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A Guide to Remortgages in Birmingham: Top Reasons to Consider

Remortgage Advice feat Mortgage Advisor Wayne | MoneymanTV

Remortgage Advice in Birmingham  

Your journey into the world of mortgages can be a rewarding endeavour. By the end of your process, you will likely end up with one of the following applying to you;

  • Your dream home to settle down in and possibly start a family.
  • A property that will serve as a vehicle to further you up the property ladder down the line.
  • An investment purchase with the aim to provide some additional income.

No matter which of these was your desired route, there will eventually come a time when your mortgage term is nearing its end. At this point you will have several options;

  • To sell your home and either upsize or downsize into a better property.
  • To look at selling your portfolio to one of your tenants or another buyer, in search of a different investment route.
  • The most popular that we find people go with though, is choosing to remortgage their home.

What is a remortgage?  

A remortgage is where you will use the proceeds borrowed from a new mortgage, in order to pay off a mortgage that you already have. There are a large amount of different options when taking out a remortgage, ranging from smaller options, to much larger options.

Remortgage for Better Interest Rates

Generally speaking, the initial mortgage deal you’re on will last around 2-5 years, featuring lower fixed rates or possibly even rates at a discount. In some cases you’ll find yourself placed on a tracker mortgage which will follow on with the Bank of England’s base rate.

Most customers will fall onto their lenders Standard Variable Rate at the end of their term (you may see this mentioned across the web only as SVR).

To briefly explain this, an SVR is a mortgage that has an interest rate determined by what the lender wishes to charge and it can change. This also won’t follow the Bank of England’s base rate like a tracker mortgage would.

Because of the nature of them, these are usually the most expensive mortgage routes to take, leaving many to look at their options for remortgaging to get better rates, which will hopefully save you a good amount of money on your monthly mortgage repayments.

Remortgage for Home Improvements

Remortgage for Home Improvements During Lockdown | MoneymanTV

A few years into your living in your home, you may decide that something is missing. Maybe you need an extra room or larger living space for your kids or belongings, a new kitchen, a new office, or converted loft.

Rather than move to a larger house, many looking to release equity by taking out a remortgage at the end of their term, so that they can cover the costs of these plans.

Project planning and managing can seem a little daunting, especially when you have to factor in getting planning permission. That being said, others would maybe say that it’s a lot less stressful and more rewarding than the process of finding a new home, selling your current one and having to move everything you own.

Further down the line, this may prove to be even more of a beneficial plan, as creating more space and having good quality craftsmanship will likely increase how much your property is worth, which is useful for if you ever do decide to sell your home or rent it out.  

Remortgage for Changes to Your Term   

Sometimes we find when speaking to customers that people may also wish to remortgage in Birmingham for a better mortgage term, by reducing the length of the term they are on or switching to a product that is a bit more flexible for their needs.

When you reduce how long your mortgage term is for, it means you won’t be paying back your mortgage for as long, though it also means that your monthly repayments will be a lot higher. The longer that you take out your term for, the lower your monthly mortgage payments will be.

Some customers may choose for a more flexible mortgage term. In doing so you may gain the ability to overpay your mortgage, which results in your mortgage being paid quicker. It can also give you the option to carry the same mortgage and rates over to another property, if you ever need to in the future.

Though a flexible mortgage sounds like the ideal mortgage type, they usually come in the form of a tracker mortgage, which as mentioned earlier will follow on from the Bank of England base rate. This will mean that one month your payments could fluctuate based on interest, making them a little inconsistent & unreliable.  

Equity Release  

Everyone that owns a home will have some level of equity in their property. This can be worked out by looking at the difference between what’s left to pay on the mortgage and the current value of the property.

As discussed briefly earlier, remortgaging can be used to fund any potential home improvements. Still, there are more options out there than just that. Some homeowners will use it to cover long-term care costs, boost their income, have a well-deserved holiday, pay off an interest-only mortgage, or free up some spending money.  

Sometimes when speaking to customers, we’ll also find that some buy-to-let landlords in Birmingham will use equity release as a means of covering the necessary deposit to purchase an additional property for their existing property portfolio.

Remortgage to Consolidate Debt  

Whilst we’re mentioning the topic of equity release, we should probably mention another big one people use their equity for, that being to pay off any unsecured debts that may have built up over time.  

Though it may seem easy to the untrained eye, debt consolidation bases not only takes into account the amount on how much owe on your debts, but also the value of the property and the state of your credit rating. Because of this, you may be limited in the amount you are allowed to borrow for a mortgage.

On top of this, to pay off your previous mortgage and your debts, you will need to borrow an amount that is higher than your outstanding mortgage amount. This will mean that your monthly repayments will probably be higher. Granted none of this is ideal, but you can worry less knowing that you have some options out there if things don’t go to plan.

If you find that you do have a particularly damaged credit rating, you still have options out there. You must bear in mind though that these will not be easy and require very specialist remortgage advice in Birmingham first.

Even with a specialist on hand, there is no guarantee you will definitely obtain a mortgage. You should always seek mortgage advice prior to consolidating and securing any debts against your home.  

Experienced Mortgage Advisors in Birmingham – Get in Touch  

If you are a homeowner nearing the end of your mortgage term, wondering what your options may be for remortgaging, we definitely recommend that you get in touch with a knowledgeable and reputable mortgage broker in Birmingham today.  

A dedicated and trusted mortgage advisor in Birmingham will help discuss your circumstances, creating a game plan for the next step of your mortgage journey. It’s always our aim to ensure the second time around is quicker and smoother than your previous mortgage experience.

Getting Organised for a Mortgage in Birmingham

First Time Buyer Mortgage Advice in Birmingham

Once you have gotten the hard part out of the way, that being saving up for your deposit (or if you’ve utilised a gifted deposit) and have decided you are ready to buy your first property as a first-time buyer in Birmingham.

The next step is to get yourself prepared for the mortgage process that is about to follow.

Know Where You Stand

In our experience as a mortgage advisor in Birmingham, we have found that customers benefit the most by getting in touch with a mortgage broker as early on in your process as you can.

Your dedicated advisor will help you to work out an outline of the amount you could be looking to borrow for a mortgage and how much your monthly mortgage costs could be.

Before anything else, your top priority should be to obtain an up-to-date credit report. You ideally don’t want any credit issues such as a missed phone contract payment, to hold you back from a mortgage. A credit report will be able to show you potentially harmful factors.

Following these steps will give you a realistic overview of the likelihood that you’ll succeed with a mortgage and what your budget could be. This will help you to organise your accounts, such as any existing credit cards or phone contracts.

Getting Organised For a Mortgage

Our hard working and dedicated mortgage advisors in Birmingham are able to obtain a fully credit-checked agreement in principle for you, within 24 hours of your primary mortgage appointment.

There’s a lot of important paperwork for you to gather for your process, so it’s a good idea to start organising what you will be required to have ahead of looking for your mortgage. In doing this, you possibly enable yourself to go through the process quicker.

Proof of ID

We need to be able to prove your identity. With this, you’ll need to provide us with some photo ID such as a driving license or passport, so that we can prove who you are.

Proof of Address

On top of this, you’ll need to prove where you are living. To achieve this, you need to send us a utility bill or original bank statement that has been dated within the last 3 months of your current home address.

Last 3 Months’ Bank Statements

One of the most important factors when seeing if you qualify for a mortgage, is analysing your income and spending habits. This can can be a big difference maker in whether or not you obtain a mortgage. Your bank statements should show your income and what you having regularly going out.

Lenders will not be too thrilled to see gambling transactions on your account. They also won’t be too happy if you go over an agreed overdraft limit or if your direct debits regularly bounce.

It’s best to plan ahead regarding your bank statements. The more organised they appear to be, the more likely you are to be accepted by a mortgage lender.

Proof of Deposit

You will have to prove you have the financial capability to pay for the deposit and also evidence where this came from for the purpose of anti-money laundering.

Try not to move money around your accounts too often as it will make auditing where everything came from a little complex. Lenders like to see you build up your savings, so you’ll need to provide individual proof for any large financial deposits into your bank account.

We regularly see that money for deposits has been given as a gift by a member of your family. The gifted funds also need to be evidenced, with the “donor” needing to sign a letter to confirm it is a gift and not to be paid back as a loan.

Proof of Income

Regarding being able to afford a mortgage, the most important thing is to be able to prove your that you are financially capable to keep up monthly mortgage repayments.

If you are a regular employee, the proof you will be required to provide is the last 3 months’ payslips and most recent P60. Lenders can take into account frequent overtime, commission, shift allowance and any potential bonuses.

If instead you are an applicant who is self-employed in Birmingham, then you’ll need to enlist the help of your accountant. They will help you request your last 2 or 3 years’ tax overviews and tax calculations documents from HMRC, which you can use for proof of income.

A list of Your Expected Outgoings

When taking out a mortgage in Birmingham, it really is a good idea to prepare yourself ahead of the process starting. Make note of what you expect your outgoings to be after you move and work out what you are able to afford.

Factor in costs like council tax and utility bills, food, drink and leisure activities. This will demonstrate how much money you actually have free to put towards monthly mortgage repayments.

It may seem like a difficult process, but without taking the steps we mentioned above, it is not possible to proceed with any lender or broker. Once you have taken the necessary steps, you’ll be just that little bit closer to your home owning dreams.

It’s better to prepare yourself in advance, making a collection of everything a mortgage lender might wish to see. This saves both your time and frustration further along the process, especially if it’s something that could’ve easily been arranged at the start.

Self-Employed Mortgage Advice in Birmingham

Wanting a Mortgage Agreement In Principle in Birmingham?

What is an Agreement in Principle? | MoneymanTV

Agreement in Principle Mortgage Advice in Birmingham

A mortgage agreement in principle is basically an obtainable document or certificate of confirmation that proves to the estate agent or seller of the property that ‘in principle’, the bank is willing to lend you a certain amount for a mortgage. You may also see this called a decision in principle.

This is something that we will always look to obtain for of our customers if they don’t have one already, and something we can usually get within 24 hours of your initial appointment.

In order to obtain an agreement in principle, you will have to pass the lenders credit score. This works out well because in almost all cases, this is a very good sign to the lender that you are creditworthy and could be trusted with a mortgage.

If you are in the market for buying a new home as a first time buyer in Birmingham, then an estate agent will often want to check again and again in order to make 100% sure that you are ‘mortgage ready’ when it comes to making any offers on a property.

In having this certificate on hand, you will prove to the seller that you are able to obtain a mortgage for the amount you will need to purchase the property and are ready to proceed with the sale.

A mortgage agreement in principle will not be a definitive guarantee of being able to obtain a mortgage, as the rest of your full application will require further background checks (such as evidencing your income) and having a property valuation undertaken on the property you’re looking to buy.

As an experienced mortgage broker in Birmingham, we highly suggest that all customers try to obtain an agreement in principle at the earliest opportunity. This is because of the following reasons:

1.   Negotiating Power.
2.  Avoid Disappointment.
3.  Knowing Your Limits.

Negotiating Power

Once you reach the point of being able to make an offer on a new home, the majority of estate agents will undertake the necessary steps to ensure that you can go forward with a mortgage on the property.

Generally speaking, they will require you to provide them with evidence that you are able to afford the purchase of the property, prior to listing the property as sold and taking it off the market.

If you have already managed to have a mortgage agreed prior to making an offer on the property, you’ll come off as more appealing to the seller.

This will also prove to the seller that you’ve put a lot of careful thought about your mortgage journey and not just decided to purchase out of the blue, with no preparation.

This might persuade a seller to accept any offers that you make that are lower than the initial asking price. Make sure not to make offers too low though, as you don’t want to insult the seller.

Avoid Disappointment

When it comes to making a purchase on a property, we often find that customers can go full steam into the process, making an offer on a property without making sure that they can afford to actually buy the property in the first place.

This could lead to customers facing potential disappointment if the mortgage application happens to fail, as by that point they may have already had their heart set on that property.

By getting in touch with a mortgage advisor in Birmingham early on, the potential disappointment that you otherwise would’ve faced could potentially be avoided.

Often, there are various factors that are causing a mortgage to decline that can be overcome with a little time and the guidance of a trusted mortgage broker.

Knowing your limits

If you know you have a good credit rating because you’ve never been turned down for credit, have paid everything on time and are registered on the voters roll etc, it is still worth getting in touch with us for mortgage advice in Birmingham.

You might find that you could approach various different lenders and each time get a different max mortgage amount back from them. These lenders all calculate affordability in their own unique way, with their own individual criteria.

If you are self employed in Birmingham, though the mortgage process is not completely impossible to navigate, it can be very complex for self employed applicants, without the assistance of a mortgage broker in Birmingham by your side.

Some lenders will take your net profit, others are known to use your salary and dividends. Some use your latest year, whereas some others will use an average over three years.

Think it’s simple?

Being aware of your borrowing limits is very important when it comes to applying for a mortgage, as then you have a realistic idea of what your price range on a property is going to be.

Our team of mortgage advisors in Birmingham will be able to give you a guide of the potential maximum mortgage available to you and help you to work out an estimate of the amount you’ll possibly be paying back per month for your mortgage.

Specialist Mortgage Advice in Birmingham

Agreement in Principle and Soft Credit Searches in Birmingham

What is an Agreement in Principle? | MoneymanTV

Agreement in Principle explained

Consumer awareness of credit scoring appears to be higher than ever before, and a large majority of people who get in touch with our team appear to have already reviewed their credit reports online.

There are lots of different credit reference agencies to choose from, with the two most commonly heard of companies being either Experian or Equifax. We personally would recommend that new clients use Check My File for a 30-day free trial. If you do not cancel, this will change to £14.99 a month, though you can cancel this at any point in time. This report offers our clients a collaborative look at the information produced in an easy to understand the color-coded credit report.

Often our customers will ask if our Mortgage Advisors in Birmingham will be doing a credit search of their own, because they are aware that too many searches can cause problems for their credit score. The lender always runs credit checks, but our Mortgage Advisors in Birmingham will ask the client for their permission beforehand.

What is a Hard Credit search?

A hard credit search will provide a much more in-depth look at your credit report. Any financial institution that looks to carry one of these out should seek your permission before doing so. The advantage of a “hard” search would be that you have a much higher chance of succeeding with your mortgage if you pass the credit search, as they will have already gone quite deep into your details.

The only thing that can go wrong from then on is if, for some reason, you cannot provide satisfactory documentation to back up the information you have disclosed, or it turns out you have provided false details.

Another benefit to the hard search is that it leaves a ‘footprint’ on your credit file, meaning that anyone who looks at your report can see that it you’ve already been under the microscope so to speak. This isn’t inherently a bad thing but if for example, you have multiple searches included in your credit file in a short period, then it could be perceived as you are applying for lots of credit at once, which the lender may feel is suspicious activity.

The footprint does not state whether your application was successful or not but if you have several searches over a few weeks then lenders’ systems could wrongly assume you are being declined on the basis that “Why else would you go to Lender number two unless Lender number one had said no?”.

The odd hard footprint on your record is no big deal so this doesn’t give reason to worry a whole lot about it. The main lesson to take away here, is take precaution in having too many hard searches, as this could negatively affect your process.

What is a Soft Credit Search? | MoneymanTV

What is a Soft Credit search?

On the other side of the coin, we have a soft credit search. This is a much ‘lighter’ search which looks at your financial situation and would be the type of search that would be carried out on price comparison websites to let you know what may be available to you. It may also be used from time to time, in order to verify your identity. Many mortgage lenders carry out soft searches, and we’re always seeing more lenders switching to this type of search.

While less information is offered to who is carrying out a soft search, as opposed to what they would receive if it were a hard search, you can still get a good idea as to whether or not you’ll find mortgage success by obtaining an Agreement in Principle. If you get this, you’re theoretically in with a good shot anyway.

One of the most beneficial things about soft searches is that while you will be able to see soft searches that have been carried out on you, if you check your credit file (people are usually surprised by how many have been carried out on them) these searches are not visible to other financial institutions like banks, building societies or other mortgage lenders. This means you can freely apply for an Agreement in Principle and it is unlikely to damage your credit score, whether it is successful or not.

How our Mortgage Advisors in Birmingham can help

If you are in the market for making an offer on a property as a First-Time Buyer in Birmingham or are maybe Moving Home in Birmingham, our trusted Mortgage Advisors in Birmingham would highly recommend that you have a Mortgage Agreement in Principle in place before getting in touch with the seller.

You want to be able to give yourself the best possible chance of securing the property you want at the lowest possible price, so if you can demonstrate that you have your finances in a good place, you are effectively giving yourself the upper hand. Having an Agreement in Principle could also mean that any estate agent may be put off trying to ‘cross-sell’ their other in-house mortgage services to you.

What is a Property Survey?

Property Survey Mortgage Advice in Birmingham

So, you’ve had your offer accepted on a property, however, is the house actually worth what you’ve said you’ll pay for it?

A property survey will be carried out to find out the true value and the overall condition of a property. They will also highlight any issues with the property, such as major/minor damages.

Types of property survey

There are three main types of property surveys: Mortgage Valuations, Homebuyer’s Report and Full Structural Survey. Sometimes, a property survey can be carried out free of charge, it depends on the lender that you use.

Depending on the survey that you choose, the outcome of your survey report will vary. Some will provide more detail, whereas others will only touch upon certain aspects. You’ll find that the more in-depth a survey is, the more costly it will be.

If you discover something on your survey about your property that you weren’t told about, by law you are allowed to approach the seller and work out an alternative price if necessary.

Types of Property Survey Explained | MoneymanTV

Mortgage Valuation

Mortgage Valuations are the simplest type of property survey. These are carried out just to work out how much a property is actually worth. Your lender will need to ensure that the property price matches how much you are set to borrow from them. For example, if you put in an offer above the property’s actual value, the seller will likely accept your offer, however, your lender won’t. Unless you have the funds to make up the difference the lender will pull out of the deal. This is called a down valuation.

Unfortunately, this type of survey will not point out unobvious repairs and damages. However, it can inform you of clear structural defects that will require a further look at. For further property investigation, you will be required to pay more to upgrade your survey. In the long run, this may be worth it.

Homebuyer’s Report

A Homebuyer’s Report focuses on safety. How safe is the property? Is it suitable for living in? These things need to be checked as there could be a mould problem, damp issues or something that does not pass the current building laws.

The report will be carried out by a property expert. They will examine the property from top to bottom, making sure that it’s safe for you to live in.

Full Structural Survey

As a Mortgage Broker in Birmingham, if you’ve made an offer on an older building, we would strongly advise that you take up a Full Structural Survey.

This is the most expensive property survey because the whole property is surveyed. It will also provide the biggest insight to the property out of the three main surveys, highlighting what condition the property is in and what changes need to be made if the property purchase goes through.

A Full Structural Survey can take as long as a whole day depending on the size of the property.

Do I need to get a survey on a new build?

New build properties work slightly differently. There is a property survey specialised for them called a Snagging Survey. This survey will point out both minor and major issues, it could be anywhere from a missing hinge on a door to cracks in the ceiling.

If the new build has already been built and it’s ready for you to move into, ideally, you want to get a snagging survey carried out on it prior to moving in. This way, you have the power to negotiate pricing if there is anything wrong with the property.

Mortgage Advice in Birmingham

If you need help to choose the right property survey for you, feel free to get in touch with our mortgage team. We’ve helped thousands of First Time Buyers in Birmingham and Home Movers in Birmingham choose property surveys in the past – you could be next!

You can obtain the services of a surveyor to carry out a Homebuyers report or building survey through the Royal Institution of Chartered Surveyors.

How to Improve your Credit Score in Birmingham

Credit Score Mortgage Advice in Birmingham

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. 

Knowing Your Credit Criteria

🏠 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.

Reasons Why Your Credit Score Dropped?

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!

Credit Score Mortgage Advice Birmingham | MoneymanTV

Look at Ways to Improve Your Credit Score

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.

1. Avoid Unnecessary Credit Searches

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.

2. Avoid Credit Applications

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.

3. Are You Registered on The Voter’s Roll?

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.

4. The Importance of Updating Your 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.

5. Don’t Run Too Close to Your Maximum Limit

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.

6. Remove Financial Links to Others

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.

7. Is it all About Your Credit Score?

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.

Different Types of Mortgages Available in Birmingham

Mortgage Advice in Birmingham

In the beginning of your mortgage process, you will quickly become aware that there are lots of different options available to you. Ranging from mortgages for First-Time Buyers in Birmingham to Home Movers in Birmingham, or Remortgages in Birmingham, there is a large variety to choose from.

In this article, you will see a selection of free information with accompanying videos, of the most popular types of mortgages available on the market. If you have any further questions regarding any of the below mortgage options, then please do not hesitate to Get in Touch.

The different types of mortgages in Birmingham:

What is a Fixed Rate Mortgage?

A Fixed-Rate Mortgage means that your mortgage payments are going to remain consistent for a set period. You are in control of the length you wish to fix your payments for. Popular choices tend to be two, three, or five years, sometimes longer.

No matter what happens to inflation, interest rates or the economy you know that your mortgage payment, often your biggest financial outgoing, will not unexpectedly change.

What is a Tracker Mortgage?

A Tracker mortgage means that your interest rate will follow the Bank of England’s base rate, and is not set by either yourself or the mortgage lender.

You will be paying a percentage above the Bank of England base rate. For example, if the base rate is 1% and you are tracking at 1% above base rate, that means you will be paying a rate of 2%.

What is a Repayment Mortgage?

When you take out a repayment mortgage, this means each month you are paying a combination capital and interest. This means that if you keep your payments going for the full length of the mortgage term, you are guaranteed to pay off your deal in full by the end of your term.

This mortgage type is the most risk-free way to pay the lender back your capital. In the beginning of your mortgage term, it is mainly the interest that you are paying and your balance will go down at a slow rate, especially if you have taken out a term over 25, 30 or 35 years.

Things pick up in the last ten years or so of your mortgage, where your payments are paying off more capital than interest and you will be able to pay off your balance quicker.

What is an Interest-Only Mortgage?

While many mortgages connected to Buy-to-Let in Birmingham can still be set-up on an interest-only basis, it is much more difficult to get that kind of mortgage on a residential. It is much less likely for lenders to offer an interest-only product nowadays, though there are certain circumstances where this can still be viable.

Reasons this may work, include downsizing when you are older or have other investments that you will use to pay the capital back. Lenders are very strict when it comes to offering these products now, and the loan to values is a lot lower than it used to be in days gone past.

What is an Offset Mortgage?

With an Offset Mortgage, the lender will organise a savings account to go alongside your mortgage account. Let’s say you have a mortgage balance of £80,000 and £20,000 remains deposited into your savings account, you only pay interest on the difference, which in this case would be £60,000. It can be a very efficient way of managing your money, especially if you are a higher rate taxpayer.

Trusted Mortgage Advisor in Birmingham

How to Make an Offer on a Property in Birmingham?

How much should I offer in Birmingham?

If you’ve found a property that has caught your eye and you think that it could be the one for you, the next step is to make an offer on it. When making an offer on a property, you have to make sure that the seller or estate agent knows the whole of your personal and financial situation.

Giving them the whole picture of your situation puts yourself in a great position and can benefit your application. They will refer back to your circumstances and consider them before accepting your application. You are always covered if something pops up in the future as you’ve already told them right from the start.

Making an offer checklist

Mortgage agreement in principle

If there is a cash buyer making an offer on a property, 99% of the time you won’t be able to beat them. However, to improve your chances of competing against other buyers, you should get an agreement in principle in place nice and early.

A mortgage agreement in principle is written confirmation that a lender is willing to let you borrow a certain amount from them for a mortgage. If there are other people interested in buying the same property as you without an agreement in principle, you should automatically be a step in front of them if you have one.

When you approach a Mortgage Broker in Birmingham like ourselves, we will arrange an agreement in principle for you within 24-hours of your application. It can even be within a couple of hours if your mortgage situation is straight forward.

Ready for a fast purchase

If you are prepared for your mortgage and have everything else ready to go, you may be in a better position than other buyers who are still preparing last minute bits. Make sure that you have everything ready, especially if you have your heart set on a property; you wouldn’t want to lose it!

Sometimes, the seller may want a quick purchase, so if you want to quickly secure the property and are settled on a final price, you may be Moving Home in Birmingham faster than you thought.

Negotiating

If a property has just been listed on the market, the seller may stick to their asking price, especially if it’s gaining interest. When a property has been on the market for a while, the seller may be more lenient with the selling price and you may be able to ask for a little less.

A top tip for making an offer on a property is to research similar housing sold prices in the same area to get a feel of how much you should offer the seller. If they aren’t willing to negotiate a deal, you may have to increase your offer or walk away if you don’t want to meet their asking price.

As a Mortgage Broker in Birmingham, we also recommend that you never take someone’s first offer, as a buyer or seller. There will be a reason why the property is listed at a certain price, so make sure that you do your research first.

Property chains may go against you

A property chain is where more than one buyer is linked to a transaction. For example, you are Moving Home in Birmingham and you want to make an offer on a property but you can only move in once the people buying your current home can move in after they’ve sold their home. It often keeps going and going, that’s why it’s called a property chain.

It can be very hard to avoid being tied into a property chain. Almost every home mover’s purchase will require another purchase to be made before they can move into another property. Therefore, if you aren’t linked to another property and that chain isn’t there, you actually could put yourself in front of lots of other people.

If you are a First Time Buyer in Birmingham, this won’t affect you as you are most likely renting or still living with your parents.

Need further Mortgage Advice in Birmingham?

If you are interested in a property in Birmingham and want further advice on how to make an offer, feel free to get in touch with our amazing team of advisors. Our Mortgage Advisors in Birmingham will not only be there to give you advice on this stage of the moving home process, they will also provide you with support and guidance through the rest of it.

We know that Moving Home can be a stressful and difficult process, and that’s why we want to offer our specialist help. Get in touch today for a free moving home mortgage consultation in Birmingham

Can you Have Multiple Mortgages in Birmingham?

Getting a second Mortgage in Birmingham

You would be surprised but we do get asked this question all of the time. Can I have multiple mortgages? The answer is yes you can, depending on your financial situation and your personal circumstances.

There are lots of reasons why a customer may require multiple mortgages in Birmingham, below are a few of the popular scenarios that we come across:

  • The customer is looking to invest in a holiday home.
  • They are thinking of becoming a Home Mover in Birmingham and want to get another mortgage with a different partner.
  • The customer is looking for a mortgage following a divorce/separation.
  • Looking for general second Mortgage Advice in Birmingham.
  • Interested in a Buy to Let in Birmingham.

Remember, it is all about meeting the lender’s mortgage criteria and they are all different from each other. This is where we step in. As an experienced Mortgage Broker in Birmingham, we are always able to help you find the perfect deal for your situation. We love a good challenge, so don’t hesitate to call us, even if you think your situation is complicated.

Reasons for wanting multiple mortgages in Birmingham:

Having multiple mortgages are very common and there are lots of reasons why people may want one:

  • People often want a second mortgage to raise money for home improvements and/or debt consolidation.
  • If you are thinking of moving home then renting out your existing property.
  • To help their children on the property ladder rather than them going through the First Time Buyer in Birmingham mortgage process.
  • Customers may want to make a buy to let purchase, single or multiple.
  • Their name may be on another mortgage and they want to purchase a new property.

Second mortgage to raise money

If you’ve got sufficient equity in your home, you may be able to release some of this for home improvements and/or consolidate debts.

Often at this time, if you are currently on a lenders standard variable rate, we are able to shop around and find a more competitive deal at the same time as releasing capital. A further advance with your current Lender is also an option.

Renting out your existing home to buy another

This is a popular choice for customers looking to move up the property ladder whilst still keeping hold of their ‘starter’ homes as an investment.

Helping your children

If you are exploring the options available to you of helping your children or grandchildren with getting on the property ladder there are now many products that we can run through to achieve this.

A second mortgage for a Buy to Let

Thinking of investing in a single or multiple Buy to Let mortgages? Not a problem, we are here to help. Our expert Mortgage Advisors in Birmingham are here to help! They will search through 1000’s of deals till they find the best one for your personal situation. We have been in this business for a very long time now, meaning that we have experience in dealing with all kinds of buy to let mortgages and purchases.

Named on another mortgage?

We often get asked about this and how to remove your name off a mortgage. This usually follows a divorce or separation and it can be tricky to sort out by yourself. This is why we recommend speaking to a Specialist Mortgage Advisor in Birmingham for Specialist Advice in Birmingham, like us.

Open and Honest Mortgage Advice in Birmingham

What do Lenders Look for When Assessing my Bank Statements?

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

First Time Buyer Mortgage Advice in Birmingham

If you are a First Time Buyer in Birmingham buying a house without support is not always easy. It is undoubtedly one of the most exciting things to do in your life but perhaps the most expensive investment of one’s life that needs to get done with dire vigilance. Unless you have a respectable amount, you will need to take out a mortgage to finance a house.

Applying for a mortgage can be nerve-wracking, and perhaps a very daunting task. No lender lends money easily. Every Lender goes through a strict process of verifying a borrower’s credentials before lending you the loan.

Once you decide to seek mortgage advice in Birmingham, you need to notice that the law demands lenders to lend money responsibly. It will require careful observation of bank statements or the creditworthiness of a borrower. However, lenders cannot grant you credit if they think that you cannot service the debt or found that you are financially weak.

What do lenders look for when assessing your bank statements?

Mortgage lenders require you to provide them with recent bank statements from any account with readily available funds, be it a salary or savings account. The purpose of carrying out such activity is to confirm that you will afford the down payment and make your monthly mortgage payments successfully without any delays.

You might be pondering how bank statements can act as proof of the creditworthiness of a borrower. One trend that has come to the forefront is the question of gambling transactions on bank statements. Let us discuss each question in detail for better clarification.

What has it got to do with the Lender whether a borrower gambles or not?

Typically, gambling and the mortgage does not go together. Taking out a mortgage means that a bank acknowledges a borrower’s creditworthiness and that a borrower can make timely payments. But if a bank finds out that you are a professional gambler, using your winnings as evidence that you can afford to take out a mortgage, it might lead to the mortgage getting declined. However, there is nothing illegal about licensed gambling. Many people practice gambling occasionally or simply as a pastime or a hobby.

You might have noticed that even the bookmakers and gambling advertisers urge customers to gamble responsibly. Therefore, we advised keeping this in mind when applying for a mortgage loan. While it is not the Lender’s job to tell you how to live your life, how to spend your money, or indeed to moralize on moral rights and wrongs of gambling but they do have a duty to lend you prudently.

Suppose lenders need to prove to the regulators that they are making prudent lending decisions. In that case, it isn’t entirely unreasonable of them because you would adopt a similar approach when it comes to lending your finances to anyone needy.

Is it still possible to get a mortgage if an individual has got gambling transactions on his recent bank statements?

Gambling indeed presents a higher risk to the Lender. However, as we mentioned above, it is not illegal to gamble, so just because you have the odd gambling transaction on your bank statements does not mean you will get automatically declined for a mortgage. That depends on the type of gambling, the amount of money you bet, and the frequency of such transactions, all play a significant part when lenders make their decision.

If your bank statements show a pattern of unaffordable, high-risk betting, you may find that lenders’ choice gets drastically reduced. Lenders will compare the level of gambling concerning your income so small flutters that do not often or affect your finances may get accepted.

On the contrary, if you bet more often and get overdrawn continuously, the Lender will likely count you as irresponsible and potentially decline your application.

What other things do lenders discourage to see on your bank statements?

As we’ve seen,  lenders look at your bank statements to identify how well you manage your money and to help them establish a viewpoint against you that either gives them the confidence that you are financially prudent or not.

Please note that the 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. Therefore understand that these things can all play an essential part prudent financial planning.

The key for a mortgage applicant is to what extent these facilities get managed. For example, having an overdraft facility and occasionally using it, is not inherently wrong, but regularly exceeding the overdraft limit is not considered satisfactory. Thus, lenders will look for excess overdraft fees or returned direct debits because these would generally show that the account is not getting well managed.

Other things to notice consist of the credit transactions from pay-day loan companies. A credit score is highly influential in almost all financial transactions. If you mismanage your credit and earn a low credit score, you’ll be less likely to qualify for loans or credit or end up with a high-interest rate on a loan and low terms and conditions. Therefore being a responsible credit score holder shows that you are trustworthy.

What can you do to improve things?

The simple answer is to be sensible and, if possible plan ahead and plan carefully. 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 that you’re likely to apply for a mortgage loan soon, try to ensure that you avoid any of the above pitfalls.

Take a break from gambling for a short while and work on presenting a strong bank statement. Often when you seek Mortgage Advice in Birmingham, you’ll observe that some lenders may ask or may not ask for your bank statements. So to be on the safe side, if you do gamble, please gamble responsibly.

Mortgage Advice in Birmingham

Birminghammoneyman.com & Birminghammoneyman 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.
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