Help to Buy Archives - Coventrymoneyman

Do Gambling Transactions Look Bad on My Bank Statements?

Lenders will look out for a variety of things when it comes to assessing your bank statements. They do this in order to see what your spending behaviours are like to determine whether or not you will keep up with your mortgage payments or not. A common question we find crops up when speaking to customers is: “do gambling transactions look bad on my bank statements”.

What Do Lenders Look For On My Bank Statements? | MoneymanTV

Mortgage Questions to Consider

What has it got to do with the lender whether I gamble or not?

You might enjoy putting down an annual bet on the grand national or regularly use internet betting sites, as you can tell, there is nothing illegal about properly licensed gambling. It is known to be a popular hobby or pastime with many bookmakers advertising it on mainstream TV and radio.

If you have seen these adverts, you have probably noticed that they always urge customers to ‘please gamble responsibly’ and this is an important point you should think about when applying for a mortgage. It’s not the lender’s job to dictate your spending habits or moralise the ethical pros and cons of gambling, however, they do have a duty (underscored by mortgage regulation) to lend responsibly.

Think about it this way, if lenders need to prove to the regulators that they are making well-judged lending decisions, it’s fair for them to expect a similar approach when it comes to their personal finances. If you were lending your own money would lend it to the applicant who gambles or the one who doesn’t?

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

As stated previously, it is not illegal to gamble. With this in mind, you will not be declined by a mortgage if you have the odd gambling transaction on your bank statements. The lender will decide whether these transactions are reasonable and responsible. They will look in detail of how frequent these transactions are, the size of the transactions in connection with the person’s income and the impact upon the account balance.

Having infrequent small gambling transactions that make little difference on a regular credit bank balance will not likely be seen as important. On the flip side, placing bets most weeks or being constantly overdrawn, the lender will view your spending behaviours as irresponsible and decline your application.

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

As you know, lenders will look at your bank statements to basically see how you manage your money and to help them determine whether they are confident in you managing payments or not.

Lender are financial institutions that either directly or as part of a wider group, usually sell current accounts, overdraft facilities credit cards and personal loans, therefore, you need to know that these factors all go towards wise financial planning. It’s good for a mortgage applicant to know how these facilities are managed. You might have an overdraft facility and occasionally use it, which is not essentially a bad thing, however, exceeding the overdraft limit regularly which is not so good. If you have excess overdraft fees or returned direct debits, these would be things lenders will look for and will show them that your account is not being managed well.

As well as this, lenders will also look for credit transactions from pay-day loan companies; “undisclosed” loan repayments (i.e. if you said on the application that you have no other loans but there is regular loan payments appearing, this could be an issue). They would also look out for any missed payments and they see how much of a typical month is spent in overdraft – i.e. you might go into credit on payday and for the rest of the month you are overdrawn, you need to wonder how you would manage with a mortgage.

What can I do to improve things?

You can be sensible and plan ahead if you can. Usually, a bank still request up to three months of your most recent bank statements. These documents will show your salary credits and all your regular bill payments. Because of this, it’s best that you avoid any of the situations above, especially if you are looking to apply for a mortgage in the near future. You could avoid gambling for short period and work on presenting your bank account in the best way.

Seeking help and support from Mortgage Broker in Coventry can be helpful because there are some lenders who may ask for fewer bank statements than others or may not request them at all. Despite this, lenders do still have the right to reserve the right to request bank statements in particular circumstances so it’s best that you be as prudent as possible when you are in the midst of any mortgage application. Remember, if you do gamble, please gamble responsibly!

Get in Touch With a Mortgage Broker in Coventry

In the circumstance where you are a First Time Buyer in Coventry who doesn’t have a lot of knowledge about mortgages, it’s you get some specialist advice from an expert Mortgage Advisor in Coventry. Throughout the process, your dedicated advisor will provide a helping hand with your application and work hard in getting you up to date so that lenders will be impressed.

Shared Ownership – What is it? How does it work?

The Shared Ownership scheme was introduced following the credit crunch in 2012, the scheme gives first time buyers and home movers the chance to buy a share of a property and then rent the remaining part of it.

Shared Ownership Mortgage Advice in Coventry

What is shared ownership?

Shared Ownership will let you take out a mortgage/purchase a share of a property. This is a percentage-based share; usually, you will have to own a share of at least 25%-75%. However, in recent times, some properties are letting you have a share as low as 10%.

You will also have to pay rent back on the remaining share of the property. Your mortgage bills should be lower as you’ve taken out a mortgage on a lower share, so you should be able to compensate for the rent payments.

Furthermore, since you’re taking out a lower share in the property, your initial mortgage deposit should be lower.

Maybe partial homeownership is the route that will help you get onto the property ladder.

How does the scheme work?

Although it can differ based on your credit history, since it’s likely that you’re only purchasing between 25%-75% of the property, the minimum deposit required should be lower.

Here’s an example of how Shared Ownership would work. If you take out a 50% share of a property that’s valued at £250,000, you’ll only need to borrow £125,000 for your mortgage. In addition to this, say that you’re required to put down a 5% deposit, you’ll only have to supply £6,250 rather than the whole £12,500 if you were to take out a 100% mortgage on the same property.

Once your Shared Ownership papers have gone through and you’ve put down your deposit, just like any other mortgage type, you’ll start paying back your mortgage each month. You’ll also be paying rent to the housing association that is linked to the property.

In theory, your combined mortgage and rent payments shouldn’t be as much as if you were to have taken out a 100% mortgage. Your mortgage advisor in Coventry can go through the costs with you.

Costs and fees

With any type of mortgage, you’ll be faced with a few different costs and fees; the same costs should apply to Shared Ownership.

You’ll have to consider obvious set-up/mortgage arrangement fees and possibly booking fees. There may also be a stamp duty charge on your property, it depends on the property price and how much you’re buying it for. You can speak to your mortgage advisor in Coventry about stamp duty to find out which threshold your property is in. Don’t forget about solicitor and legal fees too.

Costs may vary depending on the property that you’re buying. Deposit size, monthly payments, arrangement fees will differ from property to property.

How can I apply?

You’ll have to match the Shared Ownership criteria before you can move forward with your application:

  • You must be at least 18 years old.
  • If you live outside of London, your household annual income must less than or equal to £80,000. If you live in London, this is upped to less than or equal to £90,000.
  • You can’t have ownership over another property during your Shared Ownership mortgage application. You must be a first time buyer in Coventry or in the process of selling your current property.
  • If you can afford a house on the open market, you will not be able to take out a Shared Ownership mortgage. It was introduced to help struggling homebuyers.
  • You must prove that you are not in any kind of arrears, this includes both mortgages and rent.
  • You’ll need to show evidence of a good, clean credit history. This means that you may struggle if you have a CCJ (county court judgement) in your name or have had past credit issues.

Although this may seem like a long list of requirements, you must remember that most of the other home buying schemes are the same or have an even longer list!

At the end of the day, the scheme was made for a specific target audience, so if you don’t match it, it probably isn’t for you.

Speak to a Shared Ownership Mortgage Advisor in Coventry

Our team has been working as a mortgage broker in Coventry for over 20 years now. Along the way, we have helped many applicants secure Shared Ownership mortgage products – it’s one of our many specialities.

Shared Ownership fits within the government-led ‘Own Your Home’ project. There are many different schemes available through this project; you can find out more information here: www.ownyourhome.gov.uk

We offer a free Shared Ownership mortgage appointment to every customer. Book online today and speak with a mortgage advisor in Coventry at a time that suits you.

Why Use a Mortgage Broker in Coventry?

Why Use A Mortgage Broker UK? | MoneymanTV

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

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.

The Popularity of Gifted Deposits

The benefits of receiving a gifted deposit

We tend to find nowadays that more parents are gifting a deposit than ever before. Realistically, the “Bank of Mum & Dad” is now within the UK’s top 10 biggest lenders.

It’s no surprise how many younger people struggle to save enough for a deposit and lean on their parents or friends to help gift part of the entire housing deposit. Some parents or other family members, such as grandparents, are now gifting amounts upwards of £24,000.

Extra assistance to get a mortgage

Hundreds have become reliant on a family member every year, hoping to help them onto the property ladder. When speaking to some customers, we found that they felt a sense of personal responsibility.

It’s no surprise why many need that extra support, an increase of property prices, that has gone way over the average wage, leaving many unable to save for the deposit on their first home while coving the expenses of rent and utility bills. That said, it’s become more apparent if there is only one income supporting the household or being a sole applicant.

Escaping the rental cycle & getting a mortgage in Coventry

While renting may seem helpful in the short term, it can harm any chance people have to save for a mortgage deposit in the long run. Some decide to move back in with their parents to help save up the necessary costs for a larger deposit. Surveying 1600 parents who had helped their children out, many went on record as saying they had used their savings to do so. 

Another concern is that some said they had withdrawn from their pension schemes or equity to gift a deposit. Essentially, this is them putting forward any inheritance their child would receive.

To read about what could be available to you, read our help to buy service page, or check out our first time buyer in Coventry service page. If you like to arrange to speak with a mortgage advisor in Coventry, please feel free to get in touch with us today. 

Should I Get Mortgage Advice in Coventry?

Mortgage Broker in Coventry

Should you get Mortgage Advice in Coventry? It really depends on your personal & financial situation, however, sometimes it’s always best to get a second opinion from an expert.

As a Mortgage Broker in Coventry, our job is to try and help you save both time and money. Whether this is saving money on your current deal when it’s time to Remortgage in Coventry or finding you a great deal for your new property, most of the time we are able to help. We have over 20 years of experience within the mortgage world, so we know exactly where to look for the best deals.

Why do people come to us for Mortgage Advice in Coventry?

There are lots of different reasons to why people may want to come to a Mortgage Broker in Coventry like us for mortgage advice. Quite a few of our customers come to us after being declined by their bank and need an expert’s opinion on their mortgage situation. Also, we get a lot of First Time Buyers in Coventry that need help getting the ball rolling.

Remember, no matter your mortgage situation, we are still here to help. Whether you are Moving Home in Coventry, Self Employed and struggling to get a mortgage, remortgaging or even interested in Buy to Lets, we may be able to help! All you need to do is get in touch and claim your free initial mortgage consultation in Coventry. We specialise in lots of different areas, once we know your situation, we will pass you onto a Mortgage Advisor in Coventry, and before you know it, your mortgage journey will be on the move.

After your free mortgage consultation…

Once we have taken some details off you during your free mortgage consultation, you will be passed onto one of our expert Mortgage Advisors in Coventry. They will help you through the process and even help you get an agreement in principle arranged if you need help with that. All you have to do is find a property that you want to make an offer on and then the rest will fall into place.

After you make your offer, we will compare mortgage deals for you. Your Mortgage Advisor in Coventry will look at your personal and financial circumstances and then try and find deals that will benefit you most. Throughout the whole process, we will right by your side to provide our full help and guidance whenever you need it.

Our mortgage advice service in Coventry

As a reliable Mortgage Broker in Coventry, we always aim to provide an excellent level of customer service. Through a fast and friendly service, to being responsive at all times, we always go above and beyond for our customers, no matter their mortgage situation. When someone approaches us for Mortgage Advice in Coventry, we always consider every situation that we are faced with; no one gets turned away.

If you want to see more of our amazing customer reviews, feel free to check out our reviews page. We take pride in our customer service, it’s what keeps us moving forward as a business.

Availability

Your Mortgage Broker in Coventry is available 7 days a week! So, don’t ever hesitate to get in touch; our advisors will be waiting by the phone for your call.

Customer service is at the heart of our company, we work solely for you. For a free mortgage consultation, fill out our form on the contact us page or give us a call. We can’t wait to hear from 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

How to Improve Your Credit Score in Coventry

Credit Score Mortgage Advice in Coventry

Way to improve your credit score | moneymanTV

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.

Mortgage Broker in Coventry

How to Buy a Home in Coventry With a 5% Deposit | Mortgage Market Update 02/10/20

Mortgage Advice in Coventry

The mortgage market is still recovering from the effects of the coronavirus. It’s still very difficult to get a 95% mortgage (5% deposit) as lenders are only really looking for 90% or less. However, due to the latest mortgage market update, there are a couple of ways around this that can help you get a 95% mortgage. As an expert Mortgage Broker in Coventry, we are here to tell you how you can get a 95% mortgage using the Help to Buy Equity Loan or the Shared Ownership scheme:

How to Buy a Home With a 5% Deposit | Shared Ownership & Help to Buy Equity Loan UK

Help to Buy Equity Loan

The way the Help to Buy Equity loan scheme works is that you put down a deposit of 5% or more and then the government will loan you the remainder to make up a total of a 25% deposit. This means that the government own a 20% stake in your new home. Along with your mortgage, you will have to pay off this 20% equity loan. For the first 5 years of you living in the property, this loan will be interest-free. If you haven’t paid it off within these 5 years you will start receiving interest on it; this will start at 1.75%.

So you can buy a home under the roof of this scheme, although, there are some rules that come with the Help to Buy Equity Loan scheme that you need to meet in order to qualify for it:

  • The scheme is only accessible on newly built properties only
  • You will need to be a First-Time Buyer in Coventry
  • The maximum purchase price is £600,000
  • You can only own this property
  • You have to be buying the property for purely residential use only and not as a Buy-to-Let

If you take these points into account, do you think that the Help-to-Buy Equity Loan scheme could be right for you? If so, it could be time to jump at the opportunity and get yourself started on your Help-to-Buy journey. You can do this one of two ways, either by yourself or with a professional Help-to-Buy Mortgage Broker in Coventry. Getting Help-to-Buy Mortgage Advice in Coventry could take all of the stress off your back. An Advisor will guide you through the whole process and fully explain everything that is going on at every stage.

Shared Ownership

You can also get yourself onto the property ladder with a 5% deposit through the Shared Ownership scheme. The Shared Ownership scheme allows you to purchase a percentage of your mortgage and then pay the rest on rent. The percentage that you can buy is normally between 25%-75%. Essentially, you and the government share the property; your share percentage in the property can be increased at any time.

Just like the Help-to-Buy Equity Loan scheme, you will have to meet certain requirements to access the Shared Ownership scheme. Here are the rules that you will need to adhere to in order to qualify:

  • You can’t have a household income of more than £80,000 per year
  • Can only access if you can’t get a mortgage any other way
  • You need a good credit history
  • You can only own this property

If you are struggling to obtain a normal mortgage, the Shared Ownership scheme could be for you. Also, getting expert Mortgage Advice in Coventry could help you get started with your Shared Ownership mortgage.

Summary

Your options may be limited with a 5% deposit, however, the Help-to-Buy Equity Loan Scheme and Shared Ownership Scheme are definitely two routes to consider. Despite the fate of the mortgage market being up in the air, at the moment these schemes are still available and could help you obtain a great mortgage deal.

If you want to start your mortgage journey, it could prove beneficial to approach a Mortgage Broker in Coventry, particularly in this day and age. You want to have the best chances in your mortgage application being accepted so approaching a Help-to-Buy and Shared Ownership specialist could be the best option for you.

Coventrymoneyman.com & Coventrymoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.

Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk

The information contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.
Should you have cause to complain and you are not satisfied with our response to your complaint, you may be able to refer it
to the Financial Ombudsman Service, which can be contacted as follows

The Financial Ombudsman Service, Exchange Tower, London, E14 9SR
www.financial-ombudsman.org.uk

© 2022 Coventrymoneyman

Coventrymoneyman – Sherbourne House, Humber Avenue, Coventry, CV1 2AQ

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