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.
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.
Offset mortgages are not the ‘go to’ mortgage for most, but they can turn out to be a great option to go on. It provides an opportunity to the customers to reduce the interest to be paid.
Offset mortgages can help pay off your mortgage quicker, as well as coming with tax benifits.
This is a form of mortgage that connects the outstanding balance with a savings account (normally through the same financial provider).
The balance you have on your bank account reduces your mortgage interest. You should only pay interest on £200,000 on your mortgage, for instance, if your mortgage was £300 000 and you had £100,000 in your associated savings account.
An offset mortgage offers flexibility, as you are able to add or remove funds from your offset savings account as and when required, meaning the cash is still available should you need it.
Also, you are able to reduce your interest and monthly payments by adding funds to your offset savings account. I.e. if you know you are going to be paid large bonuses these could then go into your offset account to reduce your payments. An offset could turn out to be the best way for a first time buyer in Cardiff who is looking to overpay on his mortgage.
Offset mortgages appear to be of special benefit to higher taxpayers or additional taxpayers and to persons who do not rely on the increased interest to fund their daily lives.
An offsett mortgage is a specialist subject and is not the right option for most. However, our mortgage advisors in Cardiff have vast knowledge when it comes to offset mortgages and will be able to advise if it is the right option for you.
Take some time to consider all the possible options and outcomes while speaking to Mortgage Advisor in Cardiff. It is necessary to consult an advisor to know more about the impact of Offset and how would you be getting the benefit from it in the long run.
If you need any sort of help or just want the questions to be answered or you have made the decision to remortgage in Cardiff. Then get in touch with our Mortgage Advisors in Cardiff. We will be more than happy to recommend you the most suitable mortgage for your individual financial circumstances.
Once you pass your lenders credit score and have qualified for a mortgage, you will receive an agreement in principle or more commonly known as an AIP. With an AIP in place, you are able to make an offer on a property. They will also come in handy for asking price negotiations, as the seller now knows that you are serious and ready to start the home buying process.
There are two main ways that a lender will access your credit score, the type they choose is entirely up to them. They will factor in lots of different things, this includes reliability, your deposit size, etc.
The two ways a lender can assess credit score are through a soft credit search and a hard credit search.
Soft credit searches are a lot more common these days, they are much easier for lenders to carry out. They are easier to carry out because they need less information out of it. If lenders perform a soft credit search on your file, it also won’t damage your score, it will leave it unaffected.
Whilst your financial institution will gain less information about you by choosing a soft credit search over a hard credit search, an agreement in principle from one of these lenders is usually still an extremely strong signal that your full application will be accepted.
Hard credit searches go much more in-depth than soft credit searches. The main difference between the two is that hard credit searches can affect your credit score. Anyone who looks at your file in the future will be able to see that you had a hard credit search performed on you.
This won’t really affect you if your credit score is high. If your score is lower and you have more than one hard search on your file, it could look like you are trying to apply for lots of credit at the same time.
You will never be guaranteed a mortgage, however, securing an AIP will definitely help. Once you have provided your lender with all of your documents, an underwriter will make a final decision. An AIP usually includes a small print that can easily be missed. When customers reach out for help about their agreement in principle, in some cases we find they’ve been turned away at full mortgage application stage.
The documents required include ID, payslips, bank statements, etc. As your expert Mortgage Broker in Cardiff, we take pride in helping you get all of this ready.
If you are lucky you can just about get away with it, however, most estate agents will want you to provide evidence that you are able to proceed with the purchase.
Normally, your AIP will need renewing after around 30-90 days. As a Mortgage Broker in Cardiff, we strongly recommend that you get one in place as soon as possible. You don’t want a situation where you have found your dream home but can’t actually apply for it because you don’t have an agreement in principle in place.
If it’s starting to expire, don’t rush a purchase as you can renew your AIP very easily. So don’t buy a house for the sake of it, make sure it right first.
Did you know that we can usually turn around an agreement in principle for you within 24 hours of your mortgage application! This is incredibly useful if you are a First Time Buyer who has found their dream first home and want to put down your deposit straight away. Even if you are Moving Home in Cardiff, having an AIP within 24 hours could prove extremely beneficial.
On top of this, we also offer a free mortgage consultation, so don’t hesitate to get in touch today to claim this offer. We can’t wait for you to get in touch with your expert Mortgage Advisor in Cardiff.
How much deposit you need to buy a property depends on your personal situation and what it is exactly what you are looking to do. Here we take a look at how much you might need based on your own circumstances.
In previous years, 100% mortgages were readily available and before they were taken away, Northern Rock was offering 125% loan to value mortgages. What this meant is that if you were buying a property valued at £100,000 they would lend you up to £125,000.
Lenders require you to put down a deposit simply to reduce their risk of lending. If they lend you 100% of the purchase price then you happen to accrue any debts leading to property repossession, then they could be at a financial loss, especially if the house prices dip and they can’t make their money back.
You will also find that some say if you haven’t invested some of yours or your family’s money into your home, then you might find it a bit too easy to “walk away” should the going get tough and you were finding it difficult to meet your monthly payments. If you are not in a position to save up at least 5% of the purchase price yourself, then it could be argued that you’re not quite ready to take that first step onto the property ladder.
Unfortunately no, but if you are able to find 5% of your own resources then you could qualify for the government’s Help to Buy equity loan scheme. This applies to new properties only. You put in 5% and the Government loans you up to 20% to make up a 25% deposit. After 5 years you need to start looking at paying the equity loan back possibly by way of a remortgage or from any kind of savings you have been able to make in the meantime.
At the moment, yes 5% is enough in many circumstances. Not all Lenders will accept only a 5% deposit though so your options are more limited and normally you will need a reasonable credit score to qualify. There are lenders out there that would consider you for a 95% mortgage with an average credit score but the interest rates are usually higher in those cases.
A majority of the specialist lenders want you to put down at least 15% deposit if you have a history of poor credit once again as above this is simply to reduce their risk in case a repossession becomes necessary. It is much more difficult to obtain this type of mortgage than it was in the mid-2000s but it’s not completely impossible to find one.
You’ve always needed to put down a much larger deposit for Buy to Let Mortgages and most lenders at the moment are looking for at least 25%.
This could be possible but the vast majority of lenders won’t allow this as it would more or less still be 100% lending.
Yes, this happens all the time. Usually, it’s “bank of Mum and Dad” gifting or other family members but lenders have been known to accept family friends for gifting the money, so long as they can evidence the funds, prove who they are and confirm they are not expecting repayment of the gift as some kind of loan.
If you are buying as a sitting tenant at a discount from the open market value, from a family member or if you qualify for a discount under the Right to Buy scheme then generally speaking you wouldn’t need to put any of your own money in as the equity is already “built-in” to the deal.
Please remember that the above information is for reference purposes only and is not to be viewed as personal financial or mortgage advice.
First Time Buyers or any applicants with high credit scores are more likely to get accepted for a mortgage over applicants with a lower credit score. Lenders study your application carefully in order to ensure that you are able to afford a mortgage with them. You will never be guaranteed a mortgage and this is because every lender has different lending criteria and the chances of you matching every single one of these is unlikely.
Each lender has developed their own way of identifying whether you match their criteria or not. It is your Mortgage Advisors’ job to try and find you a lender who has the most criteria you match up to. They will also try to find the best deal for your personal circumstances. Whether your advisor is from your bank, the mortgage lender or a Mortgage Broker in Cardiff, your advisor will try their best to match your personal circumstances.
By going with a Mortgage Advisor in Cardiff, you will always know what is going on and will always be updated if anything changes or something comes up. We are a dedicated mortgage broker, here to help improve your credit score and help secure that perfect mortgage deal. Whether you are a First Time Buyer, Moving Home or Self Employed, we think that you would benefit from fantastic Mortgage Advice in Cardiff.
There are many different credit reference agencies in Cardiff that you can go to, with the most popular are Experian and Equifax. Before you make a decision, research each agency as it is a possibility that some of them could be holding incorrect data and discovering any discrepancies will be very beneficial to you.
Improving your credit score can be difficult but there are ways you can do this effectively in a manner that allows you to reap the rewards down the line.
Making multiple credit searches could actually have a adverse impact on your credit score. Price comparison websites are risky as they can also damage your score, so be extra careful. We also advise you to not apply for credit during the mortgage process as this may signify to the lender that you are struggling financially, even if you are not. It is a good thing in the long term though as it shows that you are reliable in making recurring payments.
Another simple but useful tip for improving your credit score is by registering for the Electoral Roll. In the eyes of the lender, it shows stability which they will favour. When registering, you must spell your name correctly and set your address to your current one and not a previous one. If you are not registered then you definitely should do this asap, as it’s quick and easy to set up and it could have a really positive impact on your credit score. Make sure everything is correct though to maximise the benefits!
Maxing out your card each month is not recommended and is bound to reduce your credit score. The lender looks at your credit card statements to check whether or not you have paid off balances by the due date. If you are meeting due dates and have never exceeded overdraft limits then a lender will see that you are more than capable of handling your finances well and it could prove beneficial towards your mortgage application.
On the flip side, if you don’t manage your finances carefully then the lender will believe that you don’t take payments seriously, thus reducing your chances of being accepted by them for any amount.
We often find that people who have moved house have not told their previous credit provider, which means that on their records you still are shown as living in the other property. Make sure you are on top of this as lenders don’t like to see your address history all mixed up and shown as living in two different places when you are not.
Some people, without even realising, have a family member or ex-partner connected to their financial commitments. It’s worth checking just to be sure, as you can’t get the financial association removed if the account is still live. If you are trying to remove any of these links then you should contact the credit reference agencies and make a request with them directly.
Applicants see credit scoring as being an unfair approach to accessing whether or not they can obtain a mortgage. Lenders disagree as this method provides a faster, fresher approach to their system of credit scoring. It’s also a lot cheaper for the mortgage lender and it provides always provides a result that they deem trustworthy.
If you want to get ahead of the game, you should send an up-to-date copy of your credit report in advance to your Mortgage Advisor in Cardiff. Starting early will increase your chances of being accepted for a mortgage the first time. The more that your advisor knows about your financial situation the better your chances will be.
Also, there are still some lenders that will want to do the process the old-fashioned way and will prefer a manual approach. They will have certain rules that they stick by about the number of defaults and CCJs that they will allow.
Each lender has a different playing field when it comes to credit scoring. You may find it easy to pass with some lenders and hard with others. If you fail to approve a credit score, lenders can sometimes be unhelpful and not tell you the exact reason why you failed.
It might be down to a mixture of things, and they can’t find exactly why your application was unsuccessful.
It is the place where your specialist Mortgage Broker in Cardiff offers you a helping hand. If you can obtain a copy of your credit file, come and speak to one of our Mortgage Advisors in Cardiff and they will try their best to match you with a lender that you have a high chance of passing through.
Also, offering a deposit of more than the minimum of 5% will increase the chances of you succeeding a “good” credit score for a mortgage.
If you have a credit card, using it regularly and paying it off every month is a great way to prove that you can keep on top of payments. Registering on the voter’s roll can also really help and is easy to set up.
If you also have any old bank accounts or store cards that are no longer in use, you should get them closed down as this looks better from the lenders’ viewpoint.
If you have failed a lenders’ credit score, don’t worry! There are lots of different lenders out there, all with additional criteria. You should eventually find one that you will fit perfectly.
On the other hand, please don’t apply for too many hard credit checks as the more you do, the worse effect it can have on your file. Lenders can see you are failing over and over, possibly removing all of your chances of passing altogether.
As well as having their unique lending criteria, each lender will also have their way of how working how much you can borrow. It is more than usual to approach ten different lenders and receive ten completely different answers. Some will be lenient, and some will be strict.
For example, if you are Self Employed in Cardiff, the lender may be more generous. You will find that some lenders will assess 100% of an employee’s overtime and bonuses and others may not, it depends on the lender. Others may allow you to pass with “unearned” income such as tax credits, child benefits, and maintenance.
As a trusted Mortgage Broker in Cardiff, we have a large panel of lenders. We can approach any of these for you, without the need for a credit check, to perform an affordability assessment for you.
If so, to get ahead of the game, you could have an affordability assessment carried out before you start searching for properties. Here’s what would show you what sort of financial situation you are in before you begin getting credit checks.
Providing evidence that you have kept on top of your mortgage and rent payments does not guarantee that you will pass a lender’s own affordability test.
Each lender has their own strict lending criteria. Some are better than others, depending on your personal and financial situation. Lenders want to attract good quality borrowers who may not fit their competitor’s criteria. They engage them by carving out niches for themselves.
Here are some reasons why your mortgage application could be denied or has been getting denied for being outside of policy:
If you come to us, your local Mortgage Broker in Cardiff, we can find the best lender for you based on your situation. Even if you think your problem is a little complicated, don’t hesitate to get in touch.
We have dealt with thousands of complex cases, and we can’t wait to help you through yours. With our help at Cardiffmoneyman combined with a perfectly matched lender, you will be able to put down a deposit for a mortgage in no time!
Get in touch with a Mortgage Advisor in Cardiff and receive a free mortgage consultation today.
One of the most popular questions we get asked here at Cardiffmoneyman is “How much can I borrow for a mortgage?”. In this post, we will go into the details of affordability assessments and how they apply post-2014.
Whether you’re a first time buyer, moving home in Cardiff or looking to delve into buy to let mortgages, we hope that this article can help!
Back in the day, before the era of credit scoring, mortgages were assessed manually by your local Building Society Manager. Lenders moved towards more uniform income assessments to bring forward a more consistent approach in the 1990s.
Maximum lending “caps” were introduced to prevent budding homeowners from borrowing more than 3-4 times their income.
Around the time of the early noughties Credit Crunch, these income multipliers started to become more “generous”. Shockingly, lenders would allow some customers to self-certify, without the need for background checks!
As you can imagine, that went very wrong. Post-financial crisis, everything became stricter, with far more rules being put in place to try and protect the market from future disrepair. This made getting a mortgage significantly more difficult for some.
In 2014, the mortgage market had managed to recover, and we were introduced to the Mortgage Market Review 2014. This was a new set of guidelines for Lenders to follow in order for things to go smoothly. The old income multiplier method was no more, and we saw the emergence of more sophisticated affordability calculators.
With these new calculators, it became possible to delve deeper into how the applicant was spending their money and what their net disposable income would be. Advisors were looking at bank statements more closely to make sure the customer could only get a mortgage they were able to afford. One of the many factors included regular large expenses such as childcare.
Lenders can get quite competitive with one another, on the likes of price and lending criteria. Because of this you will find that things like the maximum borrowing capacity can completely differ between lenders. You may fit into a different niche depending on the lender, so if you are unsuccessful with one it does not mean your journey is over.
Some Lenders will take into account state benefits such as tax credits for a mortgage. Others are more generous if you are self-employed and looking for a mortgage. Taking out the longest mortgage available also opens you up to a larger amount you can borrow.
As time went by throughout the noughties, Lenders were a lot more lenient with how much they would lend. Some would offer self-certified mortgages without bothering to do a background check to see if they were being honest! Yet they wondered why it went wrong… Predictably so, the market crashed and the time between 2008 and 2010 were very difficult indeed, making it harder to get on the property ladder.
When the market eventually recovered in 2014, we saw the regulator launch the Mortgage Market Review (MMR). There is still a “cap” on how much can be borrowed (the majority of lenders prefer to stay below 4.75 times your annual income) but spending habits now become a factor in the process. Examples of these include high childcare costs, credit commitments and student loans. If you have any of these, you could be offered a lot less than someone earning the same amount who does not need to worry about those things.
We are still regularly surprised by what some lenders will and will not accept. In some cases, lenders may penalise low-earners (it could be that they’re not the type of applicant they want), some take pension contributions as a fixed outgoing so if you were, for example, a public sector worker with a big pension deduction that is less than a private sector and so on.
Different people are often better suited for different things. If you need to maximise your borrowing capacity to secure your dream home, then you will definitely need the support of a Mortgage Broker in Cardiff. We will be able to work alongside you, seeing which lenders will be able to lend you the amount you were hoping to borrow.
It is important to sit down with an advisor prior to making any kind of offer, so you can figure out what is within the realms of affordability.