Tag Archives: mortgage application

The true cost of home-buying

True Cost Blog

Buying a home is more than shelling out for simply bricks and mortar. There are associated legal, administration and government fees to pay, as well as small things you may not have considered.

In fact, the average cost of moving home in the UK went up by £870 (9%) in the past year to almost £11,000 – in London it increased by £4,732, more than five times the national increase.

Budgeting for all the costs (big and small) at the start helps you work out what you can afford, before you make an offer on your dream home.

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Changes in home ownership through the generations

Getting on the property ladder is a lot different to how it used to be. If we compare the home ownership status of young people today to the older generation – the results show a stark difference.  Check out our Mortgage Application Guide for more information about the mortgage process.

changes in home ownership

Remortgaging: how can I improve my credit score?

Many homeowners may find that once that their deal comes to an end, their interest rate and mortgage payments may well go up. This could be a good time to check out whether you can re-mortgage and get a lower rate elsewhere.

In this case you are generally going to be taking out a mortgage which is the same size as the one you already had. Your monthly payments may be higher or lower than you currently pay, depending on the mortgage you go for. Alternatively, you may just want the stability of a fixed rate, if you’ve been on a variable rate that you think may fluctuate.

It can take a few months to process a mortgage application, so it’s best not to wait until your current deal ends before you start looking around. Watch our new #AskExperian video to find out what some of the options are.

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Home Ownership: the generation game

At a time when younger people are finding it harder than ever to buy their first home, it’s not exactly a surprise to find out that many of them are relying on family support to make buying a property a reality.

Experian research has found that over a quarter (27%) of Britons aged 55+ have provided support to their children or others to help them buy their own property – regardless of how financially comfortable they are, and a significant proportion (15%) of those people say they are ‘not at all’ financially comfortable.

It’s a far cry from how things once were. 60% of 55s and over who have ever owned their own home paid £20,000 (that figure, in 1986, would be around £54,000 in today’s money) or less for their first home, compared to recent figures showing the UK average cost of smaller homes today as £182,926[1].

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Why was I refused a mortgage?

If your mortgage application is refused, it can be not only frustrating but inconvenient, as it can affect or even halt many plans you may have already made.

The Mortgage Advice Bureau now says that the average age of a first-time buyer is now 37, which would make a standard 25-year mortgage take them to 62. However, this figure is likely to creep up, as high house prices up and down the country take first-time buyer ages beyond 40.

The mortgage affordability rules introduced in April 2014 take into account not only how much you are earning, but how much you are spending, and whether you actually have the money to make your monthly mortgage repayment.  It could even lead to longer-term mortgages, potentially taking people past 65.

The consequence for many people though is that credit refusal can often lead to more attempts to get credit – and making multiple applications in a short space of time could have a serious impact on your chances of getting credit in the future.

There are a number of reasons you might be turned down – and finding out what they are could get you back on track.

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Applying for a mortgage – top tips

Applying for a mortgage is rarely a straightforward process. Your mortgage is likely to be the biggest financial commitment you’re ever going to make – with lots of decisions to make, forms to fill in and waits for lenders to respond.

In April 2014, the process was made even tougher with the introduction of new rules on mortgage affordability.  The Mortgage Market Review (MMR) was introduced to make mortgage lending more responsible and stable.

Lenders are keen to know whether you’ll you be able to afford your monthly repayments should interest rates go up or if your circumstances change.

So they’re likely to pay close attention to your income, monthly outgoings and savings as well as the information in your credit report and application form.

Experian’s mortgage application guide lays out the steps to take when preparing to make a mortgage application.

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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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How can my kids get on the property ladder?

First time home buyers don’t have it easy these days. The Mortgage Advice Bureau says that the average age of a first-time buyer is now 37, which would make a standard 25-year mortgage take them to 62. 

So what’s the scenario for young people today? Watch our video to find out what some of the options are out there, and some tips for how improving their credit score can set them on the road to getting on the property ladder.

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