Can I Get a Mortgage in Harrogate With an IVA?

What is an IVA?

An Individual Voluntary Agreement (IVA) is a legally binding arrangement between a debtor and a creditor.

Its purpose is to create a structured plan for repaying debts over an extended period, typically around five years. Throughout this process, an Insolvency Practitioner acts as a mediator, liaising with creditors to ensure consistent and manageable repayment.

Can I get a mortgage in Harrogate with an IVA?

While obtaining a mortgage with an existing IVA presents its challenges, it’s not an insurmountable hurdle. To explore your options, it’s advisable to consult a mortgage broker in Harrogate.

Engaging a professional is crucial due to the contractual obligations of an IVA. When entering an IVA, you commit to specific terms and conditions that can impact your capacity to secure new credit, including a mortgage. These terms usually extend until all outstanding debts are cleared through the IVA.

This stance is logical as IVAs aim to facilitate better financial management and sustained repayments. Assuming additional credit obligations might compromise your ability to meet the IVA commitments.

Is an IVA right for me?

The central consideration in an IVA is affordability. Creditors need assurance that your repayments remain viable, while you also retain sufficient disposable income for essential living expenses, including housing.

How does an IVA affect my mortgage application?

Having reached a point where an IVA is necessary, your credit history might be significantly impacted. Consequently, obtaining a mortgage with an active IVA in Harrogate could pose challenges. Mortgage lenders tend to hesitate when dealing with individuals perceived as high-risk.

Furthermore, the lender must ensure that you have an adequate amount of disposable income left over. Given an IVA, a considerable portion of your earnings might be allocated to debt repayment. Combining this with mortgage payments might result in inadequate remaining funds each month.

If a reasonable amount of disposable income remains, securing a mortgage could be a possibility. As a reputable mortgage broker in Harrogate, our suggestion is to concentrate on repaying a substantial portion of your debt first before pursuing a mortgage application.

If you’re considering moving home in Harrogate, it might be worth delaying an application for a new mortgage until you’ve settled your existing debt.

Can I get a mortgage in Harrogate after an IVA?

Although the temptation to initiate the mortgage process immediately after settling your IVA might be strong, it’s wiser to assess your current financial stability and ensure your budget accommodates a mortgage.

As experienced mortgage brokers in Harrogate, we advocate rebuilding your credit score, amassing a deposit, and planning for your transition into a new home. Affordability is paramount in home buying; you must ensure you have the necessary funds before committing to a mortgage.

Our specialised mortgage advisors in Harrogate are ready to evaluate your mortgage affordability, even in the context of an IVA. We’ll examine your mortgage alternatives and identify the best path based on your unique financial situation.

To connect with a mortgage advisor in Harrogate, you can conveniently book a free mortgage appointment or remortgage review (if you’re looking for remortgage advice in Harrogate) online or contact our team directly.

What is a Cashback Mortgage?

Cashback Mortgage Advice in Harrogate

We regularly receive enquiries from customers regarding a variety of mortgage types. One we come across every now and again is a cashback mortgage.

In this article, it is our goal to answer all the main questions we hear from customers regarding the topic of cashback mortgages. These include whether or not the mortgage type will benefit you in the long or short term, as well as how it may compare to other mortgage options.

What is a Cashback Mortgage?

Cashback mortgages are a rather self-explanatory type of mortgage available to applicants. After you have finally paid off your mortgage or once your mortgage term has come to an end, you will receive some cash back in your pocket.

The amount that you can get back is usually a percentage of what you have borrowed, say around 1 or 2%. Some lenders will prefer to have a fixed price written in the contract, meaning even with a longer term, your amount won’t change.

Will a Cashback Mortgage benefit me?

Cashback mortgages tend to have both advantages and disadvantages. For example, Cashback Mortgages may also bring along with them a free property valuation or some fringe benefits.

Cashback Mortgages are generally quite attractive mortgage types to customers that are borrowing much smaller mortgages. You will make back some money plus be granted some additional benefits on the side.

If your mortgage lender offers you a reasonable percentage on your Cashback Mortgage, it is worth considering, as this could be a benefit to you in the long term.

One of the main disadvantages to a cashback mortgage is that they have also been known to have rather high interest-rates with them as well.

Different Types of Mortgages in Harrogate

Compared to the other types of mortgages that are available, Cashback Mortgages are often not the most popular mortgages to go with, though they are absolutely worth considering.

We still see come across customers at Harrogatemoneyman every so often who are looking for Cashback Mortgages, and they are a great backup option if you perhaps don’t quite meet the criteria for other mortgage types.

If you would like to receive a much more in-depth viewpoint, be sure to book your free mortgage appointment online. Here you will be able to benefit from Specialist Mortgage Advice in Harrogate.

A member of our brilliant team of mortgage advisors in Harrogate will be able to take a look at your case and determine whether or not this is the right option for you, comparing everything else that may be available to you.

Can I Have Two Mortgages in Harrogate?

Can I have two mortgages at once?

Though homeowners may not be aware, yes it is possible for you to have two mortgages!

Of course this depends on your eligibility. Providing you have enough income, have a strong credit score and a consistent job status, this may become an option for you.

Why would you take out a second mortgage?

To Purchase a Second Home

There are many reasons why someone might want to purchase a second home. For starters, you may be wanting to rent out the home you already have and purchase a new one. This is called a Let to Buy.

You may be wanting to help out your kids by releasing some equity, purchasing a second property and mortgaging it, so that they have somewhere to live.

It’s a lot more common for parents to release equity as a means of gifting a deposit, though this still crops up from time to time, especially when you factor in property price rises!

Further Advance for Home Improvements

Some may want a second mortgage with their existing lender, on the same home. This is called a further advance and allows you to borrow an additional amount in order to cover various home improvements.

This is a specialist area and would require you to speak with a mortgage advisor in Harrogate.

Second Mortgage for your Buy to Let Portfolio

If you are a landlord, you may require additional mortgages for further portfolio purchases. We find that buy to let mortgages are most commonly on interest only, as this means your monthly payments will be lower, as you’re only paying interest.

You will need to pay back the capital in full at the end of your term though, so that’s something to bear in mind. It’s beneficial to look at speaking with a mortgage advisor in Harrogate ahead of a buy to let mortgage in Harrogate.

We are experts in buy to let mortgage criteria and will work hard to take the weight of your mortgage off your shoulders.

Named on an existing mortgage and want to buy a new home?

Thanks to situations like divorce and separation, this is unfortunately quite a common occurrence for us. We would recommend looking to get your name removed from the mortgage with your ex, as otherwise you will remain liable for the payments, whether you’ve come to a personal agreement or not.

This in turn, will make it difficult to obtain a second mortgage, as they need confidence in your ability to maintain both payments. You also have to think about your ex’s credit history. If they start to miss payments, this can affect your score too.

Speak with a mortgage advisor as soon as possible and get your name removed if you can, as that is definitely your safest bet. If this isn’t an option, then there still be hope for you to get a second mortgage. Book your free mortgage appointment and we’ll be happy to go over this with you.

How to Improve your Credit Score in Harrogate

Mortgage Advice in Harrogate

What is a credit score?

A credit score is a tool that lenders use to measure whether or not an applicant can afford a mortgage or not. The higher your credit score, the more likely it is that you’ll get accepted for a mortgage. Which means that if you have a low credit score, your chances of getting a mortgage are lowered.

Having a high credit score may sound great, however, it doesn’t guarantee you a mortgage in any way. Each lender has their own unique lending criteria and it’s more than likely that you won’t meet all of them. Sometimes it’s down to your circumstances and not just your score.

Matching lender’s criteria

It is more than likely that each lender will have completely different lending criteria. Lenders have almost carved out their own niche market. You could end up matching with lots of lenders or it may only be a couple, but all that matters is that you match with one and get an amazing mortgage deal from it!

Whether you receive help from a Mortgage Broker in Harrogate or go solo and use your bank, it’s their job to help you compare deals and match you with a lender.

As a Mortgage Broker in Harrogate, we would always recommend taking up our free mortgage consultation offer. This way, we can evaluate your situation and compare deals for you straight away. If you go to a bank, you could just be added to a waiting list.

If you are struggling to match a lender’s criteria, it could be down to multiple things or maybe just one. The most common reason why people don’t match their lender’s criteria is that they have a low credit score. If this is your situation, then you need to find some ways to improve your credit score.

Improving your credit score

Avoid unnecessary credit searches

Having unnecessary credit searches on your file could negatively impact your credit score. Lenders don’t particularly like seeing repeated credit checks; they may think that there is a reason behind it and they may even start asking you questions about it. Even using price comparison websites could damage your score.

On another note, if you are applying for a mortgage, it is unwise to apply for any form of extra credit in the meantime of your application.

If you manage to pay back owed money before your application, it will look good on your file, however, if you are borrowing/paying back money during your application, it will have a reverse effect. If you borrow credit, some lenders’ could think that you cannot afford the deposit and are relying on the credit to help you.

Are you registered on the Voter’s Roll?

A great way to improve your credit score is to register onto the Voter’s Roll. Lenders love seeing applicants that are registered on it as it indicates stability. It’s really easy to get yourself registered and the fact that it can boost your credit score surely means that you have to sign up if you haven’t before!

Even if you are already registered, it’s always a good idea to double-check that you have entered all of your information correctly. If you have an old address on their system, lenders will easily spot this mistake and it could go against your score.

Don’t run too close to your maximum limit

Maxing out your card each month will have a detrimental effect on your credit score. If you are using a credit card, a lender would much rather that you pay off the full balance each month rather than cutting it short. Showing you can meet set payments each month shows reliability and can help your chances of being accepted for a mortgage.

On the other hand, if you are doing the opposite and exceeding your credit limits or overdrafts, your lender will think that you don’t take your finances seriously. This could massively impact your credit score, especially if you get declined by a lender due to this reason.

Check that your address is up to date

Your address should always be up-to-date. People usually get caught out when they move out from their parent’s house and forget to update all of their address’.

If you forget to change your address on things such as credit accounts, it will appear that you are living in two separate places. This can hurt your credit score once lenders see this so make sure that you are keeping on top of what address’ are linked with each of your accounts.

Close down your unused credit accounts

If you have any store/credit cards that are no longer in use, you should contact the provider and get them to fully close down your old account(s). These types of accounts are probably doing more damage than you think.

However, if you manage to close your account(s) it could still have a negative effect on your credit score as the credit reference can’t really tell if it’s you closing the account or the provider.

Don’t worry about this, if they ask, you will have to explain and it could work in your favour as you are proving that you want to improve your chances of being accepted.

Remember that it’s always good to check up on these types of things just in case. For example, you could’ve lost a card and you didn’t realise, then you fall victim for fraud. This could end up having a worse effect on your score.

Remove your financial link to others

People often don’t know that they are still financially tied to a family member or ex-partner. If this is the case, it can have a negative effect on your credit score without you even realising.

If the account that you are still tied to is still active, you must know that you will not be able to remove your link just yet. If you want to remove any of these links, then you should get in touch with the credit reference agencies and make a request.

Summary

As a Mortgage Broker in Harrogate, we know that some applicants see credit scoring as an unfair way of determining whether or not you’ll get accepted for a mortgage. For example, you may have a low credit score due to personal circumstances that couldn’t be prevented.

As a Mortgage Broker in Harrogate, we mostly see that it’s people that are Moving Home or Self Employed struggle with their credit score. However, if this isn’t your mortgage situation and you still need help with improving your credit score, you know to get in touch with.

Sending an up-to-date credit report to your expert Mortgage Broker in Harrogate could prove extremely beneficial to your mortgage journey. A great tool that we always recommend to our customers is checkymyfile.com.

The more your advisor knows about your finances the better. There are still some lenders out there that prefer to do things the old-fashioned way and will manually assess your application. They will still have rules that they stick by about the number of defaults and CCJ’s that they will allow.

A Mortgage Broker in Harrogate, like us, likes to do things the new way and will always aim to deliver you the same fast and friendly mortgage advice service that you are all used to. We hope to hear from you soon.

In need of a Mortgage Agreement in Principle in Harrogate?

The purpose of an Agreement in Principle (AIP) is to determine whether or not you pass a Lender credit score to qualify for a potential mortgage. Sometimes this is also referred to as a Decision in Principle.

By obtaining yourself an Agreement in Principle, you are ready to support any potential offers you make as a First-Time Buyer in Harrogate. Having one of these may also put you in a place to negotiate a lower price as it shows the seller you are serious and have the means to proceed with the purchase.

Will obtaining an Agreement in Principle impact my Credit Score? 

Common practice these days seems to lean more towards soft searches, though even these could still affect your credit score. Usually this would be more likely with a hard search, with soft searches generally leaving your credit score unaffected.

The difference between the two, is that a soft search won’t dig as deeply as a hard search. You can always rest assured though that the lender has chosen either with the best of intentions.

Should I stay away from hard credit checks? 

Now and again a hard search or two should be fine. It becomes slightly more problematic if you start having multiple hard searches over a short amount of time. Soft searches won’t show up on your credit report, but a hard search will. This looks bad, especially if you don’t pass the different criteria.

Don’t let this put you off however, as if you know you know you have a good credit score and taking a hard search with that lender is the best deal, you’ll most likely be fine.

Does my Agreement in Principle a guarantee that I will get the Mortgage? 

We really wish it were the case, but sadly no, there are no guarantees that having an Agreement in Principle will get you a mortgage. You still need to present the lender with your documents and it’s only then, that the underwriter will make the final decision on your case.

A regular occurrence here at Harrogatemoneyman, is customers getting in touch after being declined at application stage. This is often down to missing some of the small print mentioned in their Agreement in Principle. You will need to provide identification for proof of who you are, payslips for proof of income, and bank statements for proof of handle your finances the right way. Without these, your case won’t go to offer.

Can I make an offer without having an Agreement in Principle? 

If we were to get technical, the answer is yes you can. However, it is highly unrecommended and any credible estate agent will not proceed without proof that you can proceed.

How long does is the process of getting an Agreement in Principle? 

Within 24 hours of speaking with a mortgage advisor in Harrogate it is possible to obtain an Agreement in Principle.

How long will an Agreement in Principle last?

Generally speaking, an Agreement in Principle will expire around the 30-90 days mark. The good thing is though, that this doesn’t mean you should just apply for the first house you find. If your Agreement in Principle expires, it is relatively straightforward to have it refreshed when you are ready to make an offer on a property.

Finding a mortgage only to be declined a mortgage can be a major disappointment, we get that. We recommend getting an Agreement in Principle as early as you can to avoid that disappointment.

Why Isn’t it Easier to Get a Mortgage in Harrogate?

Mortgage Advice in Harrogate

During our multiple years of working as a Mortgage Broker in Harrogate, we have come across almost every single mortgage hurdle that you could think of. there are many different reasons to why a mortgage may be hard to obtain, let’s take a look at some of the most common reasons:

Passing lenders credit score

One of the first and many struggles of getting a mortgage is being able to pass a lenders credit score. Every single lender has their own individual requirements and criteria that you need to pass before they will offer you a mortgage. Each criteria is unique and it is more than likely that you won’t match every single one, even if you have a high credit score.

As a Mortgage Broker in Harrogate, we often find that people don’t realise that lenders have these strict criteria and end up applying to a lot of them. This can often have a negative effect as the more that you apply for, the more likely it is that you will get declined by some. If you are declined by a lender it can sometimes end up damaging your credits score.

This is why we always tell borrowers, especially First Time Buyers, not rushing into anything. If you are unsure on how to apply for a mortgage or don’t want to risk getting declined if you have had a bad credit history, it may be within your best options to approach a Specialist Mortgage Broker in Harrogate.

A second opinion from a mortgage expert may be exactly what you need to get the ball rolling. In fact, we have over 38 different lenders on panel that we can access for you, there is most likely a deal waiting for you amongst them!

Improving your credit score

Another mortgage obstacle that applicants commonly face is being declined a mortgage due to having a low credit score. What most people don’t realise is that having a low credit score is quite common and there are ways to boost it back up.

There are many different things that could cause someone to have a lower credit score, but remember, the only way is up! In some cases, it’s fairly easy to improve, however, in other cases it can be quite tricky and you may require a Specialist Mortgage Advisor in Harrogate to help you out.

Remortgaging

A First Time Buyer mortgage isn’t the only mortgage scenario out there, there are lots of different situations that we come across as a Mortgage Broker in Harrogate. Occasionally, it can be hard to get a mortgage arranged in all circumstances, however, one other mortgage situation that stands out is remortgaging.

Basically, remortgaging is just renewing your mortgage contract, this can be on the same deal or a completely different one if you are open to switching products. In most cases, people remortgage as their deal is approaching its end, however, it can be done midway through a deal if the homeowner wants to remortgage for home improvements, etc.

Remortgaging can be quite stressful, searching through lots of different deals can catch up on you. We do encourage in doing this though, searching through deals through external lenders could allow you to land an even better rate. We always recommend shopping around before rushing into renewing your deal.

If you are struggling to find a better remortgage deal or just don’t want to shop around, you can always try a Mortgage Broker in Harrogate like Harrogatemoneyman. We will sort out everything for you and search through 1000s of remortgage offers in order to try and find you a competitive deal that will be worth your time. 9/10 times we get it right and we find our customer a great mortgage deal that they thought they could never get.

It’s not always the applicant’s fault…

Sometimes, we find that it’s not always the applicant’s fault. A major factor that could determine the outcome of your mortgage is how the economy is performing during the time of your application.

For example, during the coronavirus pandemic, we saw 90% for several months which eventually eased towards 95% with time.

A suffering economy and getting a mortgage do not go hand in hand. In terms of saving money and making the most of your mortgage journey, it may be best to wait it out.

If you take a look back to the mid-2000s (just before the credit crunch), it was ridiculously easy to get a mortgage, anyone could get accepted. Now times have changed and the credit crunch has made lenders realise that they should be much more careful when accepting applicants for a mortgage.

Struggling yourself?

If you are struggling to get your mortgage application started and need some help from an expert Mortgage Advisor in Harrogate, we are always here to offer a helping hand. We know that the mortgage process can be daunting in sometimes scary, so don’t ever hesitate to call us.

Whether you’re a First Time Buyer, Home Mover, Self Employed, looking at Remortgaging or a Buy to Let landlord, we are here to help. Our amazing team of Mortgage Advisors in Harrogate are available 7 days a week and will be ready to answer all of your mortgage questions. Contact us today for a free mortgage consultation.

Which Property Survey to Choose? Mortgage Advice in Harrogate

What is a Property Survey?

When an offer is accepted on a property, usually the next step of to get a property survey sorted. Having this carried out will determine whether or not the property price is accurate or it needs adjusting due to the condition it is in. In the case where there is something found on the survey, the buyer does have the right by law to approach the seller to negotiate a price for the works required.

This is carried out by a property surveyor who will make you aware of any minor damages that need to be sorted

Property Survey Types

As a First Time Buyer in Harrogate, you may have been unaware of the different property survey types. Below are the three main types of property surveys available to you.

1. Mortgage Valuation
2. Homebuyer’s Report
3. Full Structural Survey

Mortgage Valuation

The cheapest option available is a basic valuation. This is a regular survey that you need to have carried out before the mortgage offer is received and is different to a full survey. By doing this, it confirms to the lender that the property is worth at least what they are lending to the buyer. You may find that your mortgage lender will offer a free basic valuation as part of your deal.

One thing with mortgage valuation is that it will not make you aware of any repairs that are needed. On the flip side, it may mention obvious that is recommended to be investigated further.

Homebuyer’s Report

If you are wanting your property to be checked over for structural safety and let you know of any problems like dampness along with anything that doesn’t meet the current building regulations, a homebuyer’s report is perfect for this. This will provide you with an independent report of the property written by an expert.

You need to make sure that the two surveys aren’t being paid for by asking the mortgage companies surveyor who will carry out this report. Usually, this can take up to a day to complete if it’s a large property.

Full Structural Survey

A Full Structural Survey is suitable for older properties and those made from non-standard construction. The duration of a full structural survey depends on the property size and type, but it can take as long as a day to complete.

Even though a Full Structural Survey is the most expensive property survey, it will provide you with a detailed report. This report will highlight the overall condition of the property as well as highlight any major repairs that need to be carried out.

If you are looking for a surveyor to carry out a Homebuyers report or building survey through the Royal Institution of Chartered Surveyors.

Do I need to get a survey on a new build?

When it comes to new build property, surveys would work slightly differently. You may think that you won’t need a property survey carried out because it’s a new property. It can be best to do this just in case.

A Snagging Survey is designed for new builds. You will be provided with a report that gives insight on the property’s overall condition, highlighting both minor and major issues. The survey will mention something as simple as a missing door hinge to a crack in the ceiling (which is unlikely to find in a new build).

For those moving into a new build that’s already been built, it would be best to get a snagging survey carried out on the property prior you move in. Having this will support you further when it comes to negotiating the price if there are any issues with the property.

How can our Mortgage Advisors in Harrogate help you?

A Mortgage Advisor in Harrogate can help you find the most appropriate property survey for you. Book your free mortgage appointment online or give us a call to connect to an expert advisor.

Here at Harrogatemoneyman, we have helped lots of First Time Buyers and Home Mover in Harrogate find the most appropriate property survey for their new home.

Why Should I Use a Mortgage Broker in Harrogate?

There are multiple reasons as to why you should use a Mortgage Broker in Harrogate. However, there is still the chance to go direct to a lender if you wish to, with the added option of doing it either in branch or online. Within this article we will include the pros and cons of both methods.

Pros and cons

When choosing the option of going direct to your bank or building society, you won’t have to pay the Broker fee, so that is an advantage in itself. Years ago, the bank manager would know your finances better than anyone but that is not the case since credit scoring was introduced.  Another advantage of doing this would be the fact that some lenders offer exclusive mortgage products that would only be available by going direct. They also use this technique with Brokers too, so that exclusive offers are only available through them. This is put into place to maintain a good spread of business from both customers and brokers.

From 2014, lenders were banned from selling mortgages on a non-advised basis when customer interaction is involved. Up until this point, some applicants were under the impression that they had received advice when in fact they hadn’t and as a result of this, they weren’t able to benefit from parts of the consumer protection that goes along with proper advised mortgage sales.

This change had meant that lenders had to get used to a different system which meant longer waiting times for an appointment and this can still be the case in contemporary settings. This can be a struggle if you’ve just had an offer accepted on a house. The frustration that came with waiting for an appointment led to a rise in applications being made via Brokers due to the same day mortgage service being available.

Before the days of credit scoring and such it was much more difficult to compare mortgages whereas nowadays it’s a lot easier to find a competitive mortgage online. On the other hand, there is an increased difficulty in finding a lender whose criteria and mortgage product is tailored to your circumstances. It is important to keep in mind that the deals with the lowest rates tend to carry high arrangement fees.

Affordability

Affordability is another key point to take on board. A lenders deal could be amazing for you but if they won’t lend you enough money then it’s useless. Most mortgage applications these days aren’t straightforward, for example, you may have:

· 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

Will lenders be lenient?

Most lenders try to stay relevant in the mortgage market by offering a better deal than their competition. The way they do this is by differentiating themselves on Lending Criteria. For example, some will be more lenient with Self Employed applicants or take a more sympathetic view on faults on a credit report.

Every mortgage situation is unique but if you approach an experienced Mortgage Broker in Harrogate then they will be able to reflect on past cases to see if there is a similar solution to decide the best outcome and hopefully find the lowest rate that’s available. 

But it’s not just about getting the mortgage. Even if an application itself is straightforward, we find that our customers rely on us for many other things. For example, we sit down and discuss how much they are going to offer on the property that they are buying. We often recommend other professional services too such as Solicitors and explain the different types of survey and protection available.

Speak to a Mortgage Advisor in Harrogate

Another key aspect which benefits customers is responsiveness which you are guaranteed with one of our Mortgage Advisors in Harrogate, with our Mortgage Broker in Harrogate we make sure that out of hours and weekend appointments are available along with responding to clients’ emails on an evening outside of office hours.

An overlooked factor of why a Mortgage Broker in Harrogate might be preferable is purely for the fact of time. Everyone is prone to have periods in their life when they’re just too busy and a mortgage application can sometimes be stressful and time-consuming.

Our Mortgage Advisors in Harrogate aim to take this stress away and handle the full transaction for you. Professional applicants see the real extent of the advantages of this as they have customers of their own that they charge out their services to so they see the reasons to have an expert on board.

Lenders are on par with Brokers in some departments but in others they are yet to step up. Perhaps lenders may want to advance ahead of Mortgage Brokers and will most likely avoid staffing up their branch networks and instead make investments in technology to transact with customers online which may be a disadvantage for customers who prefer a more face to face approach that’s available with our Mortgage Advisors in Harrogate.

How to get a Mortgage if You’re Over 40 

Open & Honest Mortgage Broker in Harrogate

The simple answer is yes, you can get a mortgage if you’re over 40. This does depend on your situation regarding your application, however, this is an option in the mortgage world.

For applicants who are looking to extend their mortgage term beyond the age of retirement, the mortgage lender may want to have an insight of a rough estimate on the amount of pension income you are going to have.

Through our experience, we have found that there are many instances where customers who are in or over their 40s are usually First Time Buyer in Harrogate. Furthermore, many customers in this demographic usually are declined because of their age.

Why are over 40s being declined mortgages and what can be done?

To start, let’s go back to the past. Before the time of computerised credit scoring and the levels of regulation that are common today. For instance, if you visited a building society in search of a mortgage, it’s likely to you would speak to your branch manager.

Their job it looks at your personal situation such as how well you have been able to manage your current account. From this, they would conclude if they will approve your application.

In the case where you are accepted, it’s then time to get the advice you need regarding the amount you could borrow which is usually present as multiple of your gross salary.

The one problem with this was that these income multiples were not factored into the age of the applicant. This means that whether you were 30 years old or 50 years old, you could borrow the same mortgage amount either way.

You may be wondering what the problem is with this as you may see it as a fair arrangement. However, if both applicants were coming towards to retire at the age of 65, each individual would have different outcomes.

An example of this is if an applicant had a £70,000 (capital and interest combined) mortgage with a national interest rate of 5%:

• An applicant who is 30 years old. If they had a 35 year mortgage term they would be paying £252pm approx.
• An applicant who is 50 years old. They would be paying £395pm approx if they had a 15 year mortgage term.
  

With this example, both applicants earn the same, looking to retire at the same age, with the same mortgage interest rate and the same overall amount to pay back.

The one difference between the two is that the second applicant’s monthly payments are a lot higher. Therefore, if mortgage rates end up rising, it could increase the risk of arrears and repossession.

Because of these reasons, the mortgage calculator now factors in the maximum term of the mortgage (i.e., how old you are) along with the income you bring in and the amount you have regularly going out.

You’ll have to borrow a lower amount

The concern isn’t that older customers are being turned down but the amount they were thinking of borrowing is a lot lower than expected. As the general public, we are reminded consistently that we will need to work until a later age by the Government before qualifying for our State Pension. Unfortunately, the banks don’t seem to keep this in mind when granting mortgages. We can take a more in-depth insight into this:

This isn’t always the case for everyone because some occupations that involve manual work will not be fit for those in your seventies.

Lenders are closely monitored when it comes to repossessions and arrears cases which means they want to minimise this risk. Taking a property into possessions can cost a lot of money and build up a negative reputation for the lender. With this in mind, when they are approving mortgages for mature applicants they don’t want to be seen kicking out a vulnerable older person because they couldn’t afford their payments.

Lenders will consider granting mortgages beyond normal retirement ages as long as there is enough evidence proving that they can keep up with payments after retirement. In terms of evidence, you could provide a letter from your Pension provider with a projection of your future income. One issue here is that many people will usually take a reduction in income at retirement. This means that you will need to demonstrate that the mortgage monthly

Retirement

In 2011, the default retirement age was removed which meant employers no longer had the power to force an employee to retire. Therefore, lenders use the State Retirement age ad the age that the mortgage must be paid off, however, these days, lenders will let the retirement age be self-declared.

For those in this current situation, you must be ready to answer the question of how you will afford your mortgage in the future. Consumer protections and regulations are there with the purpose to protect consumers as well as stimulate judicious lending.

Preparing for a mortgage at over 40 years old

We have a team of Specialist Mortgage Advisors in Harrogate who will be able to provide a helping hand through the process and will recommend you the best way for your mortgage application and the options that are appropriate for your situation.

Remortgage For A Home Office in Harrogate

The rise of COVID-19 has meant that a lot of people are now having to change the way they work whilst at the same time, warming up to working from home due to the benefits that it holds. Certain benefits can include:

– Home Workers are often more productive

– No lost travelling time 

– Less travelling is also better for the environment

– Telephone and Video meetings tend to be shorter, again good for increased productivity

– Flexible 

– Better for families

In the past, relocating for work or for a better living environment isn’t an uncommon situation. However, now that the general public are realising that working from home means this doesn’t have to be the case means that they are able to shape their home to fit in a new workspace such as a home office which will help shape their home around this situation. This brings more value to the statement of ‘improve, not move’.

The price of converting an existing room can be somewhat low cost and can range between £5 – 15,000. Recently interest rates have been dropping for a considerable amount of time and remains to be low which could mean that upcoming monthly mortgage payments will increase by an affordable amount.

Assuming an interest rate of 2% is possible over 25 years it might cost you:

– £21pm for £5,000

– £64pm for £15,000

How to remortgage for a home office

You will have to remortgage a property to be able to raise additional funds in order to remortgage for a home office. These funds will let whichever room is chosen to be converted. The most common choice is a spare room or a garage.

The first step of the process will be to find a remortgage deal. If you choose to go on your own and go directly to a bank, you will only be allowed to access deals that are offered by them. By going further than your bank you’ll be opened up to more deals that could potentially mean that you’re better off in the long term.

Our Mortgage Broker in Harrogate is able to be on hand to be able to look through thousands of remortgage deals so that you end up with the one that will suit you the most. We make it so as our Remortgage Advisors in Harrogate only keep your best interests at heart.

The costs of a home office

For the cost of a home office, you will need to find out an estimate of how much the work that will be carried out will cost. Such things as room size and how much work will be needed on the room in order to get it in shape will also be needed to be taken into consideration.

Some of the lowest rates that have been present in the mortgage market are present right now and so the money that you are able to save by converting will extend further than your remortgage.

Are you looking to remortgage for home improvements?

If you’re thinking about setting up a remortgage then our Mortgage Advisors in Harrogate have accumulated experience from numerous years of been in the mortgage field. By approaching our Mortgage Broker in Harrogate, we’ll assist you with the process as you may find the lender might extend the time frame of your remortgage process.