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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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%.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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).
When lenders ask for your bank statements, you can expect them to look for a wide range of things. However, their main goal is to assess whether you are the kind of person who handles money responsibly and is likely to keep up to date with their mortgage payments.
In recent months one question is being asked by applicants speaking with one of our Mortgage Advisors in Liverpool: “do gambling transactions look terrible on my bank statements”.
Whether you have an annual bet on the grand national or regularly use the internet betting sites. Clearly there is nothing illegal about properly licensed gambling.
Many people can see gambling as a mainstream hobby or pastime similar to many others. Still, it shouldn’t get forgotten that even the gambling advertisers urge customers to “please gamble responsibly” and this is the key to bear in mind when applying for a mortgage.
Consequently, whilst it is not a lender’s job to tell you how to live your life, how to spend your money or indeed to moralise on the ethical rights and wrongs of gambling, they do have a duty (underscored by mortgage regulation) to lend responsibly.
Suppose lenders need to prove to the regulators that they are making sensible lending decisions. In that case, it isn’t entirely unfair of them; therefore, to expect the people to whom they lend to adopt a similar approach when it comes to their finances.
Think about it. If you were lending your own money. Would you lend it to the applicant who gambles or the one who doesn’t?
As mentioned above, it is not illegal to gamble so just because you have the odd gambling transaction on your bank statements it doesn’t automatically mean you will get declined for a mortgage.
However, the lender will consider whether these transactions are reasonable and responsible. Thus they will mainly look at the frequency of these transactions, the size of the transactions about the person’s income, and the impact upon the account balance.
If these transactions are infrequent small amounts that make no significant impact on a regular credit bank balance, then they are not likely to be regarded as necessary.
However, if you bet most weeks or you get overdrawn the lender continuously, therefore, expected to see that as being irresponsible and decline your application.
As we’ve seen, essentially lenders are looking at your bank statements to show how you manage your money and to help them establish whether this gives them either the confidence that you are financially sensible or the evidence that you are not.
Remember, lenders are financial institutions that, either directly or as part of a wider group, often sell current accounts, overdraft facilities credit cards and personal loans, so understand that these things can all play a considerable role in prudent financial planning.
The key for a mortgage applicant is how these facilities get managed. For example, having an overdraft facility and occasionally using it, is not inherently a bad thing; regularly exceeding the overdraft limit – not so good.
Consequently, lenders will look for excess overdraft fees or returned direct debits because these would generally show that the account is not being well conducted
Other things to look out for include credit transactions from payday loan companies; “undisclosed” loan repayments (i.e. if you said on the application that you have no other loans but there appear to be regular loan payments, this could be a problem).
They would look out for any missed payments; finally, they might also consider how much of a typical month get spent overdrawn – namely if you only go into credit on payday and for the rest of the month are exaggerated, how sustainable is this mortgage?
The simple answer is – be sensible and, if possible, plan. Typically, a bank would ask for up to three months of your most recent bank statements.
These will show your salary credits and all your regular bill payments. Thus, if you know you’re likely to want to apply for a mortgage in the not-too-distant future. Try to make sure that you avoid any of the above pitfalls.
Take a break from gambling for a short while. Then work on presenting your bank account in the best possible light.
Your mortgage broker can help you as some lenders may ask for fewer bank statements than others. Or indeed some may not even ask for them at all.
However, even these lenders would reserve the right to request bank statements in certain circumstances. So your best bet is to be as prudent as possible in the run-up to any mortgage application.
Remember, if you do gamble, please gamble responsibly!
If you are a first time buyer in Liverpool who doesn’t know a lot about mortgages. You should get some specialist mortgage advice from a Mortgage Advisor in Liverpool.
We can guide you through the whole mortgage process and help you with your application. To get you on track so that lenders will be impressed.
Coming off the back of lockdown 2.0, it’s safe to safe that the property market is running nice and smoothly. We expected the lockdown to affect the market in some way, shape or form, however, to our surprise it was the opposite!
During the first lockdown, the market came to a brief halt, so, in true nature, people suspected a similar situation this time around. However, everyone knew what to expect and the guidelines were made very clear, so everyone knew how to prepare for the month-long lockdown.
As a Mortgage Broker in Liverpool, we have seen the market swing back and forth all year round which has put a lot of pressure and stress on home buyers. Even during the chaos, this year we still have managed to function effectively and still process thousands of mortgage applications. How have we managed? What have we been up to? Here is a look at behind the scenes to your Mortgage Broker in Liverpool and what it’s like getting Mortgage Advice in Liverpool during these unprecedented times.
Behind the scenes, your Mortgage Broker in Liverpool is running very smoothly, despite the bumps that have tried to trip us up over these last 12 months. Demand in the market is very high at the moment, which has allowed us to carry on providing expert Mortgage Advice in Liverpool.
Although everything is good on our end, although, there still may be a slight hold up with your mortgage application. This is because most estate agents, solicitors etc, are working from home now, so things that normally come with ease are taking a little longer to complete.
Maybe approaching a Mortgage Broker and getting Mortgage Advice in Liverpool could be your option; it could even speed things up! We know all of the measures that have been put in place and can still provide our full help and guidance over this December.
Beat the January rush! Think about all of the other homebuyers that you could put yourself in front of if you opt to get Mortgage Advice in Liverpool this December. January is one of the busiest time of the year to get your mortgage process started, so why not get ahead of the game?
We know that this time of year is already stressful enough, and that’s exactly why will be there for you at all time and will sort everything for you so that you have the easiest and most stress-free process as possible.
Whether you are a First Time Buyer in Liverpool or planning on Moving Home, we are here to help you take a step up the property ladder. Having a Mortgage Advisor in Liverpool by your side could be what you need, especially during these strange times.
Customer service is at the heart of our company; it always has been and always will be. Now our service is as important as ever and making sure that we are being responsive and reliable is our top priority with every customer.
No question is too small to ask, we want to keep you in the loop at all times. If you are unsure on anything whatsoever, if you ask us what’s going on, we will break it down for you so that it’s clear where you are in the process.
All of our Mortgage Advisors in Liverpool are here to support you through your whole mortgage journey. To show how amazing our customer service is, here is a quick look at some our reviews from over the lockdown…
“I found all the staff involved very helpful and easy to contact when needed. Every form and piece of information was spoken through and made easy to understand, very useful we buying a house for the first time.”
“Liverpoolmoneyman provide a great service and got us a mortgage really fast, Even through this pandemic, I couldn’t thank them enough and would definitely recommend”
“As a First Time Buyer, I honestly had no idea what I was in for! But Wayne and the team were super supportive and friendly to speak too! They provided step by step advice and were always available to speak too. If I had any queries or if they weren’t available right away they always got back to me within the same day.”
For more excellent feedback, feel free to check out our reviews page.
Your Mortgage Broker in Liverpool is ready to take your call and help you get your mortgage process started. We also provide a free mortgage consultation to anyone who approaches us for Mortgage Advice in Liverpool.
Just because your scenario is complicated, doesn’t mean we can’t help! We love a good challenge, so don’t hesitate to get in touch. We are available through December from 8am-10pm every single day, we can’t wait for you to contact your Mortgage Broker in Liverpool.
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.
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.
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.
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.
“What is a Lifetime ISA?” is a question that we receive on a regular basis as a Mortgage Broker in Liverpool. Despite applicants having heard of Lifetime ISAs, most of them don’t actually know what they are. People occasionally get them confused with the Help to Buy ISA, although they are similar, they also have their differences. Plus, the Help to Buy ISA is currently unavailable (as of March 2020).
Off the back of the interest in Lifetime ISAs, we decided to make a video and an article on the subject. Firstly, let’s look at the basics…
To put it simply, a Lifetime ISA is a savings account where your money grows tax-free. The government will also give you an extra 25% on top of whatever you save…sounds good right?
However, there is a small catch, you can only save a maximum of £4,000 a year and this total is without the government’s extra 25%. So, if you manage to save the full £4,000 and then you account for the extra £1,000, you can get a maximum of £5,000 a year.
The proceeds of your account can only be used to purchase your first property. You can’t use the savings on anything else but a home.
So, if you are a First Time Buyer in Liverpool but still want to hold off on your mortgage journey, you could invest now to prepare for that step onto the property ladder in the future. As a Mortgage Broker in Liverpool, we always advise applicants, especially first time buyers, to prepare sooner rather than later.
In order to qualify for the Lifetime ISA, you must meet some certain requirements:
If you want to find out some more helpful information on the government’s Lifetime ISA, feel free to check out their official Lifetime ISA page here: https://www.gov.uk/lifetime-isa.
If you are happy to go straight to a Mortgage Advisor in Liverpool and want to speak to them about your options, don’t hesitate to get in touch and we can talk you through your Lifetime ISA options.
If you think that the Lifetime ISA is for you, it may be time to get Mortgage Advice in Liverpool. Firstly, when you approach a Mortgage Broker in Liverpool like us, we can see if the Lifetime ISA scheme is right for you and can look at whether it will benefit your personal and financial situation as a First Time Buyer in Liverpool.
Even if you are looking for Mortgage Advice in Liverpool about a different mortgage situation, you should still get in touch. We offer a free mortgage consultation for every customer and every mortgage scenario. Whether you’re Self Employed in Liverpool, interested in Buy to Let mortgages or need Specialist Mortgage Advice, we have got your back and we can’t wait to try and help you through your mortgage journey!
Positive news for those who served in the military, as according to Army Families Federation Defence Secretary, Ben Wallace, the current Help to Buy scheme that was designed to help military personnel get onto the property ladder has had an extension!
Originally announced back in 2014, this £200 million scheme was created as a means to boost anyone from the forces who needed help purchasing a home. Though it was meant to end in December 2019, as a token of gratitude for their commitment to serving this country, the government has extended this until the end of December 2022.
Those who have served or are currently serving in the military have access to a borrowed deposit of up to half their annual salary (the maximum being £25,000), without any interest added on. This amount can then be used to either purchase their first property or remortgage for any home improvements, such as a new kitchen or an extension.
What makes this so great, is that this means you don’t need any current savings to get onto the property ladder. Some of the money raised from the loan you’ll receive via the scheme can also be put towards other costs, such as:
Most lenders will accept the loan towards the deposit for a new home. In a better deal than other schemes, the Forces Help to Buy loan can be paid back over a period of 10 years, meaning you’re less stressed and don’t feel rushed.
No matter where you thought you stood in regard to the property ladder, if you have served your country, you are eligible to purchase your home using this government scheme.
Click here to read through more information from the Government.
Our dedicated mortgage advice team in Liverpool will be supporting you from day one. Right from your initial enquiry, right through until competition and beyond, your mortgage advisor will be there to help, ensuring that you end up with the most appropriate result for your personal circumstances.
Contact us today and see how we might be able to help you achieve your property owning dreams.
Please note, the Forces Help to Buy is not the same as the standard UK Help to Buy scheme.