Agreement in Principle FAQs

What is an agreement in principle?

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.

Frequently Asked Agreement in Principle Questions:

Will obtaining an agreement in principle affect credit score? 

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.

Should I avoid hard credit checks? 

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.

Is an Agreement in Principle a guarantee that I will get the mortgage? 

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.

Can I make an offer without an Agreement in Principle? 

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.

How long does it take to get an Agreement in Principle? 

One of our dedicated mortgage advisors in Nottingham can typically obtain an Agreement in Principle within 24 hours of your initial appointment.

How long does an Agreement in Principle last for?

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.

Agreement in Principle Mortgage Advice in Nottingham

To learn more about what an Agreement in Principle is and how they can help, take a look at our YouTube video below.

Having Mortgage Problem in Nottingham?

Specialist Mortgage Advice in Nottingham

When we face a client with a complex mortgage situation, we continuously try our best to get by it, aiming to secure our client a tailored mortgage deal.

As a mortgage broker in Nottingham, we would always recommend seeking professional advice from qualified mortgage advisors like us. As we can apply our knowledge to help overcome most mortgage hurdles for our customers, there is rarely a situation that we haven’t come across before.

Whether you’re a first time buyer in Nottingham, a home mover in Nottingham or a buy-to-let landlord in Nottingham, we think that you would find our mortgage advice service extremely beneficial.

Reasons why you might struggle to get a mortgage in Nottingham

Passing lenders credit score

One of the hurdles that come with getting a mortgage is passing a lenders credit score. Every lender has unique lending criteria that you need to match to get accepted by them for a mortgage. Every lender is likely to have very different standards from one another.

We often find that people don’t realise that lenders have these individual criteria. The more lenders you approach that carry out a credit search, the more likely it is that you will get declined. That’s why we always recommend not to rush anything and always know what you are applying before you go ahead.

Improving your credit score

To pass a lender’s strict lending criteria, you often require a high credit score; otherwise, it may not match what the lenders want. Having a low credit score could be down to numerous things, and sometimes the only way to continue up the property ladder is to try and improve your credit score. In some cases, it’s relatively easy to improve, just time-consuming.

Your credit score is critical, so if you are worried about your score, you should consider checking your credit file. We hope this can help! Take a look at Check My File for more details and a free 30-day trial.

When you apply for a mortgage, your lender will either perform a soft or hard credit search. Soft credit searches will give the lender basic information and will have little impact on your credit score. On the other hand, if they perform a hard credit search, they will get a more in-depth view of your file, leaving a more significant imprint on it.

Remortgaging

If you struggle to find a better remortgage deal or don’t want to shop around, you can always try a mortgage broker in Nottingham like us. We will sort out everything for you and search through 1000’s of remortgage deals to try and find you the best mortgage deal, saving you time and money; for a more tailored answer, get in touch and speak with one of our advisors for a free remortgage consultation today.

Are you struggling yourself?

If you are struggling to get a mortgage and want some help from an expert Mortgage Advisor in Nottingham, we are always here to offer a friendly helping hand. We know that it can be a complex and often stressful process, and that’s why we want to help you.

Why Should I use a Mortgage Broker in Nottingham?

You decide: Mortgage Broker in Nottingham or Direct?

It’s completely your choice to go to a lender directly; some are a little more adept and can manage the process themselves. When it comes to this you can either go and visit a branch or do it online.

Whilst this sounds like the steps are easy enough, there are still many reasons as to why a person should use a mortgage broker in Nottingham. Our mortgage advisors in Nottingham have taken time out to put together a few pros and cons to help you decide between the two choices you’re faced with.

Advantages for Your Options

Some of the benefits of homeowners and home buyers going direct to their bank or building society means that you’ll be able to save some finances. In the past, you may have found that the bank manager knew your finances incredibly well, but that all changed when credit scoring came into place.

Other potential advantages are that you’ll find some lenders may offer exclusive products for your mortgage, ones that are only be able to be obtained from straight to the lender themselves. They do this so that it appeals to both customers and brokers alike, but these exclusive offers can be subject to change and can sometimes when they stop being available with the lender, can still be obtained by going to a mortgage broker in Nottingham instead.

From 2014 onwards, mortgage lenders were no longer allowed to sell mortgages on a non-advised basis, on a whim with any customer interaction. Up until that point, some applicants were under the impression that they were receiving advice when in fact they weren’t speaking with a qualified advisor. This meant that they had opted out unintentionally from consumer protection that they would’ve received by speaking with the right person.

Due to these changes, lenders had to change the way they ran their business, meaning that it could take up to a month to speak with an advisor. If you have had your offer accepted on a house, this is of course not a good thing, as obviously you really want it. Because of this, mortgage brokers became a more popular option. As a part of our mortgage advice service, we aim to give you same-day mortgage service. When you Get in Touch, we try and connect you with a dedicated mortgage advisor in Nottingham at a time that best suits you.

Back in the ’90s, it was a lot more challenging to compare mortgage deals. Through the advancement of technology, finding a competitive mortgage is now a lot easier, as everything is basically online now. The issue people are faced with, is not knowing whether you meet mortgage criteria and it’s hard to find products that are tailored to your individual circumstances. Wherever you’re searching, it is important to bear in mind that the deals with the lowest tend to carry high arrangement fees.

Affordability

Another key factor that could determine where you go, is affordability. It doesn’t matter how good a deal might look to be, if you aren’t able to borrow the amount of money you need. Because of this and because of how serious of a financial commitment this type of process is, many prefer a mortgage broker to help them along the way.

As it can be seen with many lenders nowadays, there are various different factors that can make a mortgage application so much more complicated. For example, these may be:

• Poor credit history
• Self Employed Income
• Mixed source of deposit (savings/gift)
• Let to Buy (keeping your current house and buying another)
• Contract workers/zero-hours contracts
• Affordability

As the years have passed, lenders have attempted to differentiate themselves from their competition by ways such as offering better deals than others. The main way they do this is through their differences in lending criteria. For example, some lend more towards those who are Self-Employed in Nottingham, whereas some might take a more relaxed to blips on your credit report.

Our mortgage advisors in Nottingham understand that your situation will be unique to you. Through our experience as an open & honest mortgage broker in Nottingham, we have seen various unique and complex scenarios in the past. It’s our hope that we will be able to draw from that experience in order to recommend a more suitable mortgage for you at the lowest rate possible.

However, it’s not just about the mortgage. Even if the application itself is straightforward, we’ve noticed our clients rely on us for much more, we strive further than just sorting your mortgage deal. Our mortgage advisors in Nottingham will be able to recommend other professional services such as Solicitors and the array of different surveys and protection available to you as a home buyer.

Broker v Direct

It has already been covered previously, but mortgage brokers in Nottingham tend to be far more responsive than high street mortgage lenders. It is not uncommon for our dedicated and hard working advisors to provide out of hours (beyond the standard 9-5 shift) and weekend appointments. They are also able to respond to clients’ emails during this time to offer a more responsive service as opposed to restricted working hours.

One factor which is often overlooked by many as to why a mortgage broker in Nottingham is a highly preferred option to a lot of home buyers and homeowners alike, is that a person may simply prefer to let someone else handle the full transaction and take the stress out of the situation. Professional applicants, such as those who run a Buy-to-Let in Nottingham, have seen this to be very beneficial as they have their own customers to handle, so find it to be much easier having a helping hand do the work for them.

If you are in need of expert mortgage advice in Nottingham, whether you’re a first-time homebuyer, moving house, looking to remortgage, are a buy-to-let landlord or even something else that hasn’t been touched upon, please do Get in Touch. Our team of mortgage advisors will do their very best to bring you one step closer to mortgage success, keeping the process as clear and simple as they possibly can.

Mortgage Advice in Nottingham

How to Improve Your Credit Score in Nottingham

Credit Score Mortgage Advice in Nottingham

A credit score is a number that represents a person’s creditworthiness. Your credit score will be used to calculate your affordability for a mortgage, loan, credit card, etc. Your score will be listed on your credit file, so anyone that does a credit search on you will be able to see your score.

Credit score criteria

• 300-580 – This is a ‘poor‘ credit score. Having a credit score within this range could lower your chances of being accepted by a lender.
• 580-670 – Having a score like this would slightly increase your chances of being accepted. This is considered to be a ‘fair‘ credit score.
• 670-740 – If you have a score that’s within this credit score criteria, you have a ‘good‘ credit score. On average, this is the most common credit score range.
• 740-800 – This credit score is ‘very good‘. If you have a score in the category, your chances of getting accepted will be high.
• 800+ – This is the ‘best‘ credit score category; having a credit score greater than 800 is ‘excellent‘. Your chances of being accepted by a lender are well above the average.

If your credit score is above 670, a lender will likely see no problem lending to you. On the flip side, if your score is less than 670, you may find it a little harder to get a mortgage and access the competitive deals that high credit scoring applicants are being offered.

If you want to access these types of rates, you may need to start thinking about trying to improve your credit score in Nottingham.

Reasons why your credit score may be lower

As a Mortgage Broker in Nottingham, we come across applicants in all different kinds of credit situations, some more specialist than others. There are lots of different reasons why your credit score may be low, some reasons are more common than you would realise.

We’ve seen a lot of customers suffering from a county court judgement (CCJ), a CCJ can severely impact your credit rating. If you fail to pay back a loan/lent money, you’ll be issued with a CCJ that won’t disappear from your credit file for 6 years or more.

This is why we always recommend that you pay off your debt before applying for credit; your lender will be able to see your ongoing finances and balances left to pay off. If a CCJ pops up during a credit search on your file, you will undoubtedly start getting asked questions.

Little things can cause damage too. For example, if you fail to keep up with your mobile phone contract payments and you end up with frequent bounced direct debits, your score will get harmed. Any sort of missed payments and bounced direct debits will appear badly on your credit file.

Even maximising into your overdraft every month could cause long term damage to your credit, without you even knowing. Your lender needs to know that you can manage your finances and not overspend. A lender will never accept an applicant who never has any money remaining at the end of the month, they need to know you have enough for your monthly payments.

This is just mentioning a few things that could negatively impact your credit rating, there are lots of other reasons why your credit score may be lower; some factors will cause more damage than others too. If you have a bad credit score and need some tips on how to improve it, feel free to get in touch with our team for Specialist Mortgage Advice in Nottingham. Whether you are a First Time Buyer in Nottingham, Home Mover or Self Employed, we are sure that you’ll benefit from our mortgage services.

Improving your credit score in Nottingham

Trying to improve your credit score can be hard, but hopefully, with the help of this handy guide, you can be nudged in the right direction towards improvement. You should know that every lender has different lending criteria, so you’ll never qualify for every mortgage deal, no matter how high your score is.

This means that you may still be able to access some specialist deals, even if you have a low score. Every lender and their criteria are different, so look out for their requirements before submitting your application. If you need help in finding a competitive mortgage product, speak to your Mortgage Broker in Nottingham today and we can recommend the best deal for you based on your personal and financial situation.

Ways to improve your credit score in Nottingham

Keep credit searches to a reasonable amount

Multiple credit searches can have adverse effects on your credit score. Be careful when using price comparison websites that are known to be major culprits of credit searching on individuals. If you are applying for a mortgage soon it may be wise to apply for additional credit afterwards.  Whilst having some credit and paying it back is a good thing for your score in the long run. Lenders prefer to see you leverage your borrowings right before setting up a mortgage application.

Check you are on the Voter’s Roll

Making sure you’re enlisted on the electoral roll really increases your credit score. It indicates stability which lenders like. Ensure your name is spelt correctly and that it’s your current address which is registered online. If you aren’t registered, it’s straightforward and easy enough to do this online.

Know your maximum limit

If you max out your card each month, your score will be reduced. Using a credit card to keep on top of your payments each month is a preferred method. This will be a good indicator to your lender that you are good at managing your money. The main red flag in a lender’s eyes is if you exceed an agreed card limit or overdraft. The reason lenders watch over this is because they want to know you’re able to take your finances responsibly.

Check your address history is keyed correctly

Sometimes it can be perceived on your credit report that you are living in two places at the same time if providers have yet to be told that you have moved houses. It is pivotal that the addresses which you’re updating are spelt correctly; If you have been residing in a flat this can be a bit more complex as the address can be formatted in different ways.

Keep up to date with credit accounts

If you no longer use certain store/credit cards you should get into contact with the providers to close the account for extra security. In the short term, this could be seen as having a brief impact on your score as the lender can’t tell who’s closing the account e.g. you or the provider but this will be for the better and an advantage to you in the long run. This is a good thing to do to reduce your chance of becoming a victim of fraud if you don’t notice you have a lost a card that you may use regularly.

Look out for financial links to others

Having family members or ex-partners connected to you financially could mean that they’re affecting your credit score unknowingly. Although you won’t be able to get the financial association removed if the account is still active though. To remove the links between you and another individual you should contact the reference agencies and make a request. The sooner you do this, the more beneficial it will be.

Many consumers feel that credit scoring is an unfair way of applications being assessed though lenders themselves are indifferent to this idea as it makes their overall job easier. It is more cost-effective for them to operate this way and computers give more consistent outcomes. On the other hand, some lenders do still do it the old-fashioned way but still apply the same rules about the number of defaults and CCJ’s they will allow.

When setting up your application, be sure your report is up to date to increase your chances of being accepted the first time. The more in-depth information which your Specialist Mortgage Advisor in Nottingham has at hand, the better.

What is a 95% Mortgage?

95% mortgages are exactly what you might imagine, where you are borrowing against 95% of the property price, and then the remaining 5% is paid with your deposit. To demonstrate an example of this, let’s say you wanted to buy a property that was worth £150,000 with a 95% mortgage. For this, your minimum deposit would be £7,500 and you would borrow the remaining £142,500. 

95% Mortgage Advice in Nottingham

As we learned from the March 2021 Budget, Prime Minister Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, introduced with the hope of making 95% mortgages more readily available from the high street banks.   

This really is great for First-Time Buyers and Home Movers, as this scheme will stick around until December 2022. Specific terms and conditions will apply. If you Get in Touch with a Mortgage Advisor in Nottingham, they will be able to look at with you, to see if you qualify.    

All our clients who wish to work with us for Mortgage Advice in Nottingham, will receive a free, no-obligation mortgage consultation. During this consultation, a member of our dedicated mortgage advice team will be able to make a recommendation on the most appropriate path for you to take.

Can I get a 95% mortgage?

You may find that 95% mortgages tend to be more for First-Time Buyers in Nottingham & those who are Moving Home in Nottingham. Saving for a 5% deposit sounds like a pretty simple plan, but you’ll still need to have a really good credit score and be able to prove to the lender that you are able to afford your monthly mortgage repayments, before they will consider you for a 95% mortgage.

Improving your credit score

You’ll need to show the lender that you have a good credit score before you’ll be accepted for a mortgage, especially when you’re looking at getting a 95% mortgage. To improve this, we would recommend things like paying any current credit commitments on time, ensuring your addresses are updated and making sure that you’re on the voters roll. For a more detailed look at our credit score tips and tricks, please see our How to Improve Your Credit Score guide. 

Affordability 

Affordability is something else you should also consider. Providing the lender with enough details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments will allow them to get a general overview of whether or not you are able to afford a 95% mortgage.

Can my family help me get a 95% mortgage?

It’s not uncommon these days to see lots of family members helping each other find their footing on the property ladder, with this especially being the case with parents and their desire to see their children succeed. This normally happens by a family member gifting the deposit required to proceed with a mortgage. Known by many as the “Bank of Mum & Dad, Gifted Deposits should be solely a gift, and not a loan to be paid back at any time. The lender will need this to be agreed and proven, before they will accept using it towards your mortgage. 

How do I choose the right 95% mortgage?

It’s always to make sure you have the right type of mortgage, especially with something like a 95% mortgage. Each type works differently, with that choice allowing you to find one that is most appropriate for your personal circumstances. 

Some homeowners and buyers tend to prefer a Fixed Rate or Tracker Mortgage, mortgage types which mean you either keep interest rates at a set amount or your interest rates will instead be tracking the Bank of England base rates.

On the other hand, you might be more comfortable with the way Interest-Only or a Repayment Mortgages work. Interest-Only allows you to benefit from cheaper payments until you need to pay a lump sum once it reaches its end (only really now used for Buy-to-Lets), whereas a Repayment mortgage (your average normal mortgage) means you’ll be paying a combination of both interest and capital every month.

You can read more about each of these different types in our Different Types of Mortgages article.

How can a bigger deposit help with my mortgage? 

A mortgage is incredibly important financial outgoing, and as such you need to be ready for it. If you aren’t ready ahead of time, you might find yourself more likely to be affected by things like higher interest rates, remortgaging difficulties due to less equity and then negative equity.

Do not worry though, as these problems can be avoided if you’re savvy with your process to begin with. The more deposit you put down, the less risk the lender will see you as.

Putting down a larger deposit would not only reduce the interest rates by a good amount, but would also give the property more equity and reduce the risk of negative equity, which will be because you are borrowing less against your potential new home.

So, whilst the risks may provide initial uncertainty, planning ahead and saving for a larger deposit to access something like a 90% or even an 85% mortgage will be very helpful in your mortgage process and something you’ll be able to reap the rewards from down the line. 

Reasons Why Your Mortgage Application Might Be Declined

Credit Score Mortgage Advice in Nottingham

Failing a credit score for a mortgage

Even though carrying out a credit score for a mortgage is not a challenging task, we do find that some applicants are unable to meet the lender’s criteria. This happens cause certain mortgage lenders have a high set of requirements to meet the lender’s criteria. In some cases, applicants may not be able to meet the credit for the mortgage and you may find the lender will not communicate to you the reason for this. This is usually the case if you approach a bank and can be a frustrating matter to many.

This is where we can help! If you approach a Mortgage Broker in Nottingham, you can get a better understanding of your credit score. Here at Nottinghammoneyman, we have a team of Mortgage Advisors in Nottingham who can recommend the most suitable lender and work hard towards achieving your mortgage goals.

Improving your credit score may involve you having to meet particular parameters. For instance, pay off your monthly balance in full when it comes to your credit card balance. Being on the voters roll in your local area can help with boosting your credit score. For even more of a positive impact, get rid of any bank account, store cards and credit cards that you are no longer using. Having a clean record does help.

In the case where one lender rejects you application, you may find that another lender accepts you. To determine this, you need to have the least amount of credit footprints registered in your name. This should be clean when your name is in the system and should not have a pending balance in order for your lender to trust you and your credit score easily.

Declined for a mortgage on affordability

For those who are looking for Specialist Mortgage Advice in Nottingham, you need to take into account that every mortgage lender uses a range of methods to work out the amount that you can borrow. Therefore, you might find 10 different approaches from 10 different lenders for the same mortgage application.

In some cases one lender may be more lenient if you are Self Employed in Nottingham, with your overtime and bonuses counting towards all of your income. Some lenders might not factor in bonuses as income, whereas, some might be lenient to accept tax credits, maintenance, as well as child benefit.

Approaching Specialist Mortgage Advice in Nottingham are very beneficial. An expert mortgage broker will have knowledge of how lenders work and speak about the chance of your application being successful. Contacting a professional for an expert opinion to see whether you will meet the lender’s requirements. From this, you can see what you need to do to meet those requirements so you can move forward with your potential mortgage.

As a Mortgage Broker in Nottingham, we do strongly suggest you to obtain Specialist Mortgage Advice in Nottingham prior to filing an application. If you do have a mortgage expert included in your process they can provide a helping hand and guide you on the best path. With this, you can organise yourself and reduce the risk of being approaching the wrong lender.

Do you find yourself outside of lending policy?

Each lender has their own refined lending criteria. As mentioned each lender’s criteria is different so you will find some are more fitting than others with your financial circumstance. Below are some of the reasons why an application may be declined because it does not reside inside the lending policy;

• Loan amount not meeting the minimum or maximum limit
• Mortgage terms do not meet the minimum or maximum age limit
• Sole mortgage requested by a married applicant
• Property construction not meeting required standards
• Insufficient deposit
• Non-satisfactory credit history
• Insufficient period of employment or self-employment

As a Mortgage Broker in Nottingham, we can utilise our knowledge and experience to find you the most appropriate product for your personal and financial situation. You might feel your situation is too complex, however, please don’t hesitate to speak to our team. Through our experience, we have encountered a variety of customers and it’s very likely we have encountered a situation similar to yours. If you are in difficulty with the mortgage process and are looking for a helping hand in overcoming any hurdles, book a free mortgage appointment with one of our advisors today!

Specialist Mortgage Advice in Nottingham

What do Lenders Look for When Assessing my Bank Statements?

Specialist Mortgage Advice in Nottingham

When lenders ask for your bank statements, they will be looking for many different things. However, their main objective is to assess whether or not you are able to manage your money responsibly and is likely to keep up to date with their mortgage payments. In recent months, one question is being asked by applicants quite a lot: “do gambling transactions look bad on my bank statements”.

Why does the lender care whether I gamble or not?

Regardless of whether you use casino and bingo sites online or take a stab at The Grand National every year, there is nothing illegal about properly licensed gambling. Many of the “bookies” as they’re affectionately known, advertise on mainstream TV and radio. To many, gambling is simply a hobby or pastime similar.

However, it shouldn’t be forgotten that even the gambling advertisers urge customers to “please gamble responsibly” and it is something highly important to remember when applying for a mortgage. Whilst it’s not up to the lender to tell you how to live your life, how to spend your money or indeed to moralise on the ethical rights and wrongs of gambling, they do have a duty (underscored by mortgage regulation) to lend responsibly to their customers.

If lenders need to prove to the regulators that they are being careful with their lending decisions, it isn’t entirely unreasonable of them to expect the people they lend to, to also be careful when it comes to their personal finances. Give it some thought; If you were lending your own money, would you lend it to the applicant who gambles recklessly or someone who is sensible?

Is it still possible to get a mortgage if I’ve got gambling transactions on my recent bank statements?

Having the odd gambling transaction on your bank statements doesn’t automatically mean you will be declined for a mortgage. That being said, the lender will consider whether these transactions are reasonable and also responsible. They will especially look at the frequency of these transactions, the size of the transactions in relation to the person’s income and the impact it has had on your account balance.

If these transactions don’t happen to often, are not large amounts of money and make no significant impact on a regular credit bank balance, then they are not likely to be regarded as important. However, if you bet money frequently or you are constantly overdrawn, the lender is more than likely going to see that as being irresponsible and decline your mortgage application.

Is there anything else lenders wouldn’t want to see on my bank statements?

As discussed, lenders are looking at your bank statements to show how you manage your money and to help them determine whether or not you are financially stable or the evidence that you are not.

Remember, lenders are financial institutions that, either directly or as part of a wider group, tend to sell current accounts, overdraft facilities credit cards and personal loans. You must understand that these things can all play an important role in financial planning. The key for a mortgage applicant is how these facilities are all managed.

For example, having an overdraft facility and occasionally using it, is not necessarily a bad thing, whereas regularly exceeding the overdraft limit is not so good. With this in mind, lenders will look for excess overdraft fees or returned direct debits because these would normally show that the account is not being handled the best way by the customer.

Other things to look out for include credit transactions from payday loan companies; “undisclosed” loan repayments (i.e. if you said on the application that you have no other loans but there appear to be regular loan payments, this could be a problem); they would look out for any obvious missed payments; finally, they might also consider how much of a typical month is spent overdrawn – i.e. if you only just go into credit on payday and for the rest of the month are overdrawn, how sustainable is this mortgage?

What can I do to improve things?

The smart answer is, if possible, plan ahead. Generally speaking, a bank would ask for up to three months of your most recent bank statements. These will show your salary credits and all your regular bill payments. If you feel like you want to apply for a mortgage in the near future, try to make sure that you avoid anything that could harm your chances. Take a break from gambling for a short while and work on presenting your bank account in the best way you can.

As someone who provides expert mortgage advice in Nottingham, our team may be able to help you, as there are some lenders who may ask for fewer bank statements than others. Some may not even ask for them at all. However even these lenders would reserve the right to request bank statements in certain circumstances, so your best port of call is to be as smart as you can be ahead of making any mortgage application. Remember, if you do gamble, please gamble responsibly!

If you are a First Time Buyer in Nottingham who doesn’t know a lot about mortgages, you should definitely get some Specialist Mortgage Advice in Nottingham from a trusted Mortgage Advisor. They will guide you through the whole mortgage process and help you with your application and get you on track with your finances.

First Time Buyer Mortgage Advice in Nottingham

Agreement in Principle and Soft Credit Searches

Mortgage Advice in Nottingham

In contemporary settings, the general public are now paying more attention to their credit rating than ever before which makes them reconsider their financial decisions. Consumer awareness of credit scoring appears to be higher than ever before and the majority of people who get in touch with our team appear to have already reviewed their credit report online to get further ahead in the mortgage process.

There are multiple credit reference agencies that are available for a person to utilise. The most common are companies such as Experian or Equifax but we recommend new clients towards Check My File for a 30-day free trial, following this it comes to £14.99 a month but can be cancelled any time. This report offers our clients a collation of information produced in an understandable colour-coded report.

Clients usually ask if our First-Time Buyer Mortgage Advisors in Nottingham will be doing a credit search on them because they are aware that too many searches can have a downward effect on their credit score. Lenders always run credit checks but we make sure our Mortgage Advisors seek out a client’s permission before doing these.

Credit searches from banks come in two forms; hard searches and soft ones.

Credit search Mortgage Advice in Nottingham

What is a hard credit search?

A hard credit search is one where it will offer a more in-depth look into your credit report, if any financial institution carrying out these should prioritise seeking your permission to do this before anything else. The benefit of a ‘hard’ search is that because the lender is looking into your situation closely, if you pass the credit score than your chances of your application being successful will improve drastically. The only thing at that stage that can go wrong is, if, for any reason, you cannot provide evidentiary support of satisfactory documentation to back up the information in which you have disclosed or it turns out that you have provided false details.

The flipside of the benefits is that the hard search leaves a ‘footprint’ on your credit file so that anyone who takes a look at your report can see that it has been carried out. This isn’t necessarily a bad thing but if for example, you have multiple searches included in your credit file in a short period of time then it could be perceived as you are applying for a vast amount of credit at the same time. The search will not state as to whether your application was successful or not but Lenders will sometimes wrongfully assume that you are being declined with the mind frame of “Why else would you go to Lender number 2 unless Lender number 1 had said no?”.

The odd hard footprint on your record is no big deal so this doesn’t give reason to worry too much about it; just take precaution in having too many.

What is a soft credit search?

The other form – a soft credit search – is a ‘lighter’ search which looks at your financial situation and would be the type of search that would be carried out on price comparison websites to let you know what may be available to you, or it could be used to verify your identity. Some Mortgage Lenders carry out soft searches and nowadays, even more lenders seem to be changing to this type of search. Whilst less information is offered to who is carrying out a soft search on you as opposed to what they would receive if it was a Hard search, if you obtain an Agreement in Principle from one of these Lenders, it’s usually still an extremely strong indication that your full application will be accepted.  

One of the most beneficial things about soft searches is that whilst you will be able to see soft searches that have been carried out on you if you check your credit file (people are usually surprised by how many have been carried out on them) these searches are not visible to other Financial institutions like Banks. This means you can apply for an Agreement in Principle for a mortgage without it damaging your credit score irrespective of whether it is successful or not.

If you are going through the thought process of putting forward an offer on a property, our First Time Buyer Mortgage Advisors in Nottingham would recommend having a mortgage agreement in principle in place prior to contacting the Estate Agent and whilst gaining this, you will also have the option to obtain Specialist Mortgage Advice in Nottingham. You want to be able to give yourself the best possible chance of securing the property you want at the lowest possible price so if you present yourselves as having your finances in a good place then you are definitely giving yourself the upper hand in the situation. Being in possession of an Agreement in Principle could also mean that the Agent is put off trying to ‘cross-sell’ their own in-house mortgage services to you.

What to Consider When Buying a Property With a Partner or Friend

Moving House Mortgage Advice in Nottingham

Over the years, property price inflation has far outstripped wage increases. It’s common to find mortgage applicants, especially First Time Buyers in Nottingham, find it difficult to raise enough funds to purchase a home with the current property prices.

In this circumstance, many home buyers will explore the option of moving in with someone else as a means to reduce costs. A joint mortgage can be a huge benefit with the mortgage lender taking two incomes into account when it comes to calculating the maximum amount you can borrow.

Furthermore, you have the chance to split costs making monthly mortgage payments more affordable for you. On the other hand, it’s not as straightforward as moving in with someone instantly.

The process will involve lots of mortgage lending criteria that you will need to meet and questions to ask yourself prior to making the big decision. Our extensive experience as a Mortgage Broker in Nottingham has given us the opportunity to answer many questions regarding joint mortgages.

Check out the video below which will answer a range of popular questions that will hopefully help you with your mortgage journey.

How many people can jointly own a property?

There is a chance to have up to four names on a mortgage as a way to co-own a property, however, this all boils down to what your mortgage lender offers.

In the circumstance where someone decides to get out of the mortgage, the joint owners left in the property will have a legal right to remain living in that property, except if a court overrules it. Therefore, it’s best to be wary of who you decide to buy a home with.

If the options are available to you, homeowners with a joint mortgage may look to increase the mortgage, however, all parties mentioned on the contract must agree to this. With this in mind, you need to think about the property’s future plans.

Joint tenancy or tenancy in common?

As a Mortgage Broker in Nottingham, we usually find that married couples or applicants in a civil partnership will decide to go with a joint tenancy, which means you have equal ownership of the property.

If you are looking into Remortgaging in Nottingham at some point in the future or looking to sell further down the line, each party will need to agree before you carry on with the process.

Tenants in common are generally popular amongst applicants that are relatives or friends. With this, you both have equal ownership of the property but are not obliged to do so in shares.

This normally occurs when one party is making significantly more money than the other. As a tenant in common, you can act individually. For instance, you can give away your share of the property to someone else.

What happens if one party stops making mortgage payments on a property?

One of the drawbacks to being a property co-owner is if a party stops paying their share of the property, which is sadly more likely with multiple people attached to a property. Just like with any mortgage, you need to keep up with the payments you contractually agreed to.

In the case where one party is struggling to keep up with their monthly mortgage payment and decides it’s best to stop paying, the other party will need to make up for this payment.

You are at risk of ending up in arrears if the payment isn’t paid which, in turn, may have a negative effect on your credit score and can affect your chances of getting another mortgage in the future.

The way you view this type of mortgage is that you don’t own whatever the percentage you pay but you’re a combined entity and own 100% jointly.

How do I remove my ex-partner from my mortgage?

In some cases, it can be a difficult process to remove a person’s name from a mortgage and this is due to a range of reasons.

Through our time providing open and honest Mortgage Advice in Nottingham, we have found that the main reason is that the mortgage lender is not confident in the applicant being solely on the mortgage and will struggle to keep up their monthly mortgage payments. If you are unable to do so, they are unlikely to allow you to do so.

You have got to remember that a mortgage is a very large financial commitment which is why it can be difficult to make changes to something that has already been agreed upon.

Regardless of whether you have managed to keep up with your payments since your ex has moved out, it’s required that a mortgage lender should carry out an affordability assessment on you (similar to what they did at the point of purchase), to make their own judgement on whether or not you can afford it.

A large number of mortgage lenders don’t particularly favour putting applicants on their mortgage as a sole applicant. This is because having more names on a mortgage lowers the chance of arrears occurring. By doing this, there is more than one source of income.

In the circumstance where your sole-name mortgage request is declined by your mortgage lender, we do strongly recommend speaking to an expert Mortgage Advisor in Sheffield about your situation. It could be incredibly beneficial to get seek Specialist Mortgage Advice in Nottingham and help you get a sole-name mortgage.

As well as this, we do advise you to speak to family members to see if they can help. One way they may be able to help your situation is by replacing your ex on your mortgage or through a gifted deposit which could help reduce the amount you owe on the mortgage balance.

How do I remove my name from my ex-partner’s mortgage?

In the unfortunate case where you and your partner split up and you are the one moving out of the property, you still need to keep up with paying your monthly mortgage payments, regardless of whether you and your ex have come to an agreement that they will be the one making the payments.

Similar to removing an ex’s name off a mortgage, it’s the same concept as removing your name. Your designated mortgage lender will only allow you to remove your name if they are confident in your ex being able to afford the payments through carrying their affordability assessment.

Sometimes, applicants will arrange with their partner to send them money each month, therefore, you need to look at your own credit report to see that they are paying their portion as well. There could be the potential risk of payment to default which has a negative impact on your own credit score.

For applicants that are still on their ex’s mortgage and are looking at Moving Home in Nottingham, into another property and obtaining a new mortgage, your mortgage lender will take into account your circumstance. This could result in you not being able to borrow as much as you’d like.

There are always potential risks when it comes to buying a property with anyone because of a change in circumstances. Here at Nottinghammoneyman, we do advise that you approach the world of home buying with an open mind. Don’t panic if your plans change unexpectedly, it’s very likely there will be a solution to this.

If you are having trouble with your joint mortgage, our team could help! Book a free mortgage with one of our friendly advisors to get Mortgage Advice in Nottingham. Simply get in touch with our team or book online today.

Mortgage Payment Holidays

Mortgage Advice in Nottingham for Mortgage Payment Holidays

At the start of the Coronavirus pandemic in March 2020, the Government promised that all borrowers would be able to access a three-month mortgage payment holiday if they needed it. Most lenders followed the Government’s guidelines and did their best to help their borrowers during these hard few months.

We have thought carefully about the possibilities of what could happen to your mortgage over the next few months and are working very closely with all of our lenders to ensure that if anything changes, we can inform you right away and recommend the best option for you to take so that you still feel secure and happy with your mortgage.

What is a Mortgage Payment Holiday?

A Mortgage Payment Holiday is an agreement settled between you and your bank, building society, or mortgage lender to put off your monthly mortgage payments for a certain period, in this case, 3-months.

However, the break-in your mortgage payments does not mean you never have to pay the amount back. The interest you defer is re-added onto the loan amount whilst your capital balance will not decrease. Simply put, the mortgage amount will increase a slight amount, and you will continue to attract interest in the overall amount.

When it comes to being ready and able to pay your mortgage payments again, your monthly payments could then get recalculated at a slightly higher level or your mortgage term increased. Most lenders would prefer the first option as with some borrowers, and it could take them over retirement age.

Depending on the conditions included in your mortgage deal, you may be able to pay off a lump sum at some point down the line to help you get back to speed with where your mortgage originally would have been.

Mortgage Payment Holidays are available both for those with residential or Buy to Let in Nottingham mortgages, which means landlords also have assistance if rental payments are affected.

What is the Government Proposal?

• Mortgage lenders will offer an automatic 3-month mortgage payment holiday for customers who are affected, whether it be directly or indirectly, by COVID-19.
• The mortgage payment holiday will apply to customers who are up to date on their payments, not in arrears, and wanting to self-certify that COVID-19 impacts them
• In any case, this means that there will be no need for lenders to complete or reassess an income and expenditure assessment or an assessment of alternate payment options as ordinarily required under MCOB.
• This proposal will allow lenders to be more responsive to customer needs and offer relief in a simple way to customers which is quick and effective if Covid-19 has impacted them.
• Lenders will make it apparent to customers that interest will accrue in the holiday period, and this will need to be made up.
• Customers who wish to undertake a full assessment of their ability to pay or financial difficulty may still do so if they feel the need.

Mortgage Payment Holidays: How do I apply?

When reviewing your Mortgage Payment Holiday, we would recommend speaking to a Mortgage Advisor in Nottingham in the first instance rather than instantly looking to undergo a mortgage payment holiday.

Suppose there is not a pressing need to do so as Lenders will be prioritising the most urgent cases first. By approaching our Mortgage Broker in Nottingham, we will be able to talk through your circumstances and look at all options available for your situation.

For a customer, up to date with payments, not in arrears and impacted by COVID-19:

• the customer would have to contact the lender and inform them of their situation, e.g. that COVID-19 affects them
• the lender would accept these details from the customer and offer the automatic 3-month mortgage payment holiday that is applicable.
• No evidence will have to get retrieved from the customer.
• The lender highlights that interest will accrue and the customer will be contacted at the end of the three months to complete an assessment of the customer’s circumstances.
• The lender will know that if the customer wished to complete a full assessment now, there might be other forbearance options more suitable to the customer.

At the end of three months, an arrangement to pay will get agreed with the customer. According to their circumstances to recover any shortfall that has possibly occurred. At the same time, ensuring that the mortgage remains affordable and sustainable for the customer.

Mortgage Payment Holidays – What does this mean for my credit score?

When mortgage payment holidays get carried out, they show on your credit score as a negative impact, but most lenders have now stated that any cases linked to the virus will mean that this does not apply in the current scenario.

When looking into the matter, it is an important reminder that you ask the question directly to your lender and makes a note of the response. Keeping a record of the name of the person you are speaking to and the date of the enquiry. In any case, this will avoid any possible confusion down the line as different lenders are carrying out other things.

Will I still be able to remortgage or take a product transfer with my lender?

The matter of remortgaging and product transfer have come to be quite controversial elements at this moment in time. There has been apparent evidence suggesting that lenders are asking borrowers not to make any unnecessary changes to their mortgages whilst within the current situation.

However, Lenders are not allowing these to happen during this time. However, borrowers who are near the end of their existing product might have to move on to the higher lenders variable rate.

In any case, this could perhaps mean to many borrowers acting too early will find themselves on a mortgage payment holiday that gathers interest on an even more expensive variable rate which could get avoided.

Our Mortgage Broker in Nottingham team highly recommend speaking to a Mortgage Advisor in Nottingham before you take any further action to see what the safest option would be, and the most sensible way forward.

I have exchanged contracts – can I complete my purchase?

Whilst the Government has advised people not to move to a new house unless necessary. So, if contracts have already gotten exchanged and the process is at the end with all in agreement, then going ahead and completing the purchase will be fine.

Should I pull out of my purchase?

It would help if you did not pull out of your purchase unless, for example, you are worried about losing your job because of Coronavirus. Our Mortgage Advisors in Nottingham are advising everyone to proceed as usual for now and “wait and see” – you are not committed to completing your purchase until contracts get exchanged.

What “other options” are available?

There are other options available, where some lenders are willing to offer ‘interest-only’, which will help reduce monthly payments drastically but not to add any increase to the loan amount by still servicing the interest payments each month.

It may not get deemed necessary to convert all your mortgage to interest-only and even putting part of the mortgage on this basis could help relieve some tension in your mortgage payments.

To borrowers who hold savings may find that remortgaging onto an offset basis may give them some more structured support as this will reduce monthly payments whilst their savings remain untouched.

An example of this for individual borrowers who may not understand offset mortgages would be as followed:

– Someone with a £400,000 loan and £100,000 in savings would only pay interest on £300,000 reducing their payments accordingly.

For others, a straight Remortgage in Nottingham to another lender could offer some relief. By calculating the cost of any Early Repayment Charges that may get incurred. It may well be enough to ease the burden or simply extending the term of your mortgage, which could be seen as helpful if you are struggling with your mortgage term or monthly payments.

Suppose you would like to discuss any of these options with a Mortgage Broker in Nottingham or to have a helpful chat about your current situation. Please get in touch with a Mortgage Advisor in Nottingham.

Specialist Mortgage Advice in Nottingham