How Do Buy to Let Mortgages in Coventry Work?

The Financial Conduct Authority does not regulate some types of commercial or buy to let mortgages in Coventry.

In the mortgage world, there are a wide variety of routes that someone buying a property in Coventry can go down. From first time buyer mortgages in Coventry, to remortgages in Coventry, holiday lets and even HMO properties, there’s a lot you could do!

One of the options that we come across most, that is incredibly popular for property buyers, is a buy to let mortgage in Coventry.

What is a buy to let purchase and mortgage in Coventry?

A buy to let in Coventry is a property purchased as an investment, it’s not a property you can live in, the sole purpose is to generate income. If you have been a private renter at some point in the past, it is incredibly likely that you have a buy to let mortgage in Coventry.

For a property to have the classification of a buy to let in Coventry, it has to be mortgaged as that type of property, with the landlord expressing their intent to rent. The tenant will be paying a monthly rental fee, that in theory should cover the monthly mortgage costs that the landlord has, plus extra.

Am I eligible for a buy to let mortgage in Coventry?

There are many different factors to take a look into, before you are able to determine your eligibility for taking out a buy to let mortgage in Coventry.

Some of these factors will include the type of property you’re looking to purchase, how old you are (you need to be at least aged 21 and not all mortgage lenders will let you borrow past aged 75), as well as any prior experience you have of being a buy to let landlord.

The biggest factors to look at are affordability, the minimum required deposit for a buy to let mortgage in Coventry and lastly, your credit score.

Affordability

For you to be able to prove that you are eligible for a buy to let mortgage in Coventry, you will need to prove to your mortgage lender that you can afford it. Most mortgage lenders base their criteria on what the projected rental income will be.

Projected rental income is the figure that your mortgage lender believes you should charge as rent, in order to cover the costs of your monthly mortgage payments, plus some more. There will be a set requirement for this, which is calculated based on the property value.

Further to this, there are some mortgage lenders that work with buy to let mortgages in Coventry, that will also have a minimum income requirement. This typically sits around £25,000, though this will entirely depend on your mortgage lender.

An expert mortgage broker in Coventry with experience in working with buy to let mortgages in Coventry, such as Coventrymoneyman, will look to find the most suitable mortgage lender for your plans, as well as with the best deal for your buy to let investment purchase.

Minimum Required Deposit

As tends to be the case with most purchases, there will be a need for you to put down a deposit. For a buy to let mortgage in Coventry, you are typically looking at a 20-25% deposit on the property, though can be more or less, depending on your mortgage lender.

The reason that they require this deposit, is to reduce your risk to the mortgage lender, as a higher deposit means you borrow less against the property. You’d be giving yourself a 75-80% loan to value as well, which gives you much better interest rates.

If say you had bad credit when applying for a buy to let mortgage in Coventry, you would be seen as a higher risk to the mortgage lender than the standard applicant, perhaps warranting the need for an even bigger deposit.

Credit Score

It may be entirely possible to get a buy to let mortgage in Coventry even with a poor credit score or with a history of having bad credit, though your mortgage lender options may be much more limited. There may even be some who won’t lend to someone with bad credit at all, depending on severity.

Fortunately, there are mortgage lenders who are willing to consider buy to let bad credit mortgages in Coventry. Of those mortgage lenders, they will want to again look at how bad it is, possibly requiring a higher deposit than you otherwise might have saved up for.

How do I apply for a buy to let mortgage in Coventry?

In order to make an application for a buy to let mortgage in Coventry, you’ll first need to find a property that you would like to buy.

From that point, the next step is to get in touch with an open & honest buy to let mortgage advisor in Coventry, in order to confirm your eligibility. They will also check the market for the absolute best deals for you and arrange your mortgage agreement in principle.

Once you have this document, you will be able to make an offer on the property you wish to buy, which will lead on to your full mortgage application process, providing that offer is accepted.

What type of buy to let mortgage in Coventry could I apply for?

Typically speaking, the majority of buy to let mortgage investors will take out an interest only mortgage on their property, as this means only paying interest per month, lowering your monthly outgoings.

Once the term comes to an end, you will owe the remaining capital balance. This is either covered by remortgaging it onto a repayment mortgage or by selling the property. You may be required to set up a repayment vehicle, to cover the costs.

Whilst this is mortgage type we come across the most with buy to let in Coventry (and is perhaps more tax-efficient for some), repayment mortgages are still valid options for buy to let landlords. This means your mortgage, much like a standard residential, would be interest and capital combined per month.

Even though this will likely increase your monthly mortgage payments, equity can grow quicker in your property. Furthermore, when your term ends, you will own your property outright, negating the need to pay back any large capital owed.

How much can I borrow for a buy to let mortgage in Coventry?

As discussed, a mortgage lender will want to stress-test your projected rental income, as a means to see how much you would have to earn in order for your monthly mortgage payments to be safely covered.

In terms of the amount that you are able to borrow, providing that your projected income can cover the amount you wish to borrow, you typically won’t have many limits. A mortgage lender may still want to see though that your projected rental income exceeds how much you owe per month, by a set amount.

What documents are needed for a buy to let mortgage in Coventry?

You will need to provide your mortgage lender with a series of documents, before you are able to proceed with your buy to let mortgage process. This can include things like proof of income, deposit, your ID, address, any bonus or commission you earn and your current/most recent P60.

If you are a self employed mortgage applicant, you also typically need to provide your SA302 tax returns. Existing landlords may also be required to provide proof of rental income, which usually is found in the form of an ARLA-regulated report, as well as a mortgage statement for your other properties.

Having as much of this with you as you can, prior to starting your buy to let mortgage process, will allow you to move through your mortgage application much quicker, so we would absolutely recommend being as prepared as you can be.

Are there any additional costs included with a buy to let in Coventry?

Of course any mortgage will have a series of costs involved and a buy to let in Coventry is no different. There will be your deposit, you could have mortgage arrangement fees, application fees and even broker fees, plus your monthly payments, all things you may be expecting.

Further to this though, there may be additional fees such as solicitors fees, disbursement fees, stamp duty land tax, valuation fees, product fees and mortgage exit fees.

Your mortgage advisor in Coventry will be able to give you a more accurate look at the potential stamp duty rates. If you ever decide you wish to leave your buy to let mortgage in Coventry early, there may also be an early repayment charge (ERC), which are often very expensive.

Lastly, you’ll have to consider the different costs that exist beyond just a mortgage and mortgage process, such as landlords insurance, letting agent fees, income tax and then of course the standard property maintenance costs.

Over time you are likely going to have tenants that need something to be looked at or fixed. Depending on the works that will need to be carried out, as well as the contractors you are working with, this can vary from cheap to quite costly.

All of the various costs that are involved with a buy to let mortgage in Coventry will depend on both your mortgage lender and personal/financial situation. Not every cost will apply, though your mortgage advisor in Coventry will make sure you are aware of all these costs.

Can I remortgage a buy to let in Coventry?

As a general rule, yes you will be able to remortgage a buy to let in Coventry. Common reasons we hear for landlords looking to remortgage a buy to let in Coventry, include releasing equity as a means of funding the deposit for a further property purchase.

The equity that is sitting within your buy to let in Coventry works a little differently than a standard residential property, if you happen to be on an interest only mortgage. Typically, your balance and interest would come down together, creating a much bigger gap between the balance and value.

With an interest only buy to let in Coventry, you would only see the interest come down. That means your equity depends on your deposit and if your property is now worth more than it was. Those who have an interest only mortgage may also decide they wish to pay their capital after all.

This is something that could be achieved, by remortgaging your buy to let in Coventry from an interest only mortgage onto a repayment mortgage. Whilst your mortgage payments would be higher, you would be able to pay both interest and capital together.

If I am a first time buyer, can I get a buy to let mortgage in Coventry?

Though you may have limited options, you may actually be able to get a buy to let mortgage in Coventry, as a first time buyer in Coventry. With buy to let mortgages in Coventry as a first time buyer, you will most likely need to put down a bigger deposit, so you can access the amount you would like to borrow.

In addition to this, it is important to remember that you would be losing benefits that first time buyers get, such as stamp duty. This is because you will not be living there and buy to let landlords will have at least some level of stamp duty that they owe on their properties.

For some first time buyers in Coventry, you might find that being a landlord is actually a good way to create a boost to your income, prior to going on to find a property of your own with a mortgage.

Please bear in mind that when this happens, a mortgage lender will be assessing you on that second purchase with the knowledge that you already have taken out a mortgage in your name before. This could affect your affordability or lower the amount that you are able to borrow.

A Guide to Remortgages in Coventry: Top Reasons to Consider

Going through the mortgage journey will prove to be beneficial. The process can come with its ups and downs, however, you will finish the process with one potential outcome when your term ends.

Getting a mortgage is a major financial commitment, for example, you’ll need to keep on top of your payments and know when your fixed-term is ending.  

When it comes to the length of fixed-term mortgage, this varies depending on the product you take out. Generally, mortgages will come in 2-year, 3-year or 5-year fixed terms. You may find that you take out an even longer fixed term like 7 or 10 years, however, this is down to your circumstance.

If you are coming to the end of your fixed term, it will be time for you to take out a new product because your current one has ended. This is when a remortgage occurs.

In some instances, you may be able to remortgage early, however, this could result in you having to pay a bigger fee ( early repayment charge) because you are switching early.  

What is a Remortgage?

Let’s begin with looking at what a Remortgage actually is. A Remortgage involves you taking out a new mortgage to pay off a mortgage that you already have. You may have a variety of options when taking out a Remortgage, some options being bigger than others.

When you take out another mortgage product to replace your current one, this is called a remortgage. You may know this is a product transfer, however, the big difference is that a remortgage is when you take out a product with a different lender and a product transfer involves you taking out a new product with your current lender.

This sounds pretty straightforward when you put it that way, however, it’s finding the right product that makes it challenging. There are a plethora of varying deals and rates on offer, which means you may need to do a lot of looking around so that you can find the most suitable deal for you. 

There are a number of reasons why people choose to remortgage, you might want to find a better rate, improve your home or consolidate debts or something else. 

Remortgage For Better Interest Rates

Usually, an average fixed mortgage term lasts between 2 and 5 years. Within this time, you will be paying off capital as well as interest. Therefore, 2-5 years later, you may find yourself in a lower loan-to-value bracket which allows you to access better rates.

With this in mind, this is why people choose to remortgage, as they risk falling onto their lender’s standard variable rate of interest (SVR). Tracker mortgages “follow” the Bank of England’s base rate. If interest rates fall, you’ll make lower payments to your lender.

If interest rates rise, your payments will increase. Along with this, lenders will put an additional percentage onto this base rate so you’re usually a rate between 2-4%. Tracker mortgage will work similarly to your lender’s SVR mortgages.

Remortgage For Home Improvements

You might feel that your current home could do with some improvements like a new extension or conversions. This might be an option if you decide to remortgage.  

When you start the process, you will get an estimation of the costs of the improvements. As soon as you have an estimate of how much the work would cost, you might be able to incorporate these costs into your mortgage when you take out a new product. This could make your monthly payments increase it, however, you will be able to fund that extension or loft conversion. 

This can be an easier option compared to going through the process of Moving Home in Coventry as this can be a stressful experience. Therefore, if you are looking to grow your family, want to add value to your home or just want to revamp your home, remortgage for home improvements might be the option for you.  

Remortgage for Changes to Your Term

You might find that you want to extend or shorten your whole term in order to switch to a more flexible product.  

In the event that you want to shorten your term, you will be able to pay off your mortgage a lot quicker. On the other hand, a shorter term can also result in higher repayments. If you decide to lengthen your term, this can lower your payments but does mean you will be paying off your mortgage for longer. 

You usually decide if you want to extend your term or not when it comes to remortgage time. Choosing to shorten your term may also give you the option to overpay, which can help you pay off your mortgage quicker.  

A flexible mortgage deal may sound appealing to you but, they do usually come in the form of a tracker mortgage. This type of mortgage is tracks the Bank of England’s base rate of interest, with this rate potentially fluctuating depending on the overall economic performance. Because of this, your payments may change each month. When the interest rates change, so do your payments.  

Remortgage to Release Equity

If you have owned a property for a lengthy amount of time, it’s very likely there is a lot of equity within it. Equity is the difference between what is still owed on the mortgage and the current value of the property. You might find that you can remortgage and release some of the equity to turn it into a lump sum of cash.  

This cash can be used for anything you want. This cash could go towards a deposit on another home, buy a new car or even pay for a wedding with it – it’s your choice! 

Through our experience as a Mortgage Broker in Coventry, we find that Buy to Let landlords release equity in order to put forward a deposit onto another property which then expands their portfolio. 

If you are aged 55+ and have a property valued around at least £70,000, it may be worth looking at your options for Equity Release in Coventry. Speak to an open & honest later life mortgage advisor to learn more about this.

Remortgage to Consolidate Debt

In the circumstance where you have built up some unsecured debt and are looking to incorporate this in to your mortgage, in some cases, this can be possible. We always advise you to speak with an expert Mortgage Advisor in Coventry because of the complexity that comes with debt consolidation. 

The reason this option can be challenging is that it is not only based on how much you owe and your property value, your credit rating is also factored in. You need to regard the fact that you’re trying to incorporate large sums into your mortgage which means your total mortgage amount will increase. 

Please don’t hesitate to contact us, if you are in need of a mortgage expert because you have bad credit. Here at Coventrymoneyman, we have debt consolidation experts that will be happy to help with your needs. 

Experienced Mortgage Advisors in Coventry – Get in Touch

When you are coming towards the end of your fixed mortgage term, you might want to start looking at your remortgage options. It’s best to begin looking around 6 months before your deal ends, it may be time to begin looking around for deals. Our team can help take as much stress away by helping you through the process. 

Book a free remortgage appointment online today. Within this appointment, you can speak to one of our knowledgable advisors who are here 7 days a week to provide open and honest Remortgage Advice in Coventry. Our goal is to provide help and support throughout the process and find you a suitable deal for your personal and financial circumstances. 

Why Use a Mortgage Broker in Coventry?

We Aim to Take Your Stress Away

Buying a home can be a stressful experience, which is why home movers and first time buyers in Coventry use a mortgage broker to help make sure their home buying process go as smoothly as possible. It’s comforting for our customers to know they have someone on their side, on hand to answer any enquiries they have.

A mortgage advisor in Coventry will ensure you obtain the cheapest mortgage to suit your needs. We take full responsibility for recommending the most suitable mortgage for you and package your application to the Lender in such a way to give it the best chance of success.

The same applies when you come to remortgage too, we like to know our customers are on the cheapest deal for the entire mortgage term.

When Should I Get Mortgage Advice in Coventry?

If you’re looking at taking out mortgage advice when buying a home, we recommend talking to a mortgage advisor in Coventry. Your committed member of the Moneyman team will be able to help you work out how much your payments will be, as well as how much you may be able to borrow.

That said, different lenders have their own strict lending criteria, so it does help to speak to an expert. If you know what you can afford well in advance of making an application, it may help you avoid any potential future disappointment. 

We aim to ensure all customers are informed about their mortgage application progress so you are fully aware of what is going on. If you have any questions, we are available seven days a week, ready to help you out in any way we can.

Free From Estate Agents, Banks or Building Societies

Mortgage Brokers work for the customer, not the Lender. This is something that is important to remember throughout your process. Our team are firmly in your corner, sometimes having to argue how strong an application may be, in order to ensure it goes through.

Our company process of requesting and checking your proof of income and bank statements ahead of time allows us to try and avoid any hurdles that may arise, hopefully before they can become a factor. 

We also can help you choose the right type of survey for your property, as well as instruct a Solicitor on your behalf to carry out the legal aspects of your transaction. 

Building Customer Relationships

We love to build up customer relationships and assist with future mortgage enquiries, whether as a Buy-to-Let landlord with your portfolio or remortgage when your term ends. This often starts with an affordability assessment and Agreement in Principle prior to even finding a house. 

Once your purchase is complete, a member of our team will keep in regular contact, and we will get in touch once more to discuss your remortgage options. We can then compare the market on your behalf as we did before to help you obtain the best remortgage deal available for your circumstances. 

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

Agreement in Principle Mortgage Advice in Coventry

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.

Should I Get Mortgage Advice in Coventry?

If you are taking on the mortgage process, you may be wondering whether or not you should take out mortgage advice in Coventry. At the end of the day, it’s all down to personal preference, as well as your finances. In many cases, however, it can be beneficial to get a second opinion.

It should be the job of a mortgage broker in Coventry to save you both time and money, making your process as stress-less as they can. This is something we pride ourselves on as a company. Whether you’re buying a new home or remortgaging an existing one, a lot of the time, we are able to help.

We have been working within the mortgage industry for a long time, with over two decades of experience. This means we know a variety of mortgage situations inside and out, with knowledge on exactly where to find the best mortgage deals for you.

Why do people get mortgage advice in Coventry?

There are all kinds of different reasons as to why people may get in touch with an expert mortgage broker in Coventry for mortgage advice in Coventry.

We sometimes see customers getting in touch with us after they have already spoken to their banks mortgage advisors in Coventry and been declined. As such, they may find themselves in need of an expert, unbiased opinion regarding their mortgage situation.

Another area we regularly help with, is first time buyers mortgages in Coventry. We love being able to help people find their footing on the property ladder with their first ever home purchase! It can be a stressful process and we try to make it as simple as possible.

No matter the mortgage situation you are in, whether self employed and struggling to evidence income, moving home and stuck in a property chain, looking to increase your portfolio of buy to let mortgages in Coventry or even something else, a mortgage broker in Coventry is here to help.

After Your Free Mortgage Appointment

When you get in touch with us, you reap the benefits of a free mortgage appointment with an expert mortgage advisor in Coventry. They will sit and chat with you about your plans for your property owning future and gather initial information from you, to help with your process.

It’s the job of a dedicated mortgage advisor in Coventry to help you through every single step of your mortgage process. This includes obtaining an agreement in principle for you, if you need us too, which can typically be done within 24 hours of your initial mortgage appointment.

From there it’s on to the next stage of your journey, whether that be making offers on a property you would like to buy or looking at better deals with a mortgage advisor, if you are instead looking to remortgage in Coventry on your home.

Once you have progressed through this next step of your process, your trusted mortgage advisor in Coventry will be able to compare mortgage deals for you, on your behalf. They will look at both your financial and personal situation, finding the deal that is likely to benefit you the most.

No matter what, your mortgage broker in Coventry is here to help, staying by your side throughout every leg of the journey. No question is a silly question and we will answer all of your queries and concerns as promptly and clearly as we can, to keep you at ease during your experience.

Our Mortgage Advice Service in Coventry

As an open & honest mortgage broker in Coventry, it is always the aim of our employees to deliver a high level of customer service. Through providing a fast and friendly service and being extremely responsive, we go the extra mile for our customers, no matter their circumstances.

When a customer gets in touch with us for mortgage advice in Coventry, we always consider every situation that is presented to us. Whilst we may not be able to help everyone, we will do everything in our power to ensure it can go in your favour.

Please feel free to take a look at our amazing customer reviews, as a way to see the levels of customer service we are able to provide. How we deliver our customer service is something that is at the heart of what we do, it motivates us everyday.

Mortgage Advisor Availability

Your trusted and dedicated mortgage broker in Coventry is available 7 days a week, from morning until late, including weekends and some bank holidays, subject to appointment availability.

Do not ever hesitate to get in touch, give us a call or use our online booking form and we will see how we can help!

Agreement in Principle & Soft Credit Searches

Credit Search Mortgage Advice in Coventry

Nowadays, people focus a lot more on their credit rating. We have seen an increase in consumers becoming aware of credit scoring and this has been evident here at Coventrymoney with many people who get in touch and have looked at their credit report online.

There are a variety of credit reference agencies out there. Experian and Equifax is the most popular ones that people use. As a Mortgage Broker in Coventry, we recommend potential new clients to use Check My File for a 30-day free trial. It will then be £14.99 a month after your free trial but you can cancel this at any time. This report pulls together the information into an easily understandable colour-coded report.

When customers contact our team, we usually receive questions about whether we will be doing a credit search on them. As mentioned, many people are aware of credit scoring and will also know that too any searches can have a negative impact on their credit score. Lenders always run credit checks, however, we do ask for the client’s permission before its carried out. Hard credit searches and soft credit searches are the two different types of credit searches that banks can run on a customer.

Credit searches

What is a hard credit search?

For a detailed analysis of your credit report, a hard credit search would be carried out. This type means any financial institution will need your permission for this to happen. The lender will be looking in depth into your situation with a hard search. Passing the credit means there is a high chance that your application is also successful which is a huge advantage.

One drawback that can happen is if for some reason an applicant cannot provide satisfactory documentation to support the information you have provided or they find that you have put forwarded false details.

Furthermore, a hard search will leave a ‘footprint’ on your credit file which means any who views your report in the future will be notified that a search has been carried out. Keep in mind that this isn’t a bad thing immediately, however, it can be if you have multiple footprints registered in a short period of time this could look like you have applied for lots of credit at once.

Even though the footprint left doesn’t determine whether your application was successful or not, lenders’ systems may automatically assume that you are being declined. From their perspective, they would think why you would go to a second lender, unless the first lender had said no.

Having a hard footprint on your every now and again is not a big issue which you don’t need to worry about but you need to be careful that you don’t have too many within a short period of time.

What is a soft credit search?

The analysing aspect of a soft credit search is a lot more straightforward. You will find soft searches on price comparison websites which can give you an idea of what products might be on offer to you or if someone wants to verify your identity.

Many mortgage lenders carry out soft searches initially, with most lenders switching to this type of search. The financial institution carrying out a soft search does mean they obtain less information compared to a hard search, however, if you are granted an agreement in principle from one of these lenders, it still increases the chances of your full application being accepted.

You may find that soft searches are more discreet because you can see that someone has carried out a soft search if you check your credit file, however, this won’t be shown to other financial institutions like banks.

With this, you will be able to apply for an agreement in principle for a mortgage because it’s pretty unlikely that this would harm your credit score, regardless if it’s successful or not.

What is a mortgage agreement in principle?

For those that are looking to make an offer on a property, we strongly advise that you have your mortgage agreement in principle in place before contacting the estate agent.

It’s key that you put yourself in the best possible position of securing the property you want at the lowest price by having your finances in place which will result in you being in a better position going forward.

With an agreement in principle in place, it will prevent the agent to “cross-sell” their own in-house mortgage services to you.

Is your situation a little out of the ordinary?

If you feel that your situation may be too complex for a Mortgage Broker in Coventry, like ourselves, to sort out, please don’t hesitate to get in touch. Here at Coventrymoneyman, we have extensive experience and rich knowledge under our belt that has allowed us to work with customers that are from a variety of circumstances. Therefore, it’s very likely we have come across a situation like yours before and our team can provide Specialist Mortgage Advice in Coventry to help with this.

Mortgage Advisor in Coventry

How to Improve Your Credit Score in Coventry

Credit Score Mortgage Advice in Coventry

The general rule around your credit score is that the higher it is, the higher the chance you have of your mortgage application being successful. In light of this, you may be wondering what you need to do in order to improve your credit score.

First of all, not everyone is guaranteed to be accepted for a mortgage. This is due to the fact that every lender has built their own credit scoring system which results in an applicant needing to demonstrate various things to a range of providers. Therefore, if your application gets declined by one lender, don’t panic, as there are lots of other mortgage lenders who may be lenient with their criteria.

This is where an expert mortgage advisor can help. They can look at your situation and financial background in order to match you to the most appropriate lender. Here at Coventrymoneyman, we always aim to pair you with the right lender the first time around and work hard in overcoming any obstacles that may occur in your situation.

There are a variety of different credit reference agencies in the UK, such as Experian and Equifax. It would be best if you check as many of these agencies as possible in order to have a good idea of your credit score. As well as this, you may find that one of the agencies could be holding incorrect data which means you can see if there is anything incorrect information and will be able to get it rectified.

Below are some helpful ways when it comes to improve your credit rating.

Improving your credit score in Coventry

Avoid unnecessary credit searches

Running a large number of credit searches can have a negative impact on your score. From a lender’s point of view, they will see this as you’re looking to borrow more money from other places which is something that will not work out in your favour.

Be conscientious when it comes to price comparison websites as they do have a reputation for carrying out discreet credit searches on people. If you are looking to apply for a mortgage in the near future, it would be best to avoid applying for any further credit until your mortgage is underway.

Check you are on the voter’s roll

One way to gain lots of points on your credit score is being on the electoral roll as it shows stability which is something a lender favours. It’s important to check all your information like your name is all correct and you’re registered at your current address, not a previous one. You can easily register to be on the electoral roll online.

Don’t run close to your maximum limit

Going over your maximum limit on a credit card each month can harm your credit score. Therefore, using a credit card and paying off the balance in full each month will demonstrate to a lender that you are good at managing your finances. Keep in mind that maxing out your limit or even worse, exceeding an agreed card limit, will not look good from a lender’s perspective.

Check your address history is keyed correctly

A credit score can make it look like you’re living in two places at once, which can be down to a number of things. You may have forgotten to tell one of your credit providers that you have moved to a new house or you may have not spelt your address correctly. This can be an issue if you have lived in a flat as the flat-apartment number can be formatted in many different ways.

Close down any unused credit accounts

Having too many credit cards can also have a negative impact on your score. Therefore, you need to go through the cards and see which ones you don’t use anymore. From this, you will need to get your account closed which can be done by getting in touch with the providers. Initially, this can be a disadvantage, because the credit scorers won’t be able to differentiate whether you close the account or the credit provider. Despite this, it’s a temporary issue that will reap its benefits in the future.

By doing this, you are reducing the risk of falling victim to fraud as you might not be aware that you have lost a card you don’t use often.

Remove financial links to others

In the case where you are financially linked to a family member or ex-partner, their credit actions could also have an impact on your credit score, in particular, if they aren’t the best at handling their money.

The unfortunate case is that you won’t be able to get this financial link removed if the account is still live. In order to detach yourself from this link, you will need to make a request with one of the credit reference agencies. Seeking Specialist Mortgage Advice in Coventry from a mortgage broker can be really beneficial as it can be a challenge removing a family member or an ex-partner, therefore, having an expert by your side to guide you could be the best option.

Credit score

There is a general argument from consumers that credit scoring is an unfair way for lenders to assess applications. The counter-argument from lenders is that it is much cheaper for them to work this way and computers give more consistent outcomes. Regardless of this, it is the most common method in the industry which is why it’s best that you look at utilising these tips to help you with improving your credit score.

One way to increase your chance of your mortgage application being accepted the first time, send an up to date copy of your credit report to your dedicated mortgage advisor in Coventry beforehand. Your advisor wants to know the ins and outs of your finances and this will help towards making the process more straightforward. Furthermore, there are still some smaller lenders in the industry who do not use credit scores, as opposed to going for the older, manual way, but they will have set rules in terms of the amount of defaults and CCJs they will allow.

Mortgage Advice in Coventry

Mortgage Payment Holidays | Mortgage Advice in Coventry

Mortgage payment holidays

At the start of the Coronavirus pandemic, the Government gave us the promise that all borrowers would be granted a three-month mortgage payment holiday if deemed necessary. Most lenders followed the Government’s guidelines and did everything in their power to help their borrowers during these hard few months.

We have thought carefully about the likely possibilities for your mortgage over the next few months and are working very closely with all of our lenders to ensure that if any changes occur, we are able to inform you right away and recommend the most ideal option for you to take so that you still feel safe and happy with your mortgage.

We feel like now is a good time to talk about mortgage payment holidays as everyone is asking about them and how they work.

What is a mortgage payment holiday?

A mortgage payment holiday is simply a period where you don’t have to pay your monthly mortgage payments. This is agreed between you as the borrower and your mortgage lender, bank or building society. In this current situation, it should be about three months.

You will still have to make all of these payments. The interest that you defer over the set period will be added on top of your loan amount whilst your capital balance will not decrease. So both your total mortgage amount and the interest on it will increase.

When you feel that you are ready to continue with your mortgage payments, either your monthly payments are recalculated at a slightly higher level or your mortgage term is extended. Lenders tend to prefer in recalculating your repayment as extending your mortgage term could put you past their standard retirement ages.

Some lenders may allow you to pay off a lump sum later on in the year to let you get back to what you were paying monthly before the mortgage payment holiday. Mortgage payment holidays are accessible for borrowers with both residential and Buy to Let mortgages in Coventry. This really helps out landlords as they have some assistance if rental payments are affected.

The Government’s proposal

Here is what the Government has said after the COVID-19 outbreak:

• Mortgage lenders will offer an automatic three-month mortgage payments holiday for borrowers who have been impacted directly or indirectly by COVID-19
• The mortgage payment holiday will apply to customers who are up to date on their payments, not in arrears, and wanting to self-certify that they are impacted by COVID-19
• This means that lenders will not complete an income and expenditure assessment, or an assessment of alternate payment options as ordinarily required under MCOB
• This proposal will allow lenders to be more responsive to customer needs and offer forbearance in a simple way to customers in an environment where the operation of collections teams made be also impacted by COVID-19
• Customers will be made aware that interest will accrue in the holiday period and they will need to make up deferred payments in the future
• Customers who wish to undertake a full assessment of their ability to pay or financial difficulty may still do so.
  
  

How do I apply for a mortgage payment holiday?

Before you go directly to your lender, we recommend that you talk to your Mortgage Advisor in Coventry first. This is because they can look through everything for you and talk you through the options available for you that will benefit you most financially. As a Mortgage Broker in Coventry, we know all about mortgage payment holidays and the dos and don’ts, so get in touch and receive a free mortgage consultation before anything else.

If you want to go directly to your lender and you are up to date with your mortgage payments, not in arrears and have been directly affected by COVID-19, here are the steps you should take:

• The customer would contact the lender and inform them that they are being impacted
  by COVID-19
• The lender would accept these details from the customer and offer an automatic
  three-month mortgage payment holiday
• No evidence is needed for the lender
• The lender makes the customer aware that interest will accrue and will be contacted at the end of the three months to complete an assessment of the customer’s circumstances
• At the end of three months, an arrangement to pay will be agreed with the customer according to their circumstances to recover any shortfall, also ensuring that the mortgage remains affordable and sustainable
• The lender notifies the customer that if they wished to complete a full assessment now, there may be other forbearance options more suitable to the customer.
  
  For more information on how COVID-19 may affect your mortgage, click here.
  
  

Will a mortgage payment holiday impact my credit score?

Yes, it can produce a negative impact on your credit score, but it shouldn’t in this situation. You are applying for a mortgage payment holiday because of a virus so your lender should make sure that it will not do any damage.

Before rushing into this, you will need confirmation that it will not damage your score. To do this, you need to contact your lender directly and ask this question, making a record of the date and time and the name of the person that you spoke to. This way, if anything changes in the future, you have a reference to what was originally said.

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

The answer to this question has changed over the last couple of days. Even when the virus wasn’t seen as a threat, you could still remortgage and transfer products as usual. Now, everything has changed and lenders are no longer offering any remortgage deals and product transfers. Things have changed so quickly!

This means that borrowers who are coming up to the end of their existing product could be forced to move onto the higher lender variable rates as there are no other lower deals available. So people who act too early could find themselves on a mortgage payment holiday that accrues a high-interest variable rate.

This is why we recommend speaking to us, your expert Mortgage Broker in Coventry. We are here to provide you with open and honest Mortgage Advice in Coventry through these next few tough months for you and your mortgage. In general, it helps if you can arrange your mortgage transfer first then enquire about your mortgage payment holiday.

What are my other options?

There are other options available for you to take to help you meet your monthly mortgage payments over these next few months. Your lender may be generous and offer you a temporary switch over to an interest-only to help you save some money on your monthly payments. This will not add any further to the loan amount by still servicing the interest each month.

On the other hand, you may not need to switch all of your mortgages to interest-only and it may be that putting your mortgage on this basis could give you that extra bit of breathing space that you need.

If you have savings, remortgaging onto an offset basis is another option. You could end up reducing your monthly payments whilst keeping your savings untouched.

An example would be that if someone had a £200,000 loan and savings account with £50,000 in, they would only pay interest on £150,000. This option could massively reduce your monthly mortgage payments.

Other options include a straight remortgage to another lender, working out costs of any repayment charges or simply extending the term of your mortgage. It’s completely up to you and you should choose whatever you think suits you better. This is where a Mortgage Broker in Coventry will come in handy, as they will talk you through all of your options and help you make a choice. They want the best for you and want to make sure that you feel comfortable and secure at all times during these tough few months.

Get in touch with a Mortgage Advisor in Coventry and discuss all of your mortgage options regarding mortgage payment holidays. We love mortgages and we love helping you! Get through these few hard months of mortgage payments with help from your Mortgage Broker in Coventry, Coventrymoneyman.

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Coronavirus & the Mortgage Market | Mortgage Advice in Coventry

Coronavirus impact on the mortgage market

As you probably guessed, the coronavirus has hit the mortgage market hard. Everything is changing so quickly and sometimes it’s hard to tell what’s actually going on. That’s why we thought that it would be best to calm things down and catch you up with the latest news on the coronavirus and its impact on the mortgage market. Here is a short video from Malcolm, the moneyman himself:

Mortgage Surveyors

Before a lender accepts a mortgage application, the property that their borrower is looking to buy will need a valuation. However, since surveyors and mortgage valuers can’t go and visit the property, lenders have put a pause on processing applications.

Some lenders rely on AVM’s (Automated Valuation Model) for valuations on properties. This means that lenders don’t have to rely on a surveyor or a mortgage valuer to physically go out and do everything in person. The problem with AVM’s is that they can only be used on restricted mortgages and on lower loan-to-values.

Recently, we have seen that lenders have decided to restrict their maximum loan-to-value down to 60%. This means that they are continuing to process these applications but not necessarily ones at higher loan-to-values.

A lender’s view

We have seen that every lender is taking a different viewpoint. All that matters is that we haven’t seen any lenders withdraw a single mortgage offer yet. We estimate that they are just waiting it out and seeing what happens. A change could happen in the coming days, weeks or even months, it’s really hard to say at this point in time.

Furthermore, lenders have decided to extend the periods of their initial mortgage offers from six months up to nine. They are giving the economy and the mortgage market the opportunity to get back on track.

Mortgage payment holidays

We talked about mortgage payment holidays last week in a recent article but we feel like we need to clarify a few things. Firstly, they are not free money, you should only take a payment holiday if you absolutely need to. You should get in touch with your Mortgage Advisor in Coventry who will go through all of your options and check whether you actually need to take one out before you go to your lender.

Lenders are more than likely to just extend the term of your mortgage anyway so it may be best to just hold off for a bit. If you are certain that you will not meet your monthly payments and you want to take a mortgage holiday, then you should get in touch with your lender as soon as possible. Lenders are asking for their borrowers to get in touch through their website rather than them phone up and this is due to the thousands of calls they are receiving every day. You are more likely to get through online too.

Make sure that you check with your lender that taking out a mortgage payment holiday will not damage your credit score or mark any arrears against your account. You must remember to not cancel your direct debit and that you will need to get permission from your lender to take out a mortgage payment holiday.

Speak to a Mortgage Advisor in Coventry

We know that everything is getting a little too much and becoming very stressful. That’s why your Mortgage Broker in Coventry, Coventrymoneyman is here to help. We want this to all blow over and for the mortgage market to resume as much as you do.

We can’t change anything though, so we got to get through this together. Your Specialist Mortgage Advisor in Coventry is available to answer all of your mortgage questions 7 days a week. We can check whether you need to take out a mortgage payment holiday or give you advice on anything mortgage that you are concerned about. We hope that we hear from you soon!

This article was originally published on 30/03/2020 and as of the 20/05/2020 the property market has now resumed and this information has become outdated. Everything was 100% accurate at the date that this article was published.

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Can I Have 2 Mortgages in Coventry?

Specialist Mortgage Advice in Coventry

Managing one mortgage can come with its challenges so imagine having to juggle two.

Regardless of this, there are a large variety of reasons why an individual may look at managing another mortgage. Through our experience as a Mortgage Broker in Coventry, we find that the most common reason why someone may look at this option is that they are a landlord looking to take out another Buy to Let Mortgage in Coventry.

If you are in this situation or something similar, we have a team of Mortgage Advisors in Coventry who will work hard to achieve your goal of obtaining a second mortgage.

The process works by the lender getting an insight into your current mortgage affordability, income and expenditure so they can get a more financial picture of who you are before they potentially accept your offer for a second mortgage. Just like with your initial mortgage, they need to know that you can afford another mortgage.

Furthermore, you may need to put down a larger deposit on this mortgage, somewhere between 15-40%.

Why would you take out a second mortgage?

As mentioned there are plenty of reasons why people will look at taking out a second mortgage with some being more common than others. Below are a few of the more popular reasons we have come across through the years providing fast & friendly Mortgage Advice in Coventry.

Second mortgage for a Buy to Let

A Buy to Let is a property that you rent out and do not live in. This is an option suitable for current or aspiring landlords.

When it comes to Buy to Lets, it’s very likely that you will need to put down a higher deposit amount. With any Buy to Let, you are required to put down an amount that is between 25-40% loan to value rate.

Buy to Let mortgage repayments and your current mortgage work the exact same. It will involve monthly bills and interest rates will apply.

In the case where you are taking out a second mortgage for a Buy to Let property, seeking a knowledgeable Buy to Let expert can be very helpful. Here at Coventrymoneyman, we have built close relationships with many landlords in the area for many years and have provided a helping hand with them when it comes to remortgages on their property.

Second mortgage for a Let to Buy

Let to Buy goes through the same process as a Buy to Let. When it comes to Moving Home in Coventry to a property that you’re purchasing and renting out your current one. The deposits and payments will stay the same as a Buy to Let because you’re still taking out two mortgages.

As well as Buy to Let, our expert Mortgage Advisors in Coventry have many years in working with Let to Buys. Book your free mortgage appointment with one of our advisors to see whether you are eligible or not.

Second mortgage to purchase a home for your children

This situation is increasingly more popular, especially in recent years. We have found many parents being aware of the challenge of getting onto the property ladder and the costs of a mortgage.

Because of the ever-growing rise of inflation and property prices, First Time Buyers in Coventry are needing help and support to move home. In some cases, many people require a bit more than a gifted deposit.

We generally find that applicants get the help they need from grandparents and parents. This is due to the fact that it’s likely they have already paid off their mortgage and are able to afford it to help. If you do get help from a family member, they will also need to pass the lender’s affordability checks so they can afford to keep up payments for their child’s and grandchild’s mortgage.

Second mortgage to raise funds

If you are looking to take equity out of your home to raise funds, people normally use the money for home improvements, debt consolidation, pursuing a big purchase like a car or funding a wedding. Furthermore, some people look to release equity and take out another mortgage.

This circumstance is also known as a further advance. This is when you borrow more from your current lender to fund something like home improvements or a second mortgage.

You may be wondering how much can borrow, however, this all comes down to the amount of equity in your property and you will still need to show that you can afford the additional mortgage amount as well as your existing one.

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

We do find that removing a name from a mortgage can be a challenge to many which result in many people leaving their name on the mortgage. Your name may still be on the mortgage, there is a possibility that you can take an additional mortgage in your own name.

It’s likely you choose this option if you are going through a recent divorce or separation. Sadly, financial commitments should be at the forefront of your mind if you are in a situation like this.

If you are looking to take out a second mortgage in your sole name, you may find some difficult to get accepted. Your lender will be aware that you are a sole applicant and are still linked to another mortgage. Regardless of whether you’ve made agreements with your ex-partner that you will still contribute to their mortgage payments, they will view this as a potential liability.

This is where it can be very complex and stressful, however, speaking to a Specialist Mortgage Advisor in Coventry could help with this. We have experienced advisors who can provide the appropriate divorce and separation Mortgage Advice in Coventry. If you are looking for further information regarding this, book your free mortgage appointment to speak to an advisor today.

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