Why Don’t I Just Use The Best Buy Tables?
A good question. The “Best Buy” tables, often found in the newspapers’ financial sections or on websites that sound like monkeysupermarket.com or confused meerkats.com, usually just list the lowest rates. What they often don’t do, however, is clearly show all of the extra fees payable. All too often we see a mortgage at the top of these tables with a spectacularly low rate and listed as a “Best Buy”. Look a little closer, however, and you’ll find that these so-called best-buy mortgages often come with a fee of nearly £2000 plus you may also have to pay for your own valuation and legal costs, typically another £6-700 at least. For many people that “best buy” could be an expensive mistake… If you’d like to find out what’s really your best deal with all costs considered, why not call us now on 01489 8549944.
Can I Get A Mortgage?
This used to be a relatively straight-forward process but in recent times the banks & building societies have understandably become a lot more selective when it comes to approving your mortgage and we are often approached by customers who have seemingly been turned-down for no apparent reason. Any of the following circumstances can result in your application being declined or referred.
- Self Employed Or Employed – We generally find that mortgages for self-employed people (including directors with a shareholding of more than 10%) are more difficult to arrange than mortgages for employed PAYE people. The lenders all have different ways of calculating self-employed income & it is important to know which lenders will accommodate your particular circumstances. Some will work on an average of the last 2 year’s income, for example, whereas others will work from the latest year’s figures. Some will use wages plus dividends for directors and others will use the net profit figure.
- Income And Affordability – It’s no longer a case of just multiplying your income by 3 or 3.5 or even 5 in some cases. Nearly all lenders use an in-depth affordability calculation based upon income and outgoings. These vary greatly from lender to lender and often include factors such as the number of people living the property, loans & credit cards held, other mortgages. Over time, bonuses and other forms of income are also treated differently by each lender.
- Credit Rating – Missed payments on loans or credit cards or even a mobile phone bill can all have a negative effect on your mortgage decision. All lenders will carry out a credit search as part of their decision making and will interpret the information held differently.
- Other Commitments – Any existing loans and credit cards will be assessed as part of the mortgage application process. If you intend to clear any of these when moving home or remortgaging some lenders will still class these as a commitment whereby some will accept that they will be repaid. This can have a substantial impact on the Income & Affordability assessment (see above)
- Income From State Benefits Or Maintenance Payments – If you are in receipt of state benefits such as tax credits, child benefit, disability payments or pensions or other income such as maintenance, these will be assessed in different ways. Some lenders will accept all of them, some will accept one but not another and others will not include any.
- Other Mortgages Held – If you have existing buy-to-let mortgages or are thinking of letting your existing property to buy another (Let-to-buy) these will also be treated differently by different lenders with each having a particular policy.
- Loan-To-Value – this is the amount of your mortgage expressed as a percentage of the value of the property. The lower the percentage, the greater the chance of the mortgage being approved. A 60% loan-to-value application, therefore, is easier to obtain than a 90% one. Again each lender has a particular policy regarding this.
- Previous Applications – Nearly all mortgage applications are recorded on your credit file. The more applications that are recorded, the lower the likelihood of your mortgage approval becomes. For this reason, it is important not to keep applying to different lenders in the hope that one will say yes. You will diminish your chances for at least 6 months.
Here at Harrison Gray, we have an in-depth knowledge of the mortgage market along with each lender’s quirks and policy requirements. By using our services you will have a much greater chance of your mortgage being approved the first time.
So why take a chance? Don’t just guess where to go – ask the experts