These days we tend to find that in our day to day lives, whether we’re homeowners, home buyers or neither, we’re a lot more savvier when it comes to checking and improving our credit rating.
Consumer awareness of credit scoring is now much higher than it ever has been. If we were to throw out an estimate, we’d say at least half, arguably more so as time progresses, have already checked their credit report online, before they’ve even gotten in touch with us.
If you’re looking online, you’ll find that there are all kinds of credit reference agencies to choose from as a customer. The most popular of these are Experian or Equifax. We would personally recommend that new customers make use of a third party Check My File for a 30-day free trial, which is £14.99 a month thereafter and can be canceled at any time.
The reason why we would recommend Check My File, is that it gathers information from several of those reference agencies like Experian and Equifax, pulling them all into one consistent report. This means you won’t need to do multiple checks and can review any potential credit file errors in one place.
We are always hearing questions from customers, wondering if we will be doing any credit searches on them. This is because they are already aware that getting too many searches done can damage their credit score overall.
Lenders will always run their own credit checks, but we will always ask for a customers permission before one is done.
There are 2 different types of credit searches that can be run on customers: hard credit searches or soft credit searches.
A soft credit search is an increasingly more common type of credit search, that tends to involve someone obtaining less information from you, but means it is unlikely to leave a footprint on your credit report.
Many lenders are switching to this nowadays, though some may still do hard searches instead. Some may do a soft search first, before following up with a hard search.
These can typically be encountered when checking out price comparison websites, so that they can give you a good indication of the products that are available to you. They can also be used to verify your identity.
Although as said, they give a mortgage lender less information about you than they’d get from a hard search, if you get an Agreement in Principle from one of these lenders, it is still very likely that you are going to be accepted at full application stage.
The reason why soft credit searches are so widely used and well liked by credit score savvy individuals, is that whilst you can see that someone has carried out a search on you (yes, you are able to find out and may be surprised how many companies have done this) these searches will not be visible to other financial institutions.
What this means, is that providing a lender uses soft credit searches, you are able to apply for an Agreement in Principle ahead of a mortgage, and it is almost certain to leave your credit score unaffected, whether it is successful or not.
If you are hopeful about making an offer on a property, it is definitely important that you get an Agreement in Principle prior to making that offer, especially if you are a first time buyer in Sunderland.
Ideally, you want to give yourself the absolute best chance of purchasing your property at the lowest price you can, so showing your finances in a positive light can help you out massively.
Additionally, having an Agreement in Principle to hand shows the estate agent that you are a serious buyer already ahead in the process, and can often put them off from trying to cross-sell their own in-house mortgage services to you.
A hard credit search is a much more detailed look at your credit score and it does leave a credit footprint. As such, any financial institution that carries one of these out, should ask for your permission before they do so.
The positive to a hard search, is that because it is so in-depth, if you pass their checks and are agreed in principle, it is very likely you are going to succeed at full application.
From this point onwards, the only thing that could really go against your chances of mortgage success, is if you are unable to provide the required documentation to backup the information you have given. False information can also affect this.
If you fail the credit scoring process with a hard search, this can seriously harm your credit score and your chances of any credit applications in the future, especially if you have failed multiple in a short amount of time.
The footprint a hard search leaves can be viewed by other financial institutions. Whilst it does not clarify whether or not it was successful, let alone why it wasn’t, multiple hard searches on a file can leave a lender to question whether or not the applicant is a risk.
Logically, if you were in their shoes; Why would someone be having multiple credit searches carried out on them if they had already passed the first one? That indicates the person has probably failed each time, and as such, mortgage lenders may be less inclined to consider lending to them.
That isn’t to say that the occasional hard footprint every now and again is a bad thing, as it is not at all. You just need to be wary of having too many done. If you happen to be moving home in Sunderland or going through a remortgage in Sunderland, a hard search may have been carried out on you, depending on your situation.
The majority of mortgage lenders out there will allow their customers to make ‘over-payments’ on their mortgage. Overpaying on your mortgage will provide you with an opportunity to clear your mortgage debt quicker, saving money on interest payments.
The fact of the matter is, if you have the ability to overpay on your mortgage, you could potentially save yourself thousands of pounds. On top of that, you will clear your mortgage quicker and save money on the amount of interest that is paid overall.
Any experienced homeowner will know that overpaying, even if it’s only by a little, can make such a difference to your mortgage amount. The sooner you are able to start overpaying, the better it will be for you.
The only real downsides to overpaying your mortgage, is that if you are in your fixed or introductory period, you usually have a cap. Also, unlike an Offset Mortgage, it does not work like a savings account. This means you can’t withdraw anything you put in if you need it; your overpayments are locked in.
Whilst it is a great habit to get into, as an experienced Mortgage Broker in Sunderland, we know that a lot of homeowners cannot afford to make the extra mortgage payments. Generally the reason for this, is that life simply gets in the way of it.
On one hand, we know that it’s probably in our best interest to overpay. On the other hand, look at all the other things we could be spending our money on!
Right off the bat, part of the issue is making sure that you remember to make those overpayments. We know that the likelihood of something like that crossing your mind is pretty slim, perhaps only cropping up when your mortgage is due to end. At this point, you’ve missed out on a lot of the benefit of doing this.
So with that in mind, if you can relate to those circumstances and want to get ahead of the curve, to prepare yourself to overpay, what should you do?
Well first of all, you are going to want to make sure that your lender will allow overpayments. The majority of them will, but it’s always better to be certain in advance. You will also want to clarify that there are not any penalties or associated costs.
For the most part, you will be capped for up to 10% of your mortgage, without penalties, if you’re still in your fixed, discounted or introductory period.
If you are beyond that, happen to be on a tracker mortgage or have gone onto the lenders Standard Variable Rate, usually you will have no limit and no penalties when it comes to overpaying.
We would definitely recommended that if you are able to set up a standing order to overpay the lender each month, that you do so. The best practice would be to set it up so that the extra amount goes out on the same day as your monthly mortgage payment does.
For example, let’s say your payment goes out on the 1st of every month and is (if we round up for example purposes) £500 each month. Your wage has increased and you now have £75 extra disposable income per month. Set up the standing order for £75 to the mortgage lender, and have it go out on the 1st as well.
Doing so will get you into the habit of feeling like your mortgage balance is £575 per month anyway, and you’ll be able to budget the rest of your income accordingly.
If you’re not able to guarantee a set amount each month, you don’t just have to set up a standing order. Technology has advanced so much that these days, you could simply load up your banking app or online portal, and just transfer the amount in that you’d like.
Alternatively, for those who prefer to speak with a real person, you can also phone up your lender and make an overpayment with your debit card.
Of course the big advantage for those setting up a standing order, is that you are in control. If you can’t afford to overpay that month, you can log into your online banking to pause that standing order until you’re able to overpay again, at which point you can resume it and carry on.
For those who are just paying as and when, it’s as simple as just not overpaying that month.
Even if you do have to stop the payments for a time, you have at least benefited from those additional payments up until that point. You have significantly reduced the amount of interest you will have to pay overall, and that can only be a positive.
Depending on your lender, if you have been overpaying for a long time, they may allow you to make a few reduced payments or even take a payment holiday. It is crucial to ask the lender before doing this though, as it could look bad on your credit report.
Regardless of if you are a First Time Buyer in Sunderland or you are going through a Remortgage in Sunderland, overpaying your mortgage is an amazing habit to get yourself into. Who wouldn’t want to reduce their overall debt?
You don’t need to go too far with it either. Making some casual, affordable overpayments each month could actually mean knocking a year or two off your mortgage overall, so you’ll really notice the benefits!
If you have any further questions regarding this strategy or have another mortgage query that you would like to discuss, book your free mortgage appointment today.
You can select a time and date that best suits you, subject to availability, and speak to a qualified Mortgage Advisor in Sunderland. We look forward to hearing from you!
Here we have put together a comprehensive list of the 10 steps that you will go through during your mortgage process as First-Time Buyers in Sunderland, hopefully allowing you to be as prepared as possible ahead of your mortgage journey.
The 10 steps of home buying and obtaining a mortgage during your process are as follows;
Buying your first ever home and taking out a mortgage on it as a First-Time Buyer in Sunderland, will likely be one of the largest financial decisions that you make throughout your life.
Once you come to realise this, the thought of it can be a little off-putting, especially when you haven’t done this before.
It is here that you will truly benefit from the assistance of a dedicated mortgage broker in Sunderland, who will be ready to step in and help you through your process.
We will always aim to reduce your stress and do everything within our power as your mortgage broker in Sunderland, to make sure that you come out the other side with a mortgaged first home, happy with the deal we found for you.
When you contact us for mortgage advice, you’ll be booked in for a free mortgage appointment with an experienced mortgage advisor in Sunderland.
During your appointment, we’ll gather some information from you and take a look at your property owning plans, before starting your mortgage process.
During your free initial mortgage appointment, your dedicated mortgage advisor will be able to run through a mortgage affordability assessment with you.
This is where your advisor will have a look at all of your monthly income and regular spendings, to figure out whether or not you have the ability to afford the monthly repayment costs for how much you are looking to borrow for a mortgage.
Doing this is incredibly important as we need to be completely confident before we put you forward with a lender, that you have the ability to afford your monthly repayments.
This is done to avoid potential arrears and your home being repossessed. Your lender will desperately try to avoid this situation occurring.
A Mortgage Affordability Assessment will typically be checked by the lender in their own time, so in doing our initial check, we will hopefully save both your and the lenders time from an application that may potential fail, due to being unable to afford the mortgage amount.
Once you have gone through this step, the next step for you to go through will be to get a Mortgage Agreement in Principle, to back up any offers you make.
If you’ve been doing some research regarding mortgages before enquiring about First-Time Buyer Mortgage Advice in Sunderland, you may have seen this under a handful of different, but fairly similar names.
These names may include ‘Decision in Principle’, ‘Mortgage in Principle’, as well as a few shortened versions such as ‘DIP’ & ‘AIP’. These are all the same thing, only their names are different.
The reason for having a Mortgage Agreement in Principle is to create a record that you have passed a lender’s primary credit scoring system, either via a hard credit search (which will leave a credit footprint on your file) or a soft search (which will not leave a credit footprint on your file).
This will not be a guarantee that you will be accepted for a mortgage but will be essential on your way towards your final goal. Another perk of your AIP is that it will show the seller that you are serious, and may even help with price negotiations.
A standard AIP will typically last between 30-90 days, and you can renew it once it expires. We are usually able to obtain one of these for you within 24 hours of your initial mortgage appointment.
Following on from obtaining your Agreement in Principle, you will need to set about finding a Conveyancing Solicitor (Conveyancer) to help you sort out all of the legal proceedings of your home buying journey.
The term Conveyancing is the name given to the transfer of legal ownership of property between the involved parties, whether you are the buyer or seller.
Your Conveyancing Solicitor has the ability to handle contracts, provide you with the necessary legal advice, conduct local council/authority searches, deal with Land Registry and last of all, transfer your funds for the property payment.
As you might expect from that description, this is a very crucial role in your process, so you will need to make sure that you choose your conveyancer carefully.
It’s also important to bear in mind that Licensed Conveyancers are property specialists who are not able to deal with more complex legal issues, whereas a more general Solicitors has a larger range of services, but in turn may cost more.
Whilst these services are not something that we ourselves offer in-house, we do have a few trusted companies that your dedicated Mortgage Advisor in Sunderland will be able to put you in touch with.
Now at this point you will have had a chat with a Mortgage Broker in Sunderland, passed the Mortgage Affordability Assessment, gotten yourself an Agreement in Principle and hired a Conveyancing Solicitor to deal the legal side of things.
This means that now at this point, you are halfway there and the next step for you to take is to make an offer on the property that you desire to make a purchase on.
As touched upon previously, with an Agreement in Principle on hand, you will have a better chance in negotiating the property price.
Keep in mind not to low ball the seller, as this may offend them, though you shouldn’t be afraid to ask for a lower purchase price.
Knowing that you have a mortgage Agreement in Principle, it is more likely that the seller will look to go with you, over someone who is happy to pay the exact asking price but is not prepared for the mortgage process.
The worst-case scenario is that the seller won’t accept your offer, but once that has happened, you can simply work out a more reasonable offer that you can both agree on, or walk away and find another property for yourself.
Once you’ve had an offer accepted, it all comes back to your mortgage advisor, as we head into the final leg of your mortgage process.
Now as we delve more into the mortgage aspect of your journey, it’s time to look at an important factor; submitting the necessary documents.
As you could probably come to expect when you are dealing with such a large amount of funds, a mortgage lender is not just going to lend to anyone, they’re going to be understandably picky.
You will be required to provide the lender with a handful of documentation that will prove to them your identity, your income, your current place of residence and how you as a potential borrower tend to conduct your finances.
If you’re obtaining a mortgage jointly with a friend or a partner, they will require both of you to provide this documentation.
The types of documents that a lender will need to see include;
Now that your mortgage has been agreed in principle and you have had an offer accepted, we can now get onto the next step, which is to submit your full mortgage application.
Once everything has been checked by your dedicated Mortgage Advisor in Sunderland & their hard working team of Mortgage Administrators, we can move onto submitting an application to the lender, hopefully resulting in you getting your mortgage.
Your advisor will send off all of the different documentation that they collected from you to the lender, and then it’s just a matter of patiently waiting for their response, informing us as to whether or not the application has been accepted.
Whilst we can never confirm a specific time frame as to when that response may be, our Mortgage Administration team will regularly chase up the lender and try to find out for you.
In-between arranging your mortgage application and the point of being offered a mortgage, the mortgage lender in question will require a valuation survey of your new home to be taken out.
These surveys are typically carried out by accredited companies that will be nominated by the mortgage lender (this is basically just someone who they trust).
The purpose of doing this is to gain an understanding of the true property value, versus what you and the seller have agreed on as a purchase price. If you’re paying above what it is actually worth, the lender may be less willing to work with you.
This is because in the event of arrears, the lender could quite possibly end up out of pocket and unable to make back the full amount they let you borrow for the property. This type of process is known as a ‘Down Valuation’.
There are various types of property survey available to home buyers, with these differing based on price. Some will just want to check how much the property is worth, whereas some will inform you of any structural concerns and possible necessary repairs.
Your Mortgage Advisor in Sunderland will be able to help you figure out which property survey is best for you to take out.
Now enter the endgame of your mortgage process. At this point your lender has had a look at your case and analysed all the evidencing documentation, meaning all that is left is for them to present you with your Mortgage Offer.
From here, our dedicated team of expert Mortgage Advisors and Administrators in Sunderland, that you’ve become quite friendly with throughout your journey, will have one last check over the offer for you, to ensure that it is right.
Once you have received your mortgage offer, it’s the job of your Conveyancing Solicitor to complete your mortgage process.
A congratulations is now in order! You have officially graduated from being a First-Time Buyer in Sunderland to a First-Time Homeowner in Sunderland.
With any stresses that you have had all throughout now firmly behind you, we hope you’re pleased with everything and ready to begin your new life, in your brand new home.
All that is left is for you to get your keys and move in! We hope our expert team were good to you and that you received a top quality, fast & friendly Mortgage Advice service in Sunderland.
If you have chosen a fixed-rate mortgage, once your mortgage term reaches its end, we will be in touch to give you a hand again with your Remortgage!
When you’re an inexperienced First-Time Buyer in Sunderland who has never bought a property before, the process can be quite a stressful one. Fortunately for you, the home buyer, it doesn’t have to be that way.
To help you make the most of your next house viewing and be as prepared as possible, we’ve put together a helpful and comprehensive list of questions that you could ask when buying a house as a first-time buyer in Sunderland.
You may want to have time to sit around and have a good long think about whether or not you want to buy a property before you fully commit to making a purchase. This is something that we completely understand, as it is one of, if not the biggest financial commitments you will ever make.
By finding out the amount of people that have asked questions about or have gone to see the house, you’ll be able to more accurately gain an idea of how much time you have to think, before you make any concrete choices.
Bearing this information in mind, if the property is regularly receiving interest from viewers, you need to be prepared to give an answer to the seller as soon as you can.
If the property you’re looking at purchasing is a part of a chain, this can also have an impact on your mortgage process.
Without an onward chain, something that could arise from either a new home, bereavement or emigration, chances are you’ll be able to move quicker, especially if you’re not a part of that chain yourself.
You’ll give yourself a lot more leverage as a buyer if you’re not a part of any chain, as you seller will recognise that you aren’t going to hold up the home buying process.
Make sure that you utilise this during property price negotiations to give yourself the advantage.
If you’re not going to be purchasing a new build property, you might find that the previous owner has left some appliances or “white goods” behind for you to make use of.
White goods is a term that generally includes things like washing machines, fridges or a freezer. Sometimes a previous homeowner may leave something like a shed behind.
This works out fantastically for buyers as it can save them a lot of time and money, though if you don’t want or need these items, you will have to figure out a way to get rid of them yourself.
If you are looking to purchase a new build property, there might be some additional features that you could have the option of adding into your property ahead of moving in.
When moving into an area that you don’t particularly know that well, it would be worth your time finding out what the neighbours are like.
We often find that a good or bad neighbour experience can oftentimes be a crucial part of whether or not you enjoy living in your new home.
On the flip side, if you instead are looking to move into a new home development, you and your neighbours will be the ones that create this new community.
Initially this can be prove to be quite a risky endeavour, as you’re putting all your faith in someone you’re yet to meet and get to know.
Depending on the location you’re moving to and the type of property you are in, running costs can differ greatly. It is recommended that you conduct some research ahead of time and ask plenty of questions prior to the purchase.
Look up council tax costs, along with how much you’ll potentially have to spend on average for utilities. You ca do this by checking online or speaking to the seller. You will need all of this information in order to correctly budget.
The direction that the house is facing will make a very big difference for a lot of people, depending on if you like to relax in your garden late on a summers evening or prefer to maybe read a good book in natural light.
If you’ve been looking at a few different properties, you may have noticed that houses with a south-facing property often come with a more premium price pay a sizable, more premium price, thanks in part to the property receiving a lot of sunlight throughout the day.
Once again you’ll find that this can also have quite the impact on your budget for purchasing a home. Some key things worth looking into for more information on include;
At some point during the home buying process, you’re going to have to start making negotiations with the seller. With this in mind, it’s important to ensure that you are as prepared as possible for making an offer on your desired property.
You will be able to find a lot more information about the topic of making an offer in our How to Make an Offer article. Once you’ve gotten yourself in a position where you are ready, you’ll be able to go ahead and make some offers.
It will also definitely be worth your time to have a chat with the seller or estate agent in order for you to determine what the seller may consider to be an offer that is too high or too low.
You should check whether or not any other offers have been made, so you know how popular the property is and how much time you have to work something out with the seller.
By setting aside a specific date on your calendar, you can plan ahead for various other jobs in advance, such as instructing a conveyancing solicitor, packing up your furniture and belongings for moving, and arranging a removal van that can move everything into your new home.
If you’ve been thinking about taking that step onto the property ladder, you may be wondering whether or not to use the assistance of a mortgage broker in Sunderland. We of course believe that our service is incredibly beneficial, especially for first-time buyers in Sunderland.
Despite this, we felt it appropriate to give a balanced overview of the pros and cons of coming to a mortgage broker in Sunderland, compared to direct to a mortgage lender.
People tend to think that they are more likely to save money by not using the services of a mortgage broker. It can seem a lot more cost-effective to just do everything by yourself.
With that in mind, you may be one of those who prefer going directly to the high street mortgage lender. Another reason why people used to prefer going to the bank directly, was that people felt their bank manager knew their finances inside and out, although this changed when credit scoring was brought into the mix.
There is also truth to the claim that some lenders have additional exclusive mortgage products only for the people who directly obtain a mortgage. The main intention behind such ideas is to attract customers away from the services of a mortgage broker.
Ultimately, it is a good way for them to spread the business. The interesting part is that it is arguably just as enticing to speak with a mortgage broker in Sunderland as well. You’ll find that some mortgage offers can only be obtained through a mortgage broker.
From 2014 onward, lenders were no longer able to sell mortgages to anyone on a non-advised basis. At that time, it was a common occurrence for non-advisors to forcefully advise their bank customers, meaning they’ll have had no benefits from consumer protection. Speaking to a professional mortgage advisor in Sunderland will allow those benefits.
It is also important to remember that taking an appointment with a bank can sometimes take months to try and get yourself booked in for. A mortgage broker in Sunderland is often able to get you booked in within the same week, usually within that same day.
These kinds of issues is why the importance of mortgage brokers has grown and changed the public perception over time. More and more applicants rely on the mortgage brokers than before for help with their mortgage process.
There is now a lot more trust for the mortgage brokers in Sunderland, who are typically able to offer their mortgage advice services within the same day. Our dedicated team are always ready to help you, so Get in Touch and we will put you with an experienced mortgage advisor in Sunderland, as soon as possible.
You might be wondering what exactly causes some of the mortgage applications to be more difficult than many applicants expect them to be. Here are some of examples of this:
In years gone by, it was a lot easier for mortgage lenders to get ahead of their other competitors by laying out more enticing offers than the others have. Times have changed and it’s now more than the deals, it’s the criteria, that differentiates between the lenders.
To make everything easier for you, you should speak with an experienced mortgage broker in Sunderland and see if they have come across a similar situation in the past or not, as they may be able to utilise their knowledge from that to help you through yours.
After undertaking lots research and working very hard, a dedicated mortgage broker will hopefully be able to guide you through your journey and be able to recommend the most suitable mortgage for your personal circumstances.
Even if your mortgage application seems rather simple, it may still be beneficial to use the services of an experienced and knowledgeable mortgage broker, as we will work hard to get the best deal we can for you.
We have a professional and trusted mortgage advice team that will be able to provide guidance on other services such as solicitors. By getting in touch with us, you will also be updated you about the surveys and protection information that will be available to you.
A key feature of our service that we love to shout about, is how we’re more quicker and responsive compared to the other mortgage brokers.
One of the biggest reasons why customers tend to require help, is that everyone nowadays is very busy and needs someone to take the weight off their shoulders, doing the hard work for them.
Our dedicated and loyal mortgage advisors in Sunderland will do everything they can to make sure the process goes smoothly for you.
If you are ready to chat with a dedicated advisor about your mortgage plans, please Get in Touch with a mortgage broker in Sunderland. We are available from early until late, all throughout the week, to help you find the perfect mortgage deal.
To be able to recommend the most appropriate mortgage for you based on the circumstances you’re currently in, it is of vital importance that our mortgage advisors gain a complete understanding of your financial situation. As a mortgage broker in Sunderland, the primary way we believe this can be achieved is by obtaining an up to date copy of your credit report.
We personally would highly recommend using Check My File to do this, as they are able to bring in your data from 4 different credit reference agencies, giving you a more accurate and detailed look at your personal credit profile. It’s especially handy, as in some instances, the data that is held by one agency, may differ to the data from another.
When it comes to sending your credit report by email, the steps necessary will be a bit different depending on what device and email client you are using, e.g., Android, iPhone or Desktop & Gmail, Hotmail or Yahoo, etc.
A member of our dedicated mortgage advice team in Sunderland will review your credit report, before they give you a call to discuss your mortgage plans in further detail.
As a mortgage broker in Sunderland with lots of experience across the industry, we have in-depth knowledge of lenders various criteria. Some of the lenders we work with are specialist lenders. Please take a look at our specialist mortgage advice in Sunderland page for more information on complex cases.
No matter if you are a first time buyer in Sunderland or looking to move home in Sunderland, we will use our knowledge and the information displayed in your credit report to work hard in finding the most appropriate mortgage deal for needs and personal circumstances.
The right to buy scheme can allow local authority tenants who live in England, to purchase their property from the council for a discounted price.
The terms of this mean you are eligible if you have spent at least three years (not always continuous) renting from the public sector rather than privately renting, and are secure tenants of that property. If you are in fact eligible for the Right to Buy Scheme in Sunderland, the property will be valued at the full market price, with a government discount applied onto it.
The discount percentage will be entirely dependent on different factors, such as where you are in the country and how long you’ve been renting from your local council or housing association. A big advantage of the Right to Buy is that due to the discount, there will usually be existing equity in the house before you’ve even bought it. How much equity again depends on some factors, such as how much your discount is and how much the property is actually worth.
We often find that those who look to use the Right to Buy Scheme are First-Time Buyers in Sunderland. We love working alongside First-Time Buyers and work hard to support you throughout every step of the process. This starts with your initial inquiry, all the way through to mortgage completion.
Working out your monthly outgoings will be of a great benefit to you if you are thinking of buying your rented home from the local authority in Sunderland.
Our recommendation is to work out what you have now as a tenant, then compare that to what it would be like if you were a homeowner. We are more than happy to walk through this with you and ensure you can comfortably afford to proceed with it.
As a fast and friendly Mortgage Broker in Sunderland with a lot of experience dealing with these mortgage types, we can look through 1000’s of Right to Buy mortgage deals on your behalf to make sure you walk away with the most appropriate deal matched to your circumstances.
Throughout the whole process, we’ll offer continuous help and guidance, answering any questions you may have along the way. We even have the ability to provide help with other local services when needed, such as referring to conveyancers.
Our brilliant team are proud of the service levels they provide day in and day out – This is reflected in our genuine customer reviews.
100-125% mortgages are a thing of the past now. The country seems to be in a more stable, secure financial state post-Credit Crunch and the property market is back in full swing.
With many more rules and regulations set in stone, mortgage lenders are now more confident when it comes to offering 95% mortgages.
95% deals aren’t the only ones available though, it can. The more deposit you have available to put towards a property, the less you have to pay back, and you open yourself up to more competitive interest rates.
Deposits also act as a safety net for mortgage lenders. The reality is, they need to be confident you can make your monthly repayments. If you don’t, they’re at a financial disadvantage. With a large enough deposit, lenders are able to retain some of their finances should difficulties arise.
Saving for a deposit is hard for a lot of people, we know this. The leap from renting to becoming a first-time buyer in Sunderland can be a tricky one to navigate. This is especially the case if you are already renting or have a family, as any potential savings would already be split amongst various home essentials.
As an experienced and knowledgeable mortgage broker in Sunderland, we regularly find many deposit related questions being asked. Here we answer these as best we can, in the hopes you will gain a better understanding of how deposits work regarding the home buying process.
Yes, it is! Larger deposits allow for improved interest rates. From here you possibly open yourself up to lower mortgage repayments per month, as you will also be borrowing less for your new home.
As touched on in the previous section, higher deposits put you at a lower risk the lender should things not go as planned, which really does work to your advantage. Products are offered in bands of 5%, with the highest and most expensive being 95%.
Though it doesn’t happen often, it has been known to crop up from time to time. However, this is considered by the lender as an additional credit commitment. Because of this, the lender will grant you a smaller mortgage than the one you might have initially planned for.
The majority of lenders would really rather you refrain from this option though, especially if you are looking to borrow 100% of the purchase price.
The majority of lenders, at least the ones we have worked with, have no problem at all with members of your family and sometimes friends too, gifting your deposit.
The one who is gifting must be able to confirm that it is 100% a gift and not something you’re required to pay back to them over time. For the purposes of anti-money laundering, they may also need to provide them with identification and proof of your funds.
Given the term “The Bank of Mum & Dad” amongst home buyers and lenders alike, gifted deposits are seen a true lifeline for those struggling to get onto the property ladder. In truth, the market would look completely different if it were not an option!
For Anti-Money Laundering purposes, all applicants are required to fully evidence their funds by providing bank statements to the lender. They like to take a look at how exactly additional funds have been obtained too. Recent large cash deposits in your account can sometimes be an issue for lenders.
If you have made a large sale lately, like sell your car, you will need to provide a receipt and be able to prove that the amount it sold for matches the deposit made in your bank account.
The longer these funds sit in your account, the less hassle this is for both you and the lender. Providing an audit trail for your deposit source can often be quite difficult for home buyers undergoing the mortgage process.
If you are planning to fund your deposit by selling your current, then your proof of deposit will be the Memorandum of Sale provided to you by the estate agent. These are documents that record the buyers’ interest in your property and the terms of sale you have both agreed on.
If you fall in the bracket for the government Help to Buy Scheme, you are still only required to have a minimum of 5% deposit. With 20% from the government equity loan, this will give a much needed boost to your deposit, taking it up to 25%. This allows you to access a lower rate mortgage.
It is important to remember though, that this is a loan, not a gift and you will need to pay it back whilst you are paying off your mortgage. Also, it is worth noting as well, is that this is interest-free for the first 5 years, after which the government will start adding interest to if not paid.
This all depends on personal circumstance, but no, you don’t necessarily need one. If the house has been genuinely discounted by the previous home owner, your lender may accept the discount as a means of deposit.
For example, if the property is worth £150,000 and you have been offered it for £130,000, they will take the £20,000 discount as a deposit. This works hand in hand with a Right to Buy from the local authority or private landlord.
Please note that the above information is for reference purposes only and should not be taken as personal financial or mortgage advice to an individual.