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Fixed-Rate Mortgages | Mortgage Advice in Durham

Fixed-rate mortgage advice in Durham

There are lots of different types of mortgages, with some being more complicated than others. In this, article, we are going to look at fixed-rate mortgages and how they could be right for you.

What is a fixed-rate mortgage?

A fixed-rate mortgage is exactly what it says on the cover. By taking out a fixed-rate mortgage, your interest rate will remain at the same rate throughout your mortgage term.

The length of a mortgage term can differ from one deal to another. It depends on how long you fix your deal in for.

The lowest fixed-terms often come with the lowest interest rates; although this is positive, on the contrary, it also means that you’ll have to renew your mortgage product through a remortgage in Durham more frequently.

Effectively, this could mean that it’s more beneficial to fix in your mortgage over a longer-term on a fixed-rate mortgage.

Medium & long term fixed mortgages

You’ll have to decide whether you’re willing to search for a new fixed-rate deal every two to three years or not. If you don’t want to be frequently searching for new deals, a medium to long-term product may be for you. You’ll have to consider your current and future personal and financial circumstances when deciding how long you’re going to fix your mortgage for.

Five-year fixed rates are popular choices; they add the security of consistent monthly payments. These lock in deals also have negatives. For example, if interest rates drop whilst you’re locked in, you will end up paying more than you would’ve been had you taken out a product with a shorter term.

You can fix in your mortgage for an even longer period of time if you feel like that’s the right thing for you. The options are usually limited, however, you can usually find seven to ten year fixed products. These types of products aren’t usually very popular, as you’re committing to a product for a whole decade! During this time, better rates are very likely to come available. You should know that these are usually the most expensive fixed-rate products available to customers.

Fees to consider

Booking and mortgage arrangement fees

On top of interest rates and payments, you’ll also have to consider mortgage arrangement and booking fees.

A booking fee may be charged for an appointment with a mortgage advisor in Durham. At Durhammoneyman, we do not charge a booking fee, we offer a free mortgage consultation to every customer.

Mortgage arrangement fees are charged upon completion, therefore, if you take out short, fixed-term products, you may end up accumulating a large number of costs just for arranging your mortgage. This is one of the benefits of taking out a medium fixed-term mortgage, you won’t have to constantly pay for arrangement fees.

Early repayment charges

Otherwise known as ERC’s, you can receive an ERC when you overpay your mortgage or pay back your mortgage too early.

Sometimes people forget about ERC’s or overpay by accident, whereas others can overpay on purpose. This is where the positives of overpaying can occasionally outweigh the negatives.

In a situation where your fixed-mortgage term is approaching its end and you can see that there are much better interest rates readily available, it may benefit you more to overpay and receive an ERC so that you can access these rates. Perhaps it’s a limited product offer that you’ve received or a deal that you’ve found and you want to lock into right away, sometimes tactically receiving an ERC can benefit you in the long run.

You’ll find that some ERC’s won’t be too costly. They are calculated by the remaining amount left on your mortgage. For example, if you have a total of £80,000 left on your mortgage and the ERC charge is 2%, you’ll receive a £1,600 early repayment fine. In the grand scheme of things, this figure does not seem too bad.

Our advice

As a mortgage broker in Durham, we always suggest that do your research jumping into a deal. We would also recommend that you don’t chase ‘headline’ deals; don’t let them mislead you, the cheapest/lowest rates can come with the highest arrangement fees!

For help securing a great fixed-rate mortgage rate and remortgage advice in Durham including how to save costs on various fees that come with getting a mortgage, get in touch with our brilliant mortgage team today.

How Will Lockdown 2.0 Affect the Property Market?

Mortgage Advice in Durham

On Saturday 31st October, the British Prime Minister Boris Johnson announced that the nation would enter another lockdown from Thursday 5th November to Wednesday 2nd December. These restrictions were brought in to try and decrease the spread of the coronavirus. In comparison to the last lockdown, the restrictions aren’t as tight this time. This is allowing more industries and educational systems to remain open. Now that we are deep into lockdown 2.0, we can say that everything is looking promising and the property market is remaining open!

On the other hand, not everything can carry on as normal as the whole nation is on lockdown. Social distancing measures have become stricter, for example, when you are visiting estate agents and going for house viewings etc. Despite some restrictions, the property market is still going strong, here is what you are allowed to do over the lockdown:

  • View a property to buy or rent
  • Visit estate agents, letting agents, sales offices and show homes
  • Move home
  • Prepare a home to move into
  • Prepare a home for sale or rent

As a Mortgage Broker in Durham, we have recently received a lot of questions about the property market and whether or not it’s going to be affected by lockdown 2.0. In response, we thought that it would be best to answer your questions by breaking them down one by one:

Lockdown Mortgage Advice in Durham

Can I move home in lockdown?

As mentioned before, this lockdown’s restrictions aren’t as tight, so yes, you can still move home. Everything that you needed for your Moving Home journey is all still available, this includes home removal services, van hire, etc.

You must remember that every step of the process must be completed under the social distancing guidelines. This is particularly important if you are taking house viewings regularly.

Can I visit my estate agents?

Yes, you can visit your estate agent’s office, however, quite a few of them have chosen to temporarily close their branches and have their employees work from home. It might be worth checking to see whether or not your estate agent has gone down this route before going directly to them.

We are expecting more and more estate agents to move towards this approach, particularly in this day and age. Don’t worry though, you can still get your process started over the phone and even online; there is nothing wrong with this new way of starting your process. We always advise that you take your time if you decide to do everything online, and make sure that you clearly understand everything that is being communicated.

Can I continue with house viewings?

Yes, you can still continue with house viewings, however of the option is there, maybe you could try out your estate agent’s virtual house viewing. Again, most home buyers are realising that this approach is a lot safer; as a Mortgage Broker in Durham, we expect that a lot of people will take up virtual viewings, especially over the lockdown period.

Even though a virtual viewing maybe your best option, we also understand that choosing your dream home is a life decision, especially if you are a First Time Buyer. So, we completely get it if you want to view the property in person to get the feel for it.

Your estate agents will also have to double-check with the property owners that a socially distanced property viewing is okay with them. If they are, you are all good to go, a date and time will just need arranging. Depending on the time of day and the homeowner’s situation, they may want to go out somewhere so that there as few people in the household as possible.

Can I put my property on the market?

The property market hasn’t really been put on hold like the last lockdown, you can continue the home selling process as normal. You’ll need to consider a lot of different things when selling a property, this includes things like choosing an estate agent and a property valuation, getting pictures of the property taken, etc.

With the current government guidelines in place, there may be a slight delay in the process. Estate agents are extremely busy at the moment and are facing new enquiries all of the time. With all of the current measures and new guidelines in place, things that are normally easy to complete are taking a little longer.

Can I still use conveyancers?

Yes, conveyancing solicitors are staying open throughout this lockdown. They will still be available to support your property sale. Again, most solicitors have chosen to work from home, so we recommend that you be patient. There is a high demand in the market right now so things may come slower than usual.

Can I take out a mortgage payment holiday during this lockdown?

In Durham, we are asked this question a lot. During the last lockdown, many homeowners decided to take out a mortgage payment holiday to help with their mortgage payments. However, in this lockdown, the demand has lowered even though you can still take one out.

So if you want to take out a mortgage payment holiday, the answer is yes, you still can. Although, make sure that you only take one out because you really need to. As a Mortgage Broker in Durham, we do realise that there are a lot of people that will need to take a mortgage payment holiday, if this is your situation, make sure that you know exactly what they are and how they work. For more useful information on mortgage payment holidays, check out our mortgage payment holidays article. It could help you decide whether you need to access the scheme or not.

If you have already taken out a mortgage payment holiday during the last lockdown and are currently still on the scheme, you can extend your holiday so that it comes to a total of six months holiday. However, if you have already had a six month payment holiday, you have already reached the six month limit and therefore unlikely that you will be able to access this scheme again.

Catching up to speed

Catching up to speed

Eventually, the property market will catch back up to speed and everything will hopefully resume back to normal. During lockdown 2.0, the property market may not be up to a perfect standard, but thankfully you can still keep trading. So you are able to get the mortgage/home buying process started whenever you want.

If you want to get the ball rolling, it may be within your best interests to get Mortgage Advice in Durham. With all of the social distancing measures in place and the demand in the market, this could also speed things up for you. As an experienced Mortgage Broker in Durham, we have mountains of knowledge in helping customers obtain their mortgage goals. We want the whole process to run as smoothly as you do; don’t hesitate to get in touch today. We can’t wait to hear from you!

How to Improve your Credit Score in Durham

Mortgage Advice in Durham

Ways to improve your credit score | moneymanTV

What is a credit score?

A credit score is a tool that lenders use to measure an applicants ability to afford a mortgage. The higher your score, the more likely it is that you’ll be accepted for a mortgage. Which means that if you have a lower score, your chances of being accepted decrease.

Even though having a good credit score may look good on the outside, you must know that each lender has their own individual lending criteria and it’s more than likely that you won’t meet all of them. So sometimes it’s also down to your circumstances and not just your score.

Matching lender’s criteria

Most lenders’ criteria are completely different from one another, lenders have almost developed their own niche market. You could end up matching to a handful of them or maybe only a couple. As long as you end up securing a great mortgage deal that is all that matter though and it’s your advisor’s job to help you do that.

Whether you go with your bank’s in-house advisor or a Mortgage Broker in Durham, your personal and financial situation will be evaluated and then compared with lenders’ and their mortgage products.

We would always recommend approaching a Mortgage Broker in Durham before going straight to your bank’s in-house advisor and this is because your bank can only offer you their own products. If you choose a broker like us, we are able to access thousands of different mortgage deals through our large panel of lender’s. Once we have your details, we will try our hardest to match you to a lenders’ criteria.

If you are struggling to match a lenders’ criteria, it could be down to numerous different things. The most common reason why people don’t meet lenders’ criteria and get declined for a mortgage is because of their low credit score. If this is the case, then you need to try and improve it.

Improving your credit score

Avoid unnecessary credit searches

Having unnecessary credit searches on your file could have a negative effect on your credit score. Lenders’ don’t like seeing that you are repeatedly checking your score, they may think that there is a reason for it and they could even start asking you questions about it during your application process. Even using price comparison websites could damage your score.

On a side note, if you are applying for a mortgage, we strongly recommend that you avoid applying for any form of extra credit in the meantime. Paying back owed credit before your application will look good on your application, however, borrowing/paying back credit during your application will have a reverse effect. If you borrow credit, some lenders’ could think that you cannot afford the deposit and are relying on the credit to help you.

Credit Check Durham

Are you registered on the Voter’s Roll?

A great way to improve your credit score is to register onto the Electoral Roll, it indicates stability and lenders really like that. It’s really easy to get yourself registered and the fact that it can increase your credit score, you’re missing out if you don’t take the opportunity.

If you are already registered, you should check that all of your information is correct as lenders will easily spot misspellings and an incorrect address.

Don’t run too close to your maximum limit

Maxing out your card each month will negatively impact your credit score. If you are using a credit card, a lender would much rather that you pay off the balance in full each month as it shows that you are good at managing your money. If you are exceeding your credit limits or overdrafts, your lender won’t think that you take your finances seriously. This could massively impact your credit score, especially if you get declined by a lender due to this reason.

Check that your address is up to date

When people move home, especially from their parent’s house, people often forget to update all of their address’. When you forget to update your address with a previous credit provider, it can appear that you live in two different properties at the same time. This can hurt your credit score once lenders see this so make sure that you are keeping on top of what address’ are linked with each of your accounts.

Close down your unused credit accounts

Do you have any store/credit cards that are no longer in use? If you do, then you should contact the provider and get them to fully close your account(s). Having these accounts open could be doing your credit score more harm than good. However, this could also still have a negative effect on your credit score as the credit reference can’t really tell if it’s you closing the account or the provider. Don’t worry though, it’s a good thing to check up on as if you have lost a card and didn’t realise then fall victim for fraud, you could end up having a worse effect on your score.

Remove your financial link to others

If you are financially linked to a family member or ex-partner your credit score could be affected without you even knowing. However, if the account is still live, you cannot remove your link just yet. If you want to remove any of these links, then you should get in touch with the credit reference agencies and make a request.

Summary

More often than not, applicants see credit scoring as an unfair way of determining the success of a mortgage application. For example, you may have a low score due to personal circumstances, which applicants think is unfair. As a Mortgage Broker in Durham, we mostly see that it’s people that are Moving Home or Self Employed struggle with their credit score. However, if this isn’t your mortgage situation and you still need help with improving your credit score, you know to get in touch with.

Sending an up-to-date credit report to your expert Mortgage Broker in Durham could prove extremely beneficial to your mortgage journey. A great tool that we always recommend to our customers is checkymyfile.com.

Check my file | Mortgage Advice in Durham

The more your advisor knows about your finances the better. Also, there are still some lenders that prefer to operate the old-fashioned way and will manually assess your application. They will still have rules that they stick by about the number of defaults and CCJ’s that they will allow.

A Mortgage Broker in Durham, like us, likes to do things the new way and will always aim to deliver you the same Fast and Friendly Mortgage Advice service that you are all used to. We hope to hear from you soon.

Should I Rent or Buy in Durham?

Mortgage Advice in Durham

As a Mortgage Broker in Durham, we often have First Time Buyers considering their first move onto the property ladder as they ponder whether to buy a home or continue renting.

When deciding whether to rent or buy, the most common thing that you will hear is that renting is a waste of money. You have to ask yourself, is it a waste of money? The answer completely relies on your personal circumstances.

In fact, times have changed and it’s now a lot more common to find people who are renting. As an expert Mortgage Broker in Durham, we thought that with all of our mortgage experience we should talk about whether you should buy or rent a property.

Rent vs Buy | moneymanTV

Why should I buy?

The property market has been dipping up and down for quite some time now, you can never tell when it’s going to drop again. So if you decide to buy a property and the market plummets, your property value could too.

This has happened to many unfortunate homeowners over the years, although, history suggests that even if you buy at the very peak of the market as long as you can afford to keep the property eventually prices tend to go back up.

For example, during the period of the credit crunch sold values dipped. Before the coronavirus outbreak in 2020, the credit crunch was one of the lowest economic periods of recent times. Surprisingly, less than a decade later these sell values shot up to a new all-time high, meaning that if you bought a property between 2005-2010, it was more than likely that your property value had increased.

What we are trying to say is that if you invest in a property, in the future your sell price could increase which shows that it was worth buying over renting.

Risks of buying

On the other hand, you could lose money if you are forced to sell your home at the wrong time, for example, this could be down to a relationship breakdown or a reduction in your income.

If you are concerned about the risks that come with buying a home, talking to a professional Mortgage Advisor in Durham could put you at ease. Before rushing into anything, it could benefit you to know where the market is currently sitting. We have been working within the mortgage industry for over 20 years now, we know exactly how the market is performing and what deals will be available based on what it’s like.

Buying a home is a huge financial commitment and you want to make sure that you get it right the first time. It also needs to be 100% right for you, the most important factor is that it matches your circumstances.

Will a mortgage be cheaper than renting?

Applicants tend to think that mortgage payments are more expensive than renting, however, this is usually not the case. Also, depending on the mortgage that you take out, your payments may fluctuate; this is due to the interest rates changing. If you don’t want an inconsistent interest rate (can sometimes go down if you are lucky), you may want to look into fixed-rate mortgages. A fixed-rate mortgage could be the best option for you as your mortgage payments stay at the same rate through your whole mortgage term.

When renting, you’ll usually find that your monthly payments stay the same. Sometimes your lender may increase your rent for one reason or another but it’s unlikely that they’ll ever reduce it.

Security

People like buying a home for a sense of security. No one can force you out of the property unless you fail to keep up with your mortgage payments. Whereas if you rent, if something goes wrong on the landlord’s end, they could ask you to move out.

Of course, you have some protection when you are renting and get asked to move out; you will always get a notice period. This is a disadvantage to renting, you are living in someone else’s property so if they want you to move out, there isn’t much that you can do. This is certainly not ideal, especially if you have family or work nearby or you have children in a local school.

Sometimes landlords give their tenants the first refusal to buy the property if they are selling it so they can save on estate agents fees.

Flexibility

Renting can be more flexible than owning. If at any time you want to move out of the property, you have the complete right to; you can give your landlord notice whenever you want. This may be because of a job offer in another area or that you simply want to move somewhere new, etc.

This is made more difficult as a homeowner as you have to decide whether you want to keep your home and rent it out as a Buy to Let or sell it. The process of selling a home and buying a new one is time-consuming and expensive, so if you are considering going down this route, it may be best to get Mortgage Advice in Durham. Speaking to a Mortgage Advisor in Durham could take all of the stress off your back and it could allow you to access competitive mortgage rates.

If you think that you may not be around in a particular area for very long you should consider whether the property is worth buying. Buying a property should definitely be seen as a long-term investment.

Repairs

If you are renting, your landlord should be responsible for any major repairs. There will always be some letting agents and landlords better than others, however, as a tenant you should expect to do some minor maintenance of the property yourself.

If you are a homeowner then all of this is on your own shoulders, and so is insuring the property which will be a condition of any mortgage you take out.

Despite what some people might say, we know that owning a home is not for everyone. If you are a First Time Buyer applicant maybe you should consider renting first, especially if you are young or are moving in with a partner for the first time. If you move in with a partner, it could end up favouring you to rent just in case the worst happens and things don’t work out. Getting a name removed from a mortgage can be tricky and complicated whereas if you are renting, it can be a much easier process as you can move out whenever you want.

Buying Out An Ex For A Mortgage UK | moneymanTV

Speak to a Mortgage Advisor in Durham

Before diving headfirst into buying a home, it could benefit you most to look at all of your options and see which route benefits you most. Buying a home is a huge financial commitment, you need to be certain that this is right for you and your circumstances. If you decide to rent though it may take you much longer to save up for a deposit.

As a Mortgage Broker in Durham, we see that most applicants end up deciding to buy over renting. People see getting a mortgage as an investment and they would much rather see their monthly payments going towards their own benefit rather than someone else’s. It’s sometimes just a case of getting your timing right and also being in the right financial position to be able to proceed.

To see what route could be best for you based on your personal circumstances, get in touch with your experienced Mortgage Advisor in Durham. Durhammoneyman will hold your hand through the whole renting/home buying process and we will provide our full help and support at all times. We have been doing this for 20 years now, we know exactly how to help you!

Types of Mortgages Explained in Durham

Mortgage Advice in Durham

Whether you are looking at Moving Home or are a First Time Buyer trying to get onto the property ladder, you will realise that there are lots of different types of mortgages out there. Some are more popular than others and not every lender will offer every different mortgage type.

We have made a list of the most common mortgage types that you will come across. We will also find a YouTube video for each mortgage type. These videos are from our YouTube channel MoneymanTV which you can go straight to here or you could watch our Mortgages Explained YouTube playlist here instead.

What is a fixed-rate mortgage?

A fixed-rate mortgage means that your mortgage payments are going to stay the same for a set period of time. You can set the length of which you want to fix your payments for, typically this being 2, 3 or 5 years or longer. No matter what happens to inflation, interest rates or the economy you know that your mortgage payment, usually your biggest outgoing, will not change.

What is a tracker mortgage?

A tracker mortgage means that your interest rate will track the Bank of England’s base rate. So in other words, the lender that you are with does not actually set the rate themselves. 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, that means you will be paying a rate of 2%.

What is a repayment mortgage?

When you take out a repayment mortgage this means that each month you are paying capital and interest combined. So as long as you keep your payments going for the full length of the mortgage term, the mortgage balance is guaranteed to be paid off at the end and the property becomes yours.

This is the most risk-free way to pay your capital back to the lender, in the early years it is mainly the interest that you are paying and your balance will reduce very slowly especially if you have taken out a 25, 30 or 35-year term. This situation switches in the last ten years or so of your mortgage, where your payments are paying off more capital than interest and the balance will come down much faster.

What is a Repayment Mortgage? | MoneymanTV

What is an interest-only mortgage?

Whilst many Buy to Let mortgages are set up on an interest-only basis, it is much more difficult to get a residential property on an interest-only basis.

It is much less likely for lenders to offer an interest-only product now.  However, there are certain circumstances where this can be an option. These include downsizing when you are older or have other investments what 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 are a lot lower than back in the day.

What is an offset mortgage?

With an offset mortgage, the lender will set you up a savings account to go alongside your mortgage account. How this works is that let’s say you have a mortgage balance of £100,000 and £20,000 is deposited into your savings account, you only pay interest on the difference, so in this case, £80,000. This can be a very efficient way of managing your money, especially if you are a higher rate taxpayer.

The Importance of Changing Your Address | Mortgage Advice in Durham

Mortgage Broker in Durham

When you are applying for a mortgage, you always need to know how your credit score is looking before you rush into your application. The higher your credit score, the more likely that it is that you will get accepted for a mortgage. There are lots of different ways to improve your credit score, so if you have a low to medium score, you should hold off applying for now as you may get declined which will also look bad on your file.

One factor that affects your credit score is your address and whether it’s up-to-date or not. Also, the fewer addresses that you have registered to you increases your chances of getting a mortgage. However, we are seeing that people are taking this the wrong way.

Some applicants who have moved out of their parents address into rented accommodation are leaving their bank statements, credit card and electoral roll information registered at their previous address. This is because they think that it’s going to have a positive effect on their application, whereas it will actually harm their score. Even if you have just forgotten to change your address, the information is still outdated, which could go against your application.

The Importance Of Changing Your Address In Durham

Double-check before you apply

Before you perform a credit search and apply for a mortgage, you have to check that nothing will go against you. You will need to get all of your accounts (credit cards / current accounts) and electoral roll switched over to your new address. This only really applies to you if you have already moved out of your parents home as when you are moving out to get a mortgage in a new home, you can change your details once you have moved in.

Either way, your address needs to be double-checked before you start the mortgage application process. It’s surprising how much of a difference it can make by having everything up-to-date.

It’s important that you get the dates right too, you need to know the exact date you moved into your rented apartment/new home and the day that you left it. If you do happen to make a mistake with these dates it can appear that you are living in two places at the same time.

Impress the lender

You need to show the lender that you are taking this seriously and you know what you are doing. This is a more open and honest way of doing things which will also benefit your credit score.

If you still require a bit more help or just want an experienced Mortgage Advisor in Durham to check everything over for you, feel free to give us a call today; we are available from 8am – 10pm, 7 days a week!

We know that being a First Time Buyer with no mortgage experience can be hard, this is why we are offering you a helping hand, get in touch with Durhammoneyman, your local Mortgage Broker in Durham today.

Mortgage Advice in Durham

Our Past & Present Apprentices in Durham

National Apprenticeship Week 2020 | #NAW2020

It’s National Apprenticeship Week 2020! This week we are celebrating this by reflecting upon our past apprentice’s Durhammoneyman journey and those who are currently still working their way through it.

Here is a quick, honourable mention to Thomas Bowes and Laura Aves who were part of the initial wave of apprentices. Tom began his Durhammoneyman journey as a member of the customer care team and has now gone onto being a Mortgage Advisor in Durham. He is now flying high as an advisor and we couldn’t be more pleased for him. Laura has always been a dedicated case handler, her job to work with and assist our Mortgage Advisors in Durham and she loves it, keep it up Laura!

We get a sense of pride and achievement, allowing young men and women to experience an amazing opportunity to work within a competitive business and learn all at the same time. We’re enabling them to build their future as well as being able to make a living.

Recently Completed Apprentices

Michael Sallabank

Michael | Mortgage Advisor in Durham

Michael has just finished his 16-month apprenticeship program for Digital Marketing. He is now a fully-fledged Digital Marketer by having everything he needs to be part of the marketing team. Mikey’s work has paid off and he is only gaining more experience by the day and he is still even learning. Mikey has also taken on the role of helping out the new wave of apprentices that have just started at Durhammoneyman.

Chloe Masters

Chloe | Mortgage Advisor in Durham

Meet Chloe, she is celebrating her one year work anniversary this week, what convenient timing! Chloe is one of the youngest members of the Durhammoneyman team and is on the route to becoming a Dedicated Case Handler with Laura! Since Chloe is finishing her apprenticeship, she will become an official member of Case Handling team providing assistance to our Mortgage Advisors in Durham.

Lee Underwood & James Lawson

Lee Digital Marketing Assistant | Durhammoneyman

James Digital Marketing Assistant | Durhammoneyman

Here are our new marketing minions who are all currently undergoing the same Digital Marketing Apprenticeship as Michael did. At Durhammoneyman, these three Digital Marketers are looking to take mortgages by storm and create even more brand awareness for people looking for Mortgage Advice in Durham.

We love seeing our apprenticeships evolve and learn as they get through their program. We can’t wait to share a future with everyone here and we also would love for more apprentices to join the Durhammoneyman mortgage team in the future!

Debt Consolidation in Durham

Debt consolidation Remortgage Advice in Durham

Debt Consolidation Exampled | MoneymanTV

Many people are, to a greater or lesser extent in debt at some point in their lives. Sometimes due to personal circumstances, this can spiral out of control. When this happens, it can feel that once you have paid all your bills at the start of the month, there is little or no disposable income left.

One route out of this for some applicants is to consider a debt consolidation remortgage in Durham, as we explore here in this case study.

Keeping within your limits will help in the long term.

Ada was a divorcee living on her own; her children have flown the nest. Her debt had started to accumulate with legal bills after her divorce and increased gradually over the years, having to live on one income with unreliable maintenance from her ex. Finally, her daughter became pregnant quite young, and as any mum would, she tried to help her out financially, although arguably, she couldn’t afford to do so.

Luckily Ada had paid her mortgage off some years ago so that asset was there to potentially borrow against. Her take-home pay was £1100 per month, and her credit commitments were taking up more than half of this.

She had not missed any payments on credit commitments, but she had no emergency fund, and while Ada’s credit score wasn’t too bad, she was no longer able to obtain new zero% credit cards to transfer her balances.
She was recommended to me to see if there were any options available to improve the quality of her financial life.

A personal loan isn’t always the easiest option.

When I met, Ada was feeling quite low. She had cut back on all luxury spending, and it was evident that she was desperate to take ownership of her financial situation before it got any worse.

We explored the possibility of a personal loan, but the debts had mounted too high for that. Ada had no family members who were able to help; downsizing was not an option, and we agreed the right way forward would be to remortgage the house to pay off the debts and reduce her outgoings.

Reliability – a vital trait for lenders.

We managed to find a lender to meet Ada’s requirements. Although it has to be said given her low income, it was hard to find a lender who would lend her enough. We managed to get her an Agreement in Principle, but regrettably, when we submitted the formal mortgage application, it was declined.

The reason the case was declined was that the Underwriter who assessed the situation felt that because Ada had been using cards to pay off other cards and not then closing down the cards.
When she had transferred balances, there was a high risk that she should re-offend and rack up debts again.

Ada was devastated. She understood the concerns, but in her eyes, she had accepted she had a problem, and by engaging us had taken a positive step to remedy her position. To her, their risk was minimal – the loan to value was under 40%, she had never missed any payments, and if the remortgage was successful, she could be a whopping £500pm better off.

All the above was indeed correct, but clients don’t always appreciate that taking a property into possession is the last thing a lender wants or needs. It reflects poorly on the numbers they are required to report each year. In the event of repossession, they have the considerable hassle of securing the property, ensuring it, marketing it, selling it, and paying the surplus of equity (if any) back to the previous owner.

As such, if there is reasonable doubt, then an Underwriter has the discretion to decline an application, even if it is within their published lending criteria.

Being declined doesn’t mean failure, you can improve for next time.

We pride ourselves on getting our recommendation right the first time, but this one didn’t work out that way due to the Underwriter’s adverse comments at the full application stage. However, we knew this remortgage wasn’t as risky as the lender had made out, and it ought to be the right outcome for her.

Ada perhaps felt like she wanted to give up, but we went back to the drawing board to find a different lender. Sure enough, we found one and armed with the information we had from the previous lender. We were able to provide better supporting comments for the second roll of the dice, and luckily this time, it was successful.

We’ll keep you on track after you’re back on track.

Ada didn’t take this step lightly. She has now secured debt that was previously unsecured and may end up paying back more interest overall, depending on how quickly she can get the mortgage paid off.

However, in the short term, this has worked well for her. She now has had the burden of debt relieved from her shoulders, her credit score has improved, and she can save a little each month.

The savings we were able to help her make amounted to over 50% of her net take-home pay monthly and it has changed her life. Upon completion of the remortgage, Ada cut up all her credit cards except one to use in emergencies only, and she has now got her financial life back on track.

If you are like Ada struggling with debt but are a Homeowner with equity please call us to discuss your options, ideally before the situation gets out of hand. The earlier you take back control of your finances the better you will feel about things. We offer debt consolidation Remortgage Advice in Durham & surrounding areas.

Bonus: Debt Consolidation, where does all the money go?

How is the money distributed? | MoneymanTV

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

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