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Opportunity For Tenants Buying From Landlords In Liverpool

Open & Honest Mortgage Advice in Liverpool

We regularly receive questions from private tenants buying from landlords, often due to some landlords offering first refusal (the opportunity to buy before it hits the open market) to existing tenants. Even if you don’t have this privilege, it might still be an option and it is always worth asking your landlord if they would be willing to offer this to you in the event of a sale.

The government decided to crack down on tax relief previously available on Buy to Let Mortgages. The changes were brought in over a 4-year period and it is only now this has taken effect that they are starting to see the impact of these changes as they receive their tax bills.

Property has been a solid means of income and a worthy investment for landlords over the years. Some landlords opted to ride out the tax changes because they are in it for the long haul, with a lengthy career as a landlord in mind.

However, some landlords were tempted to sell up and move on. There are lots of advantages on their part to selling you the property you currently reside in, which is why many of them took that route. Here are some of those:

  • Avoiding estate agents fees – the national average estate agents fee is 1.8% + vat so just by that factor alone, they’re saving a lot of money.
  • Loss of rent – it’s actually quite difficult to sell a house with a tenant already living inside. This is because tenants won’t typically put themselves out to do viewings on behalf of their landlord. Because of this, there is a chance that they will just move out, creating a “rental void” where no income is being received. Selling to the tenant guarantees rent will keep coming in right up until completion.
  • No refurb costs – if the tenant moves out then the chances are the house will need at least a lick of paint, if not more significant refurbishment to get it ready to put up on the open market. Selling to a tenant means no extra work needs to go into it, as they know the tenant already likes it that way.

Advantages to tenants buying from landlords

There are also advantages for the sitting tenants buying from Landlords in these kind of circumstances. Some are these are:

  • You are already very familiar with the property as it is your home, and you are aware of any possible improvements that need work.
  • There is no property chain involved, so the sale is less likely to fall through.
  • The landlord may offer you a slight discount from the open market value because of the costs they are avoiding.

Experienced Mortgage Advisor in Liverpool

How To Make An Offer On A Property in Liverpool?

How to make an offer on a property?

When you are at the point of being ready to make an offer on a property, it’s important that you put your circumstances across to the seller or estate agent in such a way that gives you the best chance of having your offer accepted. Whether you are a First Time Buyer or Moving Home in Liverpool, it’s always key that you know how to make an offer on a property.

A cash buyer will always have the advantage, though if you have a mortgage agreement in principle in place you will definitely be in a better position than other potential buyers who have yet to get in touch with a Mortgage Broker in Liverpool and get this sorted.

Buying a property is a negotiation process, and so if the seller rejects your initial offer you will be asked whether you want to increase your offer. So don’t be afraid to offer less in the first instance than you are willing to pay for the property you’re interested in.

If your increased offer is also rejected sometimes it just boils down to whether you are willing to pay the asking price, especially if the property in question has just been placed on the market, or whether you are prepared to walk away and find another property to live in.

As part of our dedicated mortgage advice service, we offer you a free initial mortgage consultation. So, please feel free to give us a call if you want to speak to an expert Mortgage Advisor in Liverpool. They will try their best to attend to all of your mortgage needs.

Mortgage Advice in Liverpool

Top Tips to Get into the Liverpool Buy to Let Market

The Buy to Let market is an enigma in the world of mortgages. Constantly fluctuating, growing, and changing. At times it has lost a bit of lustre, but it always seems to pick itself up and shine brightly again.

If done correctly, Buy to Let can be a long and fruitful endeavour, leading to a comfortable and constant income with the potential for high reward. Take it from Liverpoolmoneyman’s own Buy to Let Mortgage Expert, Nathan Moore, who had this to say about the benefits of this kind of investment:

“Many landlords, who have managed to find the right property(ies) and tenant(s), have found this style of investment an enjoyable and rewarding venture. Either as a main/secondary income or for retirement.”


Nathan Moore – Buy to Let Mortgage Advisor
Buy to Let Mortgage Advisor in Liverpool

Buy to Let in Liverpool

Liverpool is no stranger to the world of Buy to Let, with its L1 postcode being a prime location for investors and budding landlords. Liverpool as a whole is a worthy city for investment, being a prominent spot for business opportunities however part of its charm comes from it’s incredible private housing sector.

Statistically, Liverpool has one of the lowest average house prices in the United Kingdom, with an average price paid of £173,533 according to Zoopla. A lot of investors favour Buy to Let due to the low interest rates over recent years and affordable mortgage options. Coupled with the low house prices and potential for property value increase, it’s no wonder why people take this route!

Getting Prepared For a Buy to Let Investment

Interest rates and property values are always changing and there is a chance your investment could go down and interest rates can go up. Nothing is guaranteed in the world of Buy to Let and investments always come with risks, but with enough knowledge and preparation you may be a step ahead of other budding investors.

Here we are going to look at what you need to be prepared for a Buy to Let investment.

Research The Market You’re Investing In

First things first, you need to understand the market you are getting involved with. Are you familiar with exactly what a Buy to Let & Buy to Let Mortgage is? Is this the right investment for you? These are all valid questions that you need to make sure you have covered. You can read more about the workings of a Buy to Let Mortgage here.

To go over it briefly though, a Buy to Let is what it says on the tin; you buy a house and let it out. Letting is another term used for Renting, meaning you become the landlord, and someone pays you to live in your house.

To determine whether or not this type of investment is the right path for you, you would be better off speaking with a financial planner or one of our mortgage advisors in Liverpool. You may end up finding that you would benefit from a much different route, depending on affordability, credit score and other factors.


Make sure it’s the right choice for you

What Are The Costs Involved? What Will Your Rental Amount Be?

You will need to consider is the type of landlord you’d like to be. Would you be hands on, fixing repairs and dealing with your tenant direct, or will you hire the services of an estate agent to help with that? The latter may make things easier but comes with its own costs, whereas being hands on retains the most profit but also requires extra hard work on your part.

You’ll need to take a look at the area you’re interested in buying a property in. What are the property prices like in that area for the type of property you’re looking to buy? Say you’ve bought a detached house in an area and the average rental amount is around £800 per month. Do you have the same number of bedrooms or do you have less? Maybe you have a slightly bigger kitchen or living area that could add a little more value. In that case you could justify an increase to say £850 per month.

It’s also worth noting that buying a property in an area you’re unfamiliar with may benefit you more than buying in an area you know and love. That way you will only be following the average prices of that area and not valuing it based on local bias.

House Price Negotiations

Thanks in part to the fact you won’t need to sell a property to buy another, you will be favoured by the Estate Agent and be seen as less risk as there isn’t a chain. Your process should go similarly to that of a First-Time Buyer, without the additional hassle that Moving Home in Liverpool can bring.

With this in mind, you should also be in a better place to negotiate on the purchase price of the property. You need to make sure you don’t overpay and that your offers are relatively low, but not too low that the seller feels completely insulted. Be reasonable but be smart.

Find out why someone is selling the property you’re interested in. Is there something wrong with it or are they just ready to move on? How long have they owned the property, and have they kept up maintenance? These are all things to consider when negotiating as any additional work required may eat into your budget, justifying a potential lower offer.

Sometimes a landlord may simply be cashing in on their capital gains, often resulting in an openness for a quick sale and lower cost if offered. Alternatively, a landlord might have a family and is wanting to move home, meaning they want a quick sale but aren’t so willing to budge on price.

Local Area Appeal & The Potential For Renovation

Speaking of the local area, you need to really focus on the appeal of your surrounding area. You may want to invest in a property close to home, but is it a smart choice? The area you live in may be home to you but may not be a popular choice for others to live. As such, it may be worth your time looking out of your home area and somewhere with more potential.

You want to keep an eye out for things like the accessibility to that area, is it an easy commute, nearby jobs, schools or universities for families or students. All these and more will draw someone to an area, they want to know everything they need is not too far away.


Have you researched the area?

With that in mind, it may be worth your time hiring an outside agent to cover you in this endeavour. As mentioned before, this can obviously provide a financial hurdle due to the costs, but this is something you may need if you’re out of the area. That way, the potential tenant will have someone local to rely on in helping with maintenance of the property when required as well as looking for tenants if someone moves out.

Renovation can often improve the value of the property you’re letting out and is something that should be added prior to searching for a tenant. Renovations can not only improve the value of your property, which in turn can allow for a higher rental amount, but also appeal to more potential tenants, especially if you allow for more space.

Buy to Let Mortgage Stress Test

Another important thing to remember is that your Mortgage Advisor will want a stress test on your rental amount, to see if you are suitable for a mortgage. How this works, is say for example you were borrowing £52,000, on the basis that the interest rate is a hypothetical 5.5%, you could afford to put your monthly rent at £238.

However, the lender needs to be sure you can afford additional costs on top of what you’re already paying, so may need it to be worth 125% of this figure. This means the minimum you could put your rent is £300 per month.

One of the main things to take into account when looking at a Buy to Let, is can you afford to let it sit empty for a few months and still pay off your mortgage. At the end of the day, your lender won’t care if it’s occupied or not, they just care that you pay it back. Realistically you could be waiting 2 months or so for someone to move in, in which case you need to make sure you have the funds readily available to cover yourself, just in case.

Finding The Right Mortgage

Once you’ve worked out your rental costs, it’s time to find out what mortgage deals are available to you. A lot of the stress and hurdles can be taken away with the assistance of an experienced Mortgage Broker in Liverpool like ourselves.

We have Buy to Let Mortgage experts working here at Liverpoolmoneyman, who have a reputation for building relationships with landlords and having a large knowledge and understanding of lender criteria.

Generally, Buy to Let Mortgages are done as Interest-Only, but capital and interest is readily available also. Our dedicated mortgage advisors in Liverpool will go through your options, obtaining you an Agreement in Principle and determining whether or not you’re best suited for a tracker or fixed-rate mortgage.

Our team are available from 8am until 10pm, Monday through Sunday, to answer any Buy to Let Mortgage questions you have. Please get in touch if you require further assistance on this.

Who is Your Target Tenant?

You’ll need to decide on the type of tenant you would like to occupy your property. Some opt for student accommodation or house shares, also known as Houses in Multiple Occupation. These types of rental properties can be easy to fill and can require minimal work, depending on the tenant you have. Most student tenants prefer easy living, something to keep them comfortable in between lectures and their busy schedules. As such it would be beneficial for you to keep the property furnished with very simplistic décor and plain walls.

Potential downsides to this are that it wouldn’t be a consistent income as students would be moving in and out, as well as the risk of the property requiring maintenance or care after they leave due to the often stereotyped but likely recklessness of some students.

Alternatively, if it is a family you are looking to have as tenants, you might be better leaving it with plain walls and no furnishings. This way a family can visualise what their life might look like in your property for years to come, seeing a chance to raise a family there.

You’ve got to remember to respect your tenant too, no matter which one you opt to go with. If you agree to carry out their repairs, you need to make sure you keep up with that and get them done as soon as you possibly can. This will build up a trusting relationship with your tenant, allowing for a potential for recurring tenancy over the years and a steady income.

There may come a time when you need to increase the rent to accommodate changes in interest rates. You must remember to be fair to your tenant, respecting the trust they have in you, but also being realistic and making sure you can afford to keep running the property. Make sure to keep an eye on your Rental Yield, a percentage of what you paid for the property, against the rent you’re charging and the additional money you’ve put into it per year on things like repairs.

It’s important to keep an eye on whether or not the investment is still worth it, for both yourself and the tenant. You can’t keep on with a property that makes no money, and your tenant can’t risk losing their family home either due to either repossession or someone taking over and evicting them.


Free Initial Mortgage Consultation For All Customers

Mortgage Advice in Liverpool

We have a truly dedicated and experienced team with many years of mortgage industry work under their belt, including Buy to Let Mortgage Experts. If this is an option you are seriously looking at getting into, having a Mortgage Advisor in Liverpool will be a great benefit to you and take a lot of the stress away.

With countless customer reviews that shout about our open & honest service, you can rest assured that you will be taken care of and well informed during this important part of your Buy to Let investment process.

Please Get in Touch using our contact form or give us a call, and take advantage of our Free Initial Mortgage Consultation, offered to all who get in touch. Undertaking such a large financial commitment can be daunting, but we’ll have your back all throughout and beyond.

Mortgages for the Self Employed in Liverpool

Self Employed Guidance

Gone are the days of someone leaving school at 18 and working for one employer all the way through to their eventual retirement. The rise in new engineering and digital occupations has, in particular, allowed for the popularity of self employed roles. But the uncertain nature of this type of work can make banks nervous Self Employed Mortgage Advice here.

If you are Self-Employed, it’s not impossible to get a mortgage, though it certainly is considered a specialist area. So we will take the opportunity to help you get prepared if you’re thinking of buying a house whilst working as Self-Employed.

Self Employed Mortgage Advice in Liverpool

How many years’ accounts do I need?

Most lenders will only require a minimum of one year’s trading, with some lenders having stricter rules and wanting a minimum of two. The reason for this is that so many businesses fail within their first year and it’s a lot of risk that the banks aren’t willing to take.

How is my income assessed?

Generally speaking, lenders will take the average of your last 2 years’ earning, however, there are some who go off the latest year. This could be very good news for you if your profits are on the increase.

I’m a director of my own Limited company – does this mean I’m employed?

This is a little trickier to answer. Technically yes, you are employed, however, unless you own less than 25% of the shares, the lender will not recognise you as an employee of the business. Most lenders add your salary to your declared dividend to calculate your annual earnings, with the occasional lender using net profit, something which can be good if your business retains some profit.

My net profits don’t reflect the true picture of my business – what can I do?

This is a question we hear regularly, but unfortunately there’s not a lot we can do. Your mortgage application is assessed on the income that has been declared (net profit or salary/dividend) to the revenue. If you want to get a mortgage then you will have to have paid at least some tax.

How much deposit do I need?

No matter whether you’re a self-employed applicant or a standard employed applicant, this remains the same. You will need a minimum of 5% although it may be more than that if you only have one year’s accounts.

Will a bigger deposit help me?

Putting down more deposit will likely open you up to a better deal than you otherwise would’ve had to choose from, and you will have a wider choice of lenders too. That being said, it doesn’t make any difference to the amount of mortgage you would be granted to borrow.

I’m a contractor – am I treated differently?

Admittedly, leenders do seem to like contractors a little more at certain times, especially if you’ve built up a good track record. With that, the lenders can consider taking your “daily rate” and applying a multiplier to this rather than your net profit. There have been lenders in the past who have offered bigger mortgages to contractor applicants using this method, especially for IT contractors.

Can I self-certify my income?

Unfortunately, “self-certs” were widely abused by applicants in the pre-credit crunch days and there is no sign of this type of mortgage ever returning.

Taking out a mortgage for the self employed can certainly be more complicated than it would be for an standard employee, though some lenders may be more flexible than others when it comes to this.

That’s why It’s a good idea to speak with an experienced Mortgage Broker in Liverpool early on in the process. You’ll have realistic aspirations right from the start.

Long gone are the days when your bank manager could “take a view” on your circumstances just because you are a loyal customer. The lenders lean increasingly upon their computerised credit scoring systems and like lots of things, it’s just knowing where to look.

Product Transfer V Remortgage Mortgage Advice In Liverpool

What is product transfer?

When your initial mortgage deal reaches the end of it’s term, your mortgage lender may offer you a new deal to stay with them. This process is known as a product transfer.

Are you rewarded for being loyal?

Unfortunately, lenders do not always reward customers for their loyalty over the years, and the offer they make may not be as competitive as deals you could have access to if you go elsewhere. They are more likely to reward a First Time Buyer in Liverpool than they are someone looking to Remortgage in Liverpool.

Tempted by an online switch?

Whilst the concept of swapping to a new deal with your current lender may seem like an easy process online, it is always in your interest to see what other deals you may have access to. Lenders will also try to tempt you towards a new deal without actually taking mortgage advice.

This can be really dangerous because if you undertake this process without professional mortgage advice you are waving goodbye to all the valuable consumer protection you would otherwise have benefitted from by speaking with a Mortgage Advisor in Liverpool.

You’ll be opting out of advice

We have seen many examples of customers affecting these “follow-on” deals and locking themselves into a deal that doesn’t benefit them and isn’t appropriate to their personal circumstances. Because you opted out of advice, you then give up your right to making a complaint if you don’t like something.

We had a case in the past where a customer who was pregnant did this and was declined for a small further advance to fund some necessary home improvements down the line. She then had to pay a large early repayment charge to swap to a new lender who would grant her further funding.

Always, get mortgage advice in Liverpool

If we think a product transfer is the most suitable deal for you we will recommend that as a course of action for you and if we arrange the mortgage for you as a Mortgage Broker in Liverpool then all the regulation and consumer protection will apply.

A second opinion costs nothing, and making a mistake when taking a new product can be costly. We will do our best to ensure you take the right path with your mortgage.

The Remortgage Market in Liverpool is highly competitive and savings can generally be made by searching the market for a new deal.

Mortgage Broker in Liverpool

Agreements in Principle: Hard & Soft Credit Searches

An Agreement in Principle (also referred to as an AIP), is a piece of documentation you are given once you pass the lenders credit score. You will need one of these if you wish to qualify for a mortgage. Having an Agreement in Principle allows you to make an offer on a property you are interested in, as well as assisting when you want to negotiate on price, as it shows the seller you’re serious about your offer as a First Time Buyer in Liverpool.

What Is A Soft Credit Search For A Mortgage? | MoneymanTV

What effect does an AIP have on your credit score?

The effects of an Agreement in Principle on your credit score, completely depend on whether the lender takes a hard credit search or a soft credit search. What are the differences between these? Below we’ll answer this.

Hard credit searches:

Hard searches are more in-depth than soft searches. The main difference between hard and soft searches is that hard searches leave a footprint, which can negatively affect your credit score if you fail it too many times. If you have a good credit score however, you shouldn’t need to worry going into this as a First Time Buyer in Liverpool.

Soft credit searches:

The option you’re more likely to come across these days is that a lenders soft search. These are to hard searches, what a lite phone model is to the main release, usually requiring less information and in the majority cases leaving your credit score unaffected, even in the event of not passing.

Does an AIP guarantee me a mortgage in Liverpool?

Although an Agreement in Principle can be a massive help, it doesn’t always guarantee that you will successfully obtain a mortgage. The lender will still need you to provide them with documents in order for the underwriter to make their final decision.

You can usually find small print included on Agreements in Principle that may easily be missed. We find in some cases, when customers reach out for help about their Agreement in Principle, they’ve been turned away at full mortgage application stage.

The documents you will be required to provide can include; personal ID, payslips, bank statements and things of that ilk. As your dedicated Mortgage Broker in Liverpool, we take pride in helping our customers, whether Moving Home in Liverpool or Self Employed in Liverpool, get prepared for a mortgage.

Is my AIP a necessity when making an offer?

You may be able to get away with this, however, most credible estate agents will want evidence that you are able to proceed with the purchase in question.

How long will my AIP last For?

Your Agreement in Principle will usually need renewing after around 30-90 days, though this isn’t something you should worry about. The main reason we recommend getting one so early is to avoid being told the property you’re interested in is no longer available for purchase.

Getting your Agreement in Principle sorted also means you don’t just need to jump in and buy the first house you see. It’s a fairly easy process, so if it expires, we can quite easily help you get another one.

Mortgage Broker in Liverpool

How to get a Mortgage Agreement in Principle in Liverpool

What is an Agreement in Principle?

What is a mortgage agreement in principle?

The purpose of a mortgage agreement in principle (AIP) document is to prove that you do have a mortgage in place. To the estate agent, it proves you have good enough credit to proceed, as you have passed the lenders credit scoring system. That being said, getting a mortgage can never be guaranteed, as a full application will still require further background checks.

The value of a mortgage agreement in principle

Now you have your mortgage agreement in principle, what do you do with it? Well, having your mortgage agreed at the outset can help you negotiate on asking price with the owner of the property. It is relatively easy to obtain and is something we can arrange for all of our clients. Almost all lenders offer an Agreement in Principle.

To proceed further with a mortgage application, you will require further background checks to cover things like evidence of income, as well as a satisfactory valuation of the property itself.

Getting one in advance can really put you in a better position for negotiating, can help you avoid disappointment and allows you to figure out your limits.

Negotiating power with a mortgage agreement in principle

When you reach the point of being ready to make a formal offer on a new home, the majority of estate agents will undertake due diligence and ask you to prove that you can in fact afford to complete the purchase. Sufficient evidence of this include bank statements and also an agreement in principle certificate, which our team can provide for you. Once you have provided them with all this documentation, the estate agent will usually cease marketing the property and put a “sold” or “sale agreed” board up to let people know a deal is currently being processed.

If you already have a mortgage agreed before you make an offer, you are instantly more appealing to a seller as this proves you are not making this choice lightly and you’ve thought about how you’re going to afford the purchase. This might persuade a seller to accept an offer you put forward on their property that may be underneath their initial asking price.

Avoid disappointment with a mortgage agreement in principle

When it comes to buying a house some customers go full steam ahead and make an offer on a property without first checking that they have the means to proceed with the purchase. This can understandably leave people feeling very disappointed if this doesn’t quite work out how they’d hoped.

By that point they may have already got their heart set on their new potential family home. By getting in touch with us early on, this disappointment can be avoided. Sometimes there are things that are causing a mortgage to decline that can be overcome over time.

For example, there may be a small issue on your credit report that is proving to be a nuisance, perhaps a disputed mobile phone bill which can be easily fixed. Maybe you thought you were on the voters roll and you’re not, something that over time can be solved. In any case, it’s better than you know ahead of time, rather than mess people about. Our team will be able to tell you what you need to do to improve your credit score for the future.

Knowing your limits with a mortgage agreement in principle

Ok, so you know you’ve got a good credit rating because you’ve never been turned down for credit, you’re registered on the voters roll and you’ve always made your credit card payments on time – so what can go wrong?

Well, you could approach 10 different lenders these days and get 10 different maximum mortgage amounts! They all calculate affordability in their own unique ways. If you’re self-employed it really is a minefield: some lenders take your net profit, others your salary and divided. Some use your latest year, others an average over 3 years.

Knowing your borrowing limits is important as then you know for sure what your price range is. We’ll 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 each month.

Mortgage Advice in Liverpool

Types Of Mortgages Explained | Mortgage Advice In Liverpool

The Different Types of Mortgage

At the start of your mortgage process, you will soon realise that there are many different options available. If you are First Time Buyer in Liverpool, you are probably thinking “How could there be so many different types of mortgage?”

In this article we will provide a list of the most popular types of mortgages available on the market and hopefully answer any questions you have about them.

What is a fixed-rate mortgage?

What is a Fixed-Rate mortgage? | MoneymanTV

A fixed-rate mortgage means that your mortgage payments are not going to change for the length of your term. You are able to choose the length of this yourself, with common choices being 2, 3 or 5 years or longer. Regardless of what happens to inflation, interest rates or the economy, you have the security of knowing that your mortgage, likely your biggest outgoing payment each month, will remain the same.

What is a tracker mortgage?

What is a Tracker mortgage? | MoneymanTV

A tracker mortgage means that your interest rate will track the base rate set by the Bank of England. What this means is, the lender that you are with does not actually choose the rate that will be applied, and you will be paying a percentage above the Bank of England base rate. In an example, if the base rate is 1% and you are tracking at 1% above base rate, you will be paying a rate of 2%.

What is a repayment mortgage?

What is a Repayment mortgage? | MoneymanTV

When you take out a repayment mortgage this means that each month you are paying back a combination of both interest and capital. Providing that you keep your payments going for the full length of the mortgage term, you are almost guaranteed to have fully paid off the mortgage by the end of your term, resulting in the property becoming solely yours.

This is probably the most risk-free way to pay your capital back to the lender. Early on into your mortgage term, it is mainly the interest that you are paying and your balance will go down at a rather slow rate, especially if you have taken out a 25, 30 or 35-year term. The benefits of this arise in the last ten years or so of your mortgage, where your payments are covering more capital than interest and the balance will go down at a much quicker pace.

What is an interest-only mortgage?

What is an Interest-Only mortgage? | MoneymanTV

Whilst many Buy to Let Mortgages are set up on an interest-only basis, it is much harder task to get a residential property on that same basis.

The likelihood for lenders to offer an interest-only product now is a lot less than it was.  That being said, there are certain circumstances where this can be a viable option, including things like downsizing later on in life, or having other investments what you will use to pay the capital back. Lenders have stricter rules when it comes to offering these products now and the loan to values are a lot lower than they used to be.

What is an offset mortgage?

What is an Offset mortgage? | MoneymanTV

With an offset mortgage, the lender will set you up a savings account to work alongside your mortgage account. How this works is that, for example, if you have a mortgage balance of £100,000 and £20,000 is deposited into your savings account, you would only be paying interest on the difference, which in this case would be £80,000. This can be a much more efficient way of managing your money, especially if you pay a higher rate of tax.

Mortgage Broker in Liverpool

Gifted Deposit Mortgage Advice in Liverpool

What is a gifted deposit?

A Gifted Deposit can either be the full amount or a partial amount of the required deposit to put towards a property, gifted to you with an agreement that it is not a loan and you do not owe them any money down the line.

How can gifted deposits help?

Gifted deposits come in very handy for those who have saved enough money for their monthly repayments, but possibly due to a lower income, aren’t able to afford the initial deposit that is required for the property you are hoping to purchase. Having more gifted deposit available may also allow for you to receive better mortgage rates.

Who can gift The deposit?

Commonly, it’s parents (birth and adopted) and carers who are able to gift you the deposit. This is often known in the industry as the “bank of mum & dad”. There is the potential for other family members to gift you the deposit, though this is dependent on specific lenders and would require care when trying to find the most appropriate mortgage lender.

Do your parents know you need help?

When speaking to customers, we sometimes find that they aren’t aware that their parents can help with their mortgage, or don’t feel like they can ask them for help. The reality is that most parents are willing and ready to help out their children, helping them to take that first step onto the property ladder.

Statistically, taking out a mortgage works out a lot better for people than renting does, thanks in part to you being able to possibly pay less per month on your repayments over your rent. The deposit could come from inheritance, with some parents known to gift it earlier on in life if they already have enough in savings or have released a certain amount of equity from their own family home.

Gifted deposit vs loans

A lot of lenders won’t accept a loan as a means of paying your deposit due to the lender being unsure that you’d have enough free income to pay back both the loan and the mortgage simultaneously.

Is there a maximum or minimum gifted amount?

There isn’t a limit on the maximum amount you can receive as a gift, although there is at least one lender that insists you put in at least 5% deposit from your own personal funds.

Who can benefit from a gifted deposit?

The people who will receive the most benefits from this tend to be First Time Buyers and Home Movers. It can also be useful when used alongside the Help to Buy Scheme, as the required 5% deposit, depending on the lender, can be paid through the means of gifted deposit.

What proof is required?

Generally speaking, all lenders will require a gifted deposit form. Depending on the lender, you may be asked to provide further proof and ID (things like a passport or bank statements).

Offering Gifted Deposit Mortgage Advice in Liverpool

How Much Can I Borrow For My Mortgage In Liverpool?

How Much Can I Borrow For A Mortgage | MoneymanTV

How much can you borrow?

Are you a budding First Time Buyer in Liverpool? Maybe you haven’t thought about Moving House for quite a while? In either of these cases you are probably asking yourself one of, or both of the following questions; “Can I get a mortgage in my situation?” and “How much can I borrow?”. These are two questions we hear regularly when providing mortgage advice in Liverpool. In this article, we explain the latter, something that over the last 10 years has changed quite a bit.

How much were you used to be able to borrow?

If we look back at the ’80s and ’90s, most mortgage applications were underwritten manually. This means there was lots of “human intervention” in the mortgage application approving process. You’d make an appointment with your local building society manager, and he or she would interview you about your circumstances.

They would encourage you to save with them for a while until you prove yourself to be good enough to handle credit. The manager would then grant you what was the equivalent of today’s Agreement in Principle. Following this you would receive mortgage advice and an estimation of how much they would be able to lend you.

At face value, this sounds very much like a highly personalised process with a common-sense approach. That being said, it could often lead to inconsistent decision-making. The manager had the discretion to interpret the lending manual as they saw fit. What this means is that you could possibly approach the same Building Society in a different town or city and the result would come out different.

To make sure things like this stopped happening and more importantly, to cut costs, lenders moved to automated affordability calculations. “Caps” were applied so they would lend you more than, say, 3 or 4 times your standard household income.

As the 2000s went onwards, lenders were becoming more and more generous in the amount they would lend customers. Some lenders would even offer self-certified mortgages, meaning no background checks were taken so they were taking the applicants word on how much they were earning!

Such practices of course failed, and the market crashed. 2008-2010 were very difficult years if you were trying to get on the property ladder, as the market was in a poor state. Lenders stopped lending for the time being and created a very cautious (over-corrected) lending environment.

How much can I borrow nowadays?

The market eventually (and thankfully) recovered, and in 2014 the regulator launched the Mortgage Market Review (MMR). This was a brand new set of rules for lenders to follow. The old-style income multipliers which took little account of household expenditure were now gone.

Before 2014, two applicants earning the same could borrow roughly the same as each other, regardless of the little details and differences, including how much they spent each month. Then came brand new affordability models. These took a much more forensic view of how mortgage applicants managed their money on a monthly basis.

There is still a “cap” in place (most lenders will not go past 4.75 times your annual income) but your spending habits are also analysed more harshly. So, for example, if you have high childcare costs, lots of credit commitments and a student loan, it is likely you will be offered less than your work-colleague who doesn’t have any of these things to pay for.

We still find ourselves regularly surprised by the large variances lender to lender in how much or little they will lend customers. Some lenders seem to penalise low-earners (they may only want one type of applicant) and some take pension contributions as a fixed outgoing, so would often lend the likes public sector worker with a big pension deduction less than a private sector.

If you need to maximise your borrowing capacity to obtain the home you need to buy then you’ll need the help of a trusted and experienced Mortgage Broker in Liverpool on your side. Our advisors are able to research the market on your behalf to see if anyone will lend you the amount you need.

Before you take out a mortgage you should sit down with a Mortgage Advisor in Liverpool and work out your finances together to ensure that the repayments are to the level you were expecting.

Mortgage Broker in Liverpool

Here at Liverpoolmoneyman, we offer a free initial mortgage consultation for all customers. Contact us and we’ll get you booked in as soon as possible.

Liverpoolmoneyman.com & Liverpoolmoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited registered in England, registered number 6789312 and registered office 10 Consort Court, Hull, HU9 1PU.

© 2021 Liverpoolmoneyman

Liverpoolmoneyman, Rodney Chambers, 40 Rodney Street, Liverpool, L1 9AA.

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