Cost of living and increased house prices are the two main factors as to why it can be difficult to save for a mortgage. We know that you can’t suddenly decide to buy a home, you have to prepare and plan for months, years in advance.
Although your credit score will factor into how much you are able to borrow and how much you will need to put down for your deposit, usually, if you save for long enough and prepare in advance, you should stand a good chance of getting a mortgage.
When you are trying to save for a mortgage as a first time buyer in Nottingham, your first task is to work out your monthly disposable income. Once you have deducted your expenditures and monthly outgoings from your overall monthly income, you will have a rough estimation of your total leftover income. A portion of this could be used towards your mortgage savings.
You could work out the amount that you want to save each month by dividing the total amount that you want to save by the number of months that you wanted to move in by. For example, if I wanted to save £10,000 over 24 months (2 years) I would need to save £416 a month. The amount that you save and the length of time can be reduced with multiple incomes saving at once.
When putting down a deposit for a mortgage, you will usually need to provide at least a minimum of 5% of the cost of the property. As a Mortgage Broker in Nottingham, we’ve seen that buyers even try to aim for a 20% deposit so that their mortgage payments are significantly lower. A deposit around this size may be required anyway if you have a bad credit score; you may be asked to put down 15%-20%.
If you have good credit and manage to save for a higher deposit, you could potentially open yourself up to more competitive interest rates. Lenders also see you as a reliable applicant with a higher deposit. They always want to try and minimise the risk of repossession.
At Nottinghammoneyman, our Mortgage Advisors in Nottingham will be able to work out how much you are able to borrow. They will factor in your total deposit amount, credit and other various factors.
We would also recommend saving some money aside to factor in the additional costs of buying a property. Your mortgage and protection advisor will offer you insurance or cover for you and your property.
The government have developed various schemes to help struggling buyers get more out of their deposit. This could be a boost in their total amount or an option to purchase a percentage of the property, hence lowering the deposit required.
One example would be the Help to Buy Equity Loan scheme. This scheme allows you to boost your total deposit amount to 25%. The minimum that you have to put down is 5% and the maximum is 20%; whatever percentage that you choose to put down, the government will then loan you the remainder to make up a 25% total.
Another scheme example would be the Shared Ownership scheme. This allows you to purchase a percentage of a property (anywhere between 10%-75%), where the rest of the property is owned by the housing association or local councils. The way that this works is that you will put down a deposit on the property based on the percentage that you are buying. For your monthly payments, you will have to account for your mortgage plus rent which goes directly to the co-owner of the property.
There are many more schemes available, these are just the most popular options. Other schemes include the Lifetime ISA, Mortgage Guarantee Scheme and many more. Visit OwnYourHome.gov.uk for more information about these schemes and further options.
If you are lucky enough to receive a gifted deposit from your parents, this could give your deposit a huge boost. Combining your parent’s funds and your own deposit, you could surpass the 5% minimum mark!
Gifted deposits are becoming more and more popular, especially with the rising costs of housing prices. Sometimes we would even say to ask your parents. We have seen that many parents are more than happy to contribute to their children’s deposit (maybe it is because they want them out of the house!).
If you are saving your deposit, you may also want to review your monthly outgoings and see whether you can save money anywhere. If you take a look at some of your subscriptions, contracts or broadband packages, it could be possible to save some bits here and there and allocate your savings into your mortgage funds.
Mostly, people tend to save money in places such as gym memberships and streaming services. You could look at what you use regularly, and what you hardly use and try to see whether you can save money in some places.
When it comes to saving for a deposit, if you are combining your savings with another applicant, you will find that you save much more quicker! Obviously, if two applicants are saving rather than one, you are more likely to reach your goal than if it was just you saving up.
There are different types of mortgages designed for those looking to buy a property with their friend or partner, these include:
This involves both applicants purchasing the property as a whole and owning equal shares within it. If one of the owners passes away, 1005 of the ownership will fall to the remaining owner. Since you both own the property, you will have to come to an agreement if you want to sell or remortgage the property.
This is where both owners have a percentage share of the property that doesn’t have to be equal. As a Mortgage Broker in Nottingham, we see this option being more popular with relatives or friends who are buying together. Because you don’t have an equal share, you can act individually and have the right to sell or give away your share.
If you have bad credit, you may need to work that little bit harder to save up for your deposit. Alongside your savings, you should try and improve your credit score in the meantime. This could mean that once you reach your target deposit, you may have opened yourself up to better rates due to your increased credit score.
Whether you are a first time buyer in Nottingham, or moving home in Nottingham, saving for that deposit and reorganising your finances to compensate for the additional costs of taking out a mortgage can be difficult. We want to help by taking some of the stress off your shoulders.
Whether you just want to talk to a Mortgage Advisor in Nottingham about your mortgage plans or you need help starting your application, we are here to help. We have been working in the mortgage industry for over 20 years now and have experienced all kinds of mortgage scenarios and answered almost every mortgage question there is!
You can book a free mortgage appointment online or give us a call, we will be there to answer 7 days a week.
With a plethora of mortgage types available to home buyers, a First Time Buyer in Nottingham may feel a little overwhelmed when it comes to choosing the right one for them.
Each mortgage types have its own unique purpose each with its own advantages and disadvantages. This is where an experienced Mortgage Advisor in Nottingham can help you with finding the perfect match.
This article will take a look at how Cashback Mortgages work along with the benefits it can have to borrowers and how they compare to other options.
You can also watch our Moneyman TV YouTube video about this topic. This channel features answers to popular mortgage questions, up-to-date news about the mortgage market as well as different cases Malcolm has encountered first-hand.
If you want to keep up with all things mortgage, give us a like and subscribe for more! Feel free to comment with any questions you may have as Malcolm will happily answer these and possibly post a video on this.
Cashback mortgages are an option in which you will usually get some cash back at the end of your mortgage term. This sum is usually based on a percentage of what you borrowed and is around 1 or 2%.
When it comes to a cashback mortgage, your lender might specify a fixed price within the mortgage contract. Therefore, whether you are taking a mortgage over a long period of time, the amount will not change or increase over time.
Below are just some benefits to home buyers:
As an open and honest Mortgage Broker in Nottingham, we would suggest that if the lenders offers you a reasonable percentage on your cashback mortgage, you may wish to consider taking this up because of how beneficial it would be in the future. Sometimes, people decide not to choose a cashback mortgage because the interest rates are usually a little higher.
As mentioned, there are many mortgage options available, with cashback mortgages not being as popular compared to others. Regardless of this, our team do receive enquiries about them, as well as being a good backup choice if your first mortgage deal doesn’t quite work out.
For more information regarding the different mortgage types and your options may be, it could be helpful to contact an expert Specialist Mortgage Advisor in Nottingham. Whatever your circumstances, we will work hard to help you achieve your mortgage goals. We are always up for a challenge!
If you are a First Time Buyer in Nottingham, and just found the right property for you, you’ll be needing to negotiate the asking price and put down an offer fast to avoid any other potential buyers sweeping up your desired property, at the same time you want to put down that ‘magic number’ to secure the property but, would prefer not to overpay for it. As a First Time Buyer in Nottingham, you may not be familiar with negotiating a property price. Below are the steps you may need to take to put you in a much better position when you make an offer.
Remember that there are other potential buyers. Therefore, it is vital to get your portfolio looking as good as possible to get yourself ahead. This will give you an advantage in getting your offer accepted. Another good tip is to work out how much mortgage you can afford, add your deposit, and set money aside for the costs of buying a property too.
We also recommend sending over a copy of your Mortgage Agreement in Principle, also known as a Mortgage in Principle and Decision in Principle. It gives you a better idea as to which properties you can afford and makes it easier whem making an offer. A Mortgage Broker in Nottingham like ourselves can help you with this, our team can usually turn around an Agreement in Principle within 24 hours after your initial contact with us.
Getting a mortgage is about negotiating. It will most likely turn out that your initial offer will be rejected but rest assured, this is expected. If this happens, you will be given an option by your Estate Agent to increase the offer. It is best to be sensible and go for the amount which seems the most reasonable price to which you can afford.
If your second offer is also not accepted, the possible reason for this could be down to willingness towards the payment of the asking price. Therefore, if the property is new to the market and the asking price seems too high, sometimes the best option is to be prepared to find another property.
“Sold” prices on Property websites such as Zoopla and Rightmove can be a great insight to giving you a right estimate on correct asking prices depending on the area. A lot of this data is compiled from the Land Registry, meaning it should be reliable.
Certain properties may stand out because they may seem much lower in price compared to the other houses that surround them, there will be an underlying reason for this. The most common reasons include:
In our service we will guide you with your offering strategy. It may seem nerve-wracking but it is also a very exciting part of the process.
Making a good offer is an integral part of getting the property you liked but there are certain things you need to consider when you are making an offer on any property that you wish to purchase. It is not enough just to be giving asking price to be a good buyer and stand out from other buyers but there are other things the seller considers while making the decision on choosing the buyer.
While you can get submit a verbal offer either in person or on phone, most of the agents now ask for you to send your offer via email these days, for records for both parties. This offer is then taken to the seller who chooses to accept or reject your offer. An agent is liable to pass any offer he received to the seller for their consideration.
The seller will take you more seriously if you come across as a well-prepared buyer who can show evidence that they can afford the property with a ‘mortgage agreement in principle’. You should also have a solicitor in place so you can advance their details when the offer on the property is accepted.
Any buyer without baggage of previous mortgages, first time buyers in Nottingham or buyers with pre-organised mortgages will have a benefit of preference from the seller.
Your transactions and agreements will process more swiftly if you are a chain free and organised house buyer.
Tip: If the seller is in hurry to sell or has been trying to sell the property for some time, they might accept a lower offer than the asking price as well, especially if your purchase will pass through quickly.
Some sellers are not constricted by time or other factors and hence will wait for the buyers who can offer a higher price to maximise the value of the property.
No matter what price you are offering for the property, do it with assertiveness and confidence. Most negotiations include several rounds of offers and counter-offers.
While you might be attracted to a certain property, you should always have a budget ceiling in mind. This will help you decide the maximum you can offer for a property and if the investment is worth for you in long term. An agent is required to be transparent and will let you know if other parties are interested in the properties to help you make your case.
Ensure that it is clear to all parties that the offer is:
Subject to Contract (STC) – the final sale is made when lawyers have exchanged and signed contracts.
Subject to Survey – allows any cost for faults and issues to be taken in account.
Ensure that the agent has taken the property off the market otherwise, you risk a chance of being gazumped.
In order for customers to qualify for a mortgage, they will need to obtain an Agreement in Principle from the mortgage lender. The point of this is much as the name suggests; the lender will agree, in principle, to let you take out a mortgage with them.
This is done prior to the final checks and whilst it is not a guarantee that you will definitely get a mortgage, it is a good indicator that you are on the right track.
You may see this being called a Mortgage in Principle, a Decision in Principle, as well as the abbreviations AIP and DIP. Though it may seem confusing at first with all those names, they are all the same thing.
Once you have obtained your Agreement in Principle, you will be raring and ready to go, fully prepared to support any offers you make on a property as a First Time Buyer in Nottingham.
In having this to hand, you may also even open yourself up to the possibility of negotiating with the seller on a lower price. The reason for this, is because it demonstrates to the seller of the property you are looking to buy, that you are a serious buyer and do in fact have the funds to proceed.
We regularly find that more and more lenders are choosing to go with soft searches over hard searches. Generally speaking, a soft search will leave your credit score unaffected, as they tend not to leave a footprint.
Hard searches do leave a footprint, so having too many done can cause more harm than good, especially if you don’t pass each time. That’s not to say a soft search will never affect you, but it is not something that tends to happen often.
Soft searches don’t go quite as in-depth as hard searches, though you can rest assured that no matter which one the lender chooses to go with, they have their reasons and will choose the right one either way.
If you are not having hard searches done on a regular basis, then having one done shouldn’t really make too much difference. When it starts to become a problem is if you start having a lot of different hard searches taken out on you within a short amount of time.
It’s important to keep in mind though that if you are well aware that you do have a good credit rating, you should not feel put off by the idea of getting one done, especially if a hard search with that mortgage lender is going to be the best option for you.
Though we would like to say yes and fill you with hope, unfortunately even with an Agreement in Principle to hand, we cannot guarantee mortgage success.
The mortgage lender still needs to see all your documents and only after they have done that will an underwriter be able to make their final decision.
We tend to find that customers contact us after being declined at the point of application, as they have missed a lot of the small print that is mentioned in their Agreement in Principle.
You will need to provide your mortgage lender with proof of ID, the last 3 months payslips and bank statements to show how you handle your money, all before a lender will offer your case.
The required documentation is slightly different for Self-Employed Mortgage applicants.
Technically yes, you can make an offer without an Agreement in Principle to hand, though we personally believe you would be much better off having one with you.
Any credible estate agent will ask you for one of these before they do business with you, as they will want to know that you can go ahead with the mortgage process.
One of our dedicated mortgage advisors in Nottingham can typically obtain an Agreement in Principle within 24 hours of your initial appointment.
An Agreement in Principle will usually expire after somewhere between the 30-90 days mark. That being said, please be aware that you don’t just have to jump at the first house you see. Take time and take care when looking for a home.
If your Agreement in Principle expires, there are no worries. We can quite easily get you a new one once you are ready to make an offer on a property that is right for you.
Finding your dream home only to be declined by a lender can be both frustrating and disappointing. To counteract this feeling, we recommend getting an Agreement in Principle as early as possible, to ensure you are readily prepared for the process.
To learn more about what an Agreement in Principle is and how they can help, take a look at our YouTube video below.
There are a lot of different things that potential home buyers in Nottingham must take into consideration, whether their journey will be as a first time buyer in Nottingham or you’re moving home in Nottingham.
The sort of things you’ll have to bear in mind will include your personal finances, any mortgage arrangements and the finding the best deal you possibly can for your personal and financial situation (this is something we can help with).
Before all that though, before even deciding on the house you wish to buy, you have to know where it is you want to live. What do you want nearby, what’s important, do you like thriving scenes or quiet settings?
Below we have collated a list of the various factors you’ll need to consider when you start looking for your new home.
First of all you need to decide what type of setting you wish to call home.
Maybe you prefer the hustle and bustle of the big city and are looking to live closer to the centre? Maybe you prefer the quiet life and wish to live on the outskirts, perhaps near some countryside?
You will need to carefully consider your choice here, as determining this will have an impact on any potential commutes to work, the choice of local amenities, shops and schools.
Although we see more and more people in the UK working from home, for a vast majority of homeowners, you’re going to have to factor in the way you will be getting to work.
It’s not just work of course, you’ll also have to factor in local convenience accessibility, such as how easy it will be to get to the local shops or any other businesses/services you require the use of.
Will you be able to walk where you need to go, or do you need to drive? If you do, will you need to access any motorways to get there?
Beyond that, what if you don’t drive? Are there are buses, coaches, taxi companies or train stations nearby? Depending on location, these options may be limited greatly, especially if you’re looking to buy in the middle of nowhere.
If you happen to have children, it is generally considered important to factor in what schools are in the area and the quality of those schools.
By taking a look at school league tables online, you will be able to judge for yourself what the best options for your children may be and plan accordingly.
There are some great schools across Nottingham for kids to get a good education, as well as options for further education beyond that.
Check the catchment areas too, as the area you’ve been looking at may not fall into the catchment area for a particular school that you may have wanted for your children.
Depending on the type of lifestyle you lead, the sorts of things you will be looking for in an area may differ. Some people may have the preference of having nearby shops to visit.
Others may not be so fussed about that (especially now that home deliveries of your weekly food shop exist!) but may want to be close to a gym or a local pub.
Some that have children or pets may prefer to live close to parks or open spaces. We highly suggest that you make a shortlist of the things you need and what you would like to prioritise nearby.
When you find a house you are interested in, you can then take a look at your compiled list and see how much of it you are able to tick off.
This is a personal choice and will be dependant on your circumstances. Some people will rely on family support, often when it comes to children. You may need family nearby for childcare or school runs.
Having a social life is also usually a crucial part of people’s lives. Do you want your friends to be as close as possible? Would you prefer to have some distance between them so you can visit sporadically?
Your choice of home location will also determine how far your money is going to go. Depending on location, you may have a different option of houses to choose from.
For example, some areas may allow you to find a 4 bedroom house for the price of a 2 bedroom flat in another area.
You may have to compromise on some of the things you previously listed as wanting nearby, in order to find an affordable property near the area you were set on.
Some of us would prefer to be a part of and contribute to a local community.
With this in mind, you may possibly wish to surround yourself in a local area that is involved in arts, crafts, book fares and local events at the community hall or town/village green.
Take the time to look and see what activities occur in the local area. For best results see if there are any local or even town websites.
Maybe even visit the area beforehand and get to know some of the locals. They will likely be able to inform you on current events and what is available nearby.
The chances are your new home is a long term investment and you’ll be wanting to see house prices increase, in the event you ever do decide you want to look at moving home in Nottingham.
In order to be more informed about this you could look to see if the local area has any investment plans, new road links, planned development projects, shops, sports facilities or if there are any companies looking to call it home base.
All of these can have an affect on the future of your new homes value, so if this is something that is important to you, you should definitely make sure that you do plenty of research ahead of time.
Congratulations are in order! The hard work has paid off and you have recently passed your exams, becoming a newly qualified teacher.
From here you have found yourself a teaching position and are understandably very excited to get started in the classroom. The catch here, is that this start to your career also requires you to move to Nottingham.
Times are now equal parts exciting and stressful for you, as you now begin struggling to balance owning your own home s well as starting your brand new job role. Worry not, you are definitely not the only one to have been in this situation.
Finding a lender that is actually willing to offer a mortgage to someone who has become a newly qualified teacher can be a bit tricky. This comes down to a lack of work history or having temporary contracts, to name a few reasons.
Even still, it’s important to remember that with some care from a mortgage advisor in Nottingham searching for the right lender, you may still be able to obtain a mortgage.
There are indeed lenders out there who will lend to someone who is newly qualified, with some even potentially offering reasonable deals to those working within the education sector.
The tricky part is trying to navigate around the various mortgage lenders and finding one that you match up with the criteria of.
This is the benefit of working with a trusted team of mortgage advisors in Nottingham who will be able to search over thousands of deals on your behalf. It’s our hope that in doing so, we’ll open you up to better deals and rates.
The different types of mortgage available for NQTs can include:
The benefits of speaking with a fast and friendly mortgage broker in Nottingham.
Here are some of the critical factors that can be taken into consideration:
Our experienced mortgage advisors in Nottingham are extremely familiar with the workings of various lending criteria, utilising their many years of experience to help our customers with their mortgage circumstances.
Get in touch with us today to see what options you have available to you. Our dedicated team will take some details from you, using this information to work hard and see if we can get a mortgage suitable to your individual circumstances.
Through our experience as a mortgage broker in Nottingham, we find that customers looking at applying for a mortgage look at making a joint mortgage application as they generally look when in a relationship. This is an alternative option to apply for a mortgage under the only name of a sole named applicant.
With inflation exceeding the increase in wages along with property prices constantly rising. A couple of first time buyers in Nottingham earning an income will generally be able to get a substantial mortgage the amount which covers what the buyers are looking to achieve.
In some cases, one applicant may be able to apply for a mortgage, but this depends on the situation of the individual. One of the reasons for this may be that one of the applicants does not want their name to be linked to the mortgage in question.
Other issues could be due to someone having a previous credit problem. For instance, a bankruptcy or a County Court Judgement is stopping them from getting a mortgage now. When something like this happens, given that the spouse or partner has no financial connection to this issue, they can apply for the mortgage on their sole behalf.
If you’re in this situation, you should be careful not to build a financial link with your partner so you can protect your credit score from harm.
Another situation we have encountered through our time providing clear and transparent mortgage advice in Nottingham is when one of the partners is currently unemployed by choice or something else. The consensus is that the maximum borrowing capacity for a couple with only one applicant is much lower than if the working applicant applied for a mortgage in their sole name.
This arrangement is something we regularly come across working in the mortgage industry. Age can impact the calculation, for example, an applicant who might be older, say in their 50s or so.
The way this applies to your mortgage is that an applicant who is buying with a younger partner who is also in a good paying job could have access to a higher mortgage.
Another reason why an applicant will look into the option of applying for the mortgage in their sole name could be due to stamp duty or other tax implications.
With married applicants, we do find that lenders will usually have quite strict criteria because it will be taken our with two interconnected applicants.
You may disagree with this statement due to two applicants providing security, in the event that lenders need to chase for payments, it can open the door to complications if circumstances change like a divorce.
The good news is that not all lenders will provide this biased view. With this in mind, we have a brilliant specialist mortgage advice in Nottingham team who will be available from until late, every day of the week.
Here at Nottinghammoneyman, we have an expert team who have a fantastic reputation in helping thousands of home buyers and homeowners with varying situations to get towards mortgage success. Get in touch with our team today who will be more than happy to help you through our mortgage journey.
So, you’ve got a 5% deposit and are in the position to start making property offers, however, as you progress further through the process, you are finding that you may need a bigger deposit.
There could be lots of different reasons why you’re being asked for more deposit, it could be down to anything, e.g., sellers’ preference, buyer competition or your credit history/file.
Here we look at how you can use government schemes to help you make an offer with a small deposit as well as looking at simple things that you can do too.
There are many government schemes readily available on the market. These schemes come under an umbrella named ‘Own Your Home’ and can be utilised to help you move home in Nottingham.
These schemes could give you the extra boost that you need to get yourself onto the property ladder.
This scheme helps you increase your total deposit size, making up a total of 25%. This can heavily increase your chances of your offer being accepted.
When you take out a Help to Buy mortgage, you’ll have to supply a minimum of a 5% deposit, and your deposit will be topped up by the government to make a total of 25%. This ‘extra deposit’ that they give you is the ‘Equity Loan’. The Equity Loan is a loan and not a gift, therefore it will need paying back eventually.
The loan will be interest-free for the first five years, then afterwards, if there’s still a balance due, the remaining will start gaining interest starting at 1.75%.
You should know that this scheme can only be used on new-build properties and can only be accessed by first time buyers. Therefore, if you’re a first time buyer in Nottingham, we would recommend looking into the Help to Buy Equity Loan as it could give you that extra helping hand that you need!
The Shared Ownership scheme allows you to take out a mortgage based on a percentage share of a property (usually anywhere between 25%-75%) and then pay the rest back through rent.
As you are only taking out a mortgage on part of the property, your overall deposit required should be lower. Once you are settled in or perhaps in a better financial situation, you could even increase your share further if you want to. This is why this scheme can be such as good way to get you onto the property ladder.
The Shared Ownership scheme can get a little complicated in some places. This is why we’d recommend consulting with a mortgage advisor in Nottingham like us before getting started on your own.
A Lifetime independent savings account should be an ‘early on in the process’ thought. You should set one up once you’re thinking of moving or buying your first home in Nottingham.
The longer a Lifetime ISA has been set up, the more beneficial it will be; this is because it’s just a savings account. Your money will grow year on year; however, this is not due to interest, the government will top up whatever you save by an extra 25%. You can deposit as much as you’d like each month, as long as it doesn’t go over a total of more than £4,000 over the year. You can only save a maximum of £4,000 each year.
So after every year, you will gain 25% extra. If you manage to reach the maximum, you will have an extra £1,000 deposited into your independent savings account. The money that you’ve saved can be used for one of two things: to buy your first home or for savings for later in life.
If you set up a Lifetime ISA as soon as you starting thinking about moving home in Nottingham, you may only be required to put down a small deposit as the lifetime ISA will end up covering the majority of it!
Do you currently live inside a council house and are planning to make an offer on the property? If this is your situation, then you may only need to put down a smaller deposit, or in some cases not one at all.
You’ll discover that quite a lot of lenders will offer a right to buy discount. This discount is worked out by the government, they use factors such as how long you’ve been living within the property.
The 95% mortgage guarantee scheme was brought in off the back of the coronavirus pandemic during 2021. It gives struggling buyers the chance to purchase a property with just a 5% deposit.
Getting a mortgage application accepted is never guaranteed, however, through the use of this scheme, your chances could be significantly increased. Remember, during the whole process, you’ll still be required to pass credit checks, affordability assessments etc.
Besides using government schemes, there are over ways to get a mortgage with a small deposit.
To show your readiness to proceed through the mortgage process right away, you should get an agreement in principle (AIP) (also known as a decision in principle (DIP)). An AIP could be the thing that you need to boost your chances of getting a mortgage with a smaller deposit.
Having an AIP in place indicates that a lender is willing to lend you. Remember, this is only in principle of you being able to provide sufficient documentation to prove your mortgage affordability. When making an offer on a property with an AIP in place, you are potentially putting yourself in front of other’s who don’t have one.
You could say that in this scenario, it doesn’t really matter about the deposit, however, if you have a minimum of a small 5% deposit, having an AIP could give you that extra chance that you need. Having an AIP in place could be the difference between the seller choosing you over someone else. Choosing an applicant with an AIP over one who hasn’t got one can only speed up their process too!
An alternative would be to continue saving. Perhaps, you could postpone your home buying journey for just a little longer; this could maybe push up your total mortgage deposit.
Your ‘small’ deposit could become a much bigger deposit if you put your moving home in Nottingham journey on hold. Also, it could allow better rates and products to make their way onto the market.
We’ve even seen customers that are struggling to find a home that they’re interested in enough to make an offer on, but by waiting a little longer, they ended up finding their dream home!
Remember that the minimum 5% deposit will change depending on the property’s price. If you’re thinking of buying a larger home, you’ll likely need a bigger deposit anyway.
This situation is extremely specialist and not all lenders will not allow it. As a mortgage broker in Nottingham, we rarely see it happen, but when we do it’s always on strict terms.
In some situations, you can take out a loan to cover your deposit. This will likely affect your ability to get accepted as you are essentially borrowing 100% of a mortgage.
This means that you’ll have to pay two sets of monthly payments; your loan and your mortgage. You’ll be questioned on your affordability from the off front as they can’t risk lending to someone who has the potential to fall into arrears.
Remember that this is a specialist topic. As a mortgage broker in Nottingham, we would recommend that you speak to a mortgage advisor in Nottingham and contact us first. In all cases, taking out any sort of loan during the months leading up to your mortgage application is not recommend unless you’re certain that you can pay it off.
The amount of deposit you will be required to have in order to purchase a property is something that will be entirely dependant on your personal and financial circumstances, as well as looking at what you are trying to do. In this article we will take a look at how much deposit you may need.
The previous era of 100% and 125% mortgages are long gone, as is the infamous credit crunch. The Coronavirus did see certain deals pulled back, but nowadays we are seeing more and more lenders feeling confident about offering 95% mortgages to homebuyers.
Based on the history of mortgages and what went wrong, having to prove to a mortgage lender that you are a responsible borrower and have the means to maintain your monthly payments. Lenders need to have a confidence that they have invested correctly. This factors in with your deposit, as it also show that you have something to lose too.
The initial saving for a deposit can often be the difficult part for many, especially first-time buyers in Nottingham who have only been renting up until this point.
It can also be seen as one of the biggest obstacles in the property market and there are certain factors involved which could make the whole process seem even more daunting to someone who hasn’t experienced it before.
As an open & honest mortgage broker in Nottingham, we are always hearing questions from customers regarding deposit. In fact, we can safely say that it’s one of the most commonly discussed topics from first-time buyers. As such, we have compiled a list of the usual suspects and the answers to these.
In years gone by, 100% mortgages were on hand to most customers. There were even a selection of companies who were offering 125% loan to value mortgages. In hindsight, this sounds crazy, as it means if you were buying a property valued at £100,000, the mortgage lender would be willing to lend you up to £125,000.
Lenders require their customers to put down a deposit to reduce their risk of lending such a large amount of money. If they lend you 100% of the purchase price and for one reason or another you happen to fall into arrears, the lender would need to repossess the property in question and attempt to sell it.
If property prices dip even by a small amount, they have now not only made any profit, but have in fact lost money on this venture.
Also, there tends to be a school of thought that if you haven’t invested some money into a property, whether it be from your own savings or a gifted deposit, you might lack attachment and find it easy to “walk away” if you happened to struggle with your monthly repayments.
There is also the argument that if you are not in a position to save up at the very least, a minimum of 5% of the purchase price of a house for a deposit, then you likely aren’t ready for such a commitment at this current moment in time.
Putting down more deposit is generally a great thing to do!
If you are putting down a higher amount than the average home buyer, the lender may actually be willing to offer you a deal with lower interest rates than usual, as you will be borrowing less and therefore less of a risk.
For example; if you are looking to buy a £100,000 home and have only saved 5% deposit, you’re only able to access 95% mortgages and would be borrowing £95,000. However, if you were able to save a 20% deposit on that same property, you would be open to 80% deals and therefore only borrowing £80,000, which a lender would much prefer if an option.
It is important to know that products are offered in bands of 5% with 95% of Mortgages being the most expensive.
In some cases, very specific ones, using a personal loan for a deposit may be acceptable, though this depends on the lender.
It’s not widely accepted, because a mortgage lender will consider it as a monthly mortgage payment and therefore treat it is technically is, as an additional credit commitment. Because of this, you would be granted a smaller mortgage as opposed to the types of mortgage deals available to those who outright saved for the deposits themselves.
The reason why mortgage lenders don’t like to get involved with these circumstances, is because you are essentially borrowing 100% of the purchase price, which if we go back to mortgage history, is what caused problems in the first place.
The majority of mortgage lenders will accept gifted deposits as a source of your deposit towards a property.
Gifted deposits can pretty much come from anyone, though it is generally family and depending on criteria, friends too. There are certain obligations that the ‘donor’ will have to comply with, such as being willing to confirm it is a gift and not something you’re required to pay back.
They must also provide ID and proof of funds to keep in line with the lenders’ to anti-money laundering regulations.
As it pertains to modern society, if it weren’t for ever-rising popularity of gifted deposits, known by many as the ‘Bank Of Mum and Dad’, we believe that the property market landscape would look completely different to how we’ve come to know it.
Much like when using a gifted deposit, using your own savings to fund a deposit will require certain forms of ID and various documents in order to evidence how these funds came to be over time.
Lenders like to see how you have been saving over time. If it looks to the lender like you have had any large deposits moved into your bank account recently, then you will need to provide documentary evidence to show where it came from.
For example, if you have recently sold a car then you will need to provide the receipt and the amount you sold the asset for. The number present on this receipt should match that of the amount in your account.
Large cash deposits can sometimes prove to be problematic, especially when it comes to audit trails. When it comes to your application, audit trails can often be one of the hardest parts. The longer the funds have been in your account then the easier everything should be.
If you are selling a property, then the Memorandum of Sale provided by the Estate Agent will be sufficient proof.
Not always. If it is a genuine discounted purchase, let’s say that the house is worth £100,000 and you have been offered it for £90,000, then some mortgage lenders will accept this discount as your deposit. This also can apply if you have access to the Right to Buy Scheme when purchasing from the local authority, such as council or housing association.
There’s an expectation amongst home movers that the moving home process is going to be stressful and hard to get through. This shouldn’t be the case as it’s quite the opposite!
As a mortgage broker in Nottingham, we will make moving home stress-free. We’ll take care of the mortgage side of the process, helping you find an excellent product whilst you search for your dream home.
No matter which stage of the process that you’re up to; it could be that you’re thinking of moving home in Nottingham, still taking up property viewings or are ready to make an offer; we are able to help you.
Making the moving home process stress-free is what we do best, it’s our job. Here’s what we do best:
We’ll search through 1000s of mortgage deals on your behalf. You won’t have to do the shopping around through countless products trying to find one that matches your financial situation and property… that’s our job now!
To progress through the process, we’ll need some evidential documents to support your application, e.g. payslips, identification, etc., Once we have them, we can begin searching for the perfect product for you. If we find one that matches your personal and financial situation which you want to continue with, the next step is to submit your mortgage application.
Having worked in the mortgage industry for over 20 years, we have come across almost every mortgage scenario. We know exactly what we are doing. If you’re at the stage of the process where you’re ready to make an offer, if you need a speedy mortgage process, get in touch with our team.
Your mortgage advisor in Nottingham will try to obtain a quick but competitive mortgage product. Once you get in touch, we’ll book you in for your free mortgage consultation with your dedicated mortgage advisor in Nottingham.
Part of our process involves obtaining an agreement in principle (AIP) for you within 24-hours of your application. We do this so that you can a potential advantage over other home buyers who don’t have one in place. An AIP shows the seller that a lender is willing to lend to you, hence increasing your reliability.
If you’re first time buyer in Nottingham or moving home in Nottingham, you may want to slow down your mortgage journey, and there is nothing wrong with that.
Your mortgage advisor can slow things down for you. Don’t hesitate to ask lots of questions and take your time during your moving home journey. Our team will be open and honest with you during every step of the process; you’ll know what’s going on at all times.
We operate during out of office hours so that you contact us at when the time suits you.
Workaround your working schedule. Whether you’re calling in the morning or late at night, our team will be available. These hours don’t just apply to our customer care team, your mortgage advisor in Nottingham will be able to book an appointment during the same times.
Little things like this can still help take away the stress from the moving home process. If you can contact a mortgage advisor in Nottingham at a time that is best for you, it will mean that you can talk at a time best for you.
For a stress-free moving home process, get in touch with our amazing mortgage team in Nottingham. We will take care of you from start to finish and handle all of the stressful parts that come with moving home!
Remember, as a mortgage broker in Nottingham, we aim to take the stress away from moving home. We do this through numerous ways to ensure that you feel at ease and relaxed from enquiry to getting your keys.
Take advantage of our free moving home mortgage consultation today.