Blue Q Mortgage

People tend to assume that getting a mortgage as a first-time buyer will be really straightforward and, for the most part, this is true. However, some will find it much more difficult to get mortgage offers from lenders. If you’re looking to buy your first home and you’re wondering what can potentially stop you from getting a good mortgage deal, we have looked into some of the most common factors to be aware of. 

It is worth noting from the outset though that it isn’t necessarily impossible to get a mortgage should you relate to any of the below and the right mortgage advisor can still help you to get on the property ladder.

Bad credit history or a low credit score

You probably won’t be surprised to hear that if you have bad credit history then you may struggle to get a mortgage. There are a number of different things that can negatively affect your credit score and ultimately, every time you make a late payment on financial commitments, such as electricity bills and mobile phone contracts, it can count against your credit score. Thankfully, there are ways that you can improve this score and specialist mortgage advisers can help you get a mortgage on competitive terms with a bad credit history too. 

Zero hours working contracts

Due to the unpredictability of zero hours contracts, they can sometimes make it more difficult for you to get a mortgage offer. Lenders like to have peace of mind that you will make all repayments on your mortgage, but there is a higher risk that you will fall behind on mortgage payments when you’re not guaranteed a set number of hours at work each week/month. You may find that if you have worked for the same employer for a long period of time and your Loan To Value is not too high, you may still be able to get a competitive mortgage.

Asking to borrow too much 

Simply put, Loan to Value is the amount that a lender will consider loaning you as a percentage of the property’s value and if you’re asking to borrow too much, then they won’t provide you with a mortgage. Generally speaking, the larger your deposit, the better when applying for a mortgage as this will reduce the amount that you need to borrow. Typically, most lenders require a deposit of 10%, however, some lenders allow mortgages with as little as a 5% deposit, which can be reduced further when taking advantage of the Government’s Help to Buy Scheme. 

The term of a mortgage

The term of a mortgage can vary from 5 years up to 40 years. Lenders will take your age into consideration when deciding how long a term they’re willing to offer you and typically, most lenders won’t extend a loan past your retirement age. Unfortunately, this means the older you are, the harder it will be to get a mortgage with a long term on a standard mortgage, although there are more and more mortgages for older applicants coming to market as people are tending to live and work longer. You do of course have the option to accept a mortgage with a shorter term which will mean your monthly payments will increase.

Monthly spending habits 

When deciding whether or not they’re happy to give you a mortgage, there are lots of different aspects of your lifestyle and financial situation that lenders will consider. One of these factors is your monthly outgoings and if you spend too much, you might not get the mortgage you were hoping for. Again, this is due to the fact that lenders like to know you can afford your mortgage payments and they prefer their customers to be sensible. So, simply cutting down your outgoings and living within your means can improve your chances of getting a mortgage. 

Looking for a Mortgage Advisor in Chelmsford?

Should you require the assistance of an experienced mortgage advisor in Bracknell, don’t hesitate to contact us here at BlueQ. We provide a whole of market mortgage service to our customers and our expert mortgage advisors will gladly answer any questions that you may have. We are proud to be our customer’s first choice for all of their mortgage planning needs and we can assure you that you will be in the very best hands when you turn to our team for hassle-free mortgage advice. 

To discuss your mortgage requirements in more detail, book a free consultation with a qualified mortgage adviser today. Simply use the booking calendar on our website to select an appointment type and time that is convenient for you, it couldn’t be easier to get the tailored advice and guidance that you need. 

Getting a foot on the property ladder is becoming more and more difficult for people of all ages. Not only is the price of property in many parts of the UK continuing to rise, but the majority of businesses still only pay their employees minimum wage, so many fear that they will never be able to own their own home. Thankfully, there are lots of different options available to explore if you’re a first-time buyer trying to get a residential mortgage on a low income:   

Look into the different Government schemes available 

There are a few ‘help to buy’ schemes available that are specifically designed to help people get on the property ladder. A new Government scheme was introduced in April this year and it is set to run until March 2023. Simply put, this scheme involves the Government lending buyers up to 20% of the value of their new home, and 40% in London. 

This scheme provides buyers with the opportunity to pay a 5% deposit rather than a 10% deposit, which makes saving for this initial payment much easier when you’re on a low income. With a lack of 95% mortgages available these days, this scheme is really beneficial. 

Opt for a ‘part rent, part buy’ solution  

Another scheme that falls under the help to buy umbrella is shared ownership. For lots of people, this is a great option to consider and simply put, with shared ownership, you will own part of a property and pay rent on the remainder. This significantly reduces the deposit you need to save and also the amount you need to borrow from a lender. 

Commonly, the shares offered in a property are between 25% and 75% of the value, and you often have the ability to buy a larger share in the future; this is known as staircasing. Not to mention, you can also sell back your share later down the line and use this money as a deposit for a new property. 

Consider a family mortgage

Many don’t realise that family mortgages, like the Family Springboard Mortgage from Barclays, exist and they are another brilliant solution for anyone who is on a low income. With this type of mortgage, you won’t need to save for a deposit and instead, a family member will put 10% of the purchase price into a savings account with the lender.  

After a set period of time, which is usually 3 to 5 years, if you have kept up with your mortgage repayments then your family member will get their money back, along with any interest accrued during this time. With a family mortgage, you will still own the property in the same way you do with any other type of mortgage too. 

Ask for a guarantor on the mortgage 

Another option to consider when you’re on a low income is a guarantor mortgage. This is a similar concept to a family mortgage, however, it involves a family member underwriting your mortgage repayments. You will need to save for and put down a deposit as normal on a property when you opt for a guarantor mortgage though. 

The good thing about this type of mortgage is that you will often be able to get a bigger loan when you have a guarantor than you would independently. Due to the fact the guarantor provides the lender with the added comfort that they will always get the mortgage repayments, they’re more likely to offer mortgages with a higher Loan to Value. 

Trying to find a mortgage broker in Essex?

Since being established back in 2001, here at BlueQ we have been providing professional and friendly mortgage advice to our customers. If you’re looking for a Mortgage Adviser in Chelmsford who can help you get a mortgage deal, regardless of your current circumstances, be sure to get in touch with our team and we will do all we can to assist you. Unlike other mortgage brokers, we provide a whole of market service for mortgage deals and we are dedicated to delivering first-class customer service. 

Why not book a free mortgage consultation with a qualified Mortgage Adviser today via our website? You can either meet us in one of our offices or we can arrange a telephone meeting, whichever is more convenient for you. Whether you’re buying your first home or looking to upsize your current home, we look forward to hearing from you. 

The last 18 months or more have been a strange experience for many of us. Those that have continued to work have had to adjust, in many cases, to a new way of working. This has meant the home being more crowded than usual, especially when the kids aren’t at school and when lockdown was at its strictest.

Perhaps an unexpected by-product of this is that many people have changed their priorities when it comes to ‘must-haves’ and ‘nice-to-haves’ in their dream new home. So, what do buyers want?

Whereas short and easy commutes by road or rail and being close to local amenities were once highly prized, research suggests that this is now a priority for between 14% and 17% of people. Working from home and fast home delivery have, it seems, changed the needs of home buyers.

Additional space for a ‘proper’ home office is also high on the new buyer’s agenda as is a decent outside space or garden. If a nice garden is not available then proximity to green space is desirable. More space seems a common theme. Gardens have greater value now, and many people are will to pay a premium on a larger than average garden.

One can imagine that fast, reliable broadband that enables multi-user streaming services will quickly become a necessity for many, especially if a large part of the workforce continue to work from home at least for part of their work-week.

If you’re new to buying a home, you may hear lots of familiar phrases that you don’t fully understand. One of these phrases commonly used is ‘the property chain’. If you’re unsure what this is and why it’s talked about so much, we explain here.

As a first-time buyer, purchasing a new home is relatively straightforward. Once you have your deposit and, perhaps, your government-funded Equity Loan, you just need a valuation for the mortgage and a mortgage offer and your lawyer will do most of the rest. The housebuilder finishes the home and then sells it to you. Simple.

But what about when you are buying a home from someone other than a housebuilder?

Well, in this instance things can get more complicated. In most cases, the person you are buying from is likely to be selling to move to another property and the person they are buying from might be doing the same – and so on. This can sometimes result in a long chain of transactions, each dependent on the completion of the one before.

Most experienced home owners will be wary of long chains, simply because if just one buyer pulls out of their transaction it can cause all the other transactions to stall or even fall through completely. For this reason, buying from a housebuilder or selling to a first-time buyer with no house to sell, can be a very attractive proposition. Cash buyers are also attractive for the same reason, as is selling at auction, although this brings with it its own drawbacks.

For a chain of transactions to work well, it’s important to have a good understanding of everybody else’s needs and desires. For example, one buyer in the chain might be moving conditional upon relocating for a new job, or another might be an investor that must sell before the end of the tax year. If you don’t understand these pinch points, chains can collapse and you may all be left with what is referred to as abortive costs for work undertaken by your conveyancer, solicitor, etc.

In a successful chain, all the people involved in the transaction will understand the needs of each other and will communicate difficulties honestly and promptly. An element of flexibility might also go a long way. Especially on timescale. When everyone is sure they can ‘perform’ as required (in other words, they know they will be in funds for the purchase, etc) they will exchange contracts for the sale or purchase. At this point all the terms are set, including move dates, etc.

It’s unwise to exchange on a contract unless you know you can fulfill its terms, although sometimes it’s necessary to exchange based on the exchange of contracts with another. If at some later stage you cannot fulfill the terms of your contract because of the breach of another contract made with you, there is a route by which you can pursue a claim for damages incurred as a result of these breaches. Hopefully, it never gets to that stage.

A Debt Management Plan is a mechanism by which you can have a third party negotiate with the people to whom you owe money and set out a plan by which you will make a single, affordable monthly payment each month.

Debts that can be included in a DMT are referred to as non-priority debts and include;

• Overdrafts
• Personal loans
• Bank or building society loans
• Money borrowed from friends or family
• Credit card, store card debts or payday loans
• Catalogue, home credit or in-store credit debts

Unfortunately, some debts can’t be included in a DMT. These include;

• Court fines
• TV Licence
• Council Tax
• Gas and electricity bills
• Child support and maintenance
• Income Tax, National Insurance and VAT
• Mortgage, rent and any loans secured against your home
• Hire purchase agreements, if what you’re buying with them is essential.
• These debts are known as ‘priority debts’.

Whilst a Debt Management Plan is not specifically registered on your credit file, the fact that the implementation of a DMP will almost always be the result of you struggling to maintain (or miss previous payments to creditors) may have an effect on your credit score. However, just because you have a DMP does not necessarily restrict you from obtaining a mortgage as long as your credit history and other factors are still within parameters.

Whilst anyone can set up a Debt Management Plan, if you use a third party business then they must be properly registered with the FCA. The advantage of using a third party is that they do all the negotiating with your creditors, taking away that pain and hassle. You then pay one single agreed payment plus a once-a-month charge to your Debt Manager.

You may qualify for a Debt Management Plan if you have unsecured debt equivalent to between 15% and 39% of your annual income and you’re finding it hard to maintain repayments. It’s also usual to be on a steady income that should allow you to repay the outstanding debts over 5 years or less.

A DMP can take just a few weeks to set up and can give you the flexibility needed to repay your creditors over time.

The Budget of 2021 saw the UK Treasury announcing another state-funded scheme aimed at helping to keep the UK housing market fluid. Known as The Mortgage Guarantee Scheme, the newly announced initiative launched officially in April 2021.

The scheme offers lenders to both first-time buyers and those that have previously owned a home a government-backed guarantee, meaning that should the home reduce in value and need to be sold, the lenders are effectively insured for any loss. This scheme has resulted in the increased availability of 95% Loan to Value mortgages coming back in the first two quarters of 2021.

This is good news for borrowers with only small deposits. It means that even if you only have a 5% deposit, you may be able to obtain a mortgage on the remaining 95% of the purchase price, up to £600,000.

Several major mortgage lenders are already offering mortgages on this basis, but more are now expected to join the market.

The government plan is to close the scheme in December 2022, so interested parties should get their skates on if they wish to take advantage!

It’s a little known fact that pretty much all land and property owned in the UK is actually the property of the Crown. Really! But don’t worry, in practical terms, if you own the freehold interest in land or property then for most intents and purposes, you are the ‘owner’ of the property and everything above and below it.

Of course, there are sometimes limitations on even our Freehold ownership. These limitations might take the form of retained rights, such as mineral rights or rights of way (easements) or restrictions, such as positive or negative covenants restricting use or requiring action (such as undertaking maintenance or not using land for specific purposes).

But, if you own the freehold interest, you will own that interest in perpetuity, until you sell it or, if it is mortgaged, the mortgagee repossesses it.

An alternative way to occupy or own an interest in the property is by way of a lease. This can be like a freehold in that you might still enjoy exclusive use of the property and have rights to it. However, leases are time-limited and therefore you will not hold the property into perpetuity. You might also have more restricted rights, such as being required to maintain the property and not allow certain uses, etc. However, you will enjoy specific rights in common law, as a tenant (or lessee).

In some cases, modern statutes have allowed tenants the right to renew their lease on similar terms or even to buy the freehold interest or the freehold interest of the building containing their flat, plus a long lease on their flat.

Of course, a flat can’t be owned freehold in the true sense of the word as this would mean owning the property above and below it, which would mean you also owned flats above and below you, plus any car parking! In order to get over this problem, it’s usual for flats to be sold on long leases of say 99 or 125 years.

In some cases, these leases might even be for say 999 years! These long leases are sometimes referred to as ‘virtual freeholds’. The owner of such a lease might not own the freehold but he does have most of the rights associated with ownership of the freehold, such as the right to exclusive possession and quiet enjoyment. In such circumstances, it is usual for the lessee (the owner of the leasehold interest) to have limited obligations under the lease, other than to perhaps pay ground rent or pay into a sinking fund. Even then, some ground rents are rarely demanded or paid, or could be for something innocuous like one peppercorn per annum.

Yes. Probably.

Equity release is simply a way to realise some of the value in your existing home by increasing and/or extending the existing loan on your existing home and using that loan capital raised for other purposes. This can be used for a variety of reasons and the purchase of a second home is one.

If you increase the loan on your primary home, the mortgage lender will want you to be able to prove that you can afford the larger loan. Your personal circumstances will dictate whether you stay with your existing lender or decide to remortgage the property with another. Remember that this may involve additional costs including valuation and arrangement fees, early redemption fees and legal fees.

The more money you release by way of a remortgage, the more likely that the costs of borrowing will increase. Certainly, over say 60% LTV (Loan to Value) you can expect the new loan to be priced higher to reflect the risk the lender is perceived to be taking.

The next thing to consider, is what sort of property are you buying? If it’s a holiday home the affordability question will be asked again and unless you are buying it entirely from cash, any lender is going to need to see that your personal circumstances are such that you can afford both loans. In most cases, lenders will expect a LTV on your primary residence of 80% or less.

If the property is for investment purposes and you expect to buy to let, then the mortgage lender on the second home will want to know that the rent will cover the mortgage payments in the right ratio. You will also need to declare to the lender that this is a buy to let investment and the terms for lending are likely to be less favourable.

It’s also worth remembering that when buying a second property you will be accruing additional costs such as legal fees, loan arrangement fees and enhanced stamp duty charges. Allow for these costs when making your decisions about how much equity you need to release from your primary home.

The UK Government’s new ‘Help to Buy’ equity loan scheme allows first-time buyers to purchase a new-build property with just a 5% deposit. The lender will lend up to 75% Loan to Value (LTV) and the Government will chip in the missing 20% as an ‘equity loan’. This equity loan can be up to 40% of the property’s value in London.

Unlike the previous Help to Buy Scheme, this scheme is only open to first-time buyers. A first-time buyer is defined as someone who does not currently own or has never owned a property or residential land, either in the UK or abroad.

The new Help to Buy Scheme also introduces regional price limits, with new buyers not able to use the initiative to purchase a home costing more than 1.5 x the average first-time buyer property price in their region.

These price caps range from £186,100 in the North East to £437,600 in the South East and £600,000 in London.

The equity loan element is provided by the Government, interest-free for the first five years. Borrowers will only pay a management fee of £1 a month for the life of the loan. Once the first five years are over, interest is charged at an initial rate of 1.75%. This will rise each year by inflation as measured by the Consumer Prices Index, plus 2%.

The loan, which is secured as a second charge against your home, does not have to be repaid until you sell the property, pay off your mortgage or reach the end of your mortgage provider’s loan term. You can even start repaying the loan sooner, but your repayments must be equivalent to at least 10% of the value of your home at that time, with the option to repay 10%, 20% or 30% at a time if you are in London and took out a 40% equity loan. There is also an administration fee.

The equity loan rises and falls in line with your property’s value, so you may have to repay more than you borrowed when you first purchased your home. Of course, the good news in this scenario is that your mortgage has remained the same or reduced in size but your property has gone up by 20% in value, most of which you own after the equity loan and mortgage is deducted.

The Help to Buy Scheme is administered by Help to Buy agents such as BlueQ. The scheme is open until the 1st of April 2023, so if this is of interest, contact us quickly to find out more information.

If you would like any details Contact BlueQ for an initial chat on 01245 218018.

First of all, what is remortgaging? Well, it’s when someone that already owns a home with a mortgage, decides that they want to take advantage of more favourable terms, such as a lower interest rate or to borrow more money. They would find the best deal and a solicitor will draw down the new mortgage and repay the outstanding one.

The mortgage that you secured when buying your property may not be the best deal after a few years, especially if your home has gone up in value, which reduces your percentage loan. This might enable you to negotiate a lower interest rate with your new or even existing lender.

Alternatively, you might have been on a lower fixed rate that is about to come to an end. When this happens, the interest rate you are charged usually changes to the lender’s Standard Variable Rate (SVR) although sometimes the new rate might be directly linked to other variable datums such as LIBOR or the Bank of England’s Base Lending Rate.

You can remortgage at any time but you may incur penalties if your initial mortgage agreement stipulates fees in certain circumstances. Early repayment may well incur a penalty. There may also be costs such as legal, valuation fees and arrangement fees, (although sometimes lenders pay these for you). So it’s important to allow for these costs when evaluating the benefits of remortgaging.

Many people remortgage so that they can extend their property or otherwise improve it, perhaps by installing a new kitchen. Others want to raise some cash for a child’s education or to give them for the deposit on their new home. It is also possible to remortgage so as to consolidate loans, although in such circumstances you really should talk to your mortgage adviser before doing this. A mortgage may be cheaper on the face of it, but a mortgage over 25 years will likely cost you more than an unsecured loan over say 5 years. The legal ramifications of non-payment also differ between secured and unsecured loans.

It’s important to be aware that all the usual information will be required when remortgaging as when you took your original mortgage. Affordability and stress testing will also be undertaken, so make sure that you plan ahead, perhaps 3 or 4 months before you need to remortgage. This will give you time to get all your information together and search the market for the best deal available. This, of course, is where employing a specialist such as Mortgage Required can pay dividends. We can advise you on the best options and make the process smooth and painless.

Contact our remortgage experts today or book a free online appointment.

There are a few reasons why you might be buying a property with a tenant still in occupation (a sitting tenant). Usually, it’s because you are buying what is known as a ‘Buy to Let’ investment. In these cases, the presence of a tenant has several benefits. You will likely be receiving rent from day one, which will improve your return on capital and internal rate of return. You should also if you’ve done your homework, have a reliable tenant already in-situ.

Firstly, check that your mortgage lender is happy that you are purchasing the property with a tenant in situ, as most prefer the property to be unoccupied on completion.

Of course, if your tenant has been in occupation for a while, he or she may be paying a low rent that should be reviewed. This can involve negotiation and it’s important that you know the terms of the tenancy prior to purchase.

Some tenants may occupy under an old tenancy or a longer lease and in these cases, your rights as the property’s ‘owner’ may be significantly curtailed. You might not be able to gain occupation whilst the tenancy remains in place and you may even have to grant the tenant a new lease in such circumstances. It is critical that you take legal advice.

In any event, make sure that as a bare minimum you undertake the following;

1. Make sure you and your legal representative have read the lease or tenancy agreement and that you understand all the terms.
2. Establish whether the landlord or tenant have ever breached any of the terms of the agreement.
3. In the case of a short tenancy, make sure that any surety deposit is properly held by an authorised third party in accordance with the law and make sure that this is addressed and accounted for when you purchase the property.
4. Make sure to undertake a full survey and inspection of the premises before the exchange and completion of the purchase and, in the case of furnished property, undertake a detailed inventory.
5. If possible, speak with the tenant. Establish whether they are happy there and what, if any, problems they know about. This can save you a lot of money post-purchase!
6. If you expect to increase the rent, it might be worth floating this past the tenant to see their reaction. No-one wants to pay more but if the tenant is reasonable and happy where they are, they may be expecting a rent increase anyway.
7. If you plan to regain possession, either to live there yourself or to refurbish and re-let or resell, make sure that you are legally entitled to do so and allow for the fact that if the tenant is uncooperative, there may be a delay and a cost implication to build into your figures.
8. Make sure that the tenant is who they say they are and check that all necessary statutory obligations have been undertaken, such as annual gas safety inspections, electrical inspections, the installation of fire and gas alarms, where required and that any furniture is properly tagged as safe for tenanted accommodation.
9. Make sure to check that no-one else lives in the property or has acquired rights over the property during the previous ownership. This is usually done through various searches and the completion of a TA6 form that is filled out by the seller.

Last, of all, remember that tenants are people too! It’s amazing what you can agree if you make the deal appealing to their interests. Perhaps in return for you fixing a few taps and replacing a carpet, you can get them to sign a new tenancy or increase the rent on their existing one?

For more information, book a free appointment to speak to one of our specialist buy to let mortgage advisers/

If you’re new to buying a home, you may hear lots of familiar phrases that you don’t fully understand. One of these phrases commonly used is ‘the property chain’. If you’re unsure what this is and why it’s talked about so much, we explain here.

As a first-time buyer, purchasing a new home is relatively straightforward. Once you have your deposit and, perhaps, your government-funded Equity Loan, you just need a valuation for the mortgage and a mortgage offer and your lawyer will do most of the rest. The housebuilder finishes the home and then sells it to you. Simple.

But what about when you are buying a home from someone other than a housebuilder?

Well, in this instance things can get more complicated. In most cases, the person you are buying from is likely to be selling to move to another property and the person they are buying from might be doing the same – and so on. This can sometimes result in a long chain of transactions, each dependent on the completion of the one before.

Most experienced home owners will be wary of long chains, simply because if just one buyer pulls out of their transaction it can cause all the other transactions to stall or even fall through completely. For this reason, buying from a housebuilder or selling to a first-time buyer with no house to sell, can be a very attractive proposition. Cash buyers are also attractive for the same reason, as is selling at auction, although this brings with it its own drawbacks.

For a chain of transactions to work well, it’s important to have a good understanding of everybody else’s needs and desires. For example, one buyer in the chain might be moving conditional upon relocating for a new job, or another might be an investor that must sell before the end of the tax year. If you don’t understand these pinch points, chains can collapse and you may all be left with what is referred to as abortive costs for work undertaken by your conveyancer, solicitor, etc.

In a successful chain, all the people involved in the transaction will understand the needs of each other and will communicate difficulties honestly and promptly. An element of flexibility might also go a long way. Especially on timescale. When everyone is sure they can ‘perform’ as required (in other words, they know they will be in funds for the purchase, etc) they will exchange contracts for the sale or purchase. At this point all the terms are set, including move dates, etc.

It’s unwise to exchange on a contract unless you know you can fulfill its terms, although sometimes it’s necessary to exchange based on the exchange of contracts with another. If at some later stage you cannot fulfill the terms of your contract because of the breach of another contract made with you, there is a route by which you can pursue a claim for damages incurred as a result of these breaches. Hopefully, it never gets to that stage.