A question that we regularly get from customers, is how much will their process actually cost? Generally speaking, First Time Buyers in Derby are the ones who reach out to ask this question the most.
Because of this, we have put together a handy list of the different fees you can expect to pay throughout your mortgage journey, and the different points at which they become payable.
Estate agent fees will generally only be payable if you are selling a home. With general interest in online estate agents on the rise constantly, you can sell your home with much lower fees on a basic Rightmove listing.
On the other hand, if you are looking for a more localised and personal service provided by a dedicated sales negotiator in a local branch, you will be looking at a fee somewhere around 1-2%.
Your mortgage lender will require that you have a valuation carried out on your new home. This is to determine the value of said property, to confirm that it is worth the amount you’re looking to borrow.
The costs of a valuation can vary from nothing at all (for a basic valuation with some lenders), all the way up to well over £100 for a much more detailed Home Buyers’ Report. A full Building Survey can potentially cost more than that.
Really, being able to choose which report you would like is the key here. The valuation you decide will vary based on the age and type of the property you’re looking to buy, as well as any concerns you have.
If it’s a newer property, you may want a basic valuation. If you are buying a period property, you’ll probably want a more in-depth report.
Some of the mortgage products that you will find, will have cheaper rates. Occasionally though, the arrangement fee can outweigh how cheap it is.
This isn’t always the case, as there are products that won’t have a fee, meaning they cost nothing. That being said though, some might have a fee and they could be quite costly, depending on your lender or product.
You may have the choice to either add these to your mortgage balance or pay these upfront. If you add these to your mortgage, you may incur additional interest charges.
You will need to hire the services of a solicitor, and the fees for these can be very different depending on who you speak to. With a local company and a straightforward property purchase, you may find it’ll be around the mid hundreds.
When dealing with a solicitor, you will need to give them your property address. This will apply whether leasehold or freehold. In order to obtain a quotation, they’ll also need to know the purchase price.
The key points to cover when asking for a quote are:
You may need to pay an extra tax on your home, which your solicitor will collect on the completion of your purchase of the property. Further details about who this applies to can be found here: https://www.gov.uk/stamp-duty-land-tax.
A trusted and experienced Mortgage Broker in Derby will typically charge their own service fee. The fee amount will vary depending on the case and the mortgage advisor.
The cost of removing your furniture from your home can vary depending on who you use and the service you are looking for. Hiring a van to do it yourself may be a cheaper option than hiring a removal service, though they will be more efficient.
Book a Free Mortgage Appointment
To learn more about your mortgage options or to get started on your mortgage process, book your free mortgage appointment with one of our mortgage advisors in Derby today. We have frequent appointment availability, at times that are convenient to you.
Here at Derbymoneyman, we find the two questions First Time Buyers and Home Movers in Derby commonly ask us is ‘Can I get a mortgage in my circumstance?’ and ‘How much can I borrow?’. In this article, we will be discussing the second question as this has changed drastically in the past decade.
Prior to the days of credit scoring, your local Building Society Manager would manually assess mortgages. To make the process more consistent and reliable, the 1990s introduced the idea of lenders carrying out more regular income assessments.
In order to lower the number of mortgages being accepted to people who couldn’t afford one, a lending cap was introduced. This prevented people from borrowing more than three to four times their annual income.
To receive more applications, lenders started to become more generous with this leading cap as well as their conditions. There were even some lenders who accepted customers a mortgage without any background checks such as payslips. This would eventually become the catalyst for the credit crunch in 2007. In the midst of the credit crunch, lenders were requesting a 20-30% deposit, which made it very difficult to obtain a mortgage as a first time buyer in Derby or if you were moving home in Derby.
In the early 2000s, lenders became flexible in their criteria a lot more, arguably being too generous in the amount they would be willing to lend their customers.
Depending on the lender, some people were offered self-certified mortgages. These type of mortgages meant you were not required to have a background check so as the customer, you could self certify your income, regardless if the buyer falsely inflated the amount they were declaring.
Due to many people carrying out self certified mortgages, the market fell. This began the infamous Credit Crunch of 2008, from then to 2010, these became a very difficult times.
This especially effected individuals who were wanting to take their first step onto the property ladder. At that time, stricter lending criteria was to be put in place due to lenders having to change.
As the market made a recovery, the Mortgage Market Review (MMR) 2014 was created to provide an updated and sounder credit scoring system. The MMR was a set of requirements that lenders had to follow. Nowadays, lenders can determine if an applicant will be able to pay off their mortgage based on their financial state through the affordability calculator.
Lenders can use the calculator to receive a more meticulous insight into an applicant’s spending habits as well as net disposable income. A thorough assessment of your bank statement is carried out to ensure that if you can’t afford a mortgage, then you are not granted one as you could have been prior.
With this assessment, you will find that the majority of lenders will no longer go past 4.75 times your annual income.
As mentioned, lenders will look into your spending habits and the way they analyse these depends on your situation. For example, you may have to pay high childcare costs, have a large number of credit commitments and in some circumstances, you might be paying off your student loan. With this in mind, a mortgage lender will likely offer you less than your work colleague for example, who has fewer outgoings.
These days, there is a distinctive difference between lenders when it comes to how much or little they will lend to some customers. Now and again, lenders have been known to penalise low-earners.
The reason for this might be that they are looking for that type of applicant. They may lend if they see pension contributions as a fixed outgoing, in particular, to customers who have a significant deduction, less than a private-sector worker.
With every lender comes a very unique lending criteria, and every customer has its own circumstance, in the case that you need to maximise your borrowing capacity to have a chance at buying your dream home.
Lenders will always be competitive when it comes to price and lending criteria, however, they will avoid competing for the lowest rate as this will provide no profit gain for them. Furthermore, this will be highlighted through the difference between lenders and their maximum borrowing capacity. Different lenders target for different niches of clients therefore don’t feel it’s inevitable that one lender won’t lender to you as there will be another out there who would.
State benefits like tax credits are factors lenders will take into account for a mortgage. Some lenders may be more generous if you are for a self-employed mortgage in Derby. Increasing the amount they will lend can be done through extending the term of the mortgage to the maximum allowable.
Seeking Mortgage Advice in Derby can be very beneficial. On behalf of the customer, our team will search the market to try and match you to various lenders criteria.
When it comes to knowing the maximum amount you can borrow for a mortgage and your repayments, book your free mortgage appointment online today to speak with one of our expert Mortgage Advisors in Derby. They are determined to make sure your process run as smoothly as possible and search through thousands of mortgage deals to find you the most suitable for your circumstances.
The idea of having one mortgage can stress people out, never mind two! That said, some people weren’t aware that it was possible to have two or more mortgages.
Many various costs come with a second mortgage, and there are many different reasons why someone might want more than one mortgage.
If you have a large amount of equity built up in your home and are looking to release some to fund for a second mortgage to purchase a new home, home improvements or on another property for your portfolio.
Then this is something an experienced mortgage advice team in Derby, like ourselves, can look into for you.
You’ll often find towards the back end of your mortgage that you will be heading onto or potentially already are on a lender’s Standard Variable Rate (SVR).
Our team of advisors may be able to shop around to find you a more competitive deal. Another potential option could be an advance with your current lender.
If you are looking into the possibility of moving house but securing full ownership of your current property to let it out, this is another case where having a second mortgage would be suitable.
Your second mortgage will be a new residential one, taken out on a property after raising funds from renting out the previous home. This particular process is known as a let to buy mortgage.
Some homeowners may look to release the equity sitting in their property, using that income to buy an additional property to add to their portfolio.
We are now seeing more situations where a homeowner may wish to take out a remortgage to release equity to gift their child a substantial deposit.
Gifted deposits are a widely popular option for many first time buyers in Derby who otherwise wouldn’t have gotten on the property ladder any other way.
A second mortgage may apply to other circumstances, such as financial complications present with a divorce or separation.
You may not always be able to get out of your joint mortgage straight away, if at all, but may wish to take out a mortgage on a home of your own once you’ve moved out.
If you have any questions regarding second mortgages, please do not hesitate to get in touch.
You can now book yourself in for a free mortgage appointment to speak with a dedicated mortgage advisor in Derby at a time that suits you and your lifestyle.
Through our experience as a mortgage broker in Derby, we have found that there are a lot of questions within the mortgage industry that come up regularly. To relieve clients worries, below is a list of common difficulties you may get into:
If childcare costs are involved, you usually aren’t as at risk of getting turned down for a mortgage. Potential outgoings of childcare costs can sometimes affect affordability. This is something you should consider as the lender may grant you a lower mortgage amount because of your childcare, in comparison to an applicant who may have the same amount of income but have no children.
Childcare costs are usually associated with a loan or credit commitment. Parents can still be granted a lower mortgage without the childcare costs and the mortgage amount may still be lower than applicants who aren’t parents. This is because lender’s affordability calculators often factor in having kids in as some additional expense.
Child benefits and other state benefits can be something lenders will consider. In some cases, increase the amount they will be willing to lend you.
Nobody ever plans ahead in buying jointly with a partner, expecting to eventually get a divorce or to separate. Unfortunately, this happens more often than you might think. When divorce or separation occurs, certain files and documents need to go through changes such as a name change on a mortgage and inquiring as to whether or not a person is allowed two mortgages.
It’s a requirement that you get in-depth mortgage advice in Derby for instances like names to be removed and for someone to be allowed two mortgages. In the circumstance where you receive maintenance, this usually is put towards your income for a mortgage.
Surprisingly, this is a lot easier than people might think. In some cases, the lender’s criteria may require the applicant to be in work continuously for a period of time while some lenders are flexible with this. Even if you are still in your first job, and haven’t been employed with anyone else, you may still be able to get a mortgage.
Obtaining a signed contract and job offer when you’re starting a new job can give enable you to get a mortgage. Gaps in employment might be a problem with lenders, which is something to remember and probationary periods are typically acceptable.
The years after the financial crash have seen Anti-Money Laundering precautions become stricter. Lenders will want you to evidence where your money for the deposit has come from. This is something solicitors and estate agents might want to discuss with you.
Due to this, any large amounts that you want to deposit will be questioned and could mean your application will be at risk of being rejected. This can be a common occurrence for first time buyers in Derby.
It’s common for some applicants to have a ‘gifted deposit’. In this case, the person who decides to gift your deposit will need to confirm in writing that it is not a loan and is just a gift.
It’s important to remember that you need to be careful with your credit score when it comes to applying for a mortgage. This is because you’re more likely to be accepted for a mortgage if your credit score is higher. Addresses can be one of the factors that can affect your credit score. Having fewer addresses on your record is best, however, people have been taking this in the wrong direction.
In some cases, where applicants have moved out of their parents’ address into rented accommodation, they have left the address they previously lived in on their bank statements, credit card, and electoral roll information.
The reason many do this is that they believe that it could help their credit, but this is simply not true. If anything it can make it worse, because even if you don’t think it will show up, if you have moved to a new address, it will be recorded somewhere on your credit report.
This could be from when you have ordered online and your delivery address is shown, or can be from a car/home insurance search. Basically, the address will link to your credit report from anything you have done involving a payment.
Before carrying out a credit search and applying for a mortgage, it’s good to check that nothing will go against you. The things that will need to be switched to your new residential address includes both credit cards and current accounts as well as the electoral roll.
These checks only apply in situations where you have already moved out of your parents or previous home, as usually you only change your address after you’ve moved in, not before. If you are in a situation where you have already moved in and are paying off a mortgage, it’s imperative that you update your address to reduce any harm in the future if you are looking to remortgage.
Updating your address on your credit file and the electoral roll is something that people forget to do, however, it can make a huge difference too. As well as this, being accurate on the date in which you moved into your rented apartment/new home and the day you left is important because, making a mistake with these dates can sometimes make it look like you’re living in two places at once.
You need to demonstrate that you are responsible and take your financial life seriously. Therefore, you need to make sure that every bit of information on your file is up to date to show the lender that you are fully prepared. Impressing your lender is something you want to do ahead of applying for a mortgage and, by doing this, you conduct yourself in a more open and honest way.
Having no mortgage experience as a first time buyer in Derby can be difficult, this is why we are here to offer you a helping hand. Get in touch if you still need some mortgage advice in Derby or you are looking for some insight from a professional mortgage advisor and we’ll see how we can help.
As a first time buyer in Derby applying for a mortgage, you need to be aware of your credit score. You will find that the least amount of addresses you have on your record, the better, though this seems to be something that people are more knowledgeable and aware of nowadays.
Our experienced mortgage advisors in Derby have found they are many applicants who have moved out of their parent’s address into rented accommodation, yet believe that it is a good idea to keep their previous address registered on bank statements, credit cards, and electoral roll.
People believe this is beneficial despite being a flawed strategy. Almost every time, if you have moved to a new address, there will be some record of this on your credit report. Your address could be recorded from a delivery address when you have ordered something online or car/home insurance search and many more.
Getting all your accounts (credit cards/ current accounts) and electoral roll changed over to your new address can be the best strategy when you are thinking of taking out a mortgage. At the time of updating your address on your credit file and electoral roll, it’s best to double-check the date in and date out. The consequence of making mistakes with these dates is that it may appear on your records that you are living in two places at once.
This will show a more open and honest way of trying to apply for a mortgage which will benefit you greatly in your Mortgage application and when it comes to approaching a Mortgage Advisor in Derby.
When it comes to the homebuyer experience, first time buyers in Derby like yourself can find it stressful. It doesn’t have to be that way. Listed below are nine common questions to ask when enquiring about a property that will allow you to make the most out of your house viewing and provide you with some peace of mind.
Buying a property can be one of, if not the biggest financial commitment in your life.Therefore, it’s perfectly acceptable to have a good think about whether or not you want to commit to buying a property.
You only have so much time to think about it due to the interest your dream property may be getting. It’s best to find out how many people have viewed your desired property to understand how much ‘thinking’ time you may have before making a final decision. Furthermore, if the property receives a lot of interest, you need to be ready to have a final answer as soon as possible.
A property chain can notably impact some areas of your mortgage process and in particular, how quickly you would be able to move in.
If there is no onward chain, it’s likely the moving process will be swift, especially if you are not part of a chain yourself. Another factor that could speed up the process is if you don’t need to sell your property first. This is because you will not be holding up the home buying process.
Remember to use this tactic when negotiating a price.
Some previous homeowners like to leave items behind as a way to save on costs, which could be a big advantage for you. A washing machine, fridge, freezer are just a few they might include, or typically a shed if the property has a garden.
On the condition the appliances work, it’s a benefit to new buyers as it saves them a bit of cash until they get something new and modern, however, you will have to factor in disposing of them should you not want or need the items.
If you buy a new property, you might have the option to purchase any extras that are brand new and there for you on your moving day.
Finding out what your neighbours are like can be a key component to consider when deciding on a property as a good or bad neighbour can make or break your experience. Furthermore, this is especially helpful if you’re moving into an area you are not exactly familiar with.
Deciding to move to new homes can be a risk initially because you won’t know what your neighbor will be like. First impressions are not always important, but it’s always handy to get on with them as you may both be living there for a long time.
The amount spent on running costs can depend on where the property is in Derby. For this reason, it’s best to ask the right questions as well as doing some research. Topics to look into or ask your seller could be how much the council tax is or the average spend on utilities. As well as being good information to know, it also can help you budget for each property accordingly.
Questions like this can make a significant difference in the decision process because a south-facing garden can be a requirement for some. It’s perfect for relaxing in the garden in late summer evenings as well as reading with natural light. You may find that some locations pay for a more premium price in order to have a south-facing garden because it’s where the position of the sun is throughout most of the day.
Here is another significant impact on your budget. Information to find out that may be essential to know include:
A typical of the house-buying process is negotiating on a property price. Because of this, it’s key to be as prepared as possible to make an offer on a property that you like. If you are looking to improve negotiating on a property price and being one step ahead click here.
To get an idea of how low in price the seller would want to go, it’s best to chat with the seller or estate agent. Also, ask if any other offers have been made and rejected before your bid.
When planning what you need to do before moving in, it’s best to set out the date of moving first. From this, you can plan out other jobs such as instructing a conveyancing solicitor, packing your belongings, and arranging a removal van to transport your belongings to the new property.
When considering ‘where to live in Derby’, there are many things you will look for. House hunting as a first-time buyer in Derby or as a home mover in Derby can be daunting. You will be looking at mortgage arrangements and the best mortgage deal available for you, and your finances for your new home.
By now, you probably have a rough idea of where you may like to live, the type of house you would like. You will be considering the location, amenities and how much you get for your money. But how to decide which area you would like to live in?
We’ve put together a few points to consider when choosing where to locate in Derby.
Depending on where you decide to locate in Derby will be one of the most critical factors. You will have to think about whether you want a city location or looking for a more countryside setting.
You need to consider this carefully, as the area will affect the commute to work, access to local amenities, shops and schools.
We all generally have to consider some factors, such as how we get to work for many people. So access to primary transport links, railway or bus station, and motorway links will be necessary, especially if you don’t have your mode of transportation.
For those with children, an essential factor is usually the quality of the school in the area. There are some great schools in Derby, and it’s always worth taking a look at the school league tables if you have any doubts on which school to let your children attend.
What you are looking for in the area may differ depending on your lifestyle. Some of the things you may consider are the proximity of the nearest supermarkets, shops and maybe how close you are to the emergency facilities.
We recommend you make a shortlist, what you need and what you would like near you as a priority. When you find a house you are interested in, you can then compare it with your ‘wish list’ and see if it matches your needs.
Depending on your circumstances, this is a personal choice on whether you need additional support with the children, help with school runs and childcare. So it may also be that you would like to be in as close proximity to them as possible, or at least just a short distance away so that it’s possible to visit if you wish to do so.
When you choose the ideal home, you need to set aside how far your money will go and what you get in a home for the amount of money you spend. So you may need to compromise on what you are can within your price range and budget.
Some tend to keep to themselves, and others prefer being part of a community. For best results, look at local websites or take a visit beforehand to get to know locals who will inform you on current events and what’s available
Maybe you are purchasing a property having long term investment ideas and, as such, hope the property prices rise, on the off chance that you choose to sell in the future.
Most lenders will allow you to make ‘over-payments’ on your mortgage. Overpaying on your mortgage will allow you to clear your mortgage debt quicker, saving money on interest payments. The simple fact is, that if you can afford to overpay on your mortgage you can save thousands of pounds, you will clear your mortgage quicker and save on the overall interest paid.
All homeowners know that overpaying, even by relatively small amounts, can make a big difference to the number of interests paid back over the term. The sooner you begin overpaying, the better, as the extra payments have a greater period of time to have a greater effect.
Many homeowners cannot afford to make extra payments, but generally, the main reason is that life simply gets in the way. We know overpaying is the “right” thing to do, but let’s face it, there’s always something else you can be spending your money on, and plenty of those things are more exciting!
Part of the dilemma here is remembering to make those extra payments. It’s unlikely to cross your mind too often, except perhaps when your mortgage only has a few years left to run.
So, if you can see something of yourself in the above and would like to be making those extra payments so that, perhaps you can retire a year or two early, then what should you do?
Check first that your lender will allow overpayments, without any penalties or associated costs. Most will allow this but be sure to check first.
It’s highly recommended setting up a standing order payable to your lender each month. Set up the standing order to go out on the same day as your regular mortgage payment. E.g. your mortgage payment is, say £500pm and is collected on the 1st of the month. You can afford to pay an extra £75pm, so set up a standing order for £75pm to go out of your bank also on the 1st.
The reason for the above is that very quickly you will start to “feel” that your mortgage is £575pm and you will get used to that within a matter of months.
The big advantage of setting up a standing order to a direct debit, is you (the payer) are completely in control, unlike a direct debit where this is the receiver. Therefore, if you find yourself a little tight with money one month. You can easily log in to your online banking and pause the standing order so that it would cancel any future payments from going out until reactivated.
Up until the point of stopping the payments, at least you have benefited from the additional payments made until that point, and as mentioned above, this does not stop you reactivating your standing order in the future when you are more financially comfortable.
Some mortgages will even let you make reduced payments or take a payment holiday if you have been overpaying for a while. Before choosing a payment break though it’s essential to check with your lender that you are eligible to do so to avoid a bad mark on your credit report.
Whether a First Time Buyer in Derby or going for a Remortgage in Derby, overpaying your mortgage is a great habit to get into. You will be reducing the amount of actual debt you owe each month. You don’t need to overstretch yourself, simply making affordable additional payments each month could result in shaving a year or two off your mortgage in the long run.
A 95% mortgage is as simple as the name would suggest; you are borrowing against 95% of the price of a property, and then you are covering the remaining 5% with your deposit. An example of this is if you looked at buying a property that was worth £150,000 with a 95% mortgage, you would be putting down £7,500 as your deposit and borrow the remaining £142,500 from the lender.
Off the back of the March 2021 Budget, Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, making 95% mortgages more readily available from the bigger high street banks.
This is fantastic news for First-Time Buyers and Home Movers alike, as this scheme will continue running until December 2022. Certain terms and conditions will apply though, which is something your Mortgage Advisor in Derby will be able to look at, to see if you qualify.
All our customers who opt to Get in Touch will receive a free, no-obligation mortgage consultation where one of our dedicated mortgage advisors will be able to make a recommendation on the best possible route for you to take.
95% mortgages are usually accessible by both First-Time Buyers in Derby & those who are Moving Home in Derby. Whilst saving for a 5% deposit sounds like a pretty straightforward concept, you’ll still need to have an acceptable credit score and prove that you are able to afford your monthly mortgage repayments, in order to access a 95% mortgage.
A good credit score is essential in the process of obtaining any mortgage, especially a 95% mortgage. Things like paying any current credit commitments on time, ensuring your addresses are updated and checking that you’re on the voters roll, can all help with your credit score.
Affordability is another one that is important to take note of. By giving the lender details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments, your lender will be able to get a general overview of whether or not you are able to afford this type of mortgage.
Nowadays we see lots of family members helping each other get onto the property ladder, especially parents looking to further their children’s lives. The way this usually happens is by gifting the person looking to find their home, the deposit required. Known through the industry as the “Bank of Mum & Dad, Gifted Deposits are only intended to be a gift, and not as a loan. The lender will need proof that this has been agreed, before it can be used towards your mortgage.
When looking for a 95% mortgage, you want to make sure you have the right type of mortgage. Each mortgage type works differently, with that choice allowing you to find one that is most appropriate for your personal and financial situation.
Some homeowners and home buyers prefer Fixed Rate or Tracker Mortgages, mortgage types which mean you either keep interest rates at a set amount for the term given or have your interest rates tracking the Bank of England base rates.
Alternatively, you might find that Interest-Only or a Repayment Mortgages are more your style. Interest-Only allows cheaper payments until you need to pay a lump sum at the end (mostly now used for Buy-to-Lets), whereas a Repayment mortgage (a normal mortgage if you’d like) means you’ll be paying interest and capital combined per month.
Seeing as a mortgage is such a large financial outgoing, you need to be prepared and need to be aware. You might find things like higher interest rates, remortgaging difficulties due to less equity and then negative equity all cropping up if you’re not.
There is no need to worry though, as all these can be avoided if you’re savvy enough with your process to begin with. The more deposit you put down for a property, the less risk the lender will see you as.
A larger deposit, of say 10-15%, would not only reduce the rates of interest by a noticeable amount, but would also give the property more equity and reduce the risk of negative equity, thanks in part to you borrowing less against the property.
So, whilst the risks may seem intimidating, planning ahead and saving for a bigger deposit to access something like a 90% or even an 85% mortgage will be a massive help in your mortgage journey and something you’ll be able to reap the rewards from in the future.