Wear it Pink day 2019 at Halifaxmoneyman
Raising Money For Breast Cancer
Throughout the year we like to help out charities where we can. Making donations, sharing images, educating the workplace, and those who follow us online. When we saw that the 18th of October 2019 was going to be a charity day. Bringing awareness to another great cause, we just couldn’t resist taking part.
The occasion was to raise money and awareness for Breast Cancer Now, a charity that aims to help the future. Where everyone who develops breast cancer survives, living a long and fulfilled life.
Merging with Breast Cancer Care earlier this year. They’re supporting nearly 450 of the world’s best researchers across the UK and Ireland. Trying to make a better life for anyone affected by this awful disease.
Wanting To Help When Needed
Our amazing Mortgage Advisors in Birmingham started our charity day, by making sure everyone arrived in pink t-shirts. (Compliance Manager Paula also opted for big pink heels) and getting everyone “glittered up”. With pink glitter on their faces, hands, arms, and beards. Then as the day went on, things got wilder! We had photoshoots with all the staff, a quiz was passed around (it was a lot harder than it looked). There were a variety of cakes dotted around, and we even had a raffle – Everyone loves a good raffle!
Overall the day was fun and full of excitement. Finishing off with the fantastic news that we’d raised £161 for Breast Cancer Now. We’re incredibly grateful for all involved and their willingness to shed light on a cause that desperately needs more attention. In particular, we want to say thank you to our very own Mortgage Administrator Kayleigh Steward. Whom without we wouldn’t have had this brilliant day:
Self Employed Mortgages in Halifax
Self Employment, re-investing & restricted mortgage options?
Some business owners regularly re-invest in their companies in order for them to keep growing. In periods of growth, they don’t always pay themselves as much as they should and this can hold them back from getting a mortgage.
For these types of Self Employed applicants, there is Self Employed mortgage advice in Halifax available if they feel they are illustrated by the following case study.
Minimal expenditure shouldn’t mean minimal borrowing
Dan was an HGV driver who had been redundant and decided to start his own business in the crafting industry of all things, having spotted a gap in the market. He sold the family home and moved into his in-laws with his wife and children to set up from their garage.
He used the redundancy money and house sale proceeds to buy some stock and set off on his journey into Self Employment. Things went well, and within a couple of years, the business was making a small profit.
Dan and his family cut their cloth accordingly and aggressively minimized their expenditure to allow the business to grow more quickly. Luckily they had no rent or mortgage to pay each month, and Dan only paid himself a minimal salary in line with the annual tax-free allowance.
Fast forward 3 or 4 years and the business now had premises and was making almost £100,000 net profit. Still, with minimal expenditure, Dancontinued not to pay himself properly. It was time for the family to buy a new home, but his Bank would only lend him £40,000 for a mortgage, and he approached us for assistance.
Affordability is much more than just a salary
Dan’s Bank had let him down because he was only paying himself around £10,000, and despite the profits, in the business, he and his family could just about live without a dividend from his Limited company.
Unfortunately, most high street lenders (with the odd exception) only assess affordability based on declared earnings. This usually is salary + dividends averaged over 2 years, but in Dan’s case, salary alone.
Retained profit can be just as important
We managed to find a lender who would assess Dan’s profits in a completely different way. The lender took into account his “retained profits” and did not penalize him for his self-imposed frugal lifestyle.
This lender was not interested in the fact Dan was not drawing out a dividend he did not need from his Limited company and agreed to lend him up to £400,000 (Dan did not need this much as borrowed a much lower amount).
A low salary versus difficult lenders
Dan was not a Self Employed applicant looking to take out a Self Employed mortgage in Halifax while simultaneously seeking to minimize the amount of tax he paid aggressively. He made personal sacrifices in terms of income to grow a business from scratch.
He felt that his Bank was not interested in hearing the full story about the growth of his company and took a blinkered view of his financial situation based on income declared to the Inland Revenue.
We found him a lender who took a much more understanding view and Dan and his family are now back where they belong in a family home of their own.
We’ll try to help you on all accounts.
If you are in a similar position to Dan or are a Self Employed applicant who is looking to take out a Self Employed mortgage in the future or needing Self Employed Mortgage Advice in Halifax, please make contact with us. Sometimes there needs to be much forwarding planning to take out a Self Employed mortgage, and we are happy to help with this.
Had a client some years ago who had sold his house and moved back into the family home to start up his business. They made lots of sacrifices personally to grow his business, and within a few years, it was starting to show good profits. He kept his expenditure down to the bare bones and kept re-investing in his Limited company.
He had a sound business with a six-figure profit but hardly any declared income because of his self-inflicted lifestyle choice. Surely this is the kind of frugal businessman all lenders should be considering (low LTV case too)?
The Importance of Changing Your Address in Halifax
Mortgage Advice in Halifax
When it comes to applying for a mortgage and your credit score, the fewer addresses you have on your record the better, however it seems that people are becoming savvier and aware of this.
We are now seeing more and more applicants who have moved out of their parents address into rented accommodation but think that it is a good idea to leave their bank statements, credit card and Electoral Roll information registered at their previous address.
There are good reasons why people do this, however, I’m afraid this is now a flawed strategy. Almost without fail, if you have moved to a new address, there will be some record of this on your credit report. This could be from a delivery address when you have ordered something online or a car/home insurance search and many more.
By far a better strategy for you if you are thinking about taking out a mortgage is to get all of your accounts (credit cards / current accounts) and electoral roll changed over to your new address. When updating your address on your credit file and electoral roll ensure you double check the date in and date out. If you do make a mistake with these dates it can appear that you are living in two places at the same time. This is a more open and honest way of trying to apply for a mortgage.
Speak to a Mortgage Broker in Halifax
Speaking to a Specialist Mortgage Advisor in Halifax would benefit you in many ways. Firstly, a Mortgage Broker like Halifaxmoneyman will tell you exactly how to improve your chances in getting accepted for a mortgage and help you complete these simple steps if you need guidance. They will go above and beyond for you, trying to find you that perfect mortgage deal that best suits you and your personal and financial situation.
Here at Halifaxmoneyman, we also offer a free mortgage consultation and you can get in touch with us 7 days a week! We work for you, trying to provide the best mortgage experience we can; we hope that we hear from you soon!
Getting Prepared For Your Mortgage in Halifax
Mortgage Advice in Halifax
So, you’ve saved up for your deposit (or got the green light from “Bank of Mum and Dad”) and made the decision to move home. What’s the next step? Put simply, and in the best boy scout traditions, it’s time to get prepared.
Know where you stand
We’d recommend speaking to an experienced Mortgage Broker in Halifax as early on in the process as possible, so you know how much you can borrow for a mortgage and how much it will all cost. Obtaining an up to date credit report should also be at the top of your list, you don’t want a meaningless squabble with your mobile phone provider holding you back from buying a home. Taking the above two steps will give you a meaningful expectation of how possible this is going to be and what your budget is.
Getting organised
Your Mortgage Broker in Halifax will obtain a fully credit-checked Agreement in Principle on your behalf but you’ll have to prove who you are, where you live and how much you earn. There really is loads of paperwork for you to get together so it’s a good idea to open a file for yourself and start collecting everything in advance.
Proof of ID
In terms of proving who you are you’ll need to produce some photo ID such as a Driving license or passport, if you’re a non-UK national working over here on a Visa you’ll need that too.
Proof of address
In addition to the above, you’ll need to prove where you live. You’ll need to produce a utility bill or original bank statement dated within the last 3 months.
Last 3 months’ bank statements
The analysis of your spending habits has become one of the most important determining factors in whether you’ll qualify for a mortgage or not. Your bank statements should evidence your income and regular expenditures. Lenders will not be happy to see gambling transactions on your account. Nor will they like it if you go over an agreed overdraft limit or if your direct debits bounce regularly.
Proof of deposit
You will have to prove you have the funds in place for the deposit and also evidence this for anti-money laundering purposes. Try not to move monies around your various accounts too much as it will make evidencing the audit trail more difficult. Lenders like to see your savings building up so you’ll need to account for any large credits into your accounts.
Quite often money for deposits has been gifted by family members. These funds need to be evidenced also and the “donor” will need to sign a letter. This is to confirm it’s a non-refundable gift, not a loan.
Proof of income
In terms of affordability, the most important thing is to be able to prove your income. If you are employed this tends to be by way of your last 3 months’ payslips and most recent P60. Lenders can take into account regular overtime, commission, shift allowance and bonus.
If you are Self Employed then you’ll need your Accountant’s help. This will be to request your tax year overview.
A list of your expected outgoings
It’s a good idea to do your homework. Write down an estimate of your anticipated 1outgoings after you move house. You can work out an idea of how much the council tax and utility bills will be. In addition to that, you can work out your regular expenditures, such as food and drink. This will demonstrate how much disposable income you have available to pay your mortgage from.
As you can see from the above, it’s a real paper trail when you are applying for a mortgage but if you want your application to run like clockwork you’ll need to put the time aside to get everything together.
My own view is that it’s better to get all this at the outset and collate everything that the lender could possibly ask for. As this saves time and frustration later down the line if you’re subsequently asked for paperwork you could have had ready at the outset.
Confused About the Help to Buy Schemes?
Mortgage Advice in Halifax
Whilst it is widely accepted that there is a national housing shortage, the Government has launched several schemes over the years. These have been under the “Help to Buy” banner, designed to get people onto the property ladder.
Unfortunately calling all the schemes Help to Buy has caused confusion amongst consumers! Here’s my take on what’s out there right now.
Schemes Currently Available
Forces Help to Buy
If you’re in the armed forces, you can borrow up to 50% of your salary, up to a maximum of £25,000 interest-free towards a new home.
Some FAQs about the Help to Buy Schemes
What if I’m Self Employed?
There are lots of options available to you. It’s a good idea to speak to your Accountant and also speak to a mortgage broker for advice.
Do I have to buy a new build house?
Yes and no, the Help to Buy Equity Loan is for new build properties only. The Forces Help to Buy can be on new or old.
Do you need a good credit rating?
There may be options available to you even if you have a poor credit score. Mortgage lenders are becoming increasingly competitive on criteria and many challenger banks are entering the market. Again, please seek mortgage advice from a local expert!
How much deposit do I need?
A minimum of 5% as a rule.
Can my deposit be gifted by my parents?
Yes, family members and sometimes friends can gift (not a loan). This is a popular way for First Time Buyers to get on the property ladder. In a recent government survey, 27% of such buyers relied on family and friends to help with a deposit.
Do I need to pay the government back?
Yes, with the Help to Buy Equity Scheme the Government loan is interest-free for 5 years. After this, you’ll pay fees. Hopefully, the property will have increased in value and you can potentially remortgage the property at any time. This likely would be to raise funds to increase your share. Remember, the government will also receive their share of any profit made.
Is Help to Buy just for first-time buyers?
The Help to Buy Equity Loan is only available for First Time Buyers, however, the Forces Help to Buy can be accessed by both First Time Buyers and Home Movers.
How do I use the Help to Buy Scheme?
The first stage would be to have a free mortgage consultation. This is to work out your maximum borrowing and also to get a mortgage agreement in principle certificate. This puts you in a strong position to make an offer. Once you have this in place you’ll be a “qualified buyer”, the next step is to go and view houses!
For more information and further terms and conditions about any of the above schemes please refer to the ownyourhome.gov.uk website.
Agreement in Principle and Soft Credit Searches
More and more people these days pay much closer attention to their credit rating. Consumer awareness of credit scoring is higher now than ever before. I’d say at least half of the people who contact us for the first time, have already looked at their credit report online.
There are many different credit reference agencies out there. Most people will have heard of Experian or Equifax, but the free trial we recommend potential new clients take is with Check My File. This is because of this report “sweeps” several of those reference agencies and collates the information into an easily understandable colour-coded report.
Often, clients ask if we will be doing a credit search on them, because they are aware that too many searches can have an adverse effect on their credit score. Lenders always run credit checks but we always seek a client’s permission before doing so. There are 2 different types of credit searches that Banks can run on a customer: hard searches or soft ones.
What is a hard credit search?
A hard credit search is an in-depth look at your credit report. Any financial institution carrying out one of these should seek your permission to do so. The advantage of a “hard” search is the lender is looking into your situation quite closely. If you pass the credit score then it’s fairly likely that your application will ultimately be successful. The only thing that can really go wrong from then on, is if for some reason you cannot provide satisfactory documentation to back up the information you have disclosed. Either that, or it turns out you have provided false details.
The bad news about a hard search though is that it leaves a “footprint” on your credit file. This means anyone who looks at your report in the future can see you have had a search carried out. This isn’t necessarily a bad thing, but if you have several footprints registered in a short period of time then it could look like you applying for lots of credit at the same time.
The footprint does not state whether your application was successful or not. However, if you have several searches over a few weeks, then lenders’ systems could wrongly assume you are being declined on the basis of; “Why else would you go to lender number 2 unless lender number 1 had said no?”.
The odd hard footprint on your record from time to time is no big deal. There’s no need to worry too much about this, just be careful not to have too many.
What is a soft credit search?
A soft credit search is a “lighter touch” look at your financial situation. This is the kind of search that would routinely be carried out on price comparison websites. This would give you an indication of what products might be available to you. It can also be useful if someone wants to verify your identity.
Some mortgage lenders do soft searches in the first instance. More and more lenders seem to be changing to doing this type of search. Whilst the financial institution doing a soft search obtains less information about you than if they had done a hard search, an Agreement in Principle from one of these lenders is usually still an extremely strong signal that your full application will be accepted.
You will be able to see that someone has carried out a soft search on you if you check your credit file. The good news though, is that these searches are not visible to other Financial institutions like Banks. This means that you can apply for an Agreement in Principle for a mortgage, without it damaging your credit score. This is irrespective of whether it is successful or not.
For further Specialist Mortgage Advice in Halifax, get in touch with our team today.
Product Transfer V Remortgage Advice in Halifax
What is a product transfer?
When your introductory mortgage deal comes to an end your mortgage lender may offer you a new deal to stay with them, this is known as a product transfer.
Are you rewarded for being loyal?
Unfortunately, lenders do not always reward your loyalty and the offer they make you may not be competitive with deals you could get elsewhere. Even more annoyingly, these product transfer rates are not as good as the deal they offer new customers either!
Tempted by an online switch?
Whilst swapping to a new deal with your current lender may well be fairly easy online, it is always in your interest to see what other deals you may be eligible for. Lenders will also tempt you to effect a new deal online without taking advice.
This can be really dangerous because if you do this without advice you are waving goodbye to all the valuable consumer protection you would otherwise have benefitted from.
You’ll be opting out of advice
We have seen numerous examples of customers affecting these “follow-on” deals and locking themselves into an inappropriate deal. Because they opted out of advice then they have waived a lot of their rights in terms of making a complaint.
We did have a recent case where a customer who was pregnant did this and was declined for a small further advance to fund some necessary home improvements a few months later. She then had to pay a hefty early repayment charge to swap to a new lender who would grant her the additional funds.
Always, always, always get mortgage advice
If we think a product transfer is the most suitable deal for you we will recommend that as a course of action for you and if we arrange the mortgage for you as a mortgage broker then all the regulation and consumer protection will apply.
In short, even if your requirement seems straightforward we recommend you always take advice – a second opinion costs nothing and making a mistake when taking a new product can be costly.
The remortgage market is highly competitive and savings can generally be made by searching the market for a new deal. This is why it might be within your best interests to speak to a Remortgage Advisor in Halifax. they will support you through the whole remortgage process and help you find that 1/1000 amazing mortgage deal!
Sales Tactics of Estate Agents & Builders
Whether you are a First Time Buyer actively viewing properties or a home mover with your house on the market, you may have noticed that some of the larger estate agents and builders are very keen for you to use their in-house mortgage advisor and conveyancing services.
Being part of a stand-alone mortgage business we receive lots of feedback as to what sales tactics can be used, examples of this are:
- Refusing to put your offer forward to the vendor if you have not taken in-house mortgage advice or favouring another offer over yours because you already have your mortgage sorted. Please note these situations are illegal.
- Quoting extortionate conveyancing fees, I recently had a client who was quoted more than £1,500 for a straight forward purchase with an estate agent. They got this down to £750 with our help by using another conveyancer local to them.
- From the big well known colourful online agents, within minutes of making your offer they may call you wanting the name of your conveyancer, not just the company, the actual individual acting for you! At the same time pushing their extortionately overpriced quotations, and refuse to take the property off the market without this. Don’t worry, we can help you be ready for this.
Don’t be fooled, popular Estate Agent & Builder sales quotes include:
“Keeping everything under one roof is easier with one point of contact”
“If you use our services it will give the vendor peace of mind that everything will go through smoothly”
“You need to come in and see our mortgage advisor for your offer to be qualified”
“Your offer is more likely to be accepted if you use our mortgage advisor”
“We get better deals than most brokers”
“Everything is likely to go through quicker if you use us”
“We will do all of the chasing of the solicitors for you and they’ll be more responsive to us due to the amount of work we send them”
“We’ll give you a free carpet/washing machine if you use our (extortionately priced) recommended conveyancing service”
Remember, when negotiating a purchase price, do you really want the seller of your property having access to your personal financial situation and potentially knowing your maximum borrowing?
Critical Illness Insurance Advice in Halifax
Critical Illness Insurance pays out a lump sum if you are diagnosed with one of the conditions on the policy such as Cancer, Heart Attack or Stroke. Sometimes Insurers receive criticism for declining claims when someone is very ill but with an illness not covered on their policy but most major providers actually pay out over 90% of claims.
If claims are denied it can also be because the claimant did not disclose an underlying medical condition they have when they took the policy out.
In the event of a claim the lump sum is paid out irrespective of whether the claimant returns to work or not, the key thing is whether the illness they had matched the definition on their policy.
The claimant can use the lump sum they receive for any purpose they wish. Be this to repay their mortgage, pay for medical care or make modifications to their home.
Different insurers cover different illnesses on their policies and it’s wise to take advice prior to selecting a policy. This will ensure that you end up with one that is suitable for your needs. Critical Illness Insurance is much more expensive than life cover because the chances of you making a claim are far higher.
Your chances of surviving the types of conditions covered are far higher than they were 30 years ago. However, if you are unfortunate enough to contract one of them then there are often financial consequences. Hence the popularity of the cover, especially for applicants who have mortgages or children to think about
Our Critical Illness Insurance Advice Service
It’s very important to us that all of our customers are given an equal opportunity to take insurance our through ourselves. We wouldn’t be doing our job right if we didn’t mention it!
We offer all of our customers a free, no-obligation protection review where we’ll have a look at any existing policies you have in place and assess their suitability. We’ll then recommend which products, including critical illness and income protection that meet your needs. If required, we’ll then tailor the plan to match your available monthly budget.
- Life Insurance Advice in Halifax
- Mortgage Protection Insurance Explained
- Income Protection Insurance Advice in Halifax
Mortgage Protection Insurance Explained
Mortgage Protection Insurance is a term used to encompass various types of cover designed to protect borrowers from events which could severely impact their ability to maintain mortgage payments.
There are different variations but when connected to a mortgage they are all there to provide peace of mind and usually fall into the following categories:
- Life Cover
- Critical Illness Insurance
- Income Protection
- Family Income Benefit
Life Cover
As a rule, if the policyholder dies within the term, then the sum assured should be enough to pay off the outstanding mortgage balance and ensure the borrower’s dependants aren’t left with a debt they might not otherwise be able to manage.
Our advisors can run through all the different types of life cover and recommend the most suitable plan for you.
Critical Illness Insurance
Critical Illness Insurance works in a similar way to Life Assurance, in that it is usually taken for a specific term of years and can have the different options such as level/increasing etc. It is designed to pay out a lump sum and, like Life cover, for borrowers it is typically taken on a decreasing term basis in line with the reduction of your mortgage balance.
The key is that the benefit is paid if you fall victim to one of a number of specified critical illnesses and pays out whatever the long-term prognosis of that illness. The type of illnesses covered vary from company to company, that’s why this type of insurance cannot be solely price driven and advice is recommended.
In practice many companies will offer Life and Critical Illness Critical cover as a combined policy and would usually pay out on the “first event” i.e. whatever happens first – either death or serious illness – the pay-out is made. They can also be written on a single or joint life basis
Income Protection
Whereas Life and Critical Illness cover pay out a lump sum, Income Protection pays out a monthly sum designed to replace your wages in the event of you being unfit to work. Unlike Critical Illness cover, there are no restrictions on the illnesses or injuries covered, the only factor being whether they make you unfit to work. There are however restrictions on how much you can cover and how quickly benefits would start to be paid.
Like Life and Critical Illness cover, these policies are underwritten based on your health and lifestyle at the time you apply. All income protection policies are written on a single life basis.
Family Income Benefit
Probably the least common of the mortgage protection type policies but can often be valuable – particularly for those with young families. These plans can be taken to cover Life and/or Critical Illness and are underwritten on application in the same way as mentioned above.
However, unlike the traditional forms of policy, rather than pay out a lump sum, the cover would pay an annual or monthly income for the remainder of the term of the plan. Thus, it can replace the income of the main breadwinner for a number of years, dependent upon a particular client’s circumstances and, because of this would usually be written on a level or basis, or an index-linked basis designed to keep up with inflation.
Summary
There’s an adage that says you can never have too much insurance. Certainly, many people have one or more of the different types of policy and it would be wrong to think of Mortgage Protection Insurance as just an “either/or” choice. However, in the real world, affordability plays a massive part, so whilst it would be fantastic to cover yourself for every potential opportunity, a good advisor will sit down with you and tailor the type of cover to be the most suitable combination to your family’s priority and budget.
