Rishi Sunak’s second Budget as Chancellor brought two pieces of welcome news for the property sector as the Government attempts to transform “Generation Rent” into “Generation Buy” to help stimulate the UK economy, namely the new 95% Mortgage Guarantee and an extension of the Stamp Duty Holiday.
The name of this scheme is misleading as not everyone that applies is guaranteed to be offered a mortgage, it is still subject to affordability and credit score. The “guarantee” itself is that the Government will ensure Lenders don’t stand a loss if they grant a 95% mortgage to a customer who then subsequently falls into arrears and is repossessed leaving behind negative equity.
This scheme should in theory give Lenders more confidence to lend even though the applicant only has a smaller deposit to put down. Of course, Lenders never want to repossess someone’s home unless it is the last resort, but if that happens then the new scheme would cover any shortfall.
Lenders have been worried about the prospect of home values decreasing so this measure should alleviate that concern although of course, the chances of negative equity occurring will naturally reduce should property prices increase as a result of these announcements!
The scheme is available to both 1st Time Buyers and Home Movers, it’s available on any property (not just new build) and will run until December 2022. Some major High Street Banks have already signed up to the scheme and it’s likely more will follow later on. It’s still a big challenge for Lenders to cope with the demand they are getting for mortgages due to the difficulties training and supervising staff working from home but they will want to offer as many of these mortgages as they can.
When the Stamp Duty Holiday was launched last year we all hoped life would be very much back to normal by the cut-off date of 31st March 2021 but things didn’t pan out that way as we know. Solicitors are struggling to keep up with the workload and if lots of chains had collapsed then it would have partly defeated the object of the exercise.
Therefore it was good to hear the scheme has been extended to 30th June for purchases up to £500,000 and 30th September for purchases up to £250,000.
The Government certainly sees the property sector as an area that can play a big part in our economic recovery and if you are looking to buy a home or remortgage this year please reach out and we will be happy to advise you.
When you have an offer accepted on a property your next job is to arrange a property survey. This will establish the condition of the property and ensure that it is worth what you are going to pay for it. If something is found on the survey you are then in a position by law to approach the seller to negotiate a price for the works required.
Here’s a short video from the Royal Institution of Chartered Surveyors (RICS) that explains the different types available to you.
There are 3 main types of property survey available to you:
A basic valuation is the cheapest option and you will be required to have one of these before you receive your mortgage offer. Please don’t confuse this with a full survey. The mortgage valuation confirms to the lender that the property is worth at least what it is lending you.
Your mortgage lender may even offer you a free basic valuation as part of your deal, if you’re a First Time Buyer in Sunderland you may want to look out for this opportunity.
A Mortgage Valuation will not highlight any repairs that are needed. However, it may point out any obvious defects and recommend that you investigate further.
A Homebuyer’s report will cover structural safety and highlights problems, including damp, as well as anything that doesn’t meet current building regulations. This kind of report will give you an independent report of your property by an expert.
To ensure you are not paying for two surveys it is advisable to ask the mortgage companies surveyor to carry out this report for you – it will usually take a couple of hours to complete.
A Full Structural Survey is advisable for older properties and those of non-standard construction and might provide more help to Home Movers in Sunderland.
Depending on the property size and type – a full structural survey can take as long as a day to complete.
A full structural survey provides a detailed report on the condition of the property and highlights issues that should be investigated further before going ahead with the purchase, providing you with peace of mind about the condition of your property so you don’t end up with mortgage problems in Sunderland.
You can find a surveyor to carry out a Homebuyer’s report or building survey through the Royal Institution of Chartered Surveyors.
One of the most common mortgage questions is ‘How Much Can I Borrow For A Mortgage?’ Here information is provided on affordability assessments and how they are applicable post-2014.
Mortgage were manually assessed before the days of credit scoring, normally by a local building society manager. As time went on, lenders moved towards a more uniformed approach with income assessments to be able to be more consistent. Maximum lending ‘caps’ emerged from this meaning customers were restricted from borrowing more than 3 or 4 times their annual income.
These income multipliers started being more and more generous and we were starting to see many pitfalls in the 2000’s where lenders allowed customers to ‘self-certify’ incomes with no background checks such as payslips as evidence.
Following this everything started going wrong in the Mortgage Market and post-financial crisis lenders over-corrected and from such it became much more difficult to obtain a mortgage.
The Mortgage Market Review emerged after the market finally recovered from the Credit Crunch and brought in new guidelines for lenders along with new affordability calculators.
These new calculators pulled apart applicants expenses and looked deeper into spending habits and net disposable incomes. This meant Bank statements were scrutinised more closely to ensure unaffordable mortgages were not approved. For example, childcare was now taken into account.
Although lenders have made it harder from past mistakes happening, there are quite a few lenders out there. They compete on both price and lending criteria, as a result of this there are multiple variances between each lender in terms of maximum borrowing capacity. This is great for customers because if one lender doesn’t accept, another lender probably will. For example, some lenders will take into account state benefits such as tax credits for a mortgage, whereas others are more generous for self-employed mortgages.
With the Mortgage Market Review in place the old-style income multipliers were long in the past and replaced with a much more forensic view of how mortgage applicants managed their money on a monthly basis.
There is still a cap in place but spending habits are looked over. For example, if you have high childcare costs, lots of credit commitments and a student loan you will be offered less than your work-colleague who doesn’t have any of that expenditure.
It still surprises us on a daily basis on the differences lenders are willing to offer. Some seem to penalise low-earners, some take pension contributions as a fixed outgoing and so on. So it’s not always straightforward. If you need to maximise your borrowing capacity then you’ll need a Mortgage Broker on your side who is able to research the market and lenders to see who is willing to lend the amount you need.
If you are looking to be a First Time Buyers in Sunderland, then before you start your mortgage application you should make sure to put some time aside to sit down with your Mortgage Advisor in Sunderland and work out your financial situation to ensure that the repayments feel comfortable to you.
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 in Sunderland is much more expensive than life cover because the chances of you making a claim are far higher.
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
It’s very important to us that all of our customers are given an equal opportunity to take insurance.
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.
It’s National Apprenticeship Week for 2020. We thought we’d take a moment to reflect upon employees who recently completed their apprenticeships. As well as those who are currently undertaking them.
Riding off the success of earlier apprentices Thomas Bowes. (Formerly of the Customer Care team, now a Mortgage Advisor in Sunderland), and Laura Aves. (A Dedicated Case Handler who assists our Mortgage Advisors in Sunderland). We decided that apprenticeships were the way forward.
Giving young men and women an opportunity in what is likely their first job. Allowing them to learn and grow with skills they wouldn’t otherwise learn. It gives us a sense of pride and achievement. We’re helping to build their futures whilst they’re also able to earn a living.
First off we have former apprentice Michael Sallabank, who undertook a Digital Marketing Apprenticeship with the company. 2 years later and Michael is very much still a part of the Moneyman team. It’s been several months since he completed his apprenticeship and he’s now a fully-fledged digital marketer. As a collective, the Marketing team helps create brand awareness, allowing potential customers to take their first steps towards Mortgage Advice in Sunderland.
Next, we have Chloe Masters, who coincidentally celebrates her 1 year anniversary today. Chloe is one of the youngest members of the Sunderlandmoneyman team, joining our Mortgage Administrators as a Dedicated Case Handler. Finishing her apprenticeship this week, Chloe now joins fellow former apprentice Laura in assisting the Mortgage Advisors with their work.
At this current moment in time, the Sunderlandmoneyman team has 2 apprentices. Lee and James each joined the team in late 2019, undertaking a Digital Marketing Apprenticeship.
The 2 marketing apprentices look to take the mortgage world by storm and create even more brand awareness. For budding home buyers looking to find expert Mortgage Advice in Sunderland.
We truly value everyone who walks through our doors and always enjoys watching our apprentices grow over time. As both workers and people. We look forward to seeing who joins our team in the future!