About Interest Only Mortgages

An interest only mortgage will allow you to make monthly payments just to cover the interest on the money you have borrowed. Unlike a traditional repayment mortgage where payments consist of both capital and interest, with an interest-only mortgage, you will only pay the interest and the balance of the loan will therefore not decrease.

There are various reasons why an interest only mortgage may be appealing:

  1. Lower monthly payments: this means the loan would be more affordable on a monthly basis
  2. Short-term purchase: the borrower may be planning to sell the property in the short term and downsize to a cheaper property
  3. Investment purposes: the borrower could be planning to invest the money that would be used to pay the capital payments elsewhere

Risks and considerations

  1. Balance of mortgage will remain outstanding at the end of the term: as you are only paying the interest on the mortgage, the mortgage balance will remain the same and will be repayable at the end of the term
  2. Equity Building: as no capital is being paid during the term of the mortgage, the equity for the borrower will not increase unless the property value increases. This means they may have less equity available for the future, which could be problematic if the value of the property decreases
  3. Interest Rate Adjustments: if the interest rate loan is variable, borrowers may find their monthly payments increase if mortgage rates rise
  4. You will not fully own your own home at the end of the term: A lender will require you to pay the mortgage balance at the end of the term.  This may mean you need to sell your property to repay the loan
  5. Investment Returns: if you choose to invest your capital repayments in an investment policy, the growth may not be enough to repay your mortgage at the end of the term
  6. Part interest only and part repayment: Many lenders will offer a two-part loan which means you can have part of the mortgage on interest only and part on repayment. This allows you to build up some equity in your property whilst keeping your monthly payment low

Interest-only mortgages may not suit everyone, and it is important to fully understand the terms, risks and long-term financial implications.

Our friendly team of professionals are on hand to answer any of your concerns, so please do not hesitate to get in touch: 01245 218018 or team@blueqmortgage.com.

What is a Mortgage Prisoner?

‘Mortgage prisoners’ are people who are unable to switch mortgages to a better deal, despite being up-to-date with their mortgage payments.

Where does the name come from?

As the name suggests it is a situation where homeowners are ‘trapped’ in their existing mortgage, unable to switch to a deal with better terms, or rates. The term ‘mortgage prisoner’ surfaced during the financial crisis of 2008.

How does someone become a mortgage prisoner?
Mortgage prisoners often arise due to a combination of factors such as changes in economic downturns, lending practices, and regulatory constraints.

Below are a couple of scenarios which could lead to a borrower becoming a mortgage prisoner:

  1. High Loan-to-Value (LTV) Ratio: if you have taken out a mortgage with high LTV ratios, which means you borrowed a large portion of the property’s value. If the value of the property declines, or if your financial situation deteriorates, you may find yourself in a position where you owe more on your mortgage that the property is actually worth. This can make it difficult to refinance or switch lenders.
  2. Tightened Lending Criteria: following the financial crisis, lenders have implemented stricter lending criteria, making it more difficult for borrowers to secure new mortgages. This means, some existing homeowners who were previously able to get a mortgage do not meet the new criteria when trying to switch to a new lender or negotiate terms.

Unfortunately, mortgage prisoners may be stuck with higher interest rates and unable to benefit from any lower interest rates on the market. There are regulations and policies in place which provide initiatives to provide relief and potential solutions for those affected and facing financial hardship.

Out team will be happy to talk further about Mortgage Prisoners with you. Our friendly team of professionals are on hand to answer any of your concerns, so please do not hesitate to get in touch: 01245 218018 or team@blueqmortgage.com.

Sources of Deposit to Buy a Property

There are several potential sources you can consider when it comes to getting together a deposit to buy a property. Providing proof of the source of your deposit is a key requirement in the application process and will need to be given to both the lender and the solicitor.

Each mortgage lender will have their own criteria as to what they deem as an acceptable source of deposit. These include:

  • Personal savings

This is the most traditional and straight-forward way to fund a deposit for your home deposit. Lenders are happy to accept deposits funded by the applicant’s personal savings, although they may want to see bank statements to show the balance increasing over time.

  • Inheritance

Lenders are usually fine to accept a deposit funded by inheritance you may have received. You will be required to share legal documents from the Will’s Executor showing details of the amount, as well as evidence the money in your account.

  • Gifted deposits

Most mortgage lenders are happy if your deposit was gifted to you by a close relative. Some lenders even allow gifts from friends or more distant relatives. You will need to provide a signed legal agreement declaring that the money does not need to be re-paid.

  • Deposit from selling a property

If you are already a homeowner and you are moving home, you may be using the “equity” in your current property as a deposit for your new one. The solicitor will deal  with this for you when the sale and purchase complete.

  • Equity from another property

If you own another property, you may have enough equity to be able to release by way of a re-mortgage to make up a deposit to buy another property.

  • Gifted Equity
    Some lenders allow family members or associates selling property to gift some of the equity to the buyers, in leu of a cash deposits.

Landlords are now able to gift equity to tenants as part of a mortgage transaction, so be sure to ask if this is an option if you landlord is selling

  • Government schemes
    There are government-backed schemes on offer, this includes the First Homes scheme where the deposit required is a minimum of 5% of the discounted purchase price. This has been introduced in a bid to get first time buyers on the property ladder by offering a lower deposit and a 30-50% discount on the house itself.
  • 100% Mortgages

Finally, if you simply cannot raise funds for a deposit, it looks like 100% mortgages are returning – so you may not need one anyway!

If you have further questions about mortgage deposits, please get in touch with our team of experts.

Moving and Packing Tips for a Stress-Free Move

Are you moving into a new home soon? Despite being very exciting, it can also be an incredibly stressful time trying to pack all your belongings, book moving vans, and tie up any loose paperwork such as bills and change of address. Check out our list of tips to get you ready for the big day.

Start packing early

Quite often the thought is worse than the deed! If you break it down into smaller tasks, such as focusing on a room at a time or packing away items you definitely won’t be needing, it can feel a lot less daunting. Alternatively, you can always pay someone to pack up your house for you!

Disassemble furniture in advance

Disassembling anything that may not fit through the door in advance, will save you a lot of time and stress on moving day.

Have a clear-out in advance

You’ll have enough to take with you so you don’t want to be taking anything you don’t want to keep. It can be quite satisfying to clear unwanted belongings and donating them to charity – of throwing anything that is no good!

Who will be helping you move

Depending on your budget and how much you need to move, you’ll need to figure out which service you require – do you have friends or family to help you, or will you be relying solely on a man and a van? It is always good to book vans in advance and shop about for the best quote offering the best service to suit your needs.

Boxes and labels

Large zipped laundry bags are inexpensive and great for moving linens, shoes, and clothes. Labelling boxes may sound very obvious but clearly marking boxes will make life so much easier when you come to unpack them.

Which room?

Create an inventory of furniture and mark which room it will be going in – this makes it easier for those moving heavy, bulky items. It will also determine whether your furniture will fit through the doors!

Essentials box

Packing the kettle, tea, coffee, and loo roll last will mean you will unpack this first – these are likely to be a necessity when you arrive! It’s worth keeping remote controls, phone chargers, and anything you may need to find quickly in the same box. Be sure to keep jewellery and valuables in a safe place.

Make your bed

Knowing where your linen is and making your bed early on, will mean you can crash at the end of the day without having a further job to do before you can relax! You have made it to your new home, you can now relax and take time to unpack the rest of the boxes!

Eight Tips for Saving During the cost-of-living Crisis

Times are tough at the moment with the rising cost of living such as energy bills, food, and petrol. We’ve come up with some tips to help you save a few pennies. Even if you’re not feeling the strain, it is always good to put some of these into practice.

1) Budget
Keep a monthly budget to track your spending and set a limit. This will allow you to see your income, outgoings, spending habits, and understand your overall financial position.

2) Eat In
Keep eating out for special occasions and try cooking at home as much as possible as it can be a cost-effective way to save money. Go one better and plan your meals in advance buying ingredients in bulk where you can save money.

3) Reduce Energy Usage
Turn down your thermostat, turn off lights when you leave a room, and use energy-efficient appliances as reducing energy usage will reduce your monthly utility bills. Also, switching appliances off standby can save around £40 a year.

4) Shop for Deals
Be sure to look for deals in the supermarket, offers on the high street, and voucher codes/ money-off coupons when shopping online to get the best deals. It’s also worth seeing if you can lower your phone bill, or broadband by contacting your provider and haggling for a better deal.

5) Subscriptions
Take a look at your subscriptions and see if you can cut back on any of those you don’t currently use or need. This could be streaming services, magazine subscriptions, and gym memberships.

6) Entertainment
Now more than ever we don’t want to lose doing things that bring us joy. However, there’s no harm in getting creative when looking for entertainment options, this could include; visiting local parks, attending community events, or having a games night!

7) Mortgage
If you don’t have an early redemption penalty to pay – contact us straight away to see if we can save you money on your mortgage payments. Despite the turbulence in the market – mortgage rates are currently falling. Call us on 01245 218018 or email team@blueqmortgage.com.

8) Insurance
Make sure you are getting the best deal on your insurance policies. Contact your car and Pet insurers to see if they offer discounts for existing customers. 

Parking Rules Explained

When you’re looking to buy a home, and you own a car, you ideally want to know you’re going to be able to park your car either on your own driveway or at least close enough so that you don’t have to walk two miles carrying a week’s food shopping!

Parking rules can be confusing, even for the most experienced of drivers! This is why we have written this blog to help you and prevent any nuisance parking.

On-street parking

Be sure to look for signs and information on your local authority’s website as this will indicate whether you are in a Controlled Parking Zone, a Restricted Parking Zone, or you have the freedom to park there.

Permit holder only

Some streets only have parking for residents who hold a permit, or a temporary visitor permit. These rules may be 24 hours a day, or they may be for set periods during the day. There will be signs nearby to establish whether you can park there or not.

Can you park on a dropped kerb?

Dropped kerbs are there for a reason – to improve access for:

  • Pedestrians – particularly those using wheelchairs or mobility issues, as well as people with limited sight
  • Vehicles – for those entering or exiting a driveway

The Highway Code states that you must not park where the kerb has been lowered.

Can you park opposite a dropped kerb?

As long as it is safe to do so and vehicles can get in and out of their driveways easily you are allowed to park opposite a dropped kerb.

 Can you park in front of a driveway?

Parking in front of a driveway is sure to upset the neighbours! Often there will be dropped kerb in front of the driveway to enable vehicles to access them, which as we have already read is a no-go. Even if a driveway doesn’t have a dropped kerb, you should still avoid blocking it, again for visitors who have mobility issues or young children, unless you have permission from the occupiers.

Can you park on someone else’s drive?

It is a civil offence of trespassing on private property if you opt to park on someone else’s driveway unless you have been given permission to park there. Although it is not a crime (civil matters are enforced in different types of courts), so the police aren’t likely to get involved. Also, if your vehicle is taxed and insured you won’t be classed as an ‘abandoned vehicle’ so the council may not help either. But technically you get sued and most definitely ruffle some feathers!

Of course, it’s always good to refer to the Highway Code (rule 239) for any confusion on parking, but a lot of the time sensible parking comes down to common sense!

Top 10 Tips for Selling Your House

Selling your house can be a stressful time, there are several key tips you can do to help maximise your chances of selling successfully.

  • Improve curb appeal

Invest some time and effort in enhancing the exterior of your home – ensure the lawn is mowed, garden maintained and the front of the house is clean and tidy.

  • Make necessary repairs

Address and fix any obvious maintenance issues before listing your home. Repair any broken windows, cracked tiles, or leaky taps! A well-looked-after home will give the buyer confidence.

  • Stage your home

Be sure to showcase your home’s best features. For example, arrange furniture in a way that maximises space and lets plenty of light in. You could even hire a professional home stager.

  • Declutter and depersonalise

Remove excess clutter and personal items – buyers want to be able to envision them living in the house. Keep the décor neutral, organised, clean, and welcoming.

  • Price it right

Overpricing can put buyers off, while underpricing may result in lost revenue. It’s important to set a realistic and competitive price for your home based on its condition, location, and market trends. Consult an estate agent for guidance.

  • Market effectively

Make sure you use different channels to market your home. Include online listings, professional photography, virtual tours, and social media platforms as this will gain a larger reach and wider audience. Ask your Estate Agent about their marketing approach.

  • Highlight unique selling points

Identify and emphasise the unique features and benefits of your home. Showcase any recent renovations, energy-efficient upgrades or desirable amenities.

  • Be flexible with showings

Try to accommodate potential buyers’ schedules by being flexible with times – the more accessible your home is for viewings, the higher the chances of attracting serious buyers.

  • Respond promptly

Answer enquiries quickly, or any communication related to the sale – this shows commitment and professionalism.

  • Negotiate wisely

Be prepared for offers or counteroffers. Work closely with your Estate Agent to evaluate each offer and consider various factor beyond the sale price.

One last tip – remember to have your mortgage agreed so that you are ready to move. Selling a house can take time, so be patient and remain proactive and responsive throughout the whole process.

Debt Consolidation into a Mortgage

We are often asked if it’s good advice to consolidate “unsecured” debt (credit cards and loans etc) into your mortgage, the answer is, sometimes.

As long as you have sufficient equity built up in your property, you can borrow additional funds to pay off any of the following:

  • Loans
  • Credit cards
  • Hire purchase agreements
  • Overdrafts
  • Student finance

This would typically be by either re-mortgaging to a new lender and increasing your loan amount or taking a further advance from your existing lender. If neither of these are possible you may be able to arrange a second charge loan from another lender

It is true that paying off credit and adding it to your mortgage will reduce your monthly income initially. However, before you go ahead it is very important to go through each item of credit with your Mortgage Adviser and ask them to calculate how much it will cost you overall if you consolidate it into the mortgage vs how much it will cost if you leave it as an unsecured debt. This will help you to decide what to consolidate and what to leave as it is.

As a rule of thumb, any credit with a balance under £1,000 or where there are less than 12 months remaining on the term should not be considered, as this is not good advice!

The main benefit of taking this course of action is clearly that it will reduce your monthly outgoings. As well as this, the interest rates on secured borrowing are typically much lower than on unsecured borrowing and you will only have one payment to manage.

On the downside, additional secured borrowing puts your home at greater risk if you become unable to make the repayments and you will likely be making repayments for longer as you are spreading the costs over a longer-term

I want to re-mortgage, what do I do next?

If you feel that debt consolidation into a mortgage is for you, you’ll want to compare a range of lenders. The best way to find the most suitable deal for your personal circumstances is to seek help from a mortgage broker. This is where we can step in and guide you through the process. Our friendly team of professionals are on hand to answer any of your concerns, so please do not hesitate to get in touch: 01245 218018 or team@blueqmortgage.com.

What Does The SDLT Reduction Mean For Homeowners?

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. 

Mortgage Tips To Help With Rising House Prices

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.

Why It’s Important To Use A Whole Of Market Mortgage Adviser

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.

How Accurate Are Mortgage Salary Multipliers? | What Factors Affect It?

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. 

How Does A Mortgage Valuation Report Affect A Mortgage Offer?

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. 

Useful Tips For Switching Mortgage Providers

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. 

Top Tips on Preparing Your Property for Viewing

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.

Why Do People Take Out Secured Loans? | What Are The Benefits?

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. 

Common Reasons Why Mortgage Applications Get Rejected

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 | How Much Do You Need?

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. 

Top Tips For Remortgaging Your Home

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

What Can Stop You From Getting A 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. 

Securing A Mortgage On A Low Income – How To Approach the Situation?

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. 

How Covid-19 Has Changed What Property Buyers Want

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.

What is a Property Chain and How Does it Work?

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.

What is a Debt Management Plan (DMP) and How to Get One

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 Government’s Mortgage Guarantee Scheme Explained

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!

What Does Virtual Freehold Mean?

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.

Can I Remortgage my property to buy a Second Home?

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 New 2021 Help to Buy Scheme Explained

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.

South east£437,600
South west£349,000

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.

What You Need to Know About Remortgaging

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.

Tips on Buying a Property with a Tenant in Occupation

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/