Some people prefer to know how much their monthly mortgage payments will be. If this applies to you, then a fixed-rate mortgage would be better suited for your circumstances.
A fixed-rate mortgage is when your monthly mortgage payments will be a set amount every month. You need to be aware that the longer you fix for, the higher the rate becomes. But this will not change the duration of your term, which can vary anywhere from 1-10 years.
If you are looking for a cheaper fixed-rate mortgage, make sure to avoid taking out a longer rate. Otherwise, you could face much higher interest rates if you take one out any longer than 2 years.
If you take out a mortgage for ten years at a certain percentage, interest rates might have risen during your term, leaving the lender out of pocket whilst you’re sitting comfortably on a lower percentage.
That presents a higher risk to the lender, so longer terms tend to come with higher rates. In sticking to a shorter-term fixed-rate mortgage, you will find yourself with a better rate, but only for that two years.
Those two years will eventually come sooner rather than later, implying that you will have to start searching again for more deals at the end of the mortgage.
If the interest rates have risen during the duration of those two years, then you could be faced with higher payments than you were used to at the start of renewal.
If you prefer to limit searching for new deals every two years, then maybe you would better suit a 5-year rate. By fixing it for five years, you would have a stable recurring payment for a much longer time.
As previously discussed, being on a fixed-rate mortgage for 5 years will mean that you will be paying more per month than you necessarily would on a two-year rate.
When people consider taking out a long-term, they usually range anywhere from 7-10 years. Long term fixed-rate mortgages were never a popular choice to choose, and they aren’t something we would recommend. But, like most mortgages, there are both pros and cons to taking out a long term fixed-rate mortgage.
Anything could happen within a decade, so committing to a fixed payment for as long as 7-10 years may create problems with lenders. If the rate suddenly drops below your current rate, instead of rising. You may end up paying well over what you otherwise would’ve been, and once you are in the deal, you cannot get out of it.
A Repayment Charge (ERC) is where something happens that affects your financial situation. This leaves you having to repay your mortgage earlier than you had initially expected and, your lender may present you with a charge.
How they calculate the charge is they calculate a percentage of the remaining that you owe. An example would be if you manage to pay off your £100,000 mortgage early and your ERC is 4%. You would be charged a £4,000 penalty as you have broken the fixed-rate contract.
Nobody can get away with not fullying paying off their fixed rate and will still be charged with an ERC. For example, if someone is aware that their fixed rate is due to end soon. But start looking up deals for their next fixed-rate mortgage.
If they find a great deal and think that the rate may increase, they may look to pay off the rest of their fixed-rate payments to switch to this new deal, even though this, of course, comes with additional charges.
We advise that you avoid chasing “headline” deals advertised. Chances are, your circumstances may have changed, and you’re not guaranteed to get it at the rate you were hoping to achieve.
If you are a first time buyer in Birmingham or moving house and would like more information or some help with a fixed-rate mortgage, our experienced team of mortgage advisors will be on hand to provide any assistance they can.
Remember that the lowest rates come with the highest setup fees, which some customers are keen to avoid. Get in touch today for more fixed-rate mortgage advice in Birmingham.
For some, buying a house and taking out a mortgage is a daunting experience and arguably one of the most significant financial commitments of your life.
In your case, it would be best to prepare and save for a large deposit before proceeding with a mortgage in Birmingham.
After all, deposit amounts, purchase prices and loan-to-value percentages for first time buyers vary based on the individual and their circumstances. We recently carried out a study on first time buyers in Birmingham compared to Coventry to see the averages for these variables. Here is a closer look at the data:
We find that higher house prices require a higher deposit to receive better rates for the borrowing amount.
When looking at house prices in the West Midlands, the average deposit is the same across the board. The study showed that the average first time buyer deposit amount in Birmingham is around the £32,000 mark, whereas in Coventry, the average was around £35,200.
Many first time buyers can save up a portion of their deposit for themselves; others received a gifted deposit from a family member or a friend.
Having this gifted deposit provides extra support if the first time buyer struggles to make up the remaining funds. A gifted deposit can lead to more competitive products and lower interest rates.
House prices in the West Midlands are relatively balanced out. Birmingham average purchase price is £181,000, only a 12% increase from the rest of the neighbouring areas like Coventry which stands at £205.750.
Your loan-to-value percentage is calculated by dividing the mortgage amount by the property price and multiplying by 100.
The lower the loan-to-value, the more favourable rates you are likely to be offered. Reflecting on the data gathered, the average LTV in Birmingham comes in at around 82%, which is 1% less than Coventry.
With a vibrant economy, some very affordable living and a friendly atmosphere, Birmingham and its surrounding areas are a prime destination for people to live.
With gifted deposit popularity on the increase and lower interest rates, Birmingham could be ideal for first time buyers to invest in their first home.
As a mortgage broker in Birmingham, we would advise that you speak to your mortgage advisor and get an agreement in principle turned around as quick as possible so you can start your first time buyer mortgage journey in Birmingham right away.
The right to buy scheme in Birmingham allows individuals living in council properties the opportunity to purchase the property they’re living in if they have lived there for a prolonged period of time.
You will be offered the opportunity to purchase at a discounted price. This proposed discount will be used as your deposit meaning you are able to organised your remaining savings to help with the rest of the process.
The right to buy scheme in Birmingham was deemed helpful around the time of the ’80s when it allowed a lot of individuals to become homeowners for the first time. On the other hand, it was deemed controversial.
The main reason for this is due to the dilemma of the scheme turning the homes into privately owned therefore taking them off the public sector, this can be a disadvantage when there is already a housing shortage. As a result of this, the dynamics of council estates have changed.
If you’re interested In the right to buy scheme, the first step is to see if you’re eligible to purchase the property; this is done by completing an RTB1.
Following this, a person will arrange to value your property and inform you how much the property amounts up to. From this, you’ll find out the percentage discount you’re entitled allowing you to gain more of a level idea of future figures involved with the mortgage.
You will then be able to move forward after filling out forms included in a pack that will be sent to you by your local authority allowing you to move onwards.
The way that Lenders will calculate how much you’re able to borrow is done in the same way as any other mortgage: based on your income and expenditure.
This means that it’s still important for you to look ahead and be sensible with your finances, along with checking your credit score.
There are fees involved just as there is with other mortgages so you can prepare and be ready. These can include:
The right to buy scheme was set up so that individuals were able to have a wider opportunity to become Homeowners.
To be able to start their journey on the property ladder. If the involved property is sold before a certain amount of time, then you will be issued a penalty.
This will be in the form of repaying a sum of money linked to the original property discount generously presented at the start of the process.
It is certain factors that people are deterred from the right to buy scheme. Such as carrying out their own repairs and maintenance that come with owning a home.
On the other hand, the majority of people who do wish to take the opportunity, do so because if they tried another way, it may prove more difficult.
This article was initially published back in 2019, and now this information has become outdated. Everything was 100% accurate at the date that this article was published.
Experian statistics show that lenders rule out 33% of all mortgage applications due to mismatches in criteria.
The statistics highlight the importance of customer care and 5-star service when using a mortgage broker in Birmingham. It’s all about the value of the customer and helping them pass the lender criteria the first time.
Experian also found out that only 3.5% of people searching for mortgages were eligible for deals on the market. However, just because you had seen these cheap deals online, it cannot guarantee that you will qualify for it.
As our customer, we will offer you full customer service, trying to find you the perfect deal.
Experian had shown that 22% of applicants started using price comparison websites to find the right mortgage.
We recommend that if you happen to fall inside that demographic, remember that price comparison websites exclude matching a lender’s criteria.
On top of that, the application can take weeks to process, not to mention that the lender can dismiss your case. Ideally, please speak to one of our mortgage advisors in Birmingham. They can search thousands of deals and pick the right ones tailored for you, saving you time and money.
The analysis also showed that 27% were eligible for a mortgage but only for a reduced amount to meet the lender’s affordability requirements. Again, we find this happens all the time. A lender says you can borrow one amount but find a reason to reduce the mortgage available down the line.
Our customers are our priority, and as a trusted mortgage broker in Birmingham, whether your Self employed or looking to Remortgage, we’ll recommend the best deal tailored to you and ease the pressure throughout the entire purchase. Our brilliant mortgage advisors and outstanding back office team will do the bulk of the work for you.
This article was initially published back in March 2020, the property market has now resumed, and this information has become outdated. Everything was 100% accurate at the date that this article was published.
We understand the effect this outbreak will have on the economy, and some of you may be wondering how the COVID-19 with affect your mortgage? But we would like to point out that we can still help you. We are devoted to our clients and provide fast & friendly mortgage advice in Birmingham & the surrounding area.
There’s been no change to mortgage advice service, although, we’re finding that more and more customers want to transact over the phone. We still offer a free, no-obligation mortgage consultation, and it’s the same service seven days a week. Either way, our advisors are available to answer all your mortgage related questions.
Business as usual, here we will help you throughout processing your mortgage application.
Following the recent rate reduction, most lenders have decided to lower their standard variable rates. For new applicants, it’s our job to ensure that we search for the best mortgage deal for you.
Some fixed rates on offer have actually gone up despite the rate cut!
If you have been affected by the coronavirus economic wave and are concerned about meeting your mortgage payment, then please call your lender right away. Often, they are very understanding and will agree on a mortgage payment holiday period to help.
Interest rates are historically very low, and lenders show no sign of significantly increasing these. For first time buyers in Birmingham, home movers and homeowners looking to remortgage, this is brilliant news. There’s never been a better time to get a mortgage!
The government’s Lifetime ISA is a government scheme introduced back in 2017. However, the government scrapped this scheme back in 2020 as they decided to push the Help to Buy Equity loan over its predecessor.
A Lifetime ISA helped first time buyers in Birmingham save up enough savings for their first property.
For short, the ISA (Independent Savings Account) is a savings account where your money grows tax-free. Although there is no minimum of how much you can save each month, you can only put in £4,000 a year into this account.
As a bonus, the government top up your total annual savings by an extra 25%, so if you hit the £4,000 mark, you will receive an extra £1,000 tax-free, making your total yearly savings to £5,000.
Worry not if you don’t hit the maximum. Even if you save £720 per year (£60 a month), you will receive an additional £180 tax-free from the government.
You should know that you cannot withdraw it once the money is inside the savings account without paying a fee.
We recommend looking at the Lifetime ISA when you need that extra support to afford your deposit or planning to buy your first home within the next couple of years. Having that spare time, you can keep adding more money to strengthen your ISA until you are ready to withdraw the funds for your first property. You can find more information on GOV UK- Lifetime ISA.
If you were lucky enough to open a Lifetime ISA savings account and have saved enough for a housing deposit, feel free to get in touch with your mortgage broker in Birmingham, and let’s begin your mortgage journey.
If you have a Lifetime ISA opened or curious about other help to buy schemes in Birmingham that could match your situation. Now could be the perfect time to contact an expert mortgage advisor in Birmingham.
Our mortgage advisors don’t just specialise in Lifetime ISA’s. They have experience with other mortgage types, and we aim to help customers get onto the property ladder.
A credit score is a series of numbers that lenders use to help decide whether you get accepted for a mortgage.
Using the information displayed, lenders will look at your credit report, application form, plus any additional information they hold on you (if you are an existing customer). All this data gets used to calculate your credit score representing your credit history mathematically.
It can help Lenders indicate what kind of borrower you are and how likely it is to manage your repayments. There’s no specific number when it comes to your score. Different Lenders will be looking for other things in potential customers, so you may be better off with another while you may be not ideal for one lender.
🏠 300-580 – If your credit score is at this standard, lenders will classify it as a poor score; having a score like this will lessen your chances of a lender accepting your mortgage application.
🏠 580-670 – Having a credit score like this is considered fair, and some lender may be more lenient with accepting your mortgage application.
🏠 670-740 – This is a much better score and helps increases your chances of having your mortgage application accepted. We tend to find that most customers tend to fit into this category.
🏠 740-800 – This is very good! A score as good as this will increase your chances of having your mortgage application accepted.
🏠 800+ – Having a score that’s 800+ is exceptional; you have increased your chances of having your mortgage application accepted above average; congrats!
Generally, the higher your score, the better your chances of being accepted for your circumstances ‘best’ deal.
Don’t think you are the first; often, countless customers come to us after being declined for having a ‘low’ credit score. As a Mortgage Broker in Birmingham, we have to deal with these sorts of cases daily. We come across that the applicants are the subject of a county court judgment (also known as a CCJ).
If you fail to repay a loan/borrowed money, you will likely get a CCJ. A CCJ can leave a severe dint on your credit file for 6+ years. The best course of action is to pay off your debt before applying for credit. The CCJ will undoubtedly pop up on your file, and the Lender will start asking questions. Sometimes the little things can cause damage too, for example:
🏠 Failing to stick to credit agreements.
🏠 Failing to keep up with your mobile phone contract payments.
🏠 Dipping into your overdraft every month.
🏠 Using multiple price comparison sites.
Here we’re just a few things that could negatively impact your credit rating; there are many other reasons you could have bad credit. In any situation, it’s our job to help you improve your score, so you get the chance to have your mortgage application pass the Lenders criteria! There are various ways to improve your score to try and get you up into that next bracket, and the good news is it may still be possible to secure a mortgage in some cases!
Trying to improve your credit score can be a time-consuming task, but with the help of this handy guide, you may be able to go up another bracket. We must warn you that each Lender has their individual lending criteria, so your score may impact what deals you can access. Just because you have an excellent score doesn’t mean that you will tick every Lenders boxes. It’s sometimes down to personal circumstances and up to your Lenders criteria.
Every time you go directly to a lender and their in-house mortgage advisor puts you through for a deal, they will perform a soft or hard credit search on you, and this search will leave an imprint on your credit file. If your application is declined for any reason, the credit search performed could harm your credit score.
Multiple searches may lower your chances of getting accepted for a mortgage in the future. With the help of a Responsive Mortgage Broker in Birmingham will come in handy we aim to get it right the first time. We will look at your credit score and only approach lenders that hold criteria we know you will pass.
Applying for credit can sometimes backfire on you, especially if you don’t have a reason for doing so. If you can pay back the credit that you’ve borrowed, it may look good on your application. However, flip the situation on its head, and your credit score could end up in trouble if you fail to meet the credit payment deadline.
During your mortgage application, we strongly advise that you hold off applying for credit. In some cases, you may be able to get away with it, but lenders may believe that you are struggling for money in other scenarios. They could think that you are putting it towards your deposit or using it to aid your mortgage payments.
Here’s a beneficial and easy way to improve your credit score; make sure that you are registered on the voter’s/electoral roll. Being registered on the roll shows that you are whom you say you are. All you need to do is go to the government’s electoral roll: it’s easy to register from there.
You must provide accurate information when registering on the voter’s/electoral roll, ensuring that everything gets filled out correctly. You will need to use your current living address, not your previous address.
We always recommend that you check that all of your accounts and details are linked with your current address during the mortgage application process. This won’t affect you as much if you are a First Time Buyer in Birmingham, and this is your first application.
However, if you are Moving Home in Birmingham from rented accommodation and you still have your parents address linked with any of your accounts, your Lender will pick up on it straight away. This is why it’s essential to change your addresses and make sure they’re up-to-date before applying. Being linked to the wrong address could impact your credit score.
If you go down the broker route, our Dedicated Mortgage Advisor in Birmingham will help you out with this step. Your designated advisor will make sure that everything is updated with you to ensure that you have the best chance possible of being accepted for a mortgage.
Maxing out your credit card(s) each month will heavily impact your credit score. Your Lender will like it if you can pay off your credit card balance each month as it shows that you can manage your money.
If a lender can see that you are exceeding credit card limits and constantly dipping into your overdraft, you may think you don’t take your finances seriously.
If you are still financially linked to an ex-partner or family member, your credit score could be getting harmed without you even knowing. If the account is still active and live, you won’t be able to remove your links. The only way to clear your connection is to get in touch with the credit reference agencies and make a request.
Depending on the Lender and how strict their lending criteria is, they may be lenient and allow some wiggle room. If there are some personal reasons involved, your Lender may be considerate and factor them into your application; it’s entirely up to them what they do.
A Mortgage Broker in Birmingham like us will always be transparent with you and factor in every bit of detail. Even if you have a score on the lower end of the spectrum, our incredible team of Mortgage Advisors in Birmingham is still determined to secure you a deal that will suit you. We have access to specialist mortgage deals through our vast panel of lenders; we are sure that we will find one that matches your mortgage needs.
Just because you aren’t married and choose to settle down with kids means Life insurance doesn’t apply to you. Even if you are single, there are good reasons to take out life cover.
Having a life policy in place can support your family dealing with your debts, i.e. mortgage repayments if the most unfortunate happened to you.
Life cover gets taken out to cover mortgage debts: typically, the policy will set up to pay out a lump sum, equivalent to the home loan, in the event of the policyholder’s passing.
If you live with a partner or have children, the cover might get extended to provide an income that your dependents can use to pay for living costs.
This extra protection is unlikely to be necessary for single people, but taking out insurance covers the mortgage is still a good idea.
If an individual passes before their mortgage gets paid off, their bank or building society can attempt repayment of the loan from their late customer’s estate — this is their accumulated assets.
Most likely, to pay off the remaining balance, the property will get sold. But if the home is in negative equity, the lender has the right to demand that the difference gets made up from the estate.
The other alternative is that the lender can demand that the property gets sold. But the surviving family members cannot continue to make up any shortfall. To make matters worse, if the probate process — during which the individual’s estate gets dealt with — is drawn out, the lender can continue to add interest charges, increasing the total amount.
Taking out life insurance will help make sure that these problems do not proceed.
If you think you might want to take out life cover at some point, speak to one of our dedicated protection advisors in Birmingham. For example, if you plan to become a First Time Buyer in Birmingham or already a homeowner, or perhaps your circumstances have changed. It makes financial sense to do so now rather than waiting.
A life insurance policy means that an inheritance can be left to children or grandchildren, for example, irrespective of whether there is any equity left in the home.
A Secured Loan is also known as a Second Charge Mortgage, is a secured loan that is effectively an additional mortgage alongside the one you already have, though with interest rates that are higher than the average amount. Secured Loans are familiar with people looking to borrow more than their current lender is willing to lend.
The reason that these interest rates tend to be higher is that in the event of arrears and an eventual repossession, the provider of the Secured Loan, the second lender that you borrowed from, must wait for the original provider, the first lender that you borrowed from, to sell the property before getting their money back.
The second lender knows that there is a much higher risk of things going wrong and not making money back, so they opt to charge higher interest rates. Whilst this is often known as an expensive “last resort”, they can usually accommodate specific situations.
🏠 Borrowing more money from your current lender.
🏠 Remortgage to move onto a new lender.
🏠 Taking out a Secured Loan.
When taking out a Second Charge Mortgage, your first mortgage stays the same. The new amount gets borrowed from a different lender and a separate direct debit.
When it comes to paying these amounts back, the first lender will always prioritise, and the second lender will usually get whatever is left. If the property sells for enough and has enough equity to cover both the first and second charges, you get to keep some of it with some leftover.
The length of this new amount varies, as you could take it out over a shorter or longer-term than your primary mortgage. If you’re only in need of a small amount, you may benefit from looking at unsecured borrowing instead of a second charge.
🏠 Home improvements.
🏠 Injecting cash into businesses.
🏠 Paying for school fees.
🏠 Cosmetic surgery.
🏠 Paying for a wedding/honeymoon/memorable anniversary/holiday.
🏠 Debt consolidation.
🏠 Purchasing cars or other vehicles.
🏠 Paying tax bills.
🏠 Due to early repayment charges, you’re looking to stay away from Remortgaging.
🏠 You need to raise funds very quickly.
🏠 You are recently self-employed.
🏠 You are looking to raise capital against your UK property to purchase a foreign property.
🏠 Your current lender disallowed a further advance application.
🏠 Your income comes from multiple sources.
🏠 Your current mortgage rate is low or interest-free, and you’d like to keep it.
🏠 You’re raising funds for an unmortgageable property.
🏠 You’re looking to raise funds and would prefer a different lender.
🏠 Since you last took a mortgage, your credit rating has dropped.
Are you a First Time Buyer in Birmingham looking to buy your first Home and are undecided on a location? Have your living circumstances changed, and you are looking at Moving Home into a new area in Birmingham?
To help guide your decision, we have come up with our top list of places to live in Birmingham.
You may be familiar with the name Bournville, through the ever-present dark chocolate stand-out Bournville bars. What you may not know, is that this historic town was home to the Cadbury family and their chocolate-making empire, with Cadbury World still residing there today.
Situated on the southwest side of Birmingham, this “model” village is home to many students attending The University of Birmingham down the road. You will also find many different schools and educational institutions in Bournville, making it a great place for people young and old to discover new opportunities.
In speaking with a mortgage advisor, whether a first-time buyer or Moving Home in Birmingham, you’ll find yourself with a much clearer path to finding your dream home in the historic village of Bournville.
Found in the southwest of Birmingham, not too far away from Bournville, Stirchley has a rich history, with the earliest known settlement in the area recorded as 1658.
Referred to by Condé Nast as one of the 2020 “Coolest Neighbourhoods in the UK”, Stirchley is known for its Victorian terracing across properties, as well as its association with the River Rea, which flows through the area and the local Milling trade. If you prefer a quiet location with Victorian-style properties, Stirchley could be an ideal location for you.
Bordering the Royal Town of Sutton Coldfield, northeast of Central Birmingham, Erdington is a suburb or outer residential area of Birmingham itself. Like many of the areas in this list and the surrounding areas of Birmingham as a whole, Erdington has a very prominent history in its buildings, with many more Victorian style properties being found here.
Erdington is also well known for the Spaghetti Junction, a part of the M6 Motorway, situated in the southern areas, as well as being the starting location of the Bromford Viaduct, Britain’s longest bridge. You’ll also find Erdington to be in close proximity to notable retail establishments, with The Fort Shopping Park being only a stone’s throw away.
For home buyers looking to get into the Birmingham property market, but would prefer to live outside of the city, Erdington could be the place for you. A trusted mortgage broker in Birmingham will be able to talk you through your mortgage options.
Any JRR Tolkien fans? Then you will be familiar with Mosely, the area that inspired the ‘old forest’ in his books The Hobbit and The Lord of The Rings.
The trendy district is also famous for its shops, pubs and cultural scenes. Mosely recently had massive praise for its village community on many factors, including schools, crime rates, house prices, and transport links.
The area is a popular cosmopolitan residential location and leisure destination, with many independent bars and restaurants. Mosely also has several boutiques and specialist retailers.
If you enjoy a cup of tea and custard (just not together), then Digbeth could be the choice for you as it homes the headquarters of Typhoo Tea. Digbeth was an industrial hub thanks to its proximity to both the Grand Union Canal and Digbeth Branch Canal. Today, the area is a hub for the creative industry, with Fazeley Studios and The Custard Factory hosting a wide variety of digital and cultural businesses.
Showcasing Birmingham’s past and future, Digbeth is fitted with modern apartments built into the area’s former warehouses and cultures, making it one of Birmingham’s most adapted places to live.
Edgbaston is an affluent area in Birmingham, well-known for its green spaces and Botanical Gardens.
Any sports fan looking to move into the area? Then you are in luck. Edgbaston is the location for you; the suburban area is home to Edgbaston Cricket Ground and the Edgbaston Archery and Lawn Tennis Society, one of the oldest lawn tennis clubs in the world.
There are plenty of other attractions for those where sports don’t appeal to them, including the pretty Victorian campus of Birmingham University and many Michelin-starred restaurants. With a wide variety of housing choices with reasonable prices, this location could be perfect for you; Edgbaston is one of the best places to put your foot onto the property ladder.
Located 11 miles northeast of Birmingham, Sutton Coldfield offers the best of both upscale and most sought living areas. Sutton Coldfield is an ideal location for all types of homeowners, with local schools for families, tons of shops, bars and restaurants at your leisure, and what’s more, easy transport links into Birmingham. It’s an excellent choice for commuters.
If you love getting your daily dose of exercise, then you are in luck. The Sutton National Park has open heathland over 2,000 acres of woodlands, seven lakes, wetlands, and marshes – each with their own wide variety of plants and wildlife, some rarely seen in the region – there are even cattle and wild ponies that live on the land. All this making Sutton Coldfield being a hot spot for First Time Buyers in Birmingham.
Are you thinking of buying your first home or planning on moving home in Birmingham and need Mortgage Advice? If so, Birminghammoneyman is here to help!
Over twenty years of experience within the mortgage industry has allowed us to access great mortgage deals. We will go through thousands of these deals and pick out one that perfectly matches your personal and financial situation. Your mortgage journey is made easy with Birminghammoneyman – your Mortgage Broker in Birmingham.
To speak to a First Time Buyer or Moving Home Mortgage Advisor in Birmingham, get in touch today and receive a free mortgage consultation. We know that the mortgage process can be stressful, and that’s why we want to offer a helping hand. We would love to hear from you and assist you in the world of mortgages.