Mortgages

 
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Residential Mortgages (Regulated by the FCA)

The 2007/08 credit crunch may be a distant memory but its legacy is the impact it’s had in shaping today’s mortgage market.  There are fewer lenders, ever changing affordability criteria, acceptance/non-acceptance of overtime, commission, bonuses, second jobs, tax credits etc., stricter assessment of self-employed applicants, and a myriad of interest rates.

Selecting a mortgage isn’t just about the interest rate.  Fees and overall cost are vitally important as are early repayment charges, and switching mortgage rates every two years can over time add £000’s to your mortgage borrowing and monthly repayments due to the fees involved.  But the number one question is, “Will a lender accept your application?”

In a landscape that can change on daily basis it is vitally important to seek whole of market advice for your new mortgage.  Having provided high quality mortgage advice for over 30 years, we would be pleased to help you with your new mortgage enquiry.  You can call us on 01761 411 775 or email your contact details with a preferred contact time by clicking here.

Specialist Applicant Types

Foster Carers can have great difficulty in obtaining a mortgage, even from an existing lender where the existing mortgage was taken out before becoming a Foster Carer.  This is because many lenders don’t accept Foster Care Allowances as earned income, or they will only accept the taxable element of the carer’s allowance (the net profit, as shown on SA302 certificates) and as such assess Foster Carers as they do any other self-employed applicant.  However, there are lenders who do provide mortgages for Foster Carers.

Our firm’s Principal, Mr Michael Hoare, has been a Foster Carer and perhaps uniquely has an insightful understanding of mortgages for Foster Carers resulting in great success with helping Foster Carers obtaining mortgages with mainstream lenders at normal interest rates.  So if you’re a Foster Carer and you would like to speak to a Financial Adviser who truly does understand your situation, please call us on 01761 411 775 or email your contact details with a preferred contact time by clicking here.

Consumer Buy-To-Let & Let-To-Buy Mortgages (Regulated by the FCA)
Business Buy-To-Let & Let-To-Buy Mortgages (Not regulated by the FCA)

Changes in the regulation of buy-to-let mortgages along with the 3% Stamp Duty Land Tax surcharge and changes in the taxation of rental income, have given new and existing buy-to-let property investors lots to think about.  Consequently, advice on buy-to-let mortgages has become a specialist area requiring advisers to have specific approval to provide advice.    

Obstacles to navigate include lenders applying different criteria depending on whether the application is a Consumer or Business buy-to-let, and depending on the type of interest rate being applying for, and whether you’re a first time or experienced landlord.
We would be pleased to help you with your buy-to-let or let-to-buy enquiry.  You can call us on 01761 411 775 or email your contact details with a preferred contact time by clicking here.

Remortgaging

Remortgaging is a process of changing mortgage lenders, most likely for a more competitive interest rate and/or additional borrowing.  It’s a relatively straightforward process and lenders often offer “free remortgage deals” whereby there’s no property valuation fee or solicitor fees to pay, but this doesn’t apply in all cases.
Additional borrowing is permitted for acceptable purposes such as home improvements, investing in a new property, divorce settlement, debt consolidation, even a new car or holiday.  But borrowing for business purposes is not permitted.

But be careful: Mortgages taken out before 2008 may now operate on a very low lifetime Tracker interest rate so remortgaging to a new lender should be considered very carefully.  Also, if your mortgage was taken out in more recent years it may have significant early repayment charges if it’s repaid before a certain date.  So this must be checked.

To remortgage a property it must have been own for at least six months.
A remortgage may or may not be the cheapest or best solution so it’s important to obtain whole of market advice before making any decisions.

Interest Rate Switch

An alternative to remortgaging is to switch to a new interest rate with your existing lender, which can include additional borrowing if needed.  Switching interest rate is usually straightforward whilst combining a rate switch with additional borrowing can be surprisingly cumbersome.  Even so, how does the interest rate offered by your existing lender compare to the rest of the market?

An interest rate switch may or may not be the cheapest or best solution so it’s important to obtain whole of market advice before making any decisions.

Second Charge Mortgage (Regulated by the FCA)

Another alternative to remortgaging is taking a second charge.  This allows you to use equity you have in your home as security against another loan.  It means you’ll have two mortgages on your home.

A second charge mortgage might be worth considering if, for example: remortgaging meant giving up an attractively low existing mortgage rate; or, If you don’t qualify for additional borrowing with your existing mortgage lender; or, your current mortgage has high early repayment charges, or, if you’re struggling to get some form of unsecured borrowing, such as a personal loan, perhaps because you’re self-employed; or, if your credit rating has gone down since taking out your first mortgage;

A second charge mortgage may or may not be the cheapest or best solution so it’s important to obtain whole of market advice before making any decisions.

Whether you are thinking about a remortgage, an interest rate switch, or a second charge mortgage, we would be pleased to discuss your options with you.  You can call us on 01761 411 775 or email your contact details with a preferred contact time by clicking here.

Credit scoring

To be considered for a mortgage your application must pass an initial assessment, known as an Approval In Principle (AIP) or Decision In Principle (DIP).  This involves a credit search and credit scoring.  Credit scoring is not easily explained and takes a number of factors into account.  Furthermore, each lender has its own credit scoring criteria which lenders can change to increase or decrease their “pass” score at any time in order to manage the flow of mortgage approvals, or to target specific applicant types (e.g. existing mortgage borrowers requiring a low loan to value or first time buyers requiring high loan to values).

There are steps you can take to maintain or improve a good credit score:

  • Make sure you’re on the electoral roll at your address and check your credit file for mistakes.  The three main credit reference agencies are Experian, Equifax and Call Credit all of whom provide instant online access to your credit file.  Lenders rely heavily on what is recorded on your credit file so make sure any discrepancies on your file are corrected before you apply for a mortgage;
  • Make sure you make payments on time, including mobile phone contracts.  A day late will result in a missed payment being recorded and any missed payments in the 12 months prior to making a mortgage application could result in an application being declined or reduce your choice of lenders or interest rates;
  • Each time you apply for a mortgage or any credit agreement, a credit search “footprint” is recorded on your credit file where it remains for 12 months.  Whilst a single recent search may not affect your credit score, multiple searches during the last 12 months will have an impact.  It’s best to try and avoid applying for any form of credit in the 12 months preceding making a mortgage application.  It’s also important to avoid making your own speculative mortgage applications over the internet and to not be persuaded by your high street bank, building society or estate agent to apply for a Mortgage Certificate.  You might be applying to the wrong bank or building society and be declined.  Each occasion will result in an unwanted credit search footprint being recorded on your credit file which will lower your credit score;
  • Credit files record a 6 year payment history so missed payments take a long time to fall off.  Likewise, Defaults and County Court Judgements stay on a credit file for 6 years and one or more of either will make it difficult to get a mortgage or any other type of credit, which extends to car insurance instalment plans and mobile phone agreements.  When a credit account runs into difficulty, sometimes an account holder may be offered a reduced settlement if payment is made immediately.  Sounds good, but this is recorded on your credit file which tells a future lender that you were happy not to pay back your full obligation, which is not good;

POLITE WARNING – Our advice is to think carefully before making a mortgage application via an online comparison site, or direct to a bank’s or building society’s website or branch.  If you're unsuccessful (which could be simply because you don’t fit the profile of customer the lender is currently looking to attract) it could hinder an alternative application.  We naturally believe that it is wise to deal with a whole of market mortgage adviser
We’ll hold back on submitting an AIP/DIP application until you’ve actually found a property or you’re ready to go ahead with your remortgage or second charge mortgage which we’re able to do because we can confidently rely on our wealth of experience and knowledge of how lenders will asses your application.    .

Dealing with Estate Agents

When putting in an offer on a property it is common practice for an estate agent to want to verify that you are a proceed-able buyer and you may be asked if you have your mortgage in place, or have a mortgage certificate, or you may be asked to speak to the resident Mortgage Adviser. But why would you want to reveal to the estate agent that you could pay a higher price for a property given that the estate agent acts for the seller?  Alternatively, if your financial circumstances are a little complicated the mortgage adviser may have doubts about your ability to obtain a mortgage and the estate agent may advise their seller not to accept your offer or suggest that they continue marketing the property until you obtain a Mortgage Offer.

We invite our clients to refer estate agent to us and we’ll confirm that you are able to obtain the mortgage that you require.  But we do not divulge any information that may suggest you could pay a higher price for the property.  That’s because we act for you.

Fees

There is no charge for an initial consultation and our standard fee for our mortgage service is £295 which is payable when you on or before completion of your mortgage, so not upfront. We will also receive commission from the lender.

Location

We invite enquires from all regions of the UK.

• How to contact us

If you would like to speak to us about a mortgage, remortgage, rate switch, or second charge mortgage, or to arrange an appointment, please call us on 01761 411 775 or email us your contact details with a preferred contact time by clicking here

We look forward to hearing from you.

 

 
Michael W Hoare t/a Hallmark Mortgages & Equity Release is an Appointed Representative of Tavistock Financial Ltd which is authorised and regulated by the Financial Conduct Authority
FCA Registration No. 439054.
The information contained in this website is subject to UK regulatory regime and is therefore restricted to consumers
based in the UK