Should I Overpay My Mortgage in Derby?

The majority of lenders will allow borrowers to make ‘over-payments’ on their mortgages. If you do decide on overpaying your mortgage, you do have the chance to clear your mortgage debt quicker which can save money on interest payments. Affording to overpay on your mortgage will mean you save thousands of pounds which in turn clears your mortgage quicker and save on the overall interest paid.

It’s a very well-known fact that if homeowners overpay even by relatively small amounts this can make a big difference to the number of interests paid back over the term. In short, the sooner you start overpaying, the better, as the additional payments over a long period of time have a greater effect.

Some homeowners find they are unable to make extra payments. Usually, this is because of the obstacles that may occur in a homeowner’s life that can affect their finances. Overpaying can be a good thing to do, however, it’s likely that you would rather spend that additional cash on more exciting things.

Put the plan into action

It’s all about remembering to make those additional payments. This option is not one that will pop into your mind on a daily basis, except perhaps when your mortgage only has a few years left to run.

If this seems like an option you want to pursue and would want to make those extra payments to maybe be able to retire a year or two early, you might be wondering how to go about it.

Firstly. you need to see whether your lender will agree to overpayments, without any penalties or associated costs. Many will allow this, however, it’s good to check first.

As a Mortgage Broker in Derby, we do strongly recommend that you create a standing order payable to your lender each month. This can be set up so the standing order can go out the same day as your regular mortgage payments. For example, your mortgage might be £500pm and is collected on the 1st of the month. You found you are able to pay an extra £75pm, so you decide to set up a standing order for £75pm to gout of your bank on the 1st along with your standard mortgage payment.

By setting up both payments to go out on the same can allow you to get into the routine of thinking your mortgage is £575pm instead of two separate payments.

You’re still in control

One advantage of setting up a standing order to a direct debit is that the payer (in this case, you) has full control, unlike a direct debit where this is the receiver. If you find yourself a little tight with money one month, you can simply log in to your online banking and pause the standing order so that it would cancel any future payments from going out until reactivated.

At the point of stopping the payments, it’s good to keep in mind the fact you have benefitted from the additional payments up until that point. As mentioned, this does not mean you cannot reactive your standing order in the future when you are more financially stable.

Depending on the mortgage, you may be able to make reduced payments or take a payment holiday if you have been overpaying for a while. If you do decide to take a payment break it’s important that you check with your lender to see if you are eligible to do this to avoid a bad mark on your credit report.

Regardless of whether you are a First Time Buyer in Derby or looking to Remortgage in Derby, overpaying your mortgage is a good habit to get into. It will result in reducing the amount of actual debt you owe each month. One of the benefits is that you don’t need to overstretch yourself, just make adorable extra payments each month that could result in reducing a year or two off your mortgage in the future.

Problems & Hurdles Obtaining a Mortgage in Derby

Specialist Mortgage Advice in Derby

When you are going through the mortgage journey, you may find that you encounter some obstacles along the way. In some cases, this can get complicated!

Through our experience as a Mortage Broker in Derby, we have dealt with a range of mortgage hurdles. With over 20 years in the industry under our belt, we have encountered many complex situations both common and unique and can provide you with the solutions. In the rare case that we are confronted with a situation, we haven’t seen before, our team will work hard in overcoming it and provide support through the process. These hurdles may not be familiar to you, in particular as a First Time Buyer in Derby, we hope that we can help!

Common mortgage hurdles

Child Care Costs

Having your mortgage application turned away because of having children is unusual, but not having children can increase your chance of an offer acceptance.

From a lenders point of view, they want to make sure an applicant can manage all of your mortgage payments along with current expenditures. With this in mind, childcare costs are classed as expenditures each month. They have to take these costs into account as these costs can run into the hundreds per month. It is known for childcare costs to go down, they always increase! It’s always seen as a financial commitment and is treated the same way as a car loan or hire purchase agent.

Regardless of if you don’t have to pay nursery fees to pay, having children could mean you are offered less than other buyers who don’t have children. The one positive of this is that families can often be in receipt of tax credits and many lenders will take these into account and child benefit.

Mortgages following Divorce/Separation

It’s unfortunate when divorce or separation occurs, however, if you decide to end things with your partner, financially related issues can happen. In particular, mortgages.

It can be challenging for lenders to accept your application when you are financially linked to someone else. This is because they would prefer that applicants not to have two different sets of mortgage payments to meet each month, it could be difficult to manage.

In this situation, many people have approached us looking for Specialist Mortgage Advice in Derby and have sometimes asked these questions:

1. How can I remove my ex’s name from my mortgage?
2. How do I remove my name from my ex’s mortgage?
3. Can I have two mortgages?
   

We find that mortgage hurdles like these can get difficult, very quickly. Most of the time, there is a way around these scenarios, it’s just knowing how. Having a Mortgage in Derby by your side, like Derbymoneyman, can help relieve any stress you may have during these difficult times.

Benefit income

When it comes to benefit income, lenders have varying opinions on this, including the assessing aspect of it. The good news is that benefit income like a child tax credit, working tax credit, disability benefit and pension can all be included one way or another.

Please don’t hesitate to get in contact with us if you want additional information regarding mortgages and benefit income. Here at Derbymoneyman, our team will look at your situation and find you a lender that will consider your benefit income.

Starting a New Job – Can I get a Mortgage?

When you get a new job, normally you will be getting a larger salary which in turn can be used towards something like a new mortgage. Because of this, you may assume that you are more likely to get a mortgage but, this is not always the case.

At the beginning of your new job, you will normally have a probationary period. These are normally fine but there is still some uncertainty there. Therefore, lenders may only accept you when you have job security, this all depends on the lender and the mortgage costs.

In order for the lender to know your work patterns, they will look into your employment history. This is so lenders can see if you are the type to dip in and out of work. Having gaps in employment can have a negative effect on your application.

Some lenders will work from a newly signed employment contract even in month one or if you are about to start your new job.

Evidencing Your Deposit

With any purchase, all mortgage lenders and mortgage broker are legally required to evidence the source of the borrowers’ deposit funds. Evidence of the deposit may be required from your estate agent and your solicitor.

As an expert Mortgage Broker in Derby, we feel this is the most challenging part of applying for a mortgage and could cause issues if not done correctly. You are required to have the part audit trail for the funds if your deposit was from savings, premium bonds, the sale of another property, gifted from a family member or friend, from family overseas or from a personal loan.

The Pros & Cons Of Using A Mortgage Broker in Derby

It can be a daunting experience taking that first step into the mortgage world, or starting the mortgage process for the second or third time around.

With many options for homeowners and homebuyers to take for themselves, it is best to get it right the first time, especially with a lot of money involved.

Whatever your mortgage goals and situation is, the tailored and friendly service we provide as a Mortgage Broker in Derby will help you through your mortgage journey, especially for first time buyers in Derby.

As much as we know and are confident in our ability to help our customers through the mortgage process, we understand the process can be complicated and may wonder how obtaining Mortgage Advice in Derby can help with this.

In this article, we have collated an overview of why approaching a Mortgage Broker in Derby may help you in some cases, and why many people prefer to go direct to the mortgage lender instead.

What are the pros & cons of using a Mortgage Broker in Derby?

Cost-Effectiveness

Many believe that you are more likely to save money by doing direct and finding your own mortgage deal. This isn’t entirely the case, as a Mortgage Broker in Derby may charge a fee, however, this does base on circumstances.

It might be easier and more cost-effective if you have a lot of knowledge and have a straightforward case, however, it can be more complex depending on your situation so approaching a Mortgage Broker would be beneficial.

It can be risky choosing this option as not having a lot of knowledge could result in your ending up on the wrong deal or being unsuccessful on your mortgage deal. Either of these circumstances could end up you spending more money than you have to or harming your credit score which can impact your chances of applying for a mortgage in the future.

With a dedicated Mortgage Advisor by your side, they will be able to help you through the journey towards achieving your mortgage goals. Their aim is to get their recommendation right the first time, at the best possible price. As much as this will come with a service fee, it could mean you are saving a lot more money in the long run.

Local Bank Branch Relationship

Loyalty can be one of the reasons why many customers decide to approach the bank directly, and how the mortgage process was previously run. This was the way to go before the rise of technology and online banking in which loyal customer would approach their local branch on a daily basis, usually speaking with the same person.

In terms of the mortgage process, you would get help and guidance from the bank manager themselves, who is an expert and has a thorough knowledge of your finances so would be the best person to approve a mortgage for you. Now, the process is a lot different with the credit scoring being digital.

Because of this, the bank manager won’t physically go through the case themselves, it will go through a complex online system in order to see whether or not you are eligible for a mortgage. Everything is fair regardless of which bank you are with.

Exclusive Mortgage Products

Many do believe that by going direct, you are open to better, exclusive deals. Again, this is true to an extent, however, it’s it can be limited. This is because they are only offering the best deals from their company.

Not all mortgage lenders are banks and there are many more mortgage options available to choose from. Therefore, the deal that the bank feels is suitable for you, might not be the best deal beyond the bank that you could’ve gone with.

Getting expert Mortgage Advice in Derby can be the best way to get a competitive deal that is suitable for you. One of our expert Mortgage Advisors in Derby will be able to go through your case and find you the best deal from our large panel of lenders. This is another advantage of approaching a mortgage broker instead of just a bank.

Following on from the topic of deals, you may find approaching a Mortgage Broker in Derby can provide you with exclusive deals that you can’t find anywhere else. There will be a large range of options when you with a mortgage broker regardless of if you are a first time buyer, moving house or looking to Remortgage in Derby.

Changes to Regulation & Consumer Protection

In the wake of the 2007-08 credit crunch, a massive improvement in the mortgage market needed to happen. One of these changes was stated in the 2014 Mortgage Market Review, which instructed lenders to no longer sell mortgages to their customers without extensive, expert advice.

Because of this, people could not just approach a bank to tell them they wanted a mortgage and be instantly granted with no checks. Not every staff member in the bank could grant you a mortgage which was something that happened regularly regardless of if they were qualified to do so or not.

As well as this, these changes also bough about consumer protection, which a bank wouldn’t have given you. Now, you are able to place a complaint with the Financial Ombudsman in the event you feel misadvised. Another way to make a claim is through the Financial Services Compensation Scheme.

Having this in place means reassuring a customer that they will be safe and advised accordingly regardless of what mortgage journey they take. This applies to both mortgage brokers and mortgage lenders.

Book an Appointment with a Mortgage Advisor in Derby

Another drawback you get approaching a bank instead of a mortgage broker is the timing. If you approach a bank, it can take months to try and talk with someone at a bank. Furthermore, when you do begin the process, you’re not updated as much through the mortgage journey.

Here at Derbymoneyman, our responsive team will get in touch with you at a time that is best for you and your day to day life. From early until late, 7 days a week, including weekends, our Mortgage Advisors in Derby will be available to answer any of your questions and keep you updated. You might find us being contactable on some bank holidays.

In some cases, you may find yourself attending your appointment on the same day, however, this doesn’t have to be the case. You can speak to someone any time that you are ready and available.

We understand every customer’s lifestyle is different. This is why our advisors have availability throughout the day which means you can book an appointment out of your 9-5 or even on a weekend! Booking is simple with our online booking system where you can find an available slot to speak on an advisor.

Responsiveness is a core value within our company. Regardless of if you are at the very start of the process or towards mortgage completion, our friendly team will always keep you up to date. In the event that any changes arise, your advisor will contact you as soon as possible.

Providing this high-quality service is why many Mortgage Broker in Derby, like us, are favoured in the public eye. With this popularity, many people favour approaching local experts instead of national banks.

Handling of Complex Scenarios

Through our extensive experience in the industry, we have found some cases are more tricky than others. Below are just some scenarios that are a bit more difficult than the usual case:

• Mixed Depsoit (Savings & Gift) – This means auditing two different sources.
• Zero Hour Contract Workers – Will there be a consistent income?
• Looking to Make a Second Purchase – Can they afford to make that additional purchase?
• Self-Employed with No Fixed Income – This can be challenging for Self-Employed applicants.
• Poor Credit History – A lender will not look favourably upon an applicant who has mismanaged in the past.
• Affordability – Can they afford a mortgage full stop?

Previously, mortgage lenders could easily compete with one another by providing deals that were better than the other. Now, the main change in which deal you go with is if you match the criteria or not.

You might find a cheaper deal but it may not match your criteria. In order to see if you are able to have a mortgage, the mortgage lender either carries out a hard search (resulting in a footprint on your credit file).

In the circumstance where you apply for the mortgage with a lender and are declining an agreement in principle, this could harm your credit file. The most frustrating about it all is that it’s very unlikely you will be given a reason as to why you were declined.

A Mortgage Broker in Derby will be able to go through your case and advise you on ways to increase your chances .of being accepted.

With access to a large panel of lenders, they will be able to find you a suitable deal that perfectly matches you up with its criteria and then begins to get an agreement in principle sorted for you. If you obtain an agreement in principle through Derbymoneyman, this will usually be sorted for you within 24 hours of your free mortgage appointment.

Remember, this doesn’t automatically mean you are agreed or guarantees you a mortgage at the end. It does, however, make your credit file much safer by having an expert go through it beforehand. Our team of Mortgage Advisors in Derby will always aim at getting our recommendation right the first time.

In Conclusion; Should I use a Mortgage Broker in Derby?

At the end of the day, it’s entirely up to you! There are advantages and disadvantages of approaching a Mortgage Broker in Derby. On the hand, there are lots of pros and cons to going direct as well. The difference is how quickly you want your service to be, as well as how secure you want to be.

As a dedicated Mortage Broker in Derby, we have extensive experience in dealing with a wide range of customers who go through the mortgage journey. Whether you are a first time buyer in Derby taking that first step into the mortgage world, coming towards the end of their fixed period, or looking to remortgage in Derby, our team are more than happy to help!

Book yourself in for a free mortgage appointment or remortgage review to speak with an expert, FCA regulated Mortgage Advisor in Derby. Our team are here to help with your mortgage goals, with availability that suits you, subject to eligibility.

For more information about our service, check out our brilliant customer reviews. These show the high level of service we give to our happy customers, on a daily basis. We also have a YouTube channel MoneymanTV if you are looking for additional insight into the mortgage world.

Sole Name Mortgage Advice for Married Applicants

There are many reasons why an individual would apply for a mortgage as a sole name mortgage while married. In some cases, a sole name mortgage might be more appropriate than a joint for a number of the reasons below:

-One applicant has a low income. 
-One applicant is not working.  
-Your partner has poor credit. 
-Your partner already has a residential mortgage.  
-You are using a deposit from your servings. 
-You want to retain certain stamp duty benefits. 
 

Above are just a selection of reasons to take out a sole mortgage when you are married. Whatever situation you are in, it’s important to prepare your application to improve your odds of approval. Our Mortgage Advisors in Derby are here to provide a helping hand through the mortgage journey. 

Applying for a sole mortgage when you’re married 

If you want to apply for a mortgage as a sole applicant, it’s key to have a strategic approach. The aim is to get you the best deal that is perfect for your circumstances.
 
When you get in touch with Derbymoneyman, our Mortgage Advisors in Derby will need to know why you are wanting to get a mortgage in one name. This is so they can look into other potential opportunities, for example, you may not want to apply for a joint mortgage because your partner has bad credit. However, you may find that there is a chance you can get a joint mortgage even if one applicant has bad credit.

For applicants who are looking to purchase in their sole name due to personal reasons, this might be something lenders will allow. It can be common for lenders to not be comfortable with this arrangement because you are purchasing a marital home for you and your partner. Being permanent residents, lenders do like for both partners to be on the mortgage. This is to prevent any potential conflicts in the future about who can and can not live in the property.

Looking for a mortgage while a divorce goes through

In the unfortunate case where you decide separate from your partner or are going through a divorce, this is where getting a mortgage in one name could be utilised. You may have the option to buy your partner’s share of the property from them meaning you would remove them fully from the mortgage.

If you are in this situation, there are a number of mortgage options to choose from. This is because there are many scenarios when you are going through a divorce or separation. These include you moving out and buying a new home or you might decide to stay put in the current property and buy your partner out. Either way, both would mean you would need to obtain a new mortgage.

As long as both parties are cordial when going through a divorce or separation, the process can be pretty straightforward. A relationship that is causing conflicts can make things challenging. With a large variety of options and variables available, our Mortgage Advisors in Derby can provide you with a more tailored answer about your situation.

You may find that lender will require some evidence of separation so it’s key you have all your paperwork prepared prior to applying with a lender. Our team can look over this before the application stage.

Mortgage advisors for married applicants 

If you are married but want to get a mortgage in one name, it can be important to obtain suitable advice prior to applying for a mortgage.

As a married individual applying for a mortgage as a sole applicant will require to obtain specialist Mortgage Advice in Derby. Get in touch with our team today.

9 Questions to Ask When Buying A House in Derby

First Time Buyer Mortgage Advice in Derby

As a First Time Buyer in Derby, stepping into the mortgage world can be an exciting experience that may come with its stresses. The good news is that it doesn’t have to be that way. Through our experience as a Mortgage Broker in Derby, we have helped many people with their mortgage journey, below is the questions we commonly get asked:

The 9 most common questions:

1. How much interest has there been in the property/development?

There comes a big financial commitment when you are looking to buy a property. Because of this, it’s best that you have a good think about whether or not you want to commit to buy a property.

When it comes to buying your dream home, you will only have a set amount of time to decide because of the growing interest that would potentially be in the property. Asking how many people have viewed the property you are thinking about purchasing is a wise thing to do to give you an idea of the amount of ‘thinking’ time you have.

2. Is there a property chain?

When you are on the mortgage journey, you may find yourself in a property chain. This is where a group of sellers and buyers are linked in the buying and selling process. Certain aspects of this chain could significantly impact your mortgage process.

In the circumstance where there is no onward chain, it could make the moving process smoother. This is also the case if you aren’t a part of a chain yourself. If you don’t need to sell your property first, this could make the process quicker. This is because you will not be holding up the home buying process.

If this is the situation you are in, this can be used to your advantage and is good to mention in the negotiation process.

3. What comes with the sale?

It can be common for previous homeowners to leave items behind as a way to save costs, which could definitely benefit you. The items they may leave include things like a washing machine, fridge, freezer and in some cases, a shed if the property has a garden.

As long as the appliance work, it can be helpful to new buyers as it saves them some cash until they get something new and modern. If you decide you don’t want the items left, it is your responsibility to dispose of the items.

With new properties, you may have the choice to purchase additional items that are brand new and ready for you on your moving day.

4. Are the neighbours friendly?

Neighbours can be an important factor when considering to buy a property, as for some, good or bad neighbours can really effect your home living experience. If you are moving into an area that you don’t know much about and haven’t lived in before, having friendly neighbours can help with the unfamiliarity of the area.

When it comes to moving into a new home, it can be a risk initially as you won’t have any idea of what your neighbour will be like. As much as first impressions aren’t a massive factors, it can be nice to have a good connection with them as you may find yourself living in the property for a while.

5. How much does it cost to run?

Depending on the property you buy in Derby, the running costs can differ. With this in mind, it can be best to do some research and ask the right questions. It’s good to research into topics like council tac costs or average spend on utilities which the seller will know. This can also help when you are looking at budget for each property.

6. Which way does the house face?

Having a south-facing garden could be important to you and affect your decision process. It can be essential for people who like to relax in the garden on a late summer’s evening as well as read in natural light. It’s common for some locations to require a premium price from the buyer in order to have a south-facing garden because it’s where the sun shines for the majority of the day.

7. After moving in, how much work will be needed?

The amount of work the property will need can make a big impact on your budget. Below is some points to consider:

• Making sure the property is energy efficient.
• Sorting any damping issues (if any).
• Changing the furnishing.

8. Are you open to offers?

Negotiating a property price can be a poignant part of the home-buying process. This means that it is important to be prepared as possible to make an offer on a property that you like. Furthermore, it can be helpful to brush up on your negotiating skills and be one step ahead.

If you are wondering how low in price the seller would want to go, it’s good to chat with the seller or estate agent. You could ask them if any other offers have been made and rejected before your bid.

9. When can we move in?

The first thing you need to do is set out what date you will be moving, then you can start planning the rest. Other jobs you will need to sort out is tasks like instructing a conveyancing solicitor, packing your belongings, and sorting out a removal van to transport your belongings to the new property.

Moving Home Mortgage Advice in Derby

The Costs of Buying a Home in Derby

First Time Buyer Mortgage Advice in Derby

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 agency fees

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%.

Valuation fees

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.

Mortgage arrangement fees

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.

Solicitor’s fees

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:

• Ensure the firm includes VAT
• Is your Solicitor on your mortgage lenders panel?
• Ensure the firm includes the cost of any “disbursements.” These are fees such as Land Registry Fees and Local Authority Search Fees.

Stamp duty

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.

Mortgage broker fees

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.

Removal fees

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 to speak with one of our mortgage advisors in Derby today. We usually have a great selection of appointments available, at times that are convenient for you.

How Much Can I Borrow for a Mortgage in Derby?

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.

Historic rules for borrowing for a mortgage in Derby

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.

Mid 2000s approach

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.

Mortgage Market Review 2014

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.

Deeper analysis

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.

Lender Variances

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.

How can a Mortgage Advisor in Derby help?

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.

Can I Get a Second Mortgage in Derby?

Can you have more than one mortgage?

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.

Common Scenarios for Wanting a Second Mortgage

1. Do you want a second mortgage to raise money for your existing home?
2. Are you looking to rent out your current home and purchase a new one?
3. Are you looking to help your children out with a second mortgage?
4. Do you require a buy to let mortgage to secure a property in Derby?
5. Is your name on an existing mortgage, and you are looking to buy a new property?

Second Mortgage to Raise Money

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.

Second Mortgage to Rent out Existing Home to Purchase a new one

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.

Second Mortgage for a Buy to Let

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.

Second Mortgage to Purchase a Home for Your Children

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.

Named on Existing Mortgage and Want to buy a new Home

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.

Difficulties Getting a Mortgage in Derby

Specialist Mortgage Advice in Derby

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:

Childcare costs

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.

Mortgage following Divorce/Separation

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.

Starting a new job – Can I get 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.

Proving your deposit

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. 

Open and Honest Mortgage Advisors in Derby

The Importance of Changing Your Address Ahead of a Mortgage

Don’t Pretend to Live Somewhere Else

Once you begin the process of moving home in Derby, there will be a lot for you to deal with stress-wise. One area that is always tedious, but it essential to make sure you get right, is updating all records of your address, to make sure that bills and other post goes to the right home.

There will no doubt be a lot for you to update, from your local GP, to your Amazon shopping account and more! It goes beyond just making sure you get your post though, as consistent address information is helpful in many other areas as well.

Most of the time, addresses can be missed when you are updating everything, which can leave you being linked to multiple addresses. What you may not realise though, is it can impact your credit score too. The less varied addresses you have, the better it is for your credit score.

Because of how important your credit score is to a lot of areas, you need to make sure that your credit score is looking in a good way, especially if you are looking to apply for a mortgage on a new home in Derby.

In more recent times, first time buyers in Derby and home movers in Derby seem to think they have a much bigger and better understanding of how their credit scores work and will look to use this to their advantage, keeping both old and newer addresses active.

Typically, this will be done if they have moved out of their family home with their parents, becoming private or council tenants. Even though they will now be living somewhere else, they don’t see the issue in leaving their credit cards, electoral roll info and bank statements at the old address they had.

Many think that with this type of practice, they can manipulate how it looks to seem like they have a long-standing and stable address in their name, rather than moving from address to address. In theory, this works, though in practice, it really does not.

Records of Your Address

The reason why this does not work, is that somewhere as time has gone on, if you have moved home in Derby, there will be a record of the new address on your credit report. Staying linked to your previous addresses is a flawed strategy, unfortunately.

Whether it’s through paying home bills, any car insurance you have, things that you have ordered from online stores like Amazon or eBay, or from anything else you have given your address over time, there will be a record of it existing on your credit file.

In turn, this can seem like you are actually living in two places at the same time or even like you have failed to disclose important information to the mortgage lender. In either case, this can have an impact on your ability to achieve mortgage success, as this will be based on trust.

Keeping Your Address Up-to-Date

The best thing that anyone who is looking to purchase a new home in Derby and apply for a mortgage can do, is to make sure that every record of your address is completely accurate and your accounts are all updated.

This means you need to be sure that all of your online shopping accounts, the electoral roll, your credit cards and pretty much anything else that springs to mind that has your address on it, is all correct and the most up to date it can be, with your current home address only.

When you update your address to be where you are currently living on the electoral roll, make sure that you have definitely got the right moving in and out dates, as getting this wrong can also make it seem like you have two homes.

Making sure that all of your addresses and dates for moving in and out are correct is a far more open and honest way of handling your application for a mortgage in Derby, with a mortgage lender. Not only will it paint you in a good light, but it will make your mortgage process a little easier.

What else can be done to help me obtain a mortgage?

Aside from keeping your addresses on and offline up to date, there are also a collection of different tips that could prove to be quite useful to those applying for first time buyers mortgages in Derby, as they start their own home buying and home owning journey.

These tips include making sure you maintain your bank accounts, try to avoid unnecessary charges if you are able to do so and limit your gambling transactions, if you happen to be a regular gambler. Gambling can have a massive negative effect if you do this too often.

Remember that your bank account needs to represent a true reflection of how well you can keep up monthly payments, generate income and handle your finances in a suitable way. This is a big determining factor in your ability to obtain a mortgage.

Gifted Deposit

A gifted deposit can be a great opportunity for a first time buyer in Derby to take their first steps towards homeownership. This is where a family member is able to gift you a portion of or even the full amount of a deposit to you, to help you buy your new or first home.

This is solely to be a gift, however, not a loan to be repaid. Your mortgage lender will want to see this in writing, to prove that this is the case.

Check My File Credit Report

We would always absolutely recommend that customers, whether they are new or existing, they should take a look at obtaining an up-to-date credit report as soon as possible.

Check My File is a really great tool that can pull together information from a variety of sources, such as Experian and Equifax, in order to get a more complete view of your financial position. You get a 30 day free trial, that can be cancelled at any time, before it rolls onto £14.99 a month.