scheme designed by the government to help first time buyers and home movers get onto the property ladder.
The scheme allows you to buy a share of a property (usually between 10% to 75%) and then pay the remaining share back on rent. If you situation changes, such as getting a higher paid job, you could look at increasing the percentage share that you own. Sometimes, you can increase your share to 100% and take full ownership of the property, whereas, some building societies may not allow you to do this and put a limit on the amount that you can own.
If you meet the requirements for this scheme and are a First Time Buyer in Cardiff, it can be a great mortgage option to look at, especially since it helped you get onto the property ladder.
First of all, like any mortgage, you’ll need to put down a deposit. The minimum amount that you need to put down can vary from property to property; it can also change depending on your credit score.
You will be taking out a mortgage based on the percentage that you own. For example, if you are wanting to own a 50% share of a property that is worth £200,000, you will need to take out a mortgage worth £100,000.
Furthermore, you will not need to provide a deposit based on the price of the property, it will be based on the share that you took out. If you’re required to meet a minimum of 5%, on a £100,000 mortgage, you will need a £5,000 deposit.
Once your offer has been accepted and you’ve moved into your property, you will start paying off your mortgage and also receive rent based on the remaining percentage of the property.
Even though you have two sets of payments, your overall monthly costs shouldn’t add up to as much if you had taken out a ‘regular mortgage.
There are lots of different types of costs and fees that come with taking out a mortgage. When taking out a Shared Ownership mortgage, you may face set-up/arrangement fees, legal fees and possibly booking fees. Double-check with your Mortgage Advisor in Cardiff about other costs before you continue.
Property to property, costs can vary. This will be factors such as deposit size, monthly payments arrangement fees and even stamp duty.
First of all, if you want to check whether you qualify for the Shared Ownership scheme or not, you can get in touch with our team and we can arrange this for you. All you have to do is book your free mortgage appointment online!
Here are the schemes basic requirements:
Each of the help to buy scheme requirements will vary. Some will be harder to match than others, however, when this is the case, it could mean that you are not suited to that scheme.
If the Shared Ownership scheme doesn’t seem like the right fit for you, you can always check out other government schemes on ownyourhome.gov.uk.
If you’re a First Time Buyer in Cardiff, we would recommend getting in touch with our mortgage advice team. We can work out your mortgage affordability, how much you can borrow and whether you’re eligible for a help to buy scheme.
We have helped many customers in Cardiff access this scheme and other help to buy options. If you’re looking for Help to Buy Mortgage Advice in Cardiff, you’ve come to the right brokers!
Book your free mortgage appointment online today,
For first time buyers in Cardiff statistics show that in recent years property prices have increased at a faster rate than wages. We have found that many people look to purchase in joint names with a partner or friend in order to be able to afford a suitable home at a more reasonable price.
Purchasing in joint names usually will increase your maximum borrowing capacity, as the lender will look at all party’s income and take this into account when running the affordability calculations.
Surprisingly, we work with some lenders who will accept up to 4 people co-owning a property. If for any reason, one of the co-owners of the property decides to no longer contribute to the mortgage repayments, any joint owners will still have the legal right to reside in the property unless this is ruled otherwise by a court.
If you would like to increase the mortgage at a later date, you must gain consent from all co-owners involved. It’s therefore essential that you make long term plans about what will happen in the future should you end up wanting different things.
We find the most popular Tenancy for married couples or those in civil partnerships is ‘Joint Tenancy’. With this type of tenure, if either party were to pass away, the property would be handed over to the co-owner. If you have taken out relevant life insurance, at this point, your mortgage would be repaid.
With ‘Joint Tenancy’, when looking to remortgage or sell the property in the future. It would be required that all names on the tenancy agree to this.
When purchasing with relatives or friends, we find that ‘Tenants In common’ is the most popular tenure. You will still jointly co-own the property but are have the flexibility to do so not with equal shares. This works well if one party is making a more significant financial contribution than the other.
With ‘Tenants in Common’, another positive aspect, is that you can act independently. For example, you can choose to sell or give away your share of the property to someone else without the need to consult other parties.
All mortgage borrowers are jointly and severally liable for mortgage payments. If you find yourself paying all future payments without a co-owner, you will still be liable. You are preventing the mortgage from falling into any debt. As mortgage arrears showing on your credit file could have the potential to stop you from obtaining a mortgage in the future.
It is best to think of it like this: You don’t own 50% of a property, you own 100% jointly.
Lenders will need to be confident that you can keep up with monthly payments on your own before they can approve of this happening.
When purchasing a home with a partner, it’s a whole new chapter starting in your life and can be a great way to start fresh with another individual. In all the excitement of moving home, it can make you wonder about the justifications if things go sideways.
As seen from above, a mortgage is a big financial commitment and making changes is going to be a challenge.
With physical proof that you can maintain mortgage payments since your old partner moved, the lender may agree to your request to put the mortgage into your single name. However, Lenders like the idea that there are two people to pursue in the event of arrears occurring. To remove someone, they will carry out a brand-new affordability assessment, precisely in the same way as they would at the point of purchase.
Whilst a lender may not accept a request, it’s always beneficial to speak with a mortgage advisor in Cardiff beforehand, as there may be other lenders who could agree to your transfer request.
It can also be worth talking to family members to see if they can help you out to make life a little bit easier. They can do so by replacing your ex on your mortgage or by gifting you a lump sum to reduce the amount owed, meaning your savings can contribute to easing your future mortgage payments.
If you and your partner split up and you leave the family home, then your responsibility is still shared for mortgage payments even if an agreement was settled with your ex that they will make all the payments.
If you are sending your partner money each month, you should keep an eye on your credit report to ensure they are paying the mortgage. If they default, then it will impact your own score.
Is your name still linked with an existing mortgage? Then the payments for that will be considered if you buy a new home of your own. That will mean Lenders might not lend you as much as you would like.
Buying a home with someone is different from renting with them. It’s always better to agree on what would happen to the house should things not plan out as expected.
From a lender’s point of view, a bank statement provides an insight into your spending habits and determines if you’re trustworthy with paying on time. The presentation of your bank statements is essential because this evidence can be the difference in how much your lender will let you borrow or will lend you anything at all.
Knowing how much a lender will let you borrow is all down to risk, however, a lender needs to know that you can handle your finances and be responsible. Remember, a mortgage is likely to be the biggest financial commitment you will ever make and is not something to be taken likely.
There are different ways you can obtain your bank statement, such as receiving your bank statement through the post from your bank or going into your local branch and getting it over the counter. It’s common to see these days that people will retrieve a printable version from their bank’s online platform.
Presenting your bank statement in a positive light is important, so the main question is, what are lenders looking for on your bank statement?
Again, the lenders want to know if you’re responsible when it comes to your finances. Therefore, overdrafts will be something they will look into. An overdraft is there for you to use and on occasions using it is not necessarily a bad thing, however, if exceeding your limit becomes a daily occurrence, this is going to affect the lender’s trust in you.
Another factor to be careful with is potential returned Direct Debits because this could show you are not consistently reliable. Furthermore, failure to disclose loans at the application stage will not make you look good to the lender because, as mentioned, this is a process of trust.
Another element that you need to be aware of is missed payments for personal loans and things such as credit cards. It’s more likely that a lender will aim to lend an amount closer to what you would like to borrow if you can meet your monthly payment deadlines.
This is a commonly asked question we hear from customers when they are looking at their bank statements. A history of gambling can be an issue many get themselves into. While the odd bet is harmless, frequent betting with large amounts of money can be an issue. Whether you’re making it back or not, a lender will see this as a disadvantage
To learn more, please see our article on “Do Gambling Transactions Look Bad on My Bank Statements?”
When working with many first time buyers in Cardiff & home movers in Cardiff, we have found that the majority of mortgage lenders will require the applicants to obtain at least three months’ bank statements from an applicant. This can differ for the self-employed
With this in mind, you theoretically have three months to work on your finances. Start to think more about the future and begin working on your finances at this time. We recommend that you take a break for a while if you are a regular customer of the local bookmakers or online gambling scene. This can be a benefit to your financial state as well as your mental health.
Another step we would suggest is to try to save money. Reducing the number of times you eat out, cancelling unneeded subscriptions, and reducing your purchases on unnecessary items can all help. By doing this, you can free up additional cash to pay your bills on time.
This is all down to you being sensible and planning ahead of time to what you’re looking to do. Reducing the risk of bouts of debts and financial uncertainty will put you in a good situation with a lender.
If you’re a first time buyer, moving home, or self-employed, it’s always important to keep your finances on track. Getting in touch for specialist mortgage advice in Cardiff can help you if you’re feeling unsure when it comes to bad credit history. We are here to further your mortgage journey by advising the best we can.
When it comes to your bank statement, lenders will be looking at various factors to see if you can keep up the mortgage payments. Over the years, we have seen an increase in inquiries regarding if gambling transactions look bad on their bank statements.
There is nothing illegal about licensed gambling so an occasional bet on the world cup or regularly using internet betting sites isn’t a problem. However, like a lot of gambling adverts, they do urge customers to gamble responsibly and these principles are the same when applying for a mortgage.
The role of the lender is not to tell you how to live your life or spend your money or even lecture you about the ethical rights and wrongs of gambling, however, they do have a duty (underscored by mortgage regulation) to be responsible when accepting customers for a mortgage.
Lenders may need to prove to the regulators that they are making well-thought decisions. Therefore, it isn’t unreasonable for the lender to have expectations of the people they lend to when it comes to their finances.
Think about it. If you were lending your own money to a ‘friend’, would you lend it to someone who frequently gambles or the one who doesn’t?
Having the odd gambling transactions on your recent bank statement doesn’t automatically mean your mortgage application would get declined. As mentioned before, it is not illegal to gamble.
However, the lender will look into these transactions to see if they are reasonable and responsible. The factors that they will look at are the frequency of the transactions and the size of the transactions. Furthermore, they will take a deeper look into the individual’s account and the impact upon the account balance.
When it comes to these transactions, infrequent small amounts that make no impact on your regular credit bank balance are not likely to be regarded. If you’re in a situation where you bet most weeks or you have constantly overdrawn money, the lender is expected to see you as irresponsible and may decline your application
Providing bank statements to your lender is required as it’s a way to show how you manage your money and helps the lender when deciding if you are financially reasonable or not through your bank statements.
Lenders are financial institutions that, either directly or as part of a wider group, often sell current accounts, overdraft facilities, credit cards, and personal loans. Because of this, they have an understanding that these things can all play a role in financial planning.
You may find yourself using your overdraft, however, if maxing out your overdraft becomes a regular occurrence, this is not ideal. Lenders will look for things that could show your account is not handled well such as overdraft fees or returned direct debit.
Credit transactions from payday loan companies are another thing lenders will want to see (i.e. , if you put on your application that you have no other loans but regular loan payments appear then this could be a problem.)
As well as looking for any missed payments, they might also consider how much of a typical month gets spent overdrawn – i.e., measuring the sustainability of the mortgage by looking at situations such as if you only go into credit on payday and the rest of the monthly earnings get stretched.
The best way to improve things is to be sensible, and if possible, plan ahead. A bank would ask for up to three months of your most recent bank statements. This evidence will show your salary credits and all your regular bill payments.
If you know you’re likely to apply for a mortgage in the near future, it can be good to try to make sure that you avoid any of the above issues. Work on presenting your bank account in the best light and take a break from gambling.
You can find help from your mortgage broker in Cardiff as some lenders may ask for fewer bank statements than others or some may not even ask for them at all.
Being careful in the run-up to any mortgage application is best as lenders reserve the right to request bank statements in certain circumstances. Remember, if you do gamble, please gamble responsibly!
A mortgage advisor in Cardiff can provide specialist advice if you are a first time buyer in Cardiff. They will be there to help you through your mortgage application and guide you through the whole mortgage process as well as getting you on track so that a potential lender may be impressed with your credit history.