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.
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:
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.
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.
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.
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).
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.
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)?
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.
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 from 8am – 10pm! We work for you, trying to provide the best mortgage experience we can; we hope that we hear from you soon!
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
This is a savings scheme available from most high street banks aimed to help First Time Buyers in Halifax with their deposit. If you meet the criteria, your savings will be boosted by 25% by the government. Your Solicitor will apply for this bonus at the end of the house buying process so somewhat bizarrely you can’t use the bonus towards your deposit as it’s paid shortly after completion.
This is the most popular scheme and is available on new build properties only. The government will lend you up to 20% of the purchase price. Usually, my customers put down a 5% deposit and take out a 75% mortgage for the rest. Remember, it’s a loan not a gift and the government have a stake in your new home until you pay them back.
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.
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.
Yes and no, the Help to Buy Equity Loan is for new build properties only. The Help to Buy ISA and Forces Help to Buy can be on new or old.
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!
A minimum of 5% as a rule.
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.
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.
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.
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.
According to the Office of National Statistics, the UK is going through a bit of a Self Employed “boom”. The number of Self Employed individuals rose from 3.8m in 2008 to 4.6m in 2015. This could be down in part to people being inspired to become the new Peter Jones on Dragon’s Den or Richard Branson. More realistically it’s just that work patterns have been changing for several years now.
No longer would someone be expected to leave school at 18 and work for one employer all the way through to retirement. The rise in new engineering and digital occupations, in particular, give rise to Self Employed roles and short-term contracts. However, the uncertain nature of this type of work can make Banks nervous about issuing mortgages.
It’s not impossible to get a mortgage if you are Self Employed by any means but it certainly is a specialist area so here I take the opportunity to help you get prepared if you are in this position and thinking of buying a house.
At the moment it’s a minimum of one year’s trading with some Lenders wanting a minimum of two. The reason for this is that so many businesses fail in the first year Banks aren’t willing to take on that level of risk.
Most Lenders take the average of your last 2 years’ earnings. Some go off the latest year. This could be good news for you if your profits are increasing.
Yes and no. Yes, you are employed but no, the lenders do not assess you as an employee unless you own less than 25% of the shares. Most lenders add your salary to your declared dividend to calculate your annual earnings with the odd one using net profit (this can be good if your business retains some profit).
This is a familiar question but there’s not much that can be done. Your mortgage application is assessed on the income declared (net profit or salary/dividend) to the Revenue. If you want to get a mortgage then you need to have paid some tax.
This is the same as an employed applicant. A minimum of 5%, although it may be more if you only have one year’s accounts.
The more deposit you are able to put down the better deal the lender is likely to offer you. This means you will have a wider choice of lenders, in terms of the maximum mortgage that will be made available to you. Although this doesn’t make a massive difference.
Yes, it can be. lenders do seem to like Contractors at the moment. If you’ve built up a good track record then the lenders can consider taking your “daily rate” and applying a multiplier to this, rather than your net profit. I have seen lenders offer bigger mortgages to contractor applicants using this method, especially for IT contractors.
Unfortunately, “self-certs” were widely abused in the pre-credit crunch days and there is no sign of this type of mortgage returning.
Taking out a mortgage as a sole trader, partner or Company Director can certainly be more complicated. More so than it would be for an employee. Some lenders are more flexible than others. In my opinion, it’s a good idea to get a Mortgage Broker in Halifax on your side early on in the process.
This is so you have realistic aspirations from the start. Long gone are the days when your Bank Manager could “take a view” on your circumstances just because you are a loyal customer. The lenders lean increasingly upon their computerised credit scoring systems. Like lots of things, it’s just knowing where to look.
When you start out looking for a mortgage you will soon realise that there are lots of different options available. If you are a First Time Buyer in Halifax, you will probably be shocked to how many there are.
Below you will see a list of the most popular types of mortgages available on the market and hopefully. If you have any questions regarding any of the below mortgage options, then please do not hesitate to contact us.
A fixed rate mortgage means that your mortgage payments are going to stay the same for a set period of time. You can set the length of which you want to fix your payments for, typically this being 2, 3 or 5 years or longer. No matter what happens to inflation, interest rates or the economy you know that your mortgage payment, usually your biggest outgoing, will not change.
A tracker mortgage means that your interest rate will track the Bank of England’s base rate. So in other words, the lender that you are with does not actually set the rate themselves. You will be paying a percentage above the Bank of England base rate. In an example, if the base rate is 1% and you are tracking at 1% above base rate, that means you will be paying a rate of 2%.
When you take out a repayment mortgage this means that each month you are paying capital and interest combined. So as long as you keep your payments going for the full length of the mortgage term, the mortgage balance is guaranteed to be paid off at the end and the property becomes yours.
This is the most risk-free way to pay your capital back to the lender, in the early years it is mainly the interest that you are paying and your balance will reduce very slowly especially if you have taken out a 25, 30 or 35-year term. This situation switches in the last ten years or so of your mortgage, where your payments are paying off more capital than interest and the balance will come down much faster.
Whilst many buy to let mortgages are set up on an interest-only basis, it is much more difficult to get a residential property on an interest-only basis.
It is much less likely for lenders to offer an interest only product now. However, there are certain circumstances where this can be an option. These include downsizing when you are older or have other investments what you will use to pay the capital back. Lenders are very strict when it comes to offering these products now and the loan to values are a lot lower than back in the day.
With an offset mortgage, the lender will set you up a savings account to go alongside your mortgage account. How this works is that let’s say you have a mortgage balance of £100,000 and £20,000 is deposited into your savings account, you only pay interest on the difference, so in this case £80,000. This can be a very efficient way of managing your money, especially if you are a higher rate taxpayer.
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.
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.
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.
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.
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!
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.
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.
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!
Many schools now only offer Newly Qualified Teachers (NQT’s) a 12-month initial contract as standard. This can prove a problem for many Teachers if they want to buy a property because most of the High Street Mortgage lenders will class them as a “Contract Worker” and as such will require you to have 12 months in the role.
Fortunately, some smaller lenders are more sympathetic to this situation and will consider an application without the 12-month history. Some of the key things that can be considered are as follows: