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What is a mortgage agreement in principle and how can it help with my mortgage?

Agreement in Principle Mortgage Advice in Coventry

What is an Agreement in Principle?

First things first; What is a mortgage agreement in principle?

If you are a first time buyer in Coventry, you may not aware of what a mortgage agreement in principle is. A mortgage agreement in principle (sometimes shortened to AIP or DIP – decision in principle) is a document that demonstrates the lender believes, so far, you are a good candidate for a mortgage and are ready to go.

This shows both the estate agent and the person selling their home, that you are creditworthy as you have passed the lenders initial credit score. It’s important to remember though that this is not a guaranteed mortgage, as going for a full application will require even more in-depth background checks.

However, it is a good idea to get one done at the earliest opportunity for the following reasons:

  1. Negotiating Power
  2. Avoiding Disappointment
  3. Knowing Your Limits

Negotiating Power with a Mortgage Agreement in Principle

When you are at the point where you would like to make an offer on a new home, you’ll find that the majority of estate agents will undertake due diligence and ask you to provide them with proof that you do in fact have the means to proceed with the property purchase.

Your proof will usually come in the form of bank statements, but can also be done using an agreement in principle. This is something that we can provide for you, usually within 24 hours of your initial appointment.

Once you have provided them with all this documentation, the estate agent will generally cease marketing the property and put a “sold” or “sale agreed” board up outside of it.

If you already have a mortgage agreed prior to making an offer on a property, this will definitely appeal to the seller, as this proves you are not making an offer on the fly and have actually put a lot of thought into how you’re going to fund the purchase.

This might persuade a seller to accept an offers you make that could possibly be under their asking price.

Avoid Disappointment with a Mortgage Agreement in Principle

When it comes to purchasing a new or additional home, some customers like to try and run before they can even walk. They charge ahead all guns blazing, making an offer on a property without actually making sure they can proceed in the first place.

If the application then goes ahead and fails, this can result in disappointment that could’ve been avoided. The last thing you want to be doing is having your heart set on a new family home and then feeling down when it doesn’t work out the way you had hoped.

This can all be prevented by getting in touch with us at an earlier stage. Sometimes there are factors that may cause an application to fail, that given time and care with the help of a mortgage broker in Coventry, can be solved over time.

An example of this is, let’s say you have a disputed mobile phone bill that keeps cropping up. This is something that can be sorted with the appropriate action. Some think they’re on the voters roll when they are not. Give it a few weeks and that can be sorted too.

In some cases you might not be able to get a mortgage at all. If that does happen to be the case, it’s better that you are made aware of that now rather than mess people about. One of our dedicated mortgage advisors will be able to tell you what you need to do to improve your credit-worthiness for the future.

Knowing Your Limits with a Mortgage Agreement in Principle

Let’s say in theory, you know that you have got a good credit rating and have never been turned down for credit, you’re registered on the voters’ roll and you’ve always keep up your monthly credit payments. What could possibly go wrong?

Well the truth is, you could approach 10 different lenders these days and get 10 different results from each of them! They all have their own lending criteria and calculate affordability in their own unique ways.

If you are Self Employed in Coventry it can be complicated further, as some lenders may take your net profit, whilst others are known to use your salary and divided. In some cases, you’ll find that lenders may even use your latest year, whilst others prefer an average over 3 years.

Expert Mortgage Advice in Coventry

Being mindful of your borrowing limits is important as this will help you determine what your ideal price range will be. Ou dedicated mortgage advice team will be able to advise you of the maximum mortgage available to you. Also, more importantly, together we’ll work out how much you can afford to pay back on a monthly basis.

I’m a Single Homeowner in Coventry, Should I take out Life Insurance?

Even if you are not married and aren’t looking to settle down and have kids at any point in the near future, it is likely that you will still benefit from taking out life insurance in Coventry. No matter your personal circumstances and life choices, if you are a single homeowner, there are still plenty of justifiable reasons to take out life insurance.  

Having a life policy in place can be a big support to your family in dealing with any apparent debts after your passing, such as any remaining mortgage payments that need to be made.

How does life cover affect your mortgage? 

Typically, the purpose of taking out life cover is to cover the costs of any mortgage payment debts. The policy will usually be set up to automatically pay out a lump sum, equivalent to the mortgage cost, in the event that the policy holder (the person with the life cover) passes away whilst still having outstanding monthly mortgage payments.

If you are living with a partner or you have children, the insurance might even be extended into an income boost provided to your dependants, in order to cover any living costs.

The reasoning for that particular extra protection may not be necessary for single cover applicants, but taking out some insurance to cover your mortgage is still worth doing to ensure your payments are securely paid off when you’re gone.

Paying Back The Mortgage Loan Amount

If a single homeowner passed away before their mortgage balance has been paid off, their bank or building society can look to pay off that balance from their late customer’s estate, i.e., their collective belongings (accumulated assets is a term people use for this). This will be something of worth they can sell, like a car.

Quite often when these cases arise, we find that the property will get sold at auction in order to pay off the remaining balance. If the home happens to fall into negative equity, the lender has every right to demand that the difference must be made up by the estate.

As an alternative to this, the lender can demand that the property be sold with any surviving family members not being able to make up any shortfall on the balance. As if this wasn’t bad enough, if the probate process is drawn out (the probate is the period of time where the individual’s estate is handled), the lender can actually continue to add interest charges, increasing the total amount of the balance that needs to be paid. Morally questionable, but unfortunately not illegal.

Taking out life insurance will help protect your family and/or estate from these problems from occurring. 

Speak With One of Our Mortgage & Protection Advisors in Coventry

If you are looking at the options you have for taking out life cover in the future, please get in touch and book yourself in for a free consultation with one of our dedicated protection advisors in Coventry.

No matter if you have plans of becoming a first time buyer in Coventry or are already a homeowner, we feel this is something better sorted now than left too late.

A life insurance policy can also mean that if you have any children or grandchildren, they can be left some form of inheritance, regardless of if there is equity in the home.

Capital Raising Mortgage Advice in Coventry

Specialist Mortgage Advice in Coventry

If you have been looking at getting a mortgage or more specifically have been looking at your options for a Remortgage in Coventry, it’s likely you will have seen the term Capital Raising before.

You may see such a term and be wondering what that means, what exactly is Capital Raising? The answer is simple; Capital Raising is the act of raising money, in this case referred to as Capital. This is done through a few different methods and can be used for various reasons. 

Capital Raising Methods 

Remortgage to Release Equity 

A common way for this to occur is for customers to take out a Remortgage as a means of releasing the equity in their property. Equity is the difference between what you have left to pay on your mortgage and the true value of the property. 

Further Advance Mortgage 

If your property happens to increase in value over the duration of your mortgage, rather than Remortgaging to Release Equity, you may find yourself looking to do this with a Further Advance. This is where you take out an additional mortgage on your property to borrow even more, as a means of once again releasing equity.

This mortgage will typically be over a longer term and have interest rates that are lower than a standard personal loan, although it will be paid back alongside your existing mortgage.

This can be a great option for those who do not wish to Remortgage, or maybe tied into their existing deal. However, there are risks, such as a higher risk of repossession if you cannot keep up the significantly larger number of monthly repayments.  

Second Charge Mortgage 

A Second Charge Mortgage works similar to that of a Further Advance, wherein you will be taking out an additional mortgage alongside your existing one, as a means of releasing the equity in your home for future home improvements or anything else you wish to spend your newly acquired funds on.

The difference between a Second Charge and a Further Advance is that a Second Charge will often be with another lender and on a different rate. In the unfortunate event of a repossession, your initial mortgage lender will be paid back from the property’s sale, with any remaining funds used to pay off the Second Charge. 

Capital Raising Mortgage Reasons

You may find yourself needing to Capital Raise and release equity via a Remortgage, for all kinds of reasons. Popular choices for this include to fund any Home Improvements, Modifications or Alterations, such as a new home office, a possible home extension or even a loft/garage conversion, as well as to consolidate any debts that have been accrued over time.

Other options may include to gift a deposit to your children, to purchase a second home (usually an option with Buy to Let Landlords in Coventry), to fund large purchases such as a car, wedding or holiday. 

Saving your Time, Saving your Money – Mortgage Broker in Coventry 

If you have equity in your property and are looking to take out a capital raising mortgage, then a Remortgage in Coventry could be useful to you. Generally speaking, mortgage lenders will let you borrow up to 90% of the value of your property.

Please do Get in Touch and we will advise you of the most appropriate option for your circumstances. If remortgaging isn’t quite for you, taking out unsecured credit might be a more suitable option for you. A standard Remortgage can take roughly around 4 to 6 weeks to go through.

With Debt Consolidation there are some risks to take into account. That is why we always recommend you speak with a qualified Mortgage Advisor in Coventry, before consolidating any unsecured debts against your home.

Coventrymoneyman is an experienced Mortgage Broker in Coventry, here to help you find the best capital raising mortgage deal for both your financial and personal situation. All of our customers will benefit from a free Remortgage consultation. During this consultation we will make a full recommendation.

If you are over the age of 55, you may find yourself better suited for taking up Equity Release in Coventry. 

A Guide to Remortgages in Coventry: Top Reasons to Consider

The mortgage journey is one that can be quite rewarding in the long run. Though you will face your fair share of both positives and negatives throughout your process, in the end you will end up with one of the following: either the property of your dreams to call home and maybe start a family, a stepping stone property to help you find your place on the property ladder or an investment property to provide you with an income boost.

No matter which mortgage path you went down, eventually you will find yourself reaching the end of your mortgage term and in need of a different path to venture down. You may find yourself with the option to sell up and upsize/downsize into a new property.

You may possibly even be in the market for selling your portfolio to the tenant(s) or another buyer and look at other fortuitous financial experiences. The most popular option we hear though, over everything else, is a Remortgage.

What is a Remortgage?

First of all, let’s look at the definition of what a Remortgage is. A Remortgage is the process of using the funding from a new mortgage to pay off a mortgage that already exists. There are various options you may have when taking out a Remortgage, ranging from small ones to slightly bigger ones.

By utilising the 20 years or so knowledge of Coventrymoneyman’s resident “Moneyman” Malcolm Davidson (host of our YouTube channel MoneymanTV), we thought it would be of great use to everyone, if we put together a handy guide to all the options at your disposal when it comes to starting the Remortgage process.

Remortgage For Better Interest Rates

The mortgage deal you initially start with will normally last somewhere within the realm of 2-5 years, featuring lower fixed rates or possibly discounted rates. In some cases, your lender may even put you on something like a tracker mortgage, a mortgage type which follows the Bank of England’s base rate.

When reach the end part of your mortgage term, you will likely be placed on the lenders Standard Variable Rate (you may see this simply called SVR). The purpose of an SVR, is that this mortgages interest rate can possibly increase or decrease, depending on what the lender determines correct to charge you.

This type of mortgage does not follow the Bank of England’s base rate like a tracker mortgage would do, and as such can be a little more of a risk, as the lender is not legally obligated to charge the amount that might typically be recommended.

Because of this, Standard Variable Rates, generally speaking, are more expensive paths to take, leaving many to look at their options of Remortgaging for better rates. This would hopefully save the homeowner a little bit of money on their monthly repayments.

Remortgage For Home Improvements

Once you’ve gotten through the majority of your initial term, you may feel like something isn’t quite right, like something needs to change. It could be that you need some space for an extra room or larger living space for your kids or belongings.

We also see people doing this for a new kitchen, a new office, or even a loft conversion (which seem to be quite popular these days). Instead of just moving into a newer, much larger house, many seek to release the equity in their home with a Remortgage, in order to cover the costs of any potential improvements, alterations or modifications.

Though the idea of obtaining planning permission from a local authority, and both funding and managing your own project seems a scary task, some would argue it’s a lot less stressful and more rewarding than the process that simply house hunting, selling your home and moving out.

As time passes by, this may prove even more to be a smart investment choice, as creating more space and having good quality craftsmanship will likely increase how much your home is worth. This is very useful for if you ever do decide to sell up or rent your home out to someone else.

Remortgage for Changes to Your Term

In some cases, some homeowners may wish to Remortgage in Coventry in order to find themselves a better mortgage term, whether that be by reducing the length of the term in question or by switching to a product that is more flexible.

Doing this will mean you will be paying back your mortgage over a shorter amount of time, so you won’t be tied down for a large portion of your life. However, this route will also mean that your monthly repayments will be higher than they otherwise would’ve been. The general rule of thumb is that the longer your term, the lower the payments will be over time.

A lot of homeowners choose for their mortgage term to be a little more flexible when they take out a remortgage. It’s the benefits provided by this option that tend to sway homeowners more in its favour. Through this, you may gain the ability to overpay your mortgage.

This means you have the ability to pay your mortgage off quicker, as well as being able to carry the same mortgage and rates over to another property of your choosing, just in case you ever decide to find a new property at any point in the future.

Though a flexible mortgage sounds like it would be ideal for you, they will usually come in the form of a tracker mortgage. As discussed earlier on, these mortgage types follow the Bank of England base rate. This means your payments could fluctuate based on interest, potentially making them a little unreliable when your monthly payments come around.

Equity Release

Every homeowner has some amount of equity in their home. How much exactly, depends on factors. It can be worked out by calculating the difference between what is still owed on the mortgage and the current amount your property is valued at.

As mentioned slightly earlier in this article, equity can be used for home improvements, though that’s not all you’re limited to when it comes to using your equity. Some use their released equity to cover long-term care costs, to supplement their income, to have a holiday, to pay off an interest-only mortgage or to simply have extra money to spend freely and treat themselves.

In the occasional case, we find that Buy-to-Let landlords will use Equity Release as a means of covering their deposit for additional property portfolio purchases.

Remortgage to Consolidate Debt

Another big one that works in conjunction with Equity Release, is releasing funds to pay off any unsecured debts that may have built up over time.

Though it may seem like a fairly straightforward task, Debt Consolidation not only bases the amount on how much you’re owed and the value of the property, but it also factors in where your credit rating is currently at.

This could mean that whilst you may be able to use some money to cover these costs, you’re limited from the offset in terms of how much they’ll even let you borrow.

In addition to this, to pay off your previous mortgage and your debts, you will need to borrow more than the mortgage amount that is remaining on your balance. This will almost certainly mean that your monthly repayments will be higher than they were previously. Though not an ideal situation to find yourself in, you can at least rest assured that should you find yourself in need of a back-up plan, you do have some mortgage options to choose from.

If you happen to have a damaged credit rating, you may also still have a chance to obtain a mortgage, though this process will not be easy and requires very Specialist Remortgage Advice in Coventry before you can even proceed. Even with a professional by your side, there is still no guarantee that this will even be something you can do.

We recommend that you always seek mortgage advice before choosing to consolidate and secure any debts against your home.

Experienced Mortgage Advisors in Coventry – Get in Touch

If you are reaching the end of your term and are looking at your home owning and remortgage options may be, please do Get in Touch with an experienced and trusted mortgage broker in Coventry today and we’ll see how we could help.

An dedicated mortgage advisor in Coventry will be able to discuss your circumstances and future plans, in order to create the best path to take on the next leg of your mortgage journey. It is our aim as a mortgage broker to ensure this time around is a quicker and easier process than when you took out your mortgage the first time.

Why People Aren’t Overpaying Mortgages?

No matter if you are a First Time Buyer in Coventry, looking to take that initial step onto the property ladder, thinking of moving home in Coventry, or looking to Remortgage for any potential Home Improvements, the concept of overpaying, even by a minor amount, can make a huge difference in the amount on the interest you pay back over the course of your mortgage term. The earlier you look at overpaying, the better the effects of your extra mortgage payments.

Overpaying mortgages

Whether or not this is done, depends on the homeowner. Some may choose not to down this route, whilst some struggle to afford these additional payments. A lot of the time though, it comes down to life getting in the way.Even still, if you can, overpaying is the ideal thing to do when you take out a mortgage. Let’s be honest though, there’s always something new and flashy we’d rather buy, as opposed to making an extra payment on the mortgage.

Part of the problem here is remembering to overpay. It’s not something that’s particularly likely to cross your mind too often. Possibly when your mortgage only has a few years left, but the impact at that point isn’t as great as it could have been if you’d done it earlier.

So, if you would like to overpay what should you do?

An easy way to make overpaying part of your routine is to set up a standing order paying your lender each month. Even better, organise it so that it goes out the same day as your mortgage payments. This way, it just feels like one amount and you will become used to this.

By using a standing order, you’re in control. Unlike a direct debit which the receiver controls, you can easily cancel a standing order if your financial situation changes. Whilst it would be a shame to stop overpaying, at least you would benefit from the overpayments made up until that point.

Overpaying your mortgage is a great habit to get into. You don’t need to pay huge amounts unless you feel you can. But you’ll be grateful toward the end when you realise you’ve been able to shave a year or two off your repayments.

If you overpay, some mortgage providers will even let you make reduced payments or take a payment holiday if you have been overpaying for a while. Before taking a payment break though, it’s important to check with your lender that you are eligible to do so as you could face a negative mark on your credit report if you’re not.

If you need any extra Specialist Mortgage Advice in Coventry, make sure to get in touch and we will see what we can do to help!

Mortgage Advice in Coventry

What is a 95% Mortgage?

A 95% mortgage is as simple as the name would suggest; you are borrowing against 95% of the price of a property, and then you are covering the remaining 5% with your deposit. An example of this is if you looked at buying a property that was worth £150,000 with a 95% mortgage, you would be putting down £7,500 as your deposit and borrow the remaining £142,500 from the lender. 

95% Mortgage Advice in Coventry

Off the back of the March 2021 Budget, Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, making 95% mortgages more readily available from the bigger high street banks.   

This is fantastic news for First-Time Buyers and Home Movers alike, as this scheme will continue running until December 2022. Certain terms and conditions will apply though, which is something your Mortgage Advisor in Coventry will be able to look at, to see if you qualify.    

All our customers who opt to Get in Touch will receive a free, no-obligation mortgage consultation where one of our dedicated mortgage advisors will be able to make a recommendation on the best possible route for you to take.

Can I get a 95% mortgage?

95% mortgages are usually accessible by both First-Time Buyers in Coventry & those who are Moving Home in Coventry. Whilst saving for a 5% deposit sounds like a pretty straightforward concept, you’ll still need to have an acceptable credit score and prove that you are able to afford your monthly mortgage repayments, in order to access a 95% mortgage.

Improving your credit score

A good credit score is essential in the process of obtaining any mortgage, especially a 95% mortgage. Things like paying any current credit commitments on time, ensuring your addresses are updated and checking that you’re on the voters roll, can all help with your credit score.

Affordability 

Affordability is another one that is important to take note of. By giving the lender details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments, your lender will be able to get a general overview of whether or not you are able to afford this type of mortgage.

Can my family help me get a 95% mortgage?

Nowadays we see lots of family members helping each other get onto the property ladder, especially parents looking to further their children’s lives. The way this usually happens is by gifting the person looking to find their home, the deposit required. Known through the industry as the “Bank of Mum & Dad, Gifted Deposits are only intended to be a gift, and not as a loan. The lender will need proof that this has been agreed, before it can be used towards your mortgage. 

How do I choose the right 95% mortgage?

When looking for a 95% mortgage, you want to make sure you have the right type of mortgage. Each mortgage type works differently, with that choice allowing you to find one that is most appropriate for your personal and financial situation. 

Some homeowners and home buyers prefer Fixed Rate or Tracker Mortgages, mortgage types which mean you either keep interest rates at a set amount for the term given or have your interest rates tracking the Bank of England base rates.

Alternatively, you might find that Interest-Only or a Repayment Mortgages are more your style. Interest-Only allows cheaper payments until you need to pay a lump sum at the end (mostly now used for Buy-to-Lets), whereas a Repayment mortgage (a normal mortgage if you’d like) means you’ll be paying interest and capital combined per month.

How can a bigger deposit help with my mortgage? 

Seeing as a mortgage is such a large financial outgoing, you need to be prepared and need to be aware. You might find things like higher interest rates, remortgaging difficulties due to less equity and then negative equity all cropping up if you’re not. 

There is no need to worry though, as all these can be avoided if you’re savvy enough with your process to begin with. The more deposit you put down for a property, the less risk the lender will see you as. 

A larger deposit, of say 10-15%, would not only reduce the rates of interest by a noticeable amount, but would also give the property more equity and reduce the risk of negative equity, thanks in part to you borrowing less against the property. 

So, whilst the risks may seem intimidating, planning ahead and saving for a bigger deposit to access something like a 90% or even an 85% mortgage will be a massive help in your mortgage journey and something you’ll be able to reap the rewards from in the future. 

Coventrymoneyman Spring Budget Update 2021

Rishi Sunak’s second Budget as Chancellor brought two pieces of welcome news for the property sector as the Government attempts to transform “Generation Rent” into “Generation Buy” to help stimulate the UK economy, namely the new 95% Mortgage Guarantee and an extension of the Stamp Duty Holiday.

95% Mortgage Guarantee

The name of this scheme is misleading as not everyone that applies is guaranteed to be offered a mortgage, it is still subject to affordability and credit score. The “guarantee” itself is that the Government will ensure Lenders don’t stand a loss if they grant a 95% mortgage to a customer who then subsequently falls into arrears and is repossessed leaving behind negative equity.

This scheme should in theory give Lenders more confidence to lend even though the applicant only has a smaller deposit to put down. Of course, Lenders never want to repossess someone’s home unless it is the last resort, but if that happens then the new scheme would cover any shortfall.

Lenders have been worried about the prospect of home values decreasing so this measure should alleviate that concern although of course, the chances of negative equity occurring will naturally reduce should property prices increase as a result of these announcements!

The scheme is available to both 1st Time Buyers and Home Movers, it’s available on any property (not just new build) and will run until December 2022. Some major High Street Banks have already signed up to the scheme and it’s likely more will follow later on. It’s still a big challenge for Lenders to cope with the demand they are getting for mortgages due to the difficulties training and supervising staff working from home but they will want to offer as many of these mortgages as they can.

Stamp Duty Holiday Extension

When the Stamp Duty Holiday was launched last year we all hoped life would be very much back to normal by the cut-off date of 31st March 2021 but things didn’t pan out that way as we know. Solicitors are struggling to keep up with the workload and if lots of chains had collapsed then it would have partly defeated the object of the exercise.

Therefore it was good to hear the scheme has been extended to 30th June for purchases up to £500,000 and 30th September for purchases up to £250,000.

The Government certainly sees the property sector as an area that can play a big part in our economic recovery and if you are looking to buy a home or remortgage this year please reach out and we will be happy to advise you.

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Buying V Renting Mortgage Advice in Coventry

First Time Buyer Mortgage Advice in Coventry

Times are changing, more and more people are renting, instead of buying a home. However, many people still see renting as a waste of money. If you have parents that are homeowners and you are still young, they might encourage you to buy a house rather than renting it.

But which option is better? Why do some people choose to rent but some people choose to buy? In this article, we will dive into the pros and cons of buying a home vs renting…

Renting vs Buying in Coventry | MoneymanTV

Buying a house in Coventry

Buying a home is always a stressful process, not only financially but also because of other problems that might occur in the future. There are a lot of decisions to make when buying a house.

There are lots of pros and cons to buying a house, however, it’s really down to your personal and financial situation to whether or not you are suited for buying.

You have to keep in mind that this is an investment, this is a home that you will be living in for years. So, the most important thing is to find the most suitable one for you and that should be your motivation. That is why buying can be a tough call; is a property purchase a part of your long terms plans?

Security

It is no secret that owning a home takes out the surprise of your landlord wanting the property back (which they can do at any time whilst renting). If you own a house and can manage to keep up with your mortgage payments, no one can force you to leave the house. However, if you are a tenant, even though the landlord has to give you some kind of notice, if your landlord wants the house back from you, there is not much you can do.  

As a tenant, if your landlord wants the home back, you have to leave. It can be very unfortunate if you have children in a local school or your work is nearby. It can also be bad for your family as a whole. That is why it’s always great to have the security of your own house.

Tied into a deal

Throughout time, the value of a house will always rise but you never know if a house market crash is around the corner, and it might be annoying to buy a house only to watch its value drop.

The worse thing that could happen is that you break up with your partner, or you have to stop working due to an illness or something else and have to sell the house and lose the money that you have put into it. That is why you always have to think about the future before rushing into something and investing.

Renting in Coventry

Generally, mortgages are cheaper than renting. Plus rent payments may change over time with interest rates going up and down, and it’s unlikely for them to decrease. On the other hand, if you haven’t got a fixed-rate mortgage, it may be just like renting, your mortgage payments could change. Before you know it, you are in the same boat.

Usually, rent goes up every year, and it is highly unlikely for your landlord to lower it. Even in the middle of the pandemic, most of the landlords refused to lower it.

Flexibility

One of the main pros of renting is flexibility. For example, if you get a job offer that requires you to move or you want to Move Home in Coventry, you have to think twice as a homeowner. However, as a tenant, giving notice to your landlord is more than enough. Of course, as a homeowner, you can sell your home and buy a new one, but this is time-consuming and very expensive. And you have to make the decision whether it would be best to keep the house and rent it out or sell it. This is another dilemma that won’t cross your mind if you were renting.

All in all, if you believe that there are other places that you might want to live in the future, buying a house might not be the best option for you. Always think of buying a house as a long-term commitment.

Repairs

Repairs are another positive if you are renting because if you are a tenant, your landlord is responsible for every major and sometimes minor repair. However, some landlords may take a lot of time to get around to these repairs, it’s annoying but they’ll sometimes do it on purpose. All you can do is keep trying to get a hold of them. Some may be good and responsive, it’s just down to luck. Some minor repairs may be up to you, but generally speaking, your landlord has to handle it.

When you are a homeowner, everything is up to you. Including the insurance of the property which will be a condition of any mortgage you take out.

Moving Home Mortgage Advice in Coventry

Even though many people say owning a home is easy, it is not for everyone. There are many things you have to consider before actually making an investment like this. There is no harm in renting for a while if you made the decision to move in with your partner or have an unstable job that might require you to move somewhere else in the future.

Even though it’s more common for people to buy a house rather than renting, no matter what decision you make, you will have to pay your monthly payments. You just have to be aware of your current financial position at the point of application.

For further expert First Time Buyer Mortgage Advice in Coventry, make sure to get in touch and we can recommend you whether it may be better to rent or buy based on your financial circumstances.

Lifetime ISA Explained in Coventry

Mortgage Advice in Coventry

The Lifetime ISA scheme provides a great opportunity for First Time Buyers to get onto the property ladder and many people don’t even know what it is. The scheme is often confused with the Help to Buy ISA; they have similarities but they also have their differences.

Since First Time Buyers massively benefit from this scheme, as your Mortgage Broker in Coventry, we thought that it would be a great idea to share with you what the Lifetime ISA is and how it can help you start your mortgage journey.

Lifetime ISA Explained UK | MoneymanTV

What is a Lifetime ISA?

To make it nice and simple, a Lifetime ISA is a savings account where your money grows tax-free. As a bonus, on top of whatever you save, the government will gift you an extra 25% of your savings.

Unfortunately, there is a catch though. There is a maximum amount that you can save each year and it’s only £4,000. On the other hand, if you include the extra 25% bonus, you will get an extra £1000, making your overall savings £5,000.

How can I use my savings?

The proceeds of your savings account can be used for two different things. Firstly, the Lifetime ISA can be used to purchase your first property. So, if you are a First Time Buyer in Coventry and are looking to hold off your First Time Buyer mortgage journey for just a little bit longer, the Lifetime ISA could be for you.

The second use for the Lifetime ISA is for savings for later in life. Although, as we are a Mortgage Broker in Coventry, we only see clients who are using the ISA to purchase their first home. So if this is what you want to use the Lifetime ISA for, you should check out the official governments Lifetime ISA page here: https://www.gov.uk/lifetime-isa.

Are there any restrictions?

In order to qualify for the Lifetime ISA, you need to meet a few different requirements:

First Time Buyer making a purchase…

  • This has to be your first home purchase
  • You can only add a total of £4,000 a year
  • The property that you are buying must cost £450,000 or less
  • You must be under the scheme for a least a year before you can make a purchase
  • You must be over the age of 18 but under 40

For more useful information on the Lifetime ISA, you can check out the official government’s page here: https://www.gov.uk/lifetime-isa.

If you already feel like this is for you, feel free to get in touch with your Mortgage Broker in Coventry and we will help you get the ball rolling.

Mortgage Advice in Coventry

Does the Lifetime ISA scheme appeal to you? Do you feel like it could benefit your First Time Buyer mortgage journey? If so, now is the perfect time to speak to your Mortgage Advisor in Coventry.

We don’t just specialise in giving Lifetime ISA Mortgage Advice in Coventry, we cover a wide variety of mortgage situations. Whether it’s Self Employed Mortgage Advice in Coventry, Buy to Let Mortgage Advice or Remortgage Advice in Coventry, we have got you covered and are here to help!

We have been in this game for over 20 years now and we can’t wait to share our knowledge with you.

Agreement in Principle & Soft Credit Searches

Credit Search Mortgage Advice in Coventry

These days, people pay much closer attention to what their credit rating is. Consumer awareness of credit scoring is much higher than it used to be and we can confidently say that at least half of people who contact us for the first time have already looked at their credit report online.

There are many different credit reference agencies out there. The majority of people looking to use these services will have heard of Experian or Equifax, but we recommend potential new clients to use Check My File for a 30-day free trial. After your trial ends, it will be £14.99 a month and can be cancelled at any time. This report “sweeps” several of those reference agencies and brings together the information into an easily understandable colour-coded report.

Often when customers get in touch, we receive questions about if we will be doing a credit search on them. This is because they are aware that too many searches can have negative effect on their credit score. Lenders always run credit checks but we always seek a client’s permission before proceeding with one. There are 2 different types of credit searches that banks can run on a customer: hard credit searches or soft credit searches.

What is a Soft Credit Search for Mortgage Applications | MoneymanTV

Credit searches

What is a hard credit search?

A hard credit search is a detailed analysis of your credit report. Any financial institution carrying out one of these needs to be granted your permission to do so. Because the lender is looking into your situation quite closely with a hard search, if you pass the credit score then it’s fairly likely that your application will also be successful. This of course, is a big advantage.

The only thing that can really go wrong from that point going forward, is if for some reason you cannot provide satisfactory documentation to backup the information you have given them or it turns out you have provided false details.

The part that really stings about a hard search though is that it leaves a “footprint” on your credit file. This means that anyone who looks at your report in the future can see you have had a search carried out. This isn’t a bad thing immediately, but if you have several footprints registered in a short period of time then it could look like you applying for lots of credit at once.

The footprint left behind does not state whether your application was successful or not, though lenders’ systems could wrongly assume you are being declined on a regular basis. In their minds they would think “Why else would you go to lender number 2 unless lender number 1 had said no?”.

Leaving a hard footprint on your record every now and again is no big deal so there’s no need to worry too much about this, just be careful not to have too many within a short space of time.

What is a soft credit search?

A soft credit search is a much simpler approach towards analysing your financial situation. Soft searches are usually carried out on price comparison websites to give you an indication of what products might be available to you, or if someone wants to verify your identity.

Some mortgage lenders do soft searches in the first instance, with more lenders switching to this type of search. Whilst the financial institution doing a soft search obtains less information about you than if they had done a hard search, being granted an agreement in principle from one of these lenders is still a strong sign that your full application will be accepted.

The benefit of soft searches is that whilst you will be able to see that someone has carried out a soft search on you if you check your credit file, these searches are not visible to other Financial institutions like banks.

This means that you can apply for an agreement in principle for a mortgage with it being very unlikely that this would damage your credit score, no matter if it’s successful or fails.

What is a mortgage agreement in principle

If you are looking to make an offer on a property, we always recommend that you have your mortgage agreement in principle in place prior to contacting the estate agent.

You want to give yourselves the best possible chance of securing the property you want at the lowest price so if you can present yourselves as having your finances in place then you are definitely putting yourself in a better position going forward.

Having the agreement in principle also sometimes puts the agent off trying to “cross-sell” their own in-house mortgage services to you.

Specialist Mortgage Advice in Coventry by Coventrymoneyman.

Mortgage Advisor in Coventry

Coventrymoneyman.com & Coventrymoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is authorised and regulated by the Financial Conduct Authority.
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© 2021 Coventrymoneyman

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