Tag Archives: mortgage

Home-buying in 2017

Home-buying in 2017

Buying a new home can feel like a rollercoaster ride, with plenty of highs but also a few lows.

Almost a year on from the EU referendum, and with a General Election on the immediate horizon, how confident is the UK’s housing market – and what does it mean for home buyers?

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We are a credit broker not a lender, working with selected lenders.†

How confident is the housing market?

March 2017 saw 48,178 loans approved for house purchase, according to the British Bankers Association (BBA), no change year-on-year, while the average approved loan rose to £186,800. House prices fell by 0.4% in April 2017, though were up 2.6% on a year ago.

However, the same month, consumer confidence in the housing market dipped to 37%, the lowest since July 2013, after widespread prediction of a surge in inflation and a fall in consumer spending this year.

This comes even as overall consumer confidence remained on the up, with a sixth consecutive month of spending increases.

What do the experts predict for the UK housing market?

Some experts suggest that a time of such economic uncertainty is bound to have an impact on the housing market.

Zoopla CEO Alex Chesterman is cautious about seeing growth in the property market in 2017, and said: “Buying a home is one of the biggest and longest term decisions that people make so they tend to hold off making such important decisions in times of heightened uncertainty.”

According to John Perry, of 2017 UK Housing Review,  more houses need to be built regardless of any changes in immigration policy after Brexit – the current target, set before the referendum, is 227,000 homes a year up to 2024. He also suggests that most non-British EU citizens tend to rent in the private sector, so that it is the area that is most likely to be hit.

It’s arguable that the fewer houses being built, the more the chance that those in-demand properties will be more expensive, especially for first-time buyers.

Nationwide’s chief economist Robert Gardner agreed that uncertainty makes it hard to predict the prospects for house prices, but added: “Low interest rates are expected to help underpin demand while a shortage of homes on the market will continue to provide support for house prices.

Will house prices go up or down?

Uncertainty about the next 12 months, and the effects on the economy, could cause the market to slow down as buyers and sellers mull over what to do next.

The economy is the major factor on the housing market, so if the pound continues to struggle in 2017, it may affect house prices negatively but if things start to improve, house prices could rise.

Investing in property to make a profit – rather than just to have a long-term place to live –  is always a risk. So, it’s important to make sure that you don’t borrow more than you can afford, and try to find the right mortgage with the best rate.

What to do before applying for a mortgage

Whether you’re planning on buying your first home, stepping up to a bigger home or remortgaging, Experian’s tips can help you feel financially prepared & confident ahead of your mortgage application.

  • Check your Experian Credit Score to help you understand how lenders may view you
  • Try not to miss credit payments
  • Try not to apply for other credit in the six months before you apply for your mortgage
  • Manage credit accounts well
  • Register to vote at your current address

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†Experian acts as a credit broker and not a lender in the provision of its credit cards and personal, car finance and guarantor loans matching services, meaning it will show you products offered by lenders and other brokers.

Experian acts independently and although CreditMatcher shows products for a range of lenders and other brokers it does not cover the whole of the market, meaning other products may be available to you. CreditMatcher services are provided free however we will receive commission payments from lenders or brokers we introduce you to. For information about the commission we receive from brokers for mortgages and secured loans click here.

CreditMatcher is provided by Experian Ltd (Registered number 653331). Experian Ltd is authorised and regulated by the Financial Conduct Authority (firm reference number 738097). Experian Ltd is registered in England and Wales with registered office at The Sir John Peace Building, Experian Way, NG2 Business Park, Nottingham, NG80 1ZZ.

Copyright © 2017, Experian Ltd. All rights reserved.

A guide to remortgaging

Remortgaging is on the up! It now accounts for about a third of all home loans.

When you remortgage, you take out a new loan with either your existing lender or another lender. According to the Council of Mortgage Lenders (CML), there were 34,700 loans for remortgage in December 2016, worth a total £5.8bn – that’s an increase of 13% in volume and 14% in value – while Paragon reported they now account for 39% of all mortgages handled by advisers.

Remortgaging could help you free up money for something you really want, help you pay your mortgage off quicker by moving to a lower rate, or help you better manage your monthly household outgoings. TSB found that homeowners could save an average of £96 a month by remortgaging to a lower fixed rate deal.

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7 tips for moving in to your new home

You’ve sealed the deal, inked the contract and are about to move into your new home at last. But before you take a breather, there’s still plenty to do – some of it is the fun part (furnishings) and some of it is necessary administration tasks. Each of those can be done in a finance-friendly way though.

Here are our top tips for moving in to your new home, and how you could make the most of your finances.

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How to make mortgage lenders love you

How to get a mortgage

One of the first steps to getting a mortgage is to impress the lender with your credibility. So here are a few simple steps to financially prepare yourself to help you get the mortgage you want.

In 2014 the Financial Policy Committee (FPC) said that only 15% of all new mortgage lending offered by banks and building societies could be more than 4.5 times a person’s income. Currently, mortgages of more than 4.5 times the borrower’s income is around 10% of lending.

So, if you want to be in the 15% of high loan-to-income applications, you’ll probably need to have:

  • A good deposit
  • A steady income
  • Little debt
  • A good credit score

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7 tips for first time home buyers

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Buying your first home can seem at times like climbing a particularly steep hill - daunting, confusing and with several pitfalls along the way.  Prices are still rising, with the average UK first-time buyer home now costing £184,973, 7% up on that of a year ago1.

And finding the money for a deposit without help from the Bank Of Mum And Dad can be a real challenge – the typical first-time buyer deposit is now £33,222 - that’s 133% of an average salary1. The average first-time buyer borrowed 3.49 times their income, and the average first-time buyer loan was an estimated £136,0001.

But with a few simple steps to prepare yourself financially, and make lenders see you in a positive light, you could approach buying your first home with a lot more confidence.

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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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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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Am I too old to get a mortgage?

Getting a mortgage past 65?One news story that attracted our attention in 2015 was the one in which a bank was penalised for age discrimination after withdrawing a mortgage approval for a married couple in their 40s, on the grounds that the husband would be over 65 when the deal ended.

The Financial Ombudsman Service ruled in the couple’s favour and ordered the bank to pay them £500 in compensation, saying that the bank had relied on “untested assumptions, stereotypes or generalisations in respect of age”.

Should we be given the chance to keep up mortgage payments past the age of 65? 
It’s arguable that being 65 today  - in terms of health, lifestyle, fitness and expectations – is not the same as being 65 twenty, certainly forty years ago. And 65 being the default retirement age has been phased out, and people can work as long as they choose to – employers are no longer allowed to discriminate against workers choosing to work beyond 65. Continue reading

First Time Buyers: 5 tips to check your credit history

Could your credit history prevent you from getting a mortgage? Experian research has found that more than a quarter of people in the UK looking to buy their first home before 2016 –  around 1.81 million people  – have missed credit repayments, defaulted accounts and CCJs currently listed on their credit report*. And all of these could prevent them from securing a mortgage.

Managing credit accounts such as credit cards, mobile phone contracts and even some utility services can be important in order to build and maintain a good credit rating.

So if you’re looking to get on the housing ladder, how can understanding your credit history prepare you for a mortgage application?  Here are our 5 top tips.    Continue reading

First time buyers: How you can get on the property ladder

Guest blog post from Stephen Dwelley, Director, sharetobuy.com

Visit the London Home Show - 26 September, Queen Elizabeth II Conference Centre, Westminster, 10am-5pm

Visit the London Home Show – 26 September, Queen Elizabeth II Conference Centre, Westminster, 10am-5pm

There are many challenges faced by first time buyers trying to get on the housing ladder, particularly for those without the help of the Bank of Mum and Dad.

First time buyers should not lose hope, however, as there are now a wide range of affordable housing schemes to help people get onto the housing ladder and progress to a larger property. These include:

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