Blue Q Mortgage

At the end of September 2022, during the Growth Plan statement, the Chancellor announced some changes to Stamp Duty Land Tax (SDLT) in England and Northern Ireland. These changes have been a welcome relief to people planning to buy residential property and with mortgage interest rates rising, many are happy to know that they won’t have to pay as much SDLT. 

It’s not uncommon for people not to know what SDLT is until they purchase their first home, however, this type of tax can have a big impact on how much it costs you to buy a property. Below we have looked into SDLT in more detail and explored how the recent tax reduction can help people who want to buy a new home.  

What is SDLT?

When you buy a property that is over a certain amount, you are liable to pay Stamp Duty Land Tax. This tax is a percentage of the price of the property you’re purchasing and how much you have to pay differs depending on several factors, such as whether; you’re a first-time buyer, you’re buying a second property or you’re eligible for relief or an exemption.

This type of tax needs to be paid to HMRC within 14 days of completion. More often than not, your solicitor pays SDLT on your behalf and then adds it to their fees, so this is one less thing to worry about during the purchase process. You can use HMRC’s Stamp Duty Land Tax calculator to work out how much tax you’ll pay on the purchase of your next property. 

What are the new SDLT thresholds?

Over the years, SDLT has gone from being a relatively small payment to a significant tax and the SDLT you pay can make purchasing a property much more expensive. The recent Growth Plan revealed major cuts to Stamp Duty Land Tax and the thresholds changed immediately after the announcement on the 23rd of September, so they are relevant to all new purchases.

The new SDLT thresholds are as follows for existing homeowners; 

• Properties up to £250,000 0% 
• The next £675,000 (the portion from £250,001 to £925,000) 5% 
• The next £575,000 (the portion from £925,001 to £1.5 million) 10% 
• The remaining amount (the portion above £1.5 million) 12% 

The SDLT for first-time buyers has changed too and the thresholds are now; 

• Properties up to £425,000 0%
• The next £500,000 (the portion from £425,001 to £925,000) 5%
• The maximum purchase price for first-time buyer SDLT relief has also increased to £625,000.

What does this reduction mean for homeowners?

It goes without saying that paying less tax on your purchase is incredibly beneficial and the Government doubling the level at which people begin paying SDLT could have a huge impact on a large number of buyers. Hundreds of thousands of people may now be able to purchase a property without having to pay any SDLT at all. 

Not having to pay SDLT, or having reduced SDLT costs, could help you to get a more competitive mortgage deal. You could put the money that you would’ve spent paying this tax towards your deposit and this can help you to lower your Loan to Value (LTV) ratio. Your LTV ratio has a direct impact on the mortgage deals you’re offered by mortgage lenders and simply put, the higher your LTV ratio, the higher risk you are to lend to and therefore, you would be charged higher interest rates. 

Lowering your LTV means you could get a more competitive mortgage offer and with the cost of living crisis on everyone’s minds, getting a good mortgage deal is of the utmost importance. Reducing your mortgage loan amount can make the monthly repayments on your mortgage more affordable too and this can take some of the financial pressure off at this difficult time.

The new SDLT thresholds for first-time buyers are equally beneficial and they could help to make purchasing a house more realistic for many. Getting on the property ladder has become more difficult over the years and not having to pay as much tax could help people who have been renting for a while to buy bigger family homes. 

Getting some tailored mortgage advice 

If you’re in the process of buying a home or you need to remortgage, our team at Blue Q will be happy to assist you. We have many years of experience helping people get mortgage deals that meet all of their needs and we will explore the whole market to find the best products for you. We pride ourselves on being a local team of dedicated, independent mortgage experts and you will be in very capable hands when you turn to us for mortgage advice. 

Over the years, properties have become more and more expensive. If you speak to your parents or grandparents, they likely paid a fraction of what house prices are nowadays when they first purchased their own home. This has made it much more difficult for people to get on the property ladder and houses are less affordable than they were a decade or two ago. 

Although house prices are rising, purchasing a property is still cheaper in the long run than renting and it’s always worthwhile trying to get on the housing ladder. If you’re in the process of looking for your first home and you’re concerned about the rising house prices, below our team of mortgage advisers have put together some information you may find useful. 

What’s happening to the property market?

According to the latest Rightmove House Price Index, the average price of property has risen by 0.9% (+£3,398) in October to a new record of £371,158. For many first-time buyers, this average house price is simply unaffordable and first-time buyer demand is down by 21% when compared to this time last year. 

Experts expect house prices to drop in November and December, as they usually do each year, and there is a chance that first-time buyers may be able to find properties within their budget as we head towards 2023. The uncertain economy is still a concern for many though and it is making it difficult to predict what next year has in store for house prices. The repercussions of the Government’s mini-budget are still to unravel too and there may be more changes to come to the housing market in the near future. 

How to get a mortgage when house prices are rising 

Not only are house prices rising, but interest rates are rising too and getting a competitive mortgage has become more difficult, particularly in the last month. Unfortunately, when applying for a mortgage now, you would have to borrow more to purchase the property you’re interested in and due to higher interest rates, you would pay back more over time as well. That being said, there are a few things that can help first-time buyers get a mortgage even though house prices are rising. 

Speak to a mortgage adviser 

It’s highly recommended that all first-time buyers speak to a mortgage adviser before searching the property market for a new home. A mortgage specialist can give you an indication of how much you’re able to borrow in the current financial climate and this is incredibly helpful when you’re searching the property market. 

Some mortgage providers removed mortgage products from the market immediately after the mini-budget was announced, but they are gradually starting to release new mortgage products for buyers. When you speak to mortgage advisers, they can review the mortgage market for you and help you to find the best mortgage offers. They can also tell you more about the different help-to-buy options available that could help you to get on the property ladder. 

Check your credit score 

All mortgage lenders have their own mortgage affordability tests, also known as stress tests, and they would undertake checks before offering you a mortgage. These tests are designed to ensure borrowers would still be able to meet their monthly mortgage repayments, even if their circumstances change or interest rates rise again over the period of the loan.

Several factors impact the outcome of mortgage affordability tests, one of which is your credit score. Having a good credit score could help you to get the mortgage you need and it’s key to check your credit score before applying for a mortgage. There are a few things you could do to improve your credit score too and it’s worth looking into these in more detail.  

Consider a lower LTV 

Loan to Value (LTV) refers to the ratio between the loan amount and the value of the property. Most mortgage lenders have a minimum LTV of 95% and you would be required to put down a deposit of 5%. However, you are often considered ‘high-risk’ to lend to when you have a high LTV and ultimately, it would cost you more to borrow the money you need. 

Whilst this isn’t an option for everyone, if you have some additional savings that you could put towards your house purchase, this could be advantageous. Having a higher deposit would lower your LTV and this could help you to get a more competitive mortgage. You may have more mortgage options to choose from when you have a lower LTV too. 

Getting a new mortgage 

When you’re trying to get a new mortgage deal, don’t hesitate to contact our team at Mortgage Require for some assistance. We can make the process of getting a mortgage completely hassle-free and we offer whole of market, friendly mortgage advice to customers on all aspects of the mortgage market. Regardless of what type of mortgage you need or what your specific requirements are, we will do all we can to assist you.

Whether you’re buying a home or remortgaging, taking out a new mortgage is a big responsibility and it’s crucial to ensure you’re choosing the right mortgage deal. It’s highly recommended that you speak to a mortgage adviser before making a mortgage application, they have in-depth knowledge of the mortgage market and can help you find the right deal for your circumstances. Regardless of how long you plan to fix into your next mortgage, the support and guidance a mortgage adviser can provide is invaluable. 

There are so many mortgage advisers out there, it can be difficult to know who to turn to for assistance with your mortgage. One piece of advice we would give to first-time buyers and homeowners alike is to use a ‘whole of market’ mortgage adviser and below we have looked into the importance of this in more detail. 

What is a ‘whole of market’ mortgage adviser?

Simply put, whole of market mortgage advisers have access to a vast panel of lenders and they aren’t ‘tied’ to one specific lender. Although not all whole of market advisers are able to look at all of the mortgages available from UK lenders, they have access to a range of lenders from each sector of the mortgage market. 

You do need to be careful when choosing between different whole of market mortgage advisers as some have a smaller panel of lenders than others. We would suggest that you ask an adviser for a list of their lenders before you decide to use their services. This way you can ensure you’re enlisting the help of a truly independent mortgage specialist with access to several deals from a vast selection of UK lenders. 

Why you should contact a whole of market mortgage adviser 

The mortgage adviser you choose to assist you with your next mortgage application will have a direct impact on the final mortgage deal you take out and it’s key to ensure you’re turning to the right experts for help. Some of the biggest benefits of using a whole of market mortgage adviser include; 

View all available mortgage products 

Since whole of market mortgage advisers have access to a selection of different lenders, you can compare a wide range of mortgage products. Once they know key details, such as how much you need to borrow and what your current income is, they will search their panel of mortgage lenders to find the best mortgage deals for you. This can make the process of getting a new mortgage much easier and you won’t have to contact several different lenders yourself, having the same conversations over and over again, to enable you to compare different mortgage products. 

Get honest and impartial advice

As you may expect, when mortgage advisers are tied to a lender or they work specifically for a small selection of lenders, they will try to convince you that they have the best mortgage deals for you, but this isn’t necessarily the case. When you use a whole of market adviser, they will provide you with honest and independent advice about the different mortgage products on the market. You can trust they will have your best interest in mind and they won’t try to talk you into taking out a mortgage that isn’t right for you. 

Secure the best possible mortgage deal 

There is such a huge range of mortgage products on the market and it’s almost impossible to find them all yourself. Using a whole of market mortgage adviser is by far the best way to secure the best mortgage deal, whether this is a residential mortgage or a buy-to-let mortgage, and the mortgage advice they provide will be second to none. Ultimately, when you use a whole of market adviser, you can have peace of mind knowing that you haven’t missed out on a great mortgage deal because you weren’t told about it. 

Finding a whole of market mortgage advisor 

If you’re searching for a whole of market mortgage advisor to assist you with your mortgage needs, feel free to get in touch with our team at Blue Q. Since being established back in 2001, we have been searching the whole market to find the best mortgage products for our customers and we have the experience required to advise on all aspects of the mortgage market. We pride ourselves on delivering first-class customer service and saving our customers time and money. You can trust we are the best team to contact when you need a mortgage.

The majority of people require a mortgage to purchase a property, especially now that house prices have skyrocketed. Whenever you’re browsing the property market, it’s useful to know how much you’re able to borrow from a mortgage provider and lots of buyers use mortgage salary multiples to get an indication of how much they’re able to spend on a new property. 

You shouldn’t solely rely on the rough estimate from a salary multiplier though and this could result in you falling in love with a property that is actually out of your budget. It is more beneficial to speak to a mortgage advisor and get an accurate estimate for lending. Below we have looked into mortgage salary multiples in more detail. Whether you are a first time buyer, or moving house and remortgaging, it is important to understand how your maximum loan is calculated.

What is a mortgage salary multiplier?

The term ‘mortgage salary multiplier’ is used when referring to multiplying your income to calculate the maximum amount a mortgage provider would lend to you. All mortgage providers want to know that you’re able to pay back the money you’re borrowing, as well as any added interest, so your income is really important to them. 

Generally speaking, when you’re borrowing by yourself, a mortgage lender is happy to lend you around 4 times your salary. If you’re borrowing with a partner, they would lend you approximately 4 times your joint income. However, these figures differ from one mortgage lender to another and some have higher or lower multipliers. 

Factors that affect how much a lender would offer you 

Mortgage salary multipliers are useful because they give you a rough figure that you can use when browsing the property market, yet there is a chance this figure would change. There are lots of different factors that impact how much a mortgage provider would lend you and these factors could have a significant impact on your future mortgage offers. 

In fact, more and more mortgage lenders are moving away from using mortgage salary multipliers and instead, they apply affordability rules. They take into consideration various other financial factors when deciding how much they’re willing to lend. So, two people with exactly the same incomes could borrow different amounts from mortgage providers. 

Some of the factors that influence how much you’re able to borrow when taking out a mortgage include; 

Number of hours worked

Whether you have a full-time or part-time job, or you’re self-employed or on a zero-hour contract, could impact your mortgage. Ultimately, the more secure your job seems, the less risky you are to lend to and having a fixed and reliable salary is desirable to mortgage providers. If you’re guaranteed a certain amount of money every month, you’re more likely to be able to make your mortgage payments and you shouldn’t fall behind on them. 

Overtime, commission and bonuses

If you frequently receive overtime pay, commission or bonuses, these would sometimes be taken into consideration by mortgage lenders. Generally speaking, if these additional payments make a big difference to your basic salary and you have been receiving them for a considerable amount of time, mortgage providers would class them as regular income. Often, a few months’ averages of these extra payments would be used when providing a mortgage offer. 

Monthly expenses and disposable income

It’s not just your income that mortgage providers are interested in, they look at your expenses too. Your regular monthly outgoings, such as car finances and other loans, would be considered by a mortgage lender as they may impact your ability to make mortgage repayments. Any outgoings that reduce your disposable income may be taken into account when you’re applying for a mortgage and they could impact your mortgage rates. 

Finding out how much you could borrow on a mortgage

Should you be curious about how much you could borrow from a mortgage provider and you would like to speak to a mortgage advisor, don’t hesitate to contact us at Blue Q. We will be happy to help you and we provide whole of market mortgage advice to our customers. We understand how important it is to know how much you’re able to borrow when you’re browsing the property market and we can help you to get the mortgage agreement in principle you need. We pride ourselves on delivering first-class customer service and we can assure you that you will be in the best hands with our expert team. 

Before a mortgage provider agrees to lend you the money you need to purchase a property, they will conduct a mortgage valuation. This compulsory assessment is generally paid for by the borrower, but sometimes offered free. This is very different to a Homebuyers Report or building survey and its purpose is to essentially confirm how much the property is worth and if it is suitable security for the lender. 

If you’ve never heard of a mortgage valuation report before and you’re wondering how this could impact a future mortgage, keep reading. Below we have covered all of the basics you should know before you start your mortgage application. 

What is a mortgage valuation report?

A mortgage valuation report is essentially a ‘risk assessment’ for mortgage lenders and it helps them to ensure the property you’re purchasing provides sufficient collateral for the loan. This means, should you be unable to repay the mortgage and your property gets repossessed, the lender can make enough money from selling the property to cover the original loan amount.

The lender’s mortgage valuation report looks at the basic market value of the property. It comments on the general condition of the property and focuses on the parts of the property that most affect its value. It’s worth noting that whilst the borrower usually pays for this assessment, the mortgage lender might not share the valuation report with you once it has been completed. This isn’t abnormal and this type of report isn’t really of any use to you as the buyer, it’s solely for the benefit of the mortgage provider. 

How in-depth is a mortgage valuation report?

When compared to other property surveys, like full structural surveys, a mortgage valuation report is much less in-depth. Often, this report would only include an open market valuation and any recommendations for further investigations, if required. Some are even done on line without a visit to the property.

The lender’s qualified surveyor would usually inspect the property both inside and out if they do go to the property, however, this is normally a very short visit. They then provide the mortgage lender with a report for them to consider. 

Will a mortgage valuation report affect your mortgage offer?

As mentioned above, a mortgage valuation is a compulsory step when applying for a mortgage and the report provided directly impacts the mortgage lender’s decision to lend. Simply put, when the property is suitable security for the mortgage amount, a mortgage provider would be more likely to lend you the full amount of money you need to buy a property. 

However, should the property valuation be less than expected, this could negatively affect the mortgage offer you receive from a mortgage provider. All lenders have their own criteria in terms of Loan to Value Ratio and if the mortgage valuation finds that the property isn’t worth enough to meet these criteria, you may not be able to borrow as much. 

In addition to not being able to borrow as much, the interest rates you’re offered by a mortgage provider could be affected by the mortgage valuation report too. So, it is crucial to ensure that when you put an offer in on a property, you’re not paying above the current market value. This could end up causing lots of problems when you try to get a competitive mortgage offer. 

Speaking to a mortgage advisor about mortgage valuation reports

Hopefully, you will now know more about what a mortgage valuation report is and how it may affect the mortgage you’re applying for. If you would like to get some advice from an experienced mortgage advisor about applying for a mortgage, don’t hesitate to contact our team at Blue Q. We provide whole of market mortgage advice to a range of buyers, from first-time buyers to landlords, and we will be happy to assist you. We pride ourselves on delivering first class customer service and assure you that our team will go the extra mile to help you find the best mortgage for the property you’re purchasing. 

If your current mortgage deal is no longer competitive and you think you could save money by taking out a new mortgage product, you will have two options to consider; switching mortgage deals or switching mortgage lenders. 

It is actually really common for homeowners to remortgage with a new mortgage provider and this could be a great way to save a considerable amount of money every month. Searching the whole mortgage market for a new mortgage product is always a good idea, even if you’ve been with the same mortgage provider for many years, and switching your mortgage could be beneficial for several reasons. If you’re keen to switch mortgage providers but you’re not sure where to start, below we have put together some useful tips to help with the process. 

Get some assistance from a mortgage advisor

Whilst switching mortgage providers isn’t necessarily a complex process, it is highly recommended that you get some mortgage advice before doing so. Speaking to an experienced mortgage advisor can help you to ensure you’re making the right decision about your mortgage and that nothing important is being overlooked. 

A mortgage advisor can help you to better understand the options available on the mortgage market too. Terms and conditions vary considerably from one lender to another and your mortgage is often the biggest loan you’ll take out, so it’s best to seek some expert advice. 

Double-check how much switching providers would cost 

If your existing fixed rate deal hasn’t yet come to the end of its term and you’re planning to switch mortgage providers, it is likely that you would have to pay an Early Redemption Charge and exit fee. These fees differ depending on a number of factors, but it’s crucial to find out how much you’ll have to pay before you start the switching process. Don’t forget to inquire about other costs involved such as; arrangement fees and legal fees as well.

Often, if you’re switching mortgage lenders to save money, switching and incurring the costs would still be cost-effective in the long run, yet you need to learn more about the fees you’ll have to pay in order to ensure this is the case. 

Speak to your existing provider about their other offers

Whenever you’re considering switching mortgage lenders, it is worthwhile looking into simply switching mortgage deals too. Your current provider may have other deals available that meet all of your needs and sometimes, sticking with your existing provider is the best option. If you choose to switch deals, you might not have to pay as many fees and it would usually be a quicker process too. A mortgage advisor can help you to compare the mortgage products you’re being offered if you’re unsure whether they’re the right choice for you. 

Get your paperwork in order for the new mortgage application 

During the switching process, you need to apply for the mortgage product you’re interested in with a new lender and you have to complete an application. To make doing so as hassle-free as possible, organise all of the required documents in advance. Generally speaking, switching mortgage providers takes a few weeks and you can prevent the process from dragging on by being prepared and efficient with your application. 

Consider reducing your LTV ratio

Before you start looking at the different products on the mortgage market, it’s worth considering whether you’re able to reduce your Loan To Value (LTV) ratio. Reducing the amount you need to borrow from a lender could help you to get a more competitive mortgage with lower interest rates and it could make a big difference to the mortgage deals you’re offered. 

There are a few ways you could reduce your LTV ratio, for example; you could carry out some home improvements to increase your property’s value or you could use some of your savings to contribute towards the existing amount of equity you have. 

Looking for local mortgage advisors?

Should you be interested in switching mortgage providers, contact our team here at Blue Q today. Regardless of what your reasons may be for wanting to get a new mortgage deal, our expert team will do all they can to help. We pride ourselves on providing professional and sound mortgage advice to customers, and we can help you to ensure you’re not wasting money on an uncompetitive deal. We also offer whole of market advice and we are dedicated to making the process of finding a new mortgage product as stress-free as possible. 

With Summer coming many will be considering selling their home with a view to moving onto pastures new.

Late Spring and Summer is recognised as a great time to sell, largely because the weather is better, the days are longer, the garden looks brighter and we are all coming out of quasi hibernation, especially this year! As with all things, first impressions count and presenting your home well is so much easier on a sunny spring day.

Here are some other things to consider before placing your house on the market;

• Undertake a full spring clean! This has several benefits. First of all, it’s amazing how easily we get used to grubby door frames, piles of kids’ toys and broken blinds. Take a full inventory of what needs to be tidied, fixed or refreshed and get to it!
• Clean your carpets and curtains. This action is worthwhile anyway, but before you present your home to strangers why not give your home a thorough deep clean? If you have pets or smokers in your home then the improvement in odour alone is worthwhile.
• Make sure to clean all the windows inside and out. Clean windows make a huge difference to the appearance of a place, especially from inside on a sunny day.
• Tidy the garden, perhaps invest £30 – £50 in some attractive early flowering plants and make sure the lawn is well cut and trimmed. Clean all paths free of moss and make sure the front garden and pathway are tidy and well-presented.
• If the front door could benefit from a refresh or even redecoration, do it. And perhaps consider investing in an attractive door knocker (if you have a handsome front door).
• Make sure that oxidation on bathroom taps is no more. Nothing tarnishes a home more than that ‘grubby, lived-in look’.
• Make sure the kids keep their rooms tidy (OK, maybe that’s too big a task) or at least make sure they help tidy before viewings.
• The cliche of making bread, boiling coffee and fresh flowers in the entrance hall and living room are cliches for a reason. They help set the scene.
• Don’t redecorate entirely. Tastes vary too much. But do consider a refresh of doors, door frames and scuffed walls, where needed. Use neutral colours.

So there is a start for you. In addition, make sure to make ready the following;

• Evidence of the average energy bills – very important since the rise in energy prices
• The broadband connection speed available where you are
• The council tax bill
• Have evidence of what other homes locally have sold for. You might not mention it, but if a potential buyer starts down that route, at least you’re prepared.
• Get all your paperwork together for the conveyancer. This will include any warranties you might have for work done and for white goods you might be leaving. If you are likely to need a new mortgage then you should be collating all your PAYE information, etc.

If your home has particular features such as an open fire, a large kitchen or a spectacular garden, make sure to present them well. Let the features sell for you.

When they require quick access to funds, most people will consider taking out a loan. Loans can be useful for a number of reasons and there are lots of different ways you can borrow money these days. Typically loans will fall into one of two categories; secured loans and unsecured loans, and whilst each of these options have advantages, secured loans are often the first choice for homeowners when they need to borrow a considerable amount of money. 

Simply put, secured loans are loans that are secured on your property and they will essentially be a second mortgage. You may also hear secured loans referred to as second charges and this type of lending may be beneficial for several reasons. Below we have explored some of the reasons why people take out secured loans in more detail. 

Why do homeowners take out secured loans?

Usually, homeowners wishing to borrow further funds against their homes would either take a further advance from their existing lender or remortgage to a new lender who would offer more money. If for whatever reason this option is not available, or if they require funds quickly, they may be advised to go down the second charge route. 

Common reasons for 2nd charges include:

• To carry out home improvement projects, such as an extension 
• To purchase additional buy-to-let or holiday-let properties 
• To pay for a big life event, like a wedding
• To consolidate lots of other debt 

Generally speaking, homeowners take out secured loans when they require more than around £25,000. An unsecured loan would probably suffice for anything less. When you take out a secured loan, because this is a charge on your property just like your existing mortgage, the lender has the right to take possession of your property if you don’t make all required payments. 

What are the benefits of secured loans?

When compared to the other options available for people who require quick access to funds, secured loans are a very popular choice. Some of the biggest benefits of this particular type of loan include; 

Borrow more money 

It isn’t uncommon for the amount you can borrow with an unsecured loan to be quite low and you might not be able to get as much as you need through remortgaging with a mortgage lender. However, depending on the circumstances, the amount of money you can borrow with a secured loan is usually much greater. Generally, interest rates are more competitive than unsecured loans, reducing the amount you have to pay back to the lender. 

Longer loan period 

Due to the fact that the loan is secured on your property, lenders won’t be as apprehensive about offering you a longer loan period. Often, secured loans can be for a period of up to 30 years, or more in some cases, and you won’t have to worry about paying the amount you borrow back in a couple of years. This means your monthly repayments would be much less too, making this type of loan more affordable. 

Avoid early repayment charges 

You usually have to pay a significant early redemption fee to your existing lender if you choose to remortgage. A secured loan is a way of raising capital whilst avoiding those fees. You may still incur other costs, such as arrangement fees and legal fees, that you wouldn’t have to pay if you opted for an unsecured loan, but the benefits of taking out a second charge on a property often outweigh these additional costs. 

Taking out a secured loan 

If you’re looking for a way to raise funds and you would like to speak to someone about secured loans in more detail, get in touch with our team at Blue Q today. We are a local team of dedicated, independent mortgage experts and we will be happy to provide you with the advice and guidance you need. We pride ourselves on delivering first-class customer service and we can help you find the right mortgage lender and mortgage product, regardless of what your circumstances or needs may be. With experience in all aspects of the mortgage market, you can trust that we are the best team to turn to. 

The whole process of applying for a mortgage can be quite stressful and your hopes of getting on the property ladder or purchasing your next home can instantly be ruined by your mortgage application being rejected. The vast majority of people rely on a mortgage in order to purchase a property and whilst there is a range of mortgage products on the market, getting accepted by a lender might end up being more difficult than you anticipated. 

If you’re keen to make your first mortgage application but you’re concerned about getting rejected by mortgage lenders, we have listed some of the most common reasons why people are unable to get the mortgages they’ve applied for. Hopefully, this information can help you to ensure your application is accepted the first time round. 

Errors in the application 

One of the most common and often the most frustrating reasons why mortgage applications are rejected is because there is an error on the application form. It is important to ensure that you’re taking your time and checking that absolutely everything is correct whenever you apply for a mortgage. Even the smallest error, such as an incorrect spelling or house number, could result in your application being rejected and mortgage lenders are really particular when they’re considering your application to prevent any problems in the future. 

Low credit score 

All mortgage lenders use their own credit score to predict how risky you are to lend money to. If you have a really low credit score, this may result in them rejecting your application. Lenders have their own score level which they do not publish when it comes to your application, but it is beneficial to check your credit score before applying. This will provide you with the chance to improve your score  If you do have a low credit score, there are special lenders available to help with poor credit mortgages too. 

Asking to borrow too much 

Whenever you apply for a mortgage, in addition to looking at the Loan to Value ratio you require, you also need to find out how much you’re able to borrow from a mortgage lender. As a very rough guide, most leaders would provide you with a mortgage that is 4.5 times your salary, however, every lender is different and this is something you need to check. Mortgage lenders want to ensure that you’re able to make the repayments on your mortgage if the interest rate increases, so if you apply for a large sum of money but you have a low income, your mortgage is likely to get rejected. 

If you would like to find out how much money you could borrow from a mortgage lender, it is beneficial to speak to a mortgage advisor. They can give you a much better idea of how much you could borrow and, in turn, how much you’re able to spend on a property. 

Self-employed worker 

Unfortunately, when you’re self-employed or on a zero-hour contract, getting a mortgage can be more complicated. You will need to satisfy additional lender checks when making an application.

For example, self-employed applicants will need to provide tax documents and some lenders might want to see twelve months’ proof of income. Some mortgage lenders are more likely to accept your application than others when you’re self-employed too, so do some research or speak to a mortgage advisor to ensure you’re making an application to the right lender for your individual needs. 

Applying to the wrong lender 

Simply put, not all mortgage lenders accept the same applications and depending on their lending criteria, your application might get rejected by one lender but accepted by another. If you don’t know much about the mortgage market, you might be unsure which mortgage lender you should apply to and this can result in you wasting a lot of time applying for unsuitable lenders. To prevent multiple applications from being rejected, which can reduce your credit score and make it even harder to get a mortgage, it is useful to get some tailored advice before you make your first application. 

Looking for a mortgage advisor in Bracknell?

If you’ve had a mortgage application rejected and you would like to get some professional advice before you make another application, don’t hesitate to contact us at BlueQ. Our specialist team of mortgage advisors near Bracknell can provide you with the sound guidance you’re looking for and we have experience advising on all aspects of the mortgage market. As whole of market advisors, we will do all we can to help you find the perfect mortgage products for you at this moment in time. 

Using Equity Release To Buy A Second Home 

Equity release is known for being a brilliant way to release some of the money that is tied up in your home. The lump sum you receive through an equity release plan can be used in several ways, from paying for a luxury holiday to carrying out home improvements and lots of people will use equity release to boost their pension pot as an additional retirement income.

If you’re over 55 years of age and have considerable equity in your home, you may be wondering; ‘can I use equity release to buy a second home?’. The simple answer to this question is yes and equity release can be a great way to get a deposit for a new property. However, there are some things you will need to take into consideration when using equity release to buy a second house and below we have explored this in more detail. 

The amount of equity you need to release 

To make the process of buying a second, perhaps holiday home easier, it may be beneficial to release enough equity in order to buy the new property outright. This can prevent you from having to get another mortgage and, in turn, pay two lots of mortgage repayments every month. Not to mention, mortgages on second properties are often considered higher risk by lenders. So, in order to be able to afford the second home that you’re interested in, you need to make sure that you’re actually able to release enough equity from your existing property.  

If you can’t afford to be a cash buyer and you’re happy to take out another mortgage for your second home, you may not need to release as much equity, but there are still a number of other costs to take into consideration. In addition to paying the deposit required for the new property, you will also need to pay for things like legal fees and enhanced stamp duty charges. People commonly require more equity than they initially realise to buy another property. 

How you’re going to use the second home 

If you will require a mortgage on the second home that you’re buying, how this property is going to be used will be taken into consideration by lenders. For example, if you’re going to use the second property as a personal holiday home and you require a residential mortgage, a lender will question whether you’re able to pay for this new loan as well as your existing mortgage. 

Similarly, if you want to rent your second home, a mortgage lender will want to ensure that the rental income will cover the mortgage repayments. Buy-to-let mortgages can be quite complicated too and the rental income is subject to tax.

The other options for buying a second property

Sometimes, instead of releasing some of the equity in their home with an Equity release mortgage, people will decide to simply remortgage to buy a second house. This can be a great option to consider and it can sometimes be more suitable than equity release, depending on your individual circumstances. However, when you remortgage, you will need to be able to prove that you can afford the larger loan you’re taking out. Remortgage rates are generally lower than equity release interest rates 

Often, the cost of borrowing will increase the more money you want to release by remortgaging too and mortgage lenders will increase the price of the loan to reflect the risk of lending to you. It is also important to remember that remortgaging will generally involve various additional costs, such as; valuation and arrangement fees, legal fees and there may be an early redemption fee to redeem any existing loans.

Speaking to a mortgage advisor about equity release

Should you have any questions about equity release or buying a second property, our team at BlueQ will be happy to assist you. Since being established back in 2001, our mortgage advisors have been providing whole of market advice to customers and we are experienced in all aspects of the mortgage market. We pride ourselves on delivering first-class customer service and we can help to make the process of getting a new mortgage as hassle-free as possible. We look forward to assisting you with all of your mortgage needs. 

Once you have been living in your home for a few years, you may want to consider remortgaging. Switching mortgage providers is actually quite common and there are a number of different reasons why people choose to remortgage, such as; their circumstances have changed and they need to reduce their mortgage repayments, their current mortgage is no longer competitive or they’re interested in releasing some of the capital tied up in their home. 

Regardless of your reasons for wanting to remortgage, there are a few things you can do to make the whole process of switching mortgage providers as easy as possible. Below we have put together a list of our top tips for remortgaging your home. 

Work with an experienced mortgage adviser 

There are so many different things to consider when choosing a new mortgage product and finding the right deal isn’t always easy. When you enlist the help of an experienced mortgage broker, you can ensure that you’re opting for a mortgage that meets all of your specific requirements and that has the most competitive terms. 

Ultimately, a mortgage broker can shop around for you, saving you a lot of time and stress, and they can help you get the best new mortgage deal. In addition to providing you with sound and impartial advice, some mortgage brokers may even have access to exclusive schemes which aren’t currently available on the high street. This is undeniably advantageous. From start to finish, a good mortgage broker can make the whole remortgaging process as smooth as possible. 

Always check for penalties you may incur

Whilst you can switch mortgage providers at any time, you may find there are some penalties associated with remortgaging your home at certain times. If you have a fixed rate deal, for example, remortgaging midway through this deal can sometimes be quite costly and you need to take into consideration any additional costs when weighing up your options. Depending on your circumstances, it may be beneficial to wait a little bit longer to switch providers. 

You can generally expect to come across fees such as; Early Repayment Charges, valuation fees, arrangement fees and legal fees, when you’re remortgaging. A mortgage broker will explain all of these extra costs to you and they will help ensure there aren’t any nasty financial surprises when you decide to switch mortgage providers. 

Plan ahead before remortgaging 

When remortgaging, you need to make sure that you’re finding a new mortgage deal far enough in advance. When you currently have a fixed-rate mortgage, if you don’t plan ahead you may be moved to your lenders’ standard variable rate, which will likely increase the cost of your monthly mortgage payments. So, you should ideally start comparing the options on the market three to four months before you plan to switch mortgage providers. 

It’s important to note that when you remortgage, affordability and stress testing will still be undertaken. All of the information that was required when you took your original mortgage will be required again at this time and it’s useful to get prepared. If you’re not sure what a mortgage lender will want to see, a mortgage broker can inform you of standard requests. 

Switching mortgage providers

If you’re interested in remortgaging your home and you’d like some assistance when doing so, don’t hesitate to contact us here at Mortgage Required today. Our team of experienced mortgage brokers will gladly provide you with the guidance you need when switching mortgage providers and you can rely on us to make the whole process as hassle-free as possible. Since 2001, we have been helping clients get the most competitive mortgages available to them and we review the whole market, comparing hundreds of products to ensure you find the right solution for your individual needs. What’s more, our advice is free, so get in touch with our team of experts to find out how we can help you remortgage.