Tag Archives: how much can I borrow

How can I get a mortgage? Our step-by-step guide

Getting a mortgageApplying for a mortgage is likely to be one of the biggest financial decisions you ever make. Taking the time to prepare and really understanding what a lender is looking for – before you make your application – could not only affect you getting approved, but could also save you a lot of money in the long term.

This guide will give you some simple steps to follow to ensure you are in the best possible position to have the mortgage you can afford approved – and at the best rate.

The mortgage lending process
Usually a lender (the bank or building society) will consider the following when deciding whether to approve your mortgage application:

  • The information in your application form, including your salary and employment status
  • The information in your credit report
  • Their own policy rules
  • The amount you want to borrow and size of your deposit
  • Your monthly outgoings and spending habits
  • Any additional information they may hold on you.

PART 1: UP TO ONE YEAR BEFORE MAKING YOUR APPLICATION

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Could the Help to Buy ISA help with property dreams?

what is help to buy ISA

The home ownership dream can seem just that for many of us – a dream. New mortgage affordability rules – where mortgage lenders require more current financial information as well as examining your ability to pay in the future – have made the home-buying process more complicated. Add to this, booming house prices and it means that many hopeful homeowners have to find larger deposits than before. 

According to the Nationwide House Price Index, the average UK property price in October 2015 was £196,807 – up from £173,678 in October 2013 (a rise of 13.3 per cent). On a mortgage that offers 90 per cent loan-to-value (LTV), this means finding a deposit of nearly £20,000, with estate agent and legal fees on top of that too.

On 1 December 2015, as trailed in the Chancellor’s March 2015 budget, the Help to Buy ISA will be launched, in which the government will make a contribution towards the deposit on a house purchase.

The scheme allows first-time or existing buyers to get onto, or move up, the housing ladder with as little as a 5 per cent deposit. Depending on your circumstances and the property you are trying to buy, such as a new build, the Help to Buy scheme can help you with an equity loan or mortgage guarantee.

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Mortgages: do we feel less confident since the MMR?

Applying for a mortgage is rarely a straightforward process. In April 2014, the process was made even tougher with the introduction of the Mortgage Market Review (MMR), new rules on mortgage affordability. 

In fact, almost half (45%) of those who planned to buy a property since the introduction of the MMR last year have failed to do so, accorRising House Priceding to new research commissioned by Experian.

A quarter claim that the MMR has impacted their ability to buy a property, while a further third (37%) report that the changes have made them feel less in control of securing a mortgage. Continue reading

What credit score do you need for a mortgage?

Generally speaking, the higher your credit score, the better your chances are of getting your mortgage, lower interest rates, and better deals. When you make your application, the lender will use the data & information held on your credit report, as well as other information within your application, to give you a credit score. This will tell them whether to accept you as a customer or not.

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