The general popularity surrounding Offset Mortgages has dipped since their rise during the 1990s, though some of you may be pleased to know that they are still a great option for customers who have the ability to put some money aside every month.
They’re also quite good if you believe that you are due to receive a lump sum in the near future.
When you start out with your Offset Mortgage, you will be given a savings account by the mortgage lender that will run alongside your mortgage, for the sole purpose of aiding your mortgage. Rather than racking up interest, the money will offset against the balance of your mortgage.
As an example of how this works, let’s say that your mortgage is worth £100,000 and you have managed to save up £15,000 in savings, then you will only be paying interest on the £85,000 that is left.
Offset Mortgages tend to be rather flexible arrangements. Until you have completely offset your mortgage, you will have the ability to put as much money as you would like into it. You will always have instant access to the money that is in your savings, so if you need to dip in for any emergencies, you know that it is there.
One of the things that is really great about Offset Mortgages, is that it saves interest, as opposed to adding it on, so you won’t have to pay any tax on any savings that you put into your savings. Higher rate taxpayers are definitely big fans of these!
An Offset Mortgage is a great option if you are due a lump sum for any reason, such as possible inheritance, as because it is interest-free, it allows you to store your money until you know what you want to do with it. This also applies to any annual or quarterly bonuses from your job that you have no dependance on.
Because your savings account will be freely accessible at any time, you are able to dip into your additional savings for other means if you need to, whilst leaving some in there for your mortgage. It is important to remember that you need a substantial amount in there though to make your Offset worth taking out!
An Offset Mortgage can work out really well for First-Time Buyers in Manchester who have any plans to overpay on their mortgage. Looking further down the road, once your current term ends, overpaying can potentially reduce your mortgage payments for the next term that you take, reducing interest rates in the process.
With other mortgage types, any money that you put towards your mortgage cannot be withdrawn at any point, with releasing equity being your option once your term has ended. This is a situation that is less than ideal if you have any second thoughts or need a short term boost to your income.
It’s times like this where Offset Mortgages are rather clever. Because you have a savings account, you will have the ability to take out the funds at any time, then put them back in when you are ready to do so.
So, if you’re looking to make any further payments on your mortgage over the term, we’d recommend making use of an Offset Mortgage savings account.
You should consider all of the options that are available to you when you get in touch with a Mortgage Advisor in Manchester.
Some consumers who like using Offset Mortgages tend to keep going with them and are less likely to Remortgage than another homeowner might be inclined to. The may seem a little complex though, so there are customers who may not use this option.
Your dedicated mortgage advisor will be able to show you the impact of how an Offset Mortgage can potentially save you money over the course of the full mortgage term.
If you have any further questions relating to the topic of Offset Mortgages or a Remortgage in Manchester, feel free to book online for your free mortgage appointment and we’ll happily talk you through whatever you need help with.
Before you start with anything else, probably the main factor when moving home in or around the Manchester area, whether local or not, is what location do you have in mind.
Generally though you’ll have to think about more than just where you want to live, but what the area is like, what is there and what do you want to prioritise when looking for your dream home.
To help you get a better idea of the sort of place you’d like to live, we have compiled a detailed list of the different types of factors we have heard that home buyers look at when looking to find their new home in Manchester.
It is important to come up with an idea of the type of area you would like to make your residence in, as this is somewhere you are going to be living in for a good while, maybe even making it a family home.
If you’re the sort who feels a lot more comfortable surrounded by a thriving urban scene, the city life is definitely your best choice. If you have a preference for the quiet life, living in the countryside might be more your cup of tea.
You’ll find pros and cons to either choice, so give it a lot of careful thought before you get your heart set on a potential new home that could be based in an area that you might not enjoy.
The transport links to and from your potential new home base are important factors to pay attention to.
Make sure whether it’s to go out and socialise with friends or family, to make your way to work, to go shopping for essentials or anything else you like to do in your spare time, that your home has necessary transport links.
Also do some research as to how much each of these is going to cost you when travelling. If you drive your own vehicle, how long will it take for you to reach different places? How much will fuel be? Are there any nearby fuel stations?
For home buyers who have some children, you should take a look at what schools are nearby. Find out what the local catchment areas are, so you can get a rough idea of what the schools are like. School league tables are handy learning tools.
If you don’t have any children now, whether you are planning for the future or have no plans at all, it may be beneficial to at least look it up, just to future proof yourself.
There may be certain facilities that you would like to have close to you when you are planning on a place to potentially live. We would suggest writing a list and separating those that you want from those that are essential.
An example of this would be if you really want to have a gym nearby but doing so could mean that you have to live in an area without the shops you need within a reachable distance.
You probably need the shops more for your general living, so that might be something to prioritise, whilst leaving the gym as an added bonus if you can make it work.
The distance between where you might be living and where your family and friends currently live can have an influence on where you move to. Many prefer keeping them close by, so they have that support network if they need it.
On the other hand, some prefer to keep to themselves with their loved ones at a distance, prioritising peace and quiet over going out and socialising with people on the regular.
When making purchases, we all would like to know that we’re getting good value for money. Determining this for your home will depend on the area that you’re looking to live in.
It may be a better option for you to look for a cheaper property to start out with, though this might mean compromising various features or nearby facilities that you would’ve preferred to have had.
The local community can impact your home living experience quite a bit.
As established, some prefer the quiet life. This might entail having a few residents nearby who keep to themselves. Others like to have a thriving busy community, generally where everyone is known and communicates regularly.
Have a word with your estate agent and find out what the area is like. Community Facebook pages or locally run websites tend to be quite common these days, so they’re worth looking up to get a rough feel for the local vibe.
Some home buyers may be moving because of a new job or career plan. This is something we’ve heard from customers a lot and is a very big factor. You should review the distance between your new home and workplace.
If you’re going to be working in a home office and only visiting the office sporadically, would you be okay with living a bit further out? What is the space like within the property? Is there even the scope for a home office?
For those who will be job hunting once they have already moved, do some research on the companies in the local area and compile a list of the main employers to potentially apply with.
You will find a lot of different property types available to you across the open property market, with these varying depending on where you’re looking.
Some prefer end-terrace properties with a garden to enjoy, whilst others prefer a modern flat or studio apartment.
Make sure you have a good look at all the options available to you, undertake some property viewings and get a good idea of the type of property you would prefer to live in.
Any proposed local investment would probably be helpful to find information on, especially if you’re looking to build a life within that home and stay there for quite a while.
Online research will be the best port of call when looking to find any future investments. It’s important to consider whether these will be a benefit or a detriment to your lifestyle.
To explain further, those who might have a preference for quiet country life might find their dream scenario turned into a nightmare if a big new housing development is planned within close proximity.
Hopefully through reading our list you’ll now be better equipped for finding a place to call your home.
When the time comes for making offers on property and getting yourself a mortgage, get yourself booked in for a free mortgage appointment. We would be happy to help!
We have a dedicated team of mortgage advisors available from early until late, all throughout the working week and weekend, subject to availability.
No matter if you need some assistance with a first time buyer mortgage in Manchester or are moving home in Manchester, we can’t wait to hear from you and help you kickstart your mortgage journey.
If you are a First-Time Buyer in Manchester or a Home Mover in Manchester and have put in your offer for a property, you may be wondering what the next step in your mortgage process is.
That next step will be to take out a property survey, as a means of establishing what the condition of the property is, so you can figure out if it is worth the amount that you are paying for it.
If the surveyor happens to find something and reports it on the survey, then the buyer will be in a position by law to approach the seller and further negotiate a price that will cover the costs of any required work that may need doing to the property.
There are 3 main types of property survey available to home buyers.
A Mortgage Valuation survey will consist of basic, straightforward valuation. This kind of valuation will be required to be paid for by the person taking out the mortgage, in order to secure a mortgage offer.
It should not be confused this with a full survey. The mortgage valuation confirms to the lender that the property you are looking to borrow money to purchase, is worth exactly what you’re willing to pay for it.
This type of home valuation will not highlight any repairs that are needed, though it may still point out any obvious defects that they would recommend you further look into and use your own judgement on.
This type of survey will cover structural safety and highlights any apparent problems that will require your immediate attention, including things like any damp that exists in the property, as well as anything that doesn’t meet current building regulations.
This report will offer an independent report of your property by an expert in the field. To ensure that two surveys aren’t being paid for, it is recommended to ask the mortgage companies surveyor to carry out this report on your behalf, though be wary that it may take a couple of hours to complete.
A full structural survey is better suited for properties that are older and those of a non-standard construction.
Depending on various factors such as property size and type, a full structural survey will possibly take longer than a Homebuyers’ Report, sometimes taking as long as a day to complete.
A full structural survey will provide a detailed insight on the condition of the property and highlights issues that should be investigated further before continuing with making a full purchase, to provide the buyer with a more settled peace of mind.
You can find a surveyor to carry out a Homebuyers’ report or building survey through the Royal Institution of Chartered Surveyors.
If you have ever thought about Moving Home in Manchester, you have likely found yourself wondering which areas are the best places to live in Manchester. To help you make an informed decision, we have put together a list of the best areas to live in and around the Manchester area.
Altrincham is a large market town situated in Trafford, Greater Manchester. Having been through generations of cultural and industrial change, the town has become quite the location for First Time Buyers in Manchester and Home Movers. In fact, it has even been described as one of the best places to live in the northwest!
You may have to pay a higher amount to live in Altrincham, however, with the types of housing that is available, it’s definitely worth it. Altrincham is also a great place to bring up a family; the local area of Timperley is a good place to look if this is why you are wanting to buy a home in Altrincham.
Home to halls, gardens, canals, indoor markets and music venues, Altrincham is an amazing place to live. If you choose to live in Altrincham, we are sure that you’ll enjoy your stay and hopefully find your dream home!
Mortgage Advice in Altrincham
Chorlton is a small suburban area located 3 miles South West of the Manchester City Centre. Chorlton is a great place to live, the average housing price stands at £335,000 (May 2021). This is the perfect location for someone wanting access to the city life as well as the quieter, local suburban lifestyle.
Speaking of city life, from Chorlton, the Manchester City Centre is only a 15-minute tram ride away. You’ll find lots of transports links in Chorlton, there is no need to worry about the ease of getting to your place of work, getting from A to B and dropping your children off at school.
Even if you don’t wish to take regular trips into the city, there are still plenty of different things to do in Chorlton. You can find plenty of restaurants, cafes and pubs dotted around the area; each having their own unique but local feel.
If Chorlton sounds like the kind of place where you could see yourself living in the near or far future, make sure to get in touch and we will see how we can help you get your Moving Home process started!
The longest road in Manchester City Centre at over a mile in length, Deansgate is a location rich in history and is in fact one of Manchester’s most historic areas, with information on it dating back even as far as the 17th century.
The local high street is filled with various designer shopping opportunities, allowing for an enjoyable experience. If you wish to travel between the different areas in Manchester, you’ll find it has easy access to various popular locales and many different transport options to choose from, ranging from trams, to trains and even a shuttle bus.
If you like history filled locations that have a great high street and double as a transport hub for various nearby areas, Deansgate could be the perfect location for you.
As one of the most vibrant places to live in Manchester, Didsbury has something for everyone. With elegant greenery, noble properties, and a famous nightlife scene, it’s no wonder that this gem has been popular with First-Time Buyers in Manchester over the last few years.
Split into three areas: East Didsbury is famous for its excellent schools, West Didsbury has a selection of fantastic restaurants and Didsbury Village is home to a lively community, popular restaurants, hotels and a range of shops. Favored amongst families, Didsbury offers a quiet escape from the busy center of Manchester.
Easily accessible from Manchester City Centre, Didsbury has an excellent public transport system. You can choose from the train, bus or even the Metrolink.
As one of Manchester’s most popular area’s Didsbury is just one of the reasons that make Manchester such a wonderful place, and that’s why we recommend Didsbury for families as there are plenty of housing choices available.
If you are familiar with Rusholme, you know it’s nicknamed the “the Curry Mile” for a reason. Thanks to many curry houses, Rusholme is an area in Manchester with its own distinct culture and Asian influence.
High-performing schools make Rusholme an appealing area for families, while excellent transport links to Manchester City Centre make getting around a breeze. Suppose you’re looking for somewhere with plenty the conveniences and great food. Rusholme should be on your list of places to live in Manchester.
If you’re looking to live close to the city centre but avoid the premiums that part of city life throws up, Rusholme is the place for you. It’s an excellent area for First-Time Buyers in Manchester; from terraced to semi-detached housing, we are sure that you will find something that is for you.
5.2 miles south west of Manchester, just down the road from Stretford and Altrincham, is the large Trafford town of Sale. Popular with families, Sale has great local options for children’s education, with some regularly well-performing primary schools in and around the area. It doesn’t just stop there however, as there are plenty of secondary school options too, some of which are considered high in-demand.
There’s a great community feel in Sale, with a mixed variety of different people and even a volunteer run festival for people to take part in. If this hasn’t sold you on the area already, then let’s talk property prices. No matter the era of property you’re looking to buy, you’ll find the property prices to be a lot lower than expected, appealing to people from all walks of life.
Like much of the Manchester area, Sale too is rich in history, with potential findings suggesting even prehistoric life in this general location. For an affordable, historic and community driven area with great opportunities for your children to grow, a place in Sale could be just the home you’re looking for.
Salford is an ideal location for any media enthusiast as this city is a media hub surrounded by green belt land. Salford is a perfect place to live in, from its vibrant community to its thriving modern hub, putting it firmly on the home-buying map for First Time Buyers or Home Movers in Manchester.
Thanks to MediaCityUK and the investment in the area, Salford now homes more shops, restaurants and bars, but if this isn’t enough, the attractions of Manchester City Centre are always nearby. But this modern city development hasn’t destroyed its green spaces. Salford remains one of the UK’s greenest cities so that residents can enjoy waterfront, urban and rural living.
Supported by excellent housing prices, Salford is a great place to live in Manchester. Make sure that you don’t sweep this option under the rug.
Mortgage Advice in Salford
We hope that our list has proved to be a little helpful in your decision making. Of course, you should still do your own research and visit the areas yourself, but we at least summarised the highlights of some of the best areas in and around Manchester, to really give you a feel for what they may be like.
If you are looking at Moving Home in Manchester and would like some help with getting the process started, please do Get in Touch. A trusted and dedicated Mortgage Broker in Manchester like ourselves will work hard to try and guide you through the whole process.
Buying a home, whether you’re a First-Time Buyer in Manchester or have experience already in the property market, can be a rather stressful and an expensive process. The cost of all this only goes up even more when you are looking to buy and sell at the same time. Here is a helpful breakdown of some of the expenditures you will have to consider when buying a home in Manchester.
You should know that you only need to deal with estate agent fees when it comes to selling a property. The prices of their services can vary between companies, so make sure you try to find the best price and leading service before diving into anything concrete. The cheapest agents tend to be online ones who don’t have to worry about the costs of maintaining offices.
If you aren’t too sensitive to how much something is going to cost and you would prefer a more personalised service, you may have to pay an extra 1-2% of your properties selling price.
The fees usually have room for negotiations, especially in a “seller’s market”. A seller’s market is where agents are fighting to get your instruction, because of lack of houses on the market.
If you are thinking of taking out a mortgage, then a lender will need to be certain of whether the property is worth what you’re actually going to be paying for it. If you are lucky, your lender may offer you this service for free, although they may not send you a copy of the report in return.
From time to time, we have seen that lenders may not offer a free valuation. When this is the case case, you may need to pay a few hundred pounds for one to be undertaken. You can expect to pay roughly double that price if you would like to upgrade to a more in-depth Homebuyers Report.
Whether you wish to elect for a more detailed report or not, is entirely up to your choice. Your decision will likely depend upon the age and type of property you are purchasing. This will be along with any fears/concerns you have about the property in question.
Some mortgage products offer comparatively cheap rates. Although this benefit can be outweighed by an arrangement fee made payable to the lender. Not every product will have one, so the cost, for example, could either be nothing at all, or as much as £999, possibly even more than that, depending upon the lender or product you have gone with.
Sometimes these are to be paid as upfront costs or, as some choose to do, you can opt for these to be added to the balance of your mortgage. Although because of this, you would then incur further interest charges. As an experienced and hard working Mortgage Broker in Manchester, we are able to compare mortgage deals factoring in these costs, to give you a more general overview of what your costs may be.
You’ll need to take up the services of a solicitor, wherein the fees quoted by various firms can differ by huge amounts. A very rough estimation for a straightforward purchase with a company, is probably around £600 for a low-value property. You will need to give the property address, as well as give the purchase price to obtain quotations on what you’ll have to pay. This is the case whether freehold or leasehold.
The key points to cover when asking for a quote are:
The solicitor collects on completion of the property purchase, in addition to your Solicitor’s fees and disbursements. You will be required to pay this fee. Full details can be found here: https://www.gov.uk/stamp-duty-land-tax. An example would be if a residential purchase was £180,000, the Stamp Duty would be £1,100.
Your Mortgage Broker in Manchester will usually charge a fee for their dedicated mortgage advice service. Please try to use a company that charges on mortgage offer only, and doesn’t request any payment upfront, as this means if things happen to fall through, you walk away without a payable fee. Avoid any application fees where your money will be at risk too.
The cost of moving your furniture can vary by large amounts, depending on the service undertaken. It will depend on the level of service you are looking for. If you are quite happy to hire a van and roll your sleeves up, or even hire the services of a local man with a van, this can cost less than £200. On the other hand, if you are looking for a company that provides the full service this can be well over £1,000.
If you would like to discuss the costs involved in obtaining a mortgage in more detail then please don’t hesitate to Get in Touch and speak with a Mortgage Advisor in Manchester today.
The general rule of thumb in the mortgage world, is that the longer you fix your mortgage for, the higher the interest rate is going to be. Therefore, if you are looking for the lowest rate possible, you should really look for a short term fixed rates mortgage. The downside to a short-fixed term, is that your mortgage will be up for renewal quicker, meaning that when you come to Remortgage in Manchester, your monthly mortgage payments might be a lot more than they were previously.
If you don’t like the idea of searching for new fixed-rate deals every two years, but would rather not reach the point where interest rates go too high, then a medium-term fixed rate could be the best option for you and your circumstances.
Five-year fixed rates are popular choices, as they add the security of constant monthly payments for the foreseeable future. The downside here is that if interest rates drop whilst you’re locked in, you will end up paying more than you might have had to, if you had instead opted for a shorter period.
There are a limited number of 7 to 10-year fixed rates on the property market. These have always been the least popular choice for customers, due to the sheer length of the deal, as people tend to feel a decade is too long to be fixed in for a mortgage. These are also the most expensive fixed mortgage products available to customers.
In addition to the interest rates, you also need to take into consideration the booking and arrangement fees. A booking fee is payable upfront, whereas an arrangement fee is payable on completion. You might know people who have added fees to their mortgage amounts, but this increases the total amount repayable at the end.
Sometimes your financial circumstances suddenly change and you might have to repay your mortgage a lot earlier than you had initially planned for. This is called an ERC or an Early Repayment Charge. The ERC is calculated as a percentage of the amount that is still owed on the mortgage. So if say for example, mortgage amount you have left to pay is £200,000 and you are able to pay that off early, with a percentage that is 2%, you would have to pay back £4,000 to cover the broken fixed contract.
Many homeowners think that they can pay off their fixed mortgage early, without knowing about the Early Repayment Charge. You are tied into that deal and you can’t just jump out of it and pay it off early, unless you are okay with having a repayment charge added onto it. People who know about the charge may still choose to pay their mortgage off early to get a better deal that is currently on the market, especially if it is one that may not be available in a couple of months.
We would recommend that you avoid chasing after “headline” deals. You need to remember that the lowest rates come with the highest setup fees. Please Get in Touch today for more fixed-rate Mortgage Advice in Manchester. If you are still uncertain on them and need more help, our service could be truly beneficial to you.
100-125% mortgages are truly a thing of the past now. Following on from the infamous Credit Crunch, the country seems to be in a more stable, secure financial state and the property market is performing far better than it did before. With more rules and regulations in place (see Credit Crunch for more information on this), mortgage lenders now seem a lot more confident in offering 95% mortgages to their customers.
Of course, it doesn’t just have to be 95%, it can be as low as you might want this to be. The more savings you have free to put down as a deposit, the less you have to pay back overall, and you open yourself to the possibility of better interest rates.
Deposits essentially work as safety nets for the mortgage lenders. What this all boils down to, is that the lender needs to be confident you can make your monthly repayments. If you don’t do this, they’re at a financial loss and need to repossess and sell your property. By putting down a larger deposit, you are less risk to the lender because you are not borrowing as much from them. This also means that if the property market fluctuates and prices dip, they can afford to drop the price a little and still stay somewhat profitable.
We know that for many people, the process of saving up for a deposit to put towards a mortgage can be quite difficult, putting a roadblock in the way of trying to jump from renting to becoming a First-Time Buyer in Manchester. If you are already renting or have a family this can be even more so of an issue, as money you would like to put aside for saving often has to go on other essential needs.
Our dedicated and trusted mortgage advisors in Manchester regularly find themselves faced with many different questions about their deposits. Here we are going to look at these as best we can, with a hope of providing you with answers and a greater understanding of what it is you need to be successful, with a chance of also elevating you to a better deal with a lender.
Without a doubt, yes we definitely recommend this! The more you can put down for a deposit, the lower your rate of interest will be overall. One of the more attractive benefits of this is that it allows for potentially lower mortgage repayments per month, as you will also be borrowing less for the property you wish to buy over the course of your term.
Once again, putting down a higher deposit also means you are at a lower risk to the lender should things go wrong, so it really does work in your favour. Products are offered in bands of 5%, the most expensive of these being 95% mortgages.
It is not unheard of for this to be possible, though it does not happen often and is definitely not recommended. The use of a personal loan is considered as an additional credit commitment. Because of this, the lender will grant you a smaller mortgage than the one you might have previously found yourself with, had the deposit not been borrowed. The reason that the majority of lenders would rather this not be the case, is because at this point you would essentially be paying back 100% of the purchase price, with whatever deposit you had to cover the mortgage being paid back anyway.
Yes, almost all lenders are completely fine with Gifted Deposits from members of your family and sometimes, depending on the lender and the circumstance, from friends too. The one who is gifting must also be ready, willing and able to confirm that it is purely a gift and not to be paid back at any point. For anti-money laundering purposes, they may also need to provide proof of ID, as well as proof of their own funds.
Dubbed the “Bank of Mum & Dad” by many, gifted deposits are seen by many as a saving grace for those struggling to get onto the property ladder and the market would be a very different place without it.
For the sake of Anti-Money Laundering regulations, all applicants will need to evidence where exactly they got their funds, an audit trail if you will, by providing bank statements. Lenders like to take a look at how exactly any potential savings have been built up too. Recent large cash deposits in your account can be a big hurdle for lenders.
If you have done something like sell your car, you will need a receipt and proof that the amount it sold for matches the deposit of money made in your account. The longer you let these funds sit in your account, the easier this process gets as it’s not just a sudden and recent increase. Providing an audit trail for your deposit source can often be one of, if not the most difficult part of the application.
If you are selling a property you own to put money towards your deposit, then your proof of deposit in that case will be the Memorandum of Sale provided to you by the estate agent. These are documents that record and detail the buyers’ interest in your property and the terms of sale you have agreed on in order to hand over ownership.
If you happen to qualify for the government Help-to-Buy scheme (which is really useful for First-Time Buyers), you are still only required to have a minimum of a 5% deposit. With an additional boost of 20% from the government equity loan, this will bump your deposit up to 25%, allowing you to access a lower rate mortgage. It is very important that you remember to pay this back though. It is a loan, not a gift!
Depending on the situation you are in, no you don’t always need one. If the house has been discounted by the owner, then some lenders will accept the discount (which is basically the equity in the property) as deposit. For example, if the property is worth £100,000 and you have been offered it for £90,000, they will take the £10,000 discount off the property value as a deposit. This goes hand in hand with the Right-to-Buy Scheme from the local authority or private landlord.
Please be advised that the above information is for reference purposes only and is not to be viewed as personal financial or mortgage advice.
If you are looking for an estimation of how much you can borrow for a mortgage based on your household income, it may be worth your time trying our free Mortgage Calculator. If you would prefer a more accurate mortgage affordability figure, please Get in Touch and we’ll book you in for a free mortgage consultation with one of our Mortgage Advisors in Manchester.
The two most common questions First-Time Buyers in Manchester and Home Movers in Manchester ask us are, “Can I get a mortgage in my situation?” and “How much can I borrow?”. In this article, we will jump into the latter, which has looking at what’s changed over the years, as well as today’s approach and how it may apply to your situation.
If we look back to the ’80s and ’90s, the majority of mortgage applications were underwritten manually. What this means is there was quite a lot of “human intervention” in the process of approving these mortgage applications. You’d make an appointment with your Building Society Manager, and he or she would interview you to discuss your case.
This would inevitably turn into a sales pitch, where they would encourage you to save with them for a while until you prove yourself to be creditworthy. The manager would then grant you the equivalent of today’s Agreement in Principle. Following on from this, the customer would then receive some advice on how much they could potentially borrow.
Whilst this sounds very much like a highly personalised process with a common-sense approach, it would often lead to inconsistent decision-making. The manager had the discretion to interpret the lending manual as they saw fit. In other words, it was entirely possible to approach the same Building Society in a different town or city and leave, having obtained a completely different outcome.
To stop this from happening and more importantly, to cut unnecessary costs, lenders moved to automated affordability calculations. “Caps” were applied so they were able to lend you more than 3 or 4 times your household income.
As we went further into the 2000s , lenders became more and more, maybe even too generous in how much they would lend their customers. Some Lenders would offer self-certified mortgages, wherein no background checks would take place and the customer could declare how much they were earning, even if it was a blatant lie.
The market was a shambles and as you may have heard, completely crashed, leading to the infamous Credit Crunch of 2008. The years between then and 2010 were challenging years indeed, especially if you were trying to get on the property ladder. The lenders battened down the hatches and created a very cautious (over-corrected) lending environment.
Through very hard work and patience, the market recovered. In 2014 the regulator launched the Mortgage Market Review (MMR), a new set of guidelines for lenders to follow in order to prevent what happened before, from happening again. Gone were the old-style income multipliers, which took little account of household expenditure.
It may be shocking, but before 2014, whether their credit histories were good or bad, two applicants earning the same income could borrow roughly the same as each other. This was also not factoring in how much they spent each month. From here came new affordability models, taking a much more forensic view of how mortgage applicants managed their money on a monthly basis.
On top of the cap that was put in place, we have seen that the majority of mortgage lenders will not go past 4.75 times your annual income, and they prefer to analyse your spending habits. Depending on your personal situation, you may have high childcare costs, a large amount of credit commitments, and a student loan. In these cases, they will likely offer you less than your work-colleague who doesn’t have any of those regular outgoings.
We are always surprised by the large differences between lenders in how much, or little they will lend to some customers. From time to time, some lenders have been known to penalise low-earners. It could just be that they are not looking for that type of applicant. Some take pension contributions as a fixed outgoing so may lend, for example, a public sector worker with a significant pension deduction, less than a private sector worker.
Different lenders each have their own criteria, and each customer has their own situation unique to them. If you need to maximise your borrowing capacity to obtain the home you need to buy, then you’ll greatly benefit from the advice of a dedicated Mortgage Broker in Manchester. We’ll be able to search the market on your behalf to see if anyone will lend you the amount you need.
If you’re wondering “How Much Can I borrow?” and looking to take out a mortgage, you should speak to one of our Mortgage Advisors in Manchester today, so we can work out your finances together to ensure that the repayments feel comfortable to you.
Whether a First Time Buyer in Manchester who’s looking to put their foot onto the property ladder, thinking of moving to Manchester or looking to Remortgage for Home Improvements, overpaying, even by a small amount, can make a big difference in the amount on the interest you pay back over your mortgage term. The earlier you start overpaying, the better the effects of your extra payments.
Some homeowners choose not to down this route, and some cannot afford these additional payments. Sometimes it can come down to life gets in the way. In any case, overpaying is the ideal thing to do when you take out a mortgage, but in reality, there’s always something new and flashy we’d instead invest our money on rather make an extra payment on the mortgage.
The issue seems more likely just to be remembering to overpay your mortgage. It’s not something we imagine comes into your mind too often either, especially when your mortgage term is almost up.
Some people hope to overpay to retire early. If you feel like making additional payments, our recommendation is to set up a payable standing order to your lender each month. Set it up to go out on the same day as your regular mortgage payments.
Suppose your monthly mortgage payment is £450 per month and goes out on the 2nd of each month. You can afford an extra £85 per month and want to put that towards your mortgage payments. Set up a standing order of £85 to go out to your lender on the 2nd of each month too.
One of the perks of this is your mortgage payments will then total at £535, and because it’s going out as a regular payment, this will feel and later become the norm for you. Another perk is that whereas the receiver controls a direct debit, standing orders, the payer is in total control.
The good news is if you have a financial emergency and don’t want it to go out this month? Simple, all you need to do is log into your online banking and cancel the payment.
Whilst it would be a shame to have to stop making additional payments, at least you’ll receive those benefits thus far; depending on the lender, you may even be allowed to arrange reduced monthly costs or take a ‘mortgage payment holiday’ if you’ve been overpaying for some time. It’s essential to check with lenders, though, if you’re looking to do this; otherwise, it could negatively affect your credit report.
Overpaying is a great habit to have, but it’s not obligatory. If you don’t feel the need to, you don’t have to. That said, shaving off a year or two off your mortgage term will be something you’ll benefit from significantly.
When your initial mortgage deal reaches the end of it’s term, your mortgage lender may offer you a newer, revised deal to stay on their books. In the mortgage market, this is what is known as a Product Transfer.
It’s important to remember, however, that you are under no obligation to agree to this deal. If you wish to leave that lender and look at your options elsewhere, you are well within your right to do so. It is highly likely that you will find much better deals out there through another lender, one that is more beneficial for your personal and financial circumstances. It’s just the case of finding that works well for you and what you’re looking to do going forward, an area of which your Mortgage Broker in Manchester may be able to help.
Whilst the concept sounds ideal on paper, lenders will unfortunately not reward you for your loyalty towards them. Whether you have been a customer for 5 years, 10 years or 50 years, the reality will stay the same. Lenders have even been known for offering new First-Time Buyers in Manchester customers better rates than they tend to offer customers who are already undertaking a mortgage with them.
This is one of the many reasons why it is recommended that you shop around and looking for more competitive deals. Though this can be achieved off your own back, you may find yourself benefitting from utilising the help of an expert Mortgage Advisor in Manchester. As a trusted and experienced Remortgage broker in Manchester, we are able to work with a large variety of different lenders on panel that we have access to, allowing us to find you the most appropriate and favourable mortgage deal for your circumstances.
We often find that usually, our customers can get better rates and they are missing out those opportunities because it’s more ‘convenient’ to stay with the lender you already know and are currently using.
Whilst the process of swapping from an existing deal over to a new deal with your current lender may seem straightforward online, we always believe it is incredibly beneficial to see what other deals you may be eligible for. Lenders will also try to tempt customers to go with a new deal online, without that customer actually taking any professional mortgage advice, leaving some customers aware they could have ended up with a better deal.
The lender not providing advice to online switches is rather dangerous, as without professional advice, you are essentially saying goodbye to all the valuable consumer protection you would have benefitted from had you been given that option initially. Rushing into something like this headfirst is absolutely not recommended. Please take a step back and analyse all of your options prior to making a final decision on what to go with going forward.
All customers who contact us for mortgage advice in Manchester will benefit from a Free Mortgage Consultation. Once we have your information keyed in, we will pass you onto a Mortgage Advisor in Manchester who will talk you through all of your mortgage options and work with you to try and ensure you end up with the most appropriate deal available to you, based on your personal and financial circumstances.
We have seen various different examples of customers over the years, being affected these “follow-on” deals and ending up being locked into an inappropriate deal. Lenders like it when you choose not to go with advice, as it invalidates any future complaints due to you taking your own path and neglecting to take any advice. In their minds, this way you only have yourself to blame for any displeasure with your deal.
We have seen this happen in the past with our customers. In one particular case, we saw someone declined for a small further advance, which was intended to fund some necessary home improvements down the line. This customer then had to pay a rather large early repayment charge to change over to a new lender who would grant her the additional required funds.
You may expect that we would recommend using a mortgage broker in Manchester, but we only do so with the intent of making sure you are fully equipped for the mortgage process. If handled without a mortgage advisor in Manchester to back you up, you could find yourself in a rather troubling situation. We only ever have your best interests at heart!
Even though this is the case, it doesn’t necessarily mean that we will tell you to switch. If we feel that your best option is to go with a Product Transfer, we will recommend that you take action and take up the deal whilst you still have that option available to you.
Regardless of these paths, even if your requirements seem straightforward, we always recommend you take mortgage advice in Manchester. A second opinion costs nothing and making a mistake when taking a new product can cost you a lot of time and money.
The Remortgage market is a very competitive part of the mortgage market. Savings can often be made by searching the market for a new deal with the assistance of a mortgage advisor in Manchester. Getting help from an experienced Mortgage Broker in Manchester could be the most beneficial option, especially if your financial or personal circumstances have changed since your initial mortgage process was underway.
If you require any further Product Transfer advice or Remortgage Advice in Manchester, feel free Get in Touch with your Mortgage Broker in Manchester.