Introduced following the credit crunch, as a government initiative, Shared Ownership has become a popular scheme to guide applicants towards homeownership.
Aimed primarily at first time buyers in Nottingham experiencing difficulty in entering the property market, the scheme provides a more achievable path to owning a property. This article explores the fundamental principles of this scheme and the qualifying criteria you need to meet.
As hinted in the name, you don’t own a property outright with Shared Ownership. The scheme enables you to acquire a certain portion of the property, typically between 25% and 75%. You’ll then pay rent on the remaining portion owned by the housing association.
The scheme allows individuals to own a home in a manageable way compared to taking out a mortgage on 100% of a property.
Yes, it’s often possible to increase your share in a Shared Ownership property in Nottingham through a process known as “staircasing.”
Staircasing allows you to buy additional shares in your home, gradually increasing your ownership percentage over time. This can be a beneficial option for customers who wish to own a larger portion of their property, potentially leading to reduced rent payments on the remaining share.
However, it’s important to note that the specifics of staircasing can vary depending on your housing association or shared ownership provider, so it’s advisable to discuss your options with them directly to understand the process and any associated costs involved.
To qualify for the Shared Ownership scheme, the first requirement is that your annual household income should be less than £80,000.
At the time of applying for the scheme, you shouldn’t own any other property. The scheme is most commonly used by first time buyers, but home movers can access it too.
You must have a good financial record, this means that no mortgage or rent payments have been missed, and a positive credit history is maintained.
Moreover, you have to demonstrate the ability to meet the costs that come with Shared Ownership in Nottingham, ensuring that you will be capable of meeting the financial commitments that come with this homeownership route.
If you ever get to the point where you own 100% of the property, you attain the right to sell your property.
However, if you do not own 100% of the property the housing association retains the first refusal rights. It’s only after you own the property that you become free to sell the property to any prospective buyer as you deem fit.
As a mortgage broker in Nottingham, we specialise in helping applicants with their Shared Ownership mortgage in Nottingham.
Our expert mortgage advisors in Nottingham are available 7 days a week to help answer all of your Shared Ownership questions. Whether you’re a first time buyer or looking at moving home in Nottingham, we’re equipped to offer the necessary support.
Book your free mortgage appointment online today or give us a call to discuss your mortgage options in Nottingham. We’ll aim to understand your specific circumstances before offering tailored advice on how to best achieve your homeownership goals within the bounds of your financial capability.
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.
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.
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 in Nottingham Scheme when purchasing from the local authority, such as council or housing association.
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.
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.
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:
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.
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.
Introduced in 2014, following the success of the Help to Buy Equity Loan Scheme, the government unveiled a ground-breaking initiative aimed at addressing the low rates of homeownership among members of the UK’s armed forces.
Known as the Forces Help to Buy Scheme, this program extends its benefits to individuals serving in the Tri-Service, encompassing the Royal Navy, Royal Marines, Army, and Royal Air Force, provided they meet the specified eligibility criteria.
Additionally, the scheme aligns with the Ministry of Defence’s Defence Accommodation Strategy, which strives to ensure that everyone under its purview enjoys access to quality housing solutions.
Embedded within this strategy is a recognition of the significant positive impact that homeownership can have on individuals with inherently mobile careers. This impact spans partner employability, stable educational opportunities for children, and continuity for service members as they transition from active duty.
While originally slated to conclude in 2019, the Forces Help to Buy Scheme in Nottingham has witnessed extensions, ultimately transforming it into a permanent policy. This ensures that current and future service members can continue to benefit from its provisions.
The Forces Help to Buy (FHTB) Scheme operates in a straightforward manner. Serving personnel have the opportunity to borrow up to 50% of their annual salary, with a maximum cap of £25,000, and this loan does not incur any interest charges.
These funds can be utilised to purchase either a first home or a new one. Eligibility for this scheme extends to all active service members who have met the requisite service duration, are not reservists or part of the Military Provost Guard Service, have at least 6 months remaining in their service when applying, and meet the relevant medical criteria.
It’s important to note that there may be exceptions to these criteria, especially when considering unique medical or personal circumstances. For comprehensive details regarding Forces Help to Buy in Nottingham and related information, you can refer to the government guidance website.
One of the most appealing aspects of FHTB for many individuals is that you do not need to have existing savings to utilise this scheme for purchasing a home. These funds can also be used towards your deposit, as well as covering various associated fees such as those for solicitors, estate agents, and stamp duty.
From a deposit perspective, the good news is that virtually all mortgage lenders accept funds from FHTB. Furthermore, the scheme offers more relaxed terms compared to some other housing assistance programs.
While the Help to Buy Equity Loan, for instance, typically required repayment within 5 years, Forces Help to Buy in Nottingham allows for repayment within a more accommodating 10-year timeframe.
As a dedicated and reliable mortgage broker in Nottingham, we hold a deep appreciation for our role in helping clients throughout the UK with their mortgage needs.
Our primary aim is to offer unwavering support and guidance throughout the entire process of securing a mortgage for your home purchase.
From the moment you reach out to a member of our team at Nottinghammoneyman, right through to the successful completion of your mortgage and even beyond that stage, your dedicated mortgage advisor in Nottingham is committed to ensuring a seamless and stress-free experience.
We prioritise addressing all your requirements and concerns along the way. To learn more about how we can help you, we invite you to schedule a free mortgage consultation.
During this session, we will carefully evaluate your unique situation and provide expert guidance on the necessary steps. Additionally, if possible, we will strive to secure an excellent mortgage deal that suits your specific needs. Your satisfaction and peace of mind are our top priorities!
Note: The Forces Help to Buy is not the same as the standard UK Help to Buy Scheme in Nottingham or Shared Ownership Scheme in Nottingham.
For currently serving service members and homeowners in Nottingham who are 55 or older and considering the use of Forces Help to Buy, exploring options such as equity release in Nottingham or retirement interest-only mortgages (RIO Mortgages) can be a valuable decision.
This is particularly relevant because forces pensions may offer advantages in these situations.
To understand the features and risks of equity release in Nottingham and lifetime mortgages, ask for a personalised illustration.
A lifetime mortgage may impact the value of your estate and it could affect your entitlement to current and future means-tested benefits. The loan plus accrued interest will be repayable upon death or moving into long-term care.
So you have your eyes set on a property and you want to make your first offer. Do you have your agreement in principle at the ready? Do you have a mortgage deal lined up and waiting? If not, these need arranging as soon as possible.
You have two options in this situation, you can either go through the mortgage process on your own or gain the expert help from a Mortgage Advisor in Nottingham. It’s entirely up to you, however, just know that there is a big difference between the two options.
If you are opting to take things into your own hands, which is perfectly normal, just know that you could potentially be missing out on countless competitive mortgage deals. When you approach a bank/lender for an offer, you are limited to their products and their products only. They may have an offer that suits your personal and financial situation just right but they also may not.
If you are declined by your bank/lender, you may need to go down the specialist mortgage advice in Nottingham path and see if they can find any specialist deals that will match your specific situation.
If you decide to start your mortgage journey with a Mortgage Broker in Nottingham, you will be taken care of by a professional mortgage expert right from the get-go.
Firstly, you will receive a free initial mortgage consultation. During this step, you will speak to one of our friendly team members who will talk to you about the process and get some basic information from you. Once we have your details, we can move forward and pass you over to a Mortgage Advisor in Nottingham who will continue your mortgage process wit you.
It’s your advisor’s job to find you the most appropriate mortgage deal for your circumstances. They will search through thousands of mortgage deals until they find the best one for you; whether you are looking for a buy to let mortgage in Nottingham, a remortgage in Nottingham or even a Right to Buy Mortgage, we are sure that our excellent advisors will match you with a great deal.
It’s often the case that our customers are first time buyers in Nottingham or people who have been declined by their bank due to strict lending criteria. If this isn’t your situation, it doesn’t mean that we can’t help you as we also deal with lots of other mortgage situations as you know.
Different situations also fit into these categories, for example, you could be wanting to look at remortgaging for Home Improvements, the different schemes or it could be something specialist. Whatever your situation, we are sure that we’ll be able to help answer some of your questions.
Our Mortgage Broker in Nottingham is here to guide you through the mortgage process with a fast & friendly service. We know that the home buying process can be stressful and that’s why we always recommend getting a helping hand from an expert. Here is an insight into our Mortgage Broker service:
To see find out even more information about our great mortgage advice service, feel free to take a look at our service page.
At Nottinghammoneyman, our services are available from 8am – 10pm, 7 days a week. You now don’t have an excuse to get in touch with your Mortgage Broker in Nottingham. We can’t wait to hear from you, claim your free mortgage consultation in Nottingham today.
From the set up of the Help to Buy Mortgage scheme being put into action, many major Builders started selling houses by leasehold, when houses were traditionally freehold. This had built up to be controversial issue overtime from which the Government felt the need to intervene.
Some of the major housebuilders within the country have been accused of prioritising profit over social conscience. They’re doing so by trying to balance the fact homes are needed for families and that shareholders are also tended to; this leads to the media regularly accusing them of ‘Land-Banking’, which is when they own land for a certain period of time and not build on it due to market conditions not being favourable.
Consolidation within the industry would often mean land gets inherited by Builders and their organisations which come as a leasehold basis. However, to appease buyers, they will state that both leasehold and freehold properties are available to appear that they have access to an informed choice.
The market appeared to be swaying too much towards leasehold for the publics liking, especially when observations of how much profit the Builders had been making off the back of the leases. Things became apparent when the Chief Executive of one of the UK’s largest Builders received a bonus of over £100m. At that particular moment in time, it was one of the largest bonus paid in corporate history.
Some Leasehold first time buyer in Nottingham Homeowners became shocked when quotes for home alterations were surfacing as thousands of pounds in fees, after seeking permission from Leasehold Management Companies.
Some of the annual ground rents were to double every 10 years and owners could see that selling their home in the future once these increases have kicked in would become a lot more difficult. After the topic was subject to a debate in parliament after MP’s were notified, the government agreed that if you were buying a house then it is only reasonable that you should, in fact, own the freehold.
If you come to realise that you are in ownership of a house and didn’t realise that it was leasehold then you should have been made aware at the start. If you as a first time buyer in Nottingham, feel that the acting Solicitor did not inform you of the full facts about the lease you signed, then you should re-contact them immediately to investigate why. Although it is not advised, you do have the option to contact the freeholder at any time, if you are interested in buying the freehold from them.
Looking past the leaseholds, there is also the issue of service charges. When permission is granted by Councils for Housebuilders to build on land, they don’t always agree to adopt the common areas and roads. That would mean that the upkeep of these areas would need to be outsourced, most usually to a private company. The owners residing in the area make a financial contribution to this maintenance work on top of their council tax. By the way, this can happen on both leasehold and freehold.
The costs of the service charges can rapidly increase which infuriates homeowners who are affected. Sometimes the residents in the area group together to form an association which might allow them to choose a different service provider.
If you’re thinking of buying a leasehold property, make sure to take advice from your Solicitor in regards to the lease and be informed as to what this entails. It’s so easy to get carried away with the excitement of buying a home but you need to also take into account that it’s a major investment decision that you need to think about thoroughly with care.
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.
Try it FREE for 30 days, then £14.99 a month – cancel online anytime.
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.
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.
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 buye mortgage advice 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.
Mortgage Protection Insurance is a term used to encompass various types of cover designed to protect borrowers from events which could severely impact their ability to maintain mortgage payments.
There are different variations but when connected to a mortgage they are all there to provide peace of mind and usually fall into the following categories:
As a rule, if the policyholder dies within the term, then the sum assured should be enough to pay off the outstanding mortgage balance and ensure the borrower’s dependents aren’t left with a debt they might not otherwise be able to manage.
Our Mortgage Advisors in Nottingham can run through all the different types of life cover and recommend the most suitable plan for you.
Critical Illness Insurance works in a similar way to Life Insurance, in that it is usually taken for a specific term of years and can have different options such as level/increasing etc. It is designed to pay out a lump sum and, like Life cover, for borrowers, it is typically taken on a decreasing term basis in line with the reduction of your mortgage balance.
The key is that the benefit is paid if you fall victim to one of a number of specified critical illnesses and pays out whatever the long-term prognosis of that illness. The type of illnesses covered vary from company to company, that’s why this type of insurance cannot be solely price-driven and advice is recommended.
In practice many companies will offer Life and Critical Illness Critical cover as a combined policy and would usually payout on the “first event” i.e. whatever happens first – either death or a serious illness – the pay-out is made. They can also be written on a single or joint life basis
Whereas Life and Critical Illness cover pay out a lump sum, Income Protection pays out a monthly sum designed to replace your wages in the event of you being unfit to work. Unlike Critical Illness cover, there are no restrictions on the illnesses or injuries covered, the only factor being whether they make you unfit to work. There are however restrictions on how much you can cover and how quickly benefits would start to be paid.
Like Life and Critical Illness cover, these policies are underwritten based on your health and lifestyle at the time you apply. All income protection policies are written on a single life basis.
Probably the least common of the mortgage protection type policies but can often be valuable – particularly for those with young families. These plans can be taken to cover Life and/or Critical Illness and are underwritten on application in the same way as mentioned above.
However, unlike the traditional forms of policy, rather than pay out a lump sum, the cover would pay an annual or monthly income for the remainder of the term of the plan. Thus, it can replace the income of the main breadwinner for a number of years, dependent upon a particular client’s circumstances and, because of this would usually be written on a level or basis, or an index-linked basis designed to keep up with inflation.
There’s an adage that says you can never have too much insurance. Certainly, many people have one or more of the different types of policy and it would be wrong to think of Mortgage Protection Insurance as just an “either/or” choice. However, in the real world, affordability plays a massive part, so whilst it would be fantastic to cover yourself for every potential opportunity, a good advisor will sit down with you and tailor the type of cover to be the most suitable combination to your family’s priority and budget.
Please give us a call or fill out our enquiry form to speak with one of our Dedicated Protection Specialists.