Costs of Buying a Home in Durham

One of the more often encountered questions that we hear from prospective First Time Buyers in Durham is them curious about how much their mortgage process would cost them.

Responding to this, we have put together a short list of all the fees you can expect to pay when you are looking to buy a new home, and when it will become payable.

Estate Agency Fees

This would apply only if you are planning to sell your home. With an increase in the popularity of online estate agencies, you can be seeing hundreds of standard website listings.

That being said, for a more localised service, you could be looking at a fee of around 1-2% of the property price.

Valuation Fees

Your mortgage lender will need you to have a valuation conducted on the property you are purchasing to make sure that the property is worth the amount you are looking to borrow from them.

Prices for a property survey can cost anywhere from hundreds of pounds, this can depend if you want just a basic valuation, a lot more in-depth Home Buyers’ Report, or a Full Building Survey.

A key thing to remember when to working around the cost is that you always have some element of choice in the level of detail your survey goes into, with your decision by age and property type, as well as any questions.

Mortgage Arrangement Fees

Sometimes you can have a product with a cheaper rate, but the advantage can be outweighed by the payable arrangement fee to a mortgage lender.

This cost doesn’t exist with every mortgage lender, so you may not have to pay for anything at all, but in some cases, it could be upwards of 3 figures, depending on how the mortgage lender is in question.

You can find that these costs can be paid upfront, though you may also be able to add these onto the balance of your mortgage. Noteworthy though, that this would mean incurring further interest charges.

Here at Durhammoneyman, our team of Mortgage Advisors in Durham, has helped many first time buyers and home movers in Durham alike, we can compare deals for you in order to find you the most suitable one for your circumstances.

Solicitor’s Fees

You will have to hire the services of a qualified solicitor. The cost of this service can be quoted very differently depending on the firm you are speaking to. An estimation for a straight forward purchase with a local company is likely within the mid-hundreds.

You will need to give the property address, whether it’s leasehold or freehold and how much you are purchasing it for, in order to receive accurate quotations.

The key points to cover when asking for a quote are:

• Ensure the firm includes VAT.
• Ensure the firm includes the cost of any “disbursements.” These are fees such as Land Registry Fees and Local Authority Search Fees.
• Is your solicitor on your mortgage lenders panel?

Stamp Duty Fees

In addition to the costs and disbursements involved in paying your solicitor, depending on your circumstances, you may also be required to pay this tax which the solicitor collects on completion of the property purchase.

This doesn’t apply to everyone. The government have been known to change the criteria on Stamp Duty, with the latest change being in favour of First Time Buyers in Durham. The latest Stamp Duty updates can be found here.

Mortgage Broker Fees

A Mortgage Broker in Durham will typically charge for their service. The cost of this will vary from company to company.

In our case, your dedicated mortgage advisor in Durham will discuss this in more detail with you during your free initial mortgage appointment.

We would definitely recommend choosing a local company such as ourselves, rather than a big organisation. They are more likely only to charge on completion, as opposed to any application fees and additional costs that could be incurred.

Moving/Removal Fees

Of course if you are Moving Home in Durham, the cost of doing so in regard to the actual moving aspect, can be quite costly. This will depend on the level of service you are looking for.

Hiring your own van and doing the work yourself can be quite cheap. Opting for a local man with a van can be only slightly more than hiring your own van. A professional van service can be in the high hundreds, early thousands.

To further discuss the costs involved in buying a home, including anything we may have missed, book your free mortgage appointment today. A trusted mortgage advisor in Durham will be more than happy to discuss this with you.

Buying a Property With a Partner or Friend in Durham?

Buying a Property with Others in Durham

Stepping into the mortgage world for the first time can be an intimidating but exciting experience for a number of home buyers even more for those looking to purchase a property on their own.

As an alternative, we do find that many First Time Buyers in Durham look at purchasing a property with a friend or partner if they are able to do so.

Lenders will factor in both your income as well as your co-borrowers’ so they can work out your maximum mortgage amount. The benefit of having two applicants is that the mortgage costs will be split between you both which, in turn, can help increase your chance of getting offered.

In the event that you default, your co-borrower could be responsible for the full mortgage, and vice versa.

With the help and expertise of being a First Time Buyer Mortgage Broker in Durham, we have collated a guide of helpful tips we recommend you take into account when into a property with a friend or partner.

How many people can jointly own a property?

Some lenders may allow you to co-borrow with up to four people jointly.

This may seem like a safe option with multiple parties creating more financial security when paying the mortgage, however, the chances of someone pulling out before the term ends can be higher. Because of this, it is wise to be selective with who you buy a property.

If you decide that you want to increase your mortgage further down the line, you and your co-borrowers will all have to agree to this. Therefore, it’s good to plan ahead for your future and your plans for the property.

Joint tenancy or tenancy in common – what’s the difference?

Normally, joint tenancies are utilised by many civil partnerships or married couples. In the case where half of the party dies, the property would instantly be given to the other half. From a legal perspective, joint tenants are two halves of one whole, one borrower.

When it comes to remortgaging or selling the property, both of you will need to agree before proceeding with the mortgage.

For applicants that have co-borrowers that are friends or family, it is likely that you will go for the option of ‘Tenancy in Common’. This means that you both own your part of the property.

You do not need to split your share equally so if one of you is making a lot more income than the other, you will own more of the property than the other.

With this in mind, as a ‘Tenant in Common’, you have the right to act independently. This gives you the option to sell or give away your share if you wish.

Joint mortgages & removing names

What happens if you jointly own a mortgage, but your co-borrower(s) stop meeting the mortgage payments?

A mortgage lender will stress the fact that all borrowers are jointly and severally liable which means that if one of your bo-borrowers decides not to pay their part of the mortgage, it’s your responsibility to keep up the payments.

How do I remove my ex-husband/wife from my mortgage?

The intention of looking to buy a home with your then other half doesn’t come with the assumption that you’re going to split before the term is up. It is a large financial commitment to make anyway and can become complex if you are wanting to make any changes.

This can become even more of a challenge when children are involved. In most cases, the parent who will stay with them usually stays in the current property whilst their ex-partner moves out to look possibly look for their own mortgage. Regardless of if you are staying or going, both parties will need the help of a Mortgage Advisor in Durham for divorce and separation.

Whether the situation is that you pay for the mortgage with the assistance of your ex or you pay the mortgage on your own, it doesn’t alter the joint financial commitment you have with them. Therefore, in the event of arrears, the lender will chase both parties.

Removing anyone from a mortgage means that only you will be in charge of paying and managing the payments. From a lender’s point of view, they will need to be confident that you are able to manage these mortgage payments so will reassess your income to make sure this is achievable before they will proceed.

We do find that applicants who are unable to afford a mortgage on their own will go down the route where they apply jointly again with a friend, family member or new partner. These situations will be best with the assistance of Mortgage Advice in Durham.

How do I remove my name from my ex-partner’s mortgage?

As mentioned, when it comes to divorcing or separating your partner whilst on a mortgage, both parties are still jointly liable for the property and its mortgage payments.

In the circumstance where you are the one to leave and wanted to remove your own name from their mortgage, it’s not as simple as coming to an agreement between the two of you, they would need to get in touch with their lender.

For those looking to get a mortgage on their own, the lender would take into consideration the property you are currently tied to, so it’s key to make sure that you are removed from the previous mortgage.

In these circumstances, you should always seek Mortgage Advice in Durham.

When it comes to the amount they will be willing to lend you, you will find that some lenders will be more generous than other lenders. This is something your designated Mortgage Advisor in Durham will factor in when recommending the most appropriate mortgage lender to apply for a Mortgage Agreement in Principle with.

First Time Buyer Mortgage Advice in Durham

The Pros and Cons of Using a Mortgage Broker in Durham

There are many reasons why you should use a Mortgage Broker in Durham. It can be helpful if you are taking that first step into the mortgage world, or going through the process the second time as you come towards the end of your fixed term as the process can be daunting sometimes.

With many options available for homeowners and home buyers, you ideally want to get it right first time, even with a lot of money involved.

Obviously, we believe that our tailored service as a Mortgage Broker in Durham would be helpful during the mortgage journey, in particular, First Time Buyers in Durham.

Even though we are experts in assisting customers through the process, it’s also understandable that the service is not for everyone and some may still wonder how we can help.

With this in mind, we have created a helpful guide about why approaching a Mortgage Broker in Durham could benefit you in your situation and why some people decide to go direct to the mortgage lender instead.

What are the pros & cons of using a mortgage broker in Durham?

Cost-Effectiveness

Deciding to go direct with the mortgage lender and finding your own mortgage deal can save you more money than approaching a Mortgage Broker in Durham. However, mortgage brokers may charge a fee but can be based on circumstances.

Being experienced in going through the process, having an easy case and lengthy knowledge may mean that it’s best and cheaper to go through the process yourself. This can be an issue if you have a more complicated case and people who don’t understand the lender criteria.

Going through the mortgage process with little to no knowledge could either result in you being on the wrong deal or ending up unsuccessful when applying for a mortgage deal. Either circumstance could mean spending more money than you have to, or damage your credit score which could negatively effect your chances of applying for a mortgage further down the line.

A dedicated Mortgage Advisor in Durham strives in getting your recommendation right the first time by finding you the best and cheapest deal on offer. As much as this service comes with a fee, you could find that you save a lot of money in the end.

Local Bank Branch Relationships

One of the reasons why many older customers decide to approach a bank is due to how the mortgage process was previously run. Prior to the introduction of online banking apps and modern technology, as a loyal customer, you may approach your local branch a lot where you would speak to the same people.

If you were looking to get a mortgage, you would go through the bank manager and speak to them. They had extensive knowledge of your finances and would be the ones to approve a mortgage for you. Now, many things are done digital including credit scoring.

Because of advanced technology within these banks, it means that the bank manager would not personally go through your case. It would be carried out through an online system which will determine if you are eligible for a mortgage or not. Regardless of what bank you are with, everyone is treated fairly.

Exclusive Mortgage Products

Following on from the previous point, there is an assumption amongst people that going direct would mean they are open to the best and exclusive deals. This is true to an extent, however, they will offer the best deal from their own company.

Not every mortgage lender is a bank and there is a large variety of options to choose from. Therefore, the most suitable deal your bank can offer, might not be the best one for you outside that bank.

This is another reason why taking out tailored Mortgage Advice in Durham can be a huge benefit to you. With an expert advisor by your side, they will be able to go through your case and find you the deal amongst our large panel of lenders that is perfect for your circumstance.

On the topic of exclusivity, approaching a Mortgage Broker in Durham can give you access to deals that you can’t find anywhere else. If you are a first time buyer, looking to remortgage in Durham or have a specialist case, there are many options available to you through an expert mortgage broker.

Changes to Regulation & Consumer Protection

After the 2007-08 credit crunch, the mortgage market needed to change. The 2014 Mortgage Market Review, stated that lenders could not sell mortgages to their customers without regulated advice.

This policy meant you couldn’t just approach a bank to tell them you want a mortgage and be accepted without the important checks. Furthermore, it meant that you couldn’t be granted a mortgage by any member of the bank, which was a regular occurrence, regardless of if they were qualified to do so or not.

Along with these new policies, consumer protection was introduced which was initially not provided to you by the bank. This means that you, as the customer, as the right to complain to the Financial Ombudsman if you feel misadvised in any way. The Financial Services Compensation Scheme is also available to you to make a claim.

Having this in place can assure customers who approach both mortgage brokers and mortgage lenders that they are in safe hands and are receiving professional and regulated advice.

Booking an Appointment with a Mortgage Advisor in Durham

One factor which can be a disadvantage to mortgage lenders but is beneficial to mortgage broker is that it can sometimes take months to try and speak to an individual at a bank. Whereas, getting in touch with a Mortgage Broker in Durham, like ourselves, can provide you with a more quick and responsive service that keeps you updated constantly about your mortgage process.

We are proud to offer a tailored service where a member of our team will contact you at a time that is best for you and your lifestyle. From morning, until late, 7 days a week, our expert Mortgage Advisors are here to help. This can sometimes include bank holidays!

Depending on availability, you may be able to book yourself in and have the appointment on the same day! However, it’s up to you if you want to speak to someone today or in a few days time.

As a part of our tailored service, our advisors have flexible availability. This means you can book yourself in around your 9-5 or around any other commitments. Our quick and simple book online system is great if you are on the move and need to book an appointment.

Responsiveness is an important part of Durhammoneyman. Whatever mortgage process you are going through, our friendly team will keep you in the loop. Your advisor will let you know of any changes that could arise.

The public’s views on mortgage brokers has changed due to Mortgage Brokers in Durham, like ourselves, providing an open and honest service to all customers looking to start their mortgage journey.

Handling Complex Scenarios

Through our time providing Mortgage Advice in Durham, we sometimes speak to customers who have a more complex situation than your average case. Below are just a few common situations we have encountered over the years;

• Mixed Deposit (Savings & Gift) – This means auditing two different sources.
• Applicants, who are on zero hour contracts – Will there be a consistent income?
• Making a Second Purchase – Can they afford to make that additional purchase?
• Self-Employed with No Fixed Income – A common challenge for Self-Employed applicants.
• Poor Credit History – A lender will not look favourably upon an applicant who has mismanaged payments in the past.
• Affordability – Can they afford a mortgage full stop?

In previous years, mortgage lenders could easily offer you deal that was better than any other lenders. Now, it’s not all about which deal you go with, it’s if you match the criteria or not.

Even if you find a deal that is reasonable, it doesn’t mean you match the criteria for it. In order to determine this, the lender will perform either a hard search (resulting in a footprint on your credit file? or soft search (leaves less of a footprint on your credit file).

One thing that could damage your credit file is being declined for an agreement in principle when applying for a mortgage. On top of that, if you are declined, it’s very unlikely that you will be given a reason for this which can be frustrating.

If you do speak to a Mortgage Broker in Durham like Durhammoneyman, we will be able to go through your case before, so you are prepared and in a position where you have a better chance of being accepted.

Here at Durhammoneyman, we have a large panel of lenders who offer a range of mortgage products. We will be able to match you up with deals and look to get you an agreement in principle. If you get your agreement in principle through Durhammoneyman, it will usually take no more than 24 hours after your free mortgage appointment.

Remember, having an agreement in principle doesn’t always mean you’re guaranteed to be agreed, nor does it guarantee a mortgage in the end, but it does provide safety for your credit file to have an expert go through your file beforehand. As a Mortgage Advisor in Durham, we always aim to get your recommendation right the first time.

In Conclusion; Should I use a Mortgage Broker in Durham?

At the end of the day, it’s your decision. As mentioned, there many advantages and disadvantages of going with a Mortgage Broker in Durham. On the other hand, there is many pros and cons to going direct as well. It all depends on how quick you want your service to be, and how secure you want to be.

Through our time as a Mortgage Broker in Durham, we have built up a positive reputation and strong relationship with many customers looking to begin their mortgage journey. If you are a first time buyer in Durham, coming to the end of your fixed term, looking to remortgage in Durham, we have done it all!

Here at Durhammoneyman, we offer fast & friendly advice that is FCA regulated. Simply book online or get in touch to book yourself for a free mortgage appointment or remortgage review with one of our brilliant advisors. Our goal is to fulfil your mortgage needs, by providing you with advice, at a time that best suits you, subject to availability.

For more information about our service, check out our fantastic customer reviews. You can have a customer insight on how our service has helped many individuals on their mortgage journey. We also offer free financial education through our YouTube Channel, MoneymanTV.

Top 5 Mortgage Hurdles People Experience in Durham

Experienced Mortgage Advisor in Durham

Through our experience as a mortgage advisor in Durham, we have heard of our many clients’ different mortgage hurdles. Although these challenges are not entirely impossible to resolve, it’s vital to know that they can become a major factor in stalling the speed and flow of the process.

 These challenges could include:

• The effects that divorce and separation could have on a mortgage
• Unemployment and getting a new job
• Costs relating to childcare  
• Evidencing a deposit source
• Understanding benefit income

Effect of Divorce and Separation  

Divorce and separation can be hard to deal with and is very unfortunate. When this occurs, many divorced partners are then faced with more than just marriage challenges, with one of these being the joint financial endeavours that were taken out together. 

An option that initially sounded endearing to many married couples, due to the fact it can allow them to achieve their goal quicker, can quickly turn sour in the event of a separation. 

We tend to hear a handful of commonly asked questions from one half of the former happy couple when they get in touch. These include;

• What is the possibility of being excluded from their ex-partner’s mortgage?
• Could they possibly obtain a second mortgage?
• Is there a way to exclude their ex-partner from the mortgage, in order to keep it for themselves?

Considering the affordability of your mortgage payments is paramount. As well as having an expert Durham mortgage advisor, you need to ensure that you are fulfilling necessary income requirements that make the obstacle of divorce and separation easier to overcome.

Effect of Employment Gap and New Job on Mortgage Payments 

In some cases, getting a new job comes with a greater income level than your previous job. However, a gap between going from your previous job to your new job can become a complication with your mortgage, and it’s especially the case for mortgage lenders.

If you are starting a new job, some lenders are always willing to factor in the new job either in the first month or as soon as you are about to start it. Furthermore, you will find periods of probation are acceptable.

Childcare-related Expenses 

When dealing with mortgage-related issues, we have found that the mortgage amount can change depending on if you are a family with children or not. A family with children, for example, will be offered much less compared to a family without children.

This is especially true in cases where the parents have just started back at work and are in the process of managing childcare, which are known for having notoriously high monthly costs. Many mortgage lenders will view these the same way they view other large monthly outgoings such as car payments.

It is best to mention, however, that a number of mortgage lenders operate in a different way. In some cases, lenders dismiss childcare-related expenses as part of the outgoing costs. This is due to the fact they strictly operate based on the data presented by the Office of National Statistics for outgoing costs. This can potentially increase the mortgage amount.

Evidence of Deposit Source 

Anti-Money Laundering laws, put in place in the UK, tend to be quite strict. Because of this, it needs to be known where all funds deposited by the mortgage borrower are coming from. Evidence of the deposit source will be required by your mortgage broker and lender. Sometimes, it may even be required by estate agents and solicitors.

Due to this, the entire mortgage application becomes a lot more complicated. Regardless of the source of deposit (either gift, personal savings, property sale, premium bonds, or personal loans), there must be documents detailing how the funds were obtained.

What to Know About Benefit Income? 

Benefit income can have its challenges too! With the help of an expert mortgage broker, this can be easily tackled. In fact, all forms of benefit incomes can be taken into account from disability benefits to child tax credits, however, this depends on the views of the mortgage lender.

Get in Touch with a Mortgage Advisor in Durham

It doesn’t matter if you are a first time buyer in Durham, looking to move home in Durham, or looking to remortgage in Durham, challenges can come about and cause unnecessary stress. Get in touch with a mortgage broker like ourselves and we will try and help take the stress away. 

What is a 95% Mortgage?

A 95% mortgage is as simple as the name would suggest; you are borrowing against 95% of the price of a property, and then you are covering the remaining 5% with your deposit. An example of this is if you looked at buying a property that was worth £150,000 with a 95% mortgage, you would be putting down £7,500 as your deposit and borrow the remaining £142,500 from the lender. 

95% Mortgage Advice in Durham

Off the back of the March 2021 Budget, Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, making 95% mortgages more readily available from the bigger high street banks.   

This is fantastic news for First-Time Buyers and Home Movers alike, as this scheme will continue running until December 2022. Certain terms and conditions will apply though, which is something your Mortgage Advisor in Durham will be able to look at, to see if you qualify.    

All our customers who opt to Get in Touch will receive a free, no-obligation mortgage consultation where one of our dedicated mortgage advisors will be able to make a recommendation on the best possible route for you to take.

Can I get a 95% mortgage?

95% mortgages are usually accessible by both First-Time Buyers in Durham & those who are Moving Home in Durham. Whilst saving for a 5% deposit sounds like a pretty straightforward concept, you’ll still need to have an acceptable credit score and prove that you are able to afford your monthly mortgage repayments, in order to access a 95% mortgage.

Improving your credit score

A good credit score is essential in the process of obtaining any mortgage, especially a 95% mortgage. Things like paying any current credit commitments on time, ensuring your addresses are updated and checking that you’re on the voters roll, can all help with your credit score.

Affordability 

Affordability is another one that is important to take note of. By giving the lender details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments, your lender will be able to get a general overview of whether or not you are able to afford this type of mortgage.

Can my family help me get a 95% mortgage?

Nowadays we see lots of family members helping each other get onto the property ladder, especially parents looking to further their children’s lives. The way this usually happens is by gifting the person looking to find their home, the deposit required. Known through the industry as the “Bank of Mum & Dad, Gifted Deposits are only intended to be a gift, and not as a loan. The lender will need proof that this has been agreed, before it can be used towards your mortgage. 

How do I choose the right 95% mortgage?

When looking for a 95% mortgage, you want to make sure you have the right type of mortgage. Each mortgage type works differently, with that choice allowing you to find one that is most appropriate for your personal and financial situation. 

Some homeowners and home buyers prefer Fixed Rate or Tracker Mortgages, mortgage types which mean you either keep interest rates at a set amount for the term given or have your interest rates tracking the Bank of England base rates.

Alternatively, you might find that Interest-Only or a Repayment Mortgages are more your style. Interest-Only allows cheaper payments until you need to pay a lump sum at the end (mostly now used for Buy-to-Lets), whereas a Repayment mortgage (a normal mortgage if you’d like) means you’ll be paying interest and capital combined per month.

How can a bigger deposit help with my mortgage? 

Seeing as a mortgage is such a large financial outgoing, you need to be prepared and need to be aware. You might find things like higher interest rates, remortgaging difficulties due to less equity and then negative equity all cropping up if you’re not. 

There is no need to worry though, as all these can be avoided if you’re savvy enough with your process to begin with. The more deposit you put down for a property, the less risk the lender will see you as. 

A larger deposit, of say 10-15%, would not only reduce the rates of interest by a noticeable amount, but would also give the property more equity and reduce the risk of negative equity, thanks in part to you borrowing less against the property. 

So, whilst the risks may seem intimidating, planning ahead and saving for a bigger deposit to access something like a 90% or even an 85% mortgage will be a massive help in your mortgage journey and something you’ll be able to reap the rewards from in the future. 

Reasons Why People Choose to Move House in Durham

Home Mover Mortgage Advice

There are a plethora of reasons why a homeowner may instead look to move home. Here, we will be discussing the most common reasons that we have come across through our experience as a mortgage broker in Durham.

More Living Space

It is known that many homeowners to look at the option of moving home when they are in need of more living space. This is quite a common case with many first time buyers in Durham as it’s very likely they went for a smaller home when they initially applied.

As well as this, your circumstances may be different now from what they were when you moved into your first home which has resulted in you needing more living space. This may be because you are looking at starting a family or are wanting extra space for things like a home office.

With this in mind, if you are looking at revamping the home you are living in currently instead of moving home in Durham, you may benefit from raising capital through a remortgage to fund building the space you need.

This route is very popular with growing families and could give you the opportunity of developing the home you are already happy with.

Normally, we find parents will convert their loft into a bedroom for one of their children, meaning there is extra an extra room that could be a home gym, home office or guest room to name a few!

From a selling point of view, remortgaging for home improvements can also build up the value making it a long term investment. If you are looking for more information regarding this, contact our team for remortgage advice in Durham.

Change of Scenery

A change of scenery may be the reason why you are looking to move home in Durham and this is especially the case for those who initially had first time buyer mortgages in Durham.

This is because they may have had a limited budget before meaning they settled for a cheaper property as a way to achieve their homeowning goals. Now, they may have a higher budget to work with and can explore properties in a more affluent area.

When moving into a first home, it’s unlikely for people to be exploring aspects like schools and parks in that area because starting a family wasn’t their goal at the time. With this in mind, individuals who are looking at starting or planning to have a family will take this into account when looking at places to move to.

Family & Friends

Our team of mortgage advisors do find that another common reason that they encounter is those looking to move home to be closer to friends and family. This can happen when couples are looking to start their own family or after a significant loss.

A more popular case of this is when both parents are working full time and are in need of child care. This is when reaching out to a family member or friend can not only be convenient, but cheaper with costs of nurseries being a lot more expensive and not as flexible.

Get in Touch for Mortgage Advice in Durham

Contact a trusted mortgage broker in Durham if you are looking at exploring options for moving home in Durham. Our team will be able to go through the costs with you of the moving home process.

Here at Durhammoneyman, we can search through 1000s of mortgage products as a way to find out the best deal for your personal and financial goals. Book your free mortgage appointment today!

On the other hand, if you are looking at remortgaging for home improvements instead of moving home in Durham, our team can utilise their expertise on this. Simply book yourself in for a free remortgage review to get started towards revamping your dream home.

Mortgage Payment Holidays | Mortgage Advice in Durham

Mortgage Payment Holiday

At the start of the Covid pandemic, the Government promised that all borrowers would be allowed a three-month mortgage payment holiday if they needed it. Most lenders followed the Government’s guidelines and did their best to help their borrowers during these hard few months.

We feel that it is best to create a summary of what mortgage payment holidays are, what lenders are doing and who can provide you with help and guidance through the coming months.

On that note, we feel like this is a good time to talk about what mortgage holiday payments are and how they can help you with your mortgage payments.

What is a Mortgage Payment Holiday?

They are quite simple. A mortgage payment holiday is a set-period, agreed upon between you and your lender, bank or building society, where your mortgage payments are deferred. In this situation, the set period should be around three months.

You will still have to pay back these payments. Over the period, you will receive interest which will be added onto your loan at the end of the payment holiday whilst your capital balance will not decrease. So, your overall mortgage loan will slightly increase. So you save money in the short term but in the long term, it may prove expensive.

Once you feel like you are ready to start paying back your monthly mortgage payments, either your monthly mortgage payments will be recalculated at a higher level or your mortgage term could be increased. Lenders prefer to not increase your mortgage term as it could put you past their standard retirement ages.

You may even be allowed to pay off a lump sum later on in the year to get your monthly mortgage payments back on track to how they were prior to your payment holiday.

Mortgage payment holidays are available for borrowers with both residential or Buy to Let Mortgages in Durham. This really helps out landlords as they now have help if rental payments are affected.

The Government’s Proposal

Here is the Government’s proposal following the COVID-19 outbreak:

• Mortgage lenders will offer an automatic three-month mortgage payments holiday for borrowers who have been impacted directly or indirectly by COVID-19
• The mortgage payment holiday will apply to customers who are up to date on their payments, not in arrears, and wanting to self-certify that they are impacted by COVID-19
• This means that lenders will not complete an income and expenditure assessment, or an assessment of alternate payment options as ordinarily required under MCOB
• This proposal will allow lenders to be more responsive to customer needs and offer forbearance in a simple way to customers in an environment where the operation of collections teams made be also impacted by COVID-19
• Customers will be made aware that interest will accrue in the holiday period and they will need to make up deferred payments in the future
• Customers who wish to undertake a full assessment of their ability to pay or financial difficulty may still do so.

How do I apply for a Mortgage Payment Holiday

Even if you had a mortgage payment holiday before, we always recommend speaking to your Mortgage Advisor in Durham. They will sort out everything out for you and work out whether you actually need to take a mortgage payment holiday. You can also go directly to your mortgage lender and enquire about taking one but this may not benefit you as you may not even need one. The main thing is not to panic and explore all of your options before rushing into anything.

Here are the steps you need to take if you won’t meet/aren’t meeting your monthly mortgage payments and have been directly affected by the COVID-19 outbreak:

• The customer would contact the lender and inform them that they are being impacted
  by COVID-19
• The lender would accept these details from the customer and offer an automatic
  three-month mortgage payment holiday
• No evidence is needed for the lender
• The lender makes the customer aware that interest will accrue and will be contacted at the end of the three months to complete an assessment of the customer’s circumstances
• At the end of three months, an arrangement to pay will be agreed with the customer according to their circumstances to recover any shortfall, also ensuring that the mortgage remains affordable and sustainable
• The lender notifies the customer that if they wished to complete a full assessment now, there may be other forbearance options more suitable to the customer.

For more useful information on how the coronavirus could affect your mortgage click here.

Will a Mortgage Payment Holiday impact my Credit Score?

In most cases yes, they can give a negative effect to your credit score. However, you are taking one because of a virus so lenders shouldn’t let it damage your score.

To ensure that this is the case, before taking out a mortgage payment holiday, you must contact them. You need to record their answer as well as the date, time and the name of the person that you spoke with. This will avoid any confusion down the line if anything changes. It all depends on your lender, there is no guarantee that every lender will say the same thing.

Will I still be able to Remortgage or take a Product Transfer with my lender?

You would’ve thought that everything would continue as normal, however, all lenders are now avoiding all remortgages and product transfers during a mortgage payment holiday.

This will affect borrowers approaching the end of their existing product as they may be forced to move on to a higher lenders variable rate. This could mean that borrowers who act too early and jump into a mortgage payment holiday deal straight away could end up accruing interest on a costly variable rate.

This is another reason why we say don’t rush into anything! Take it slow and evaluate your options with an expert Mortgage Advisor in Durham first, they will make sure that you actually need to take out a payment holiday first before diving in headfirst. There are lots of mortgage options out there so have a look first with your mortgage Broker in Durham.

What are my other options?

Some lenders could offer you a temporary switch over to interest-only in order to reduce your monthly payments but not to add any more to the loan amount by still servicing the interest payments each month.

You don’t need to put all of your mortgages onto interest-only, but doing so could help you out financially.

If you have savings, remortgaging onto an offset basis could really help you out, you will be cutting down on monthly payments massively. For example, if you have a £250,000 loan and £50,000 in your savings, you would only pay interest on £200,000.

This may all may seem a bit stressful and it this may have come around faster than expected, however, you should try to take it slow and calm down. As your Mortgage Broker in Durham, we are still here to help and relieve you of all of that stress. Remember, we are still open as usual operating 7 days a week. Receive a free mortgage consultation with a Mortgage Advisor in Durham today, we hope that we can help you out!

Mortgage Advice in Durham

How to Improve your Credit Score in Durham

Mortgage Advice in Durham

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.

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.

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.

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.

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!

The Importance of Changing Your Address

Mortgage Broker in Durham

If you are looking at applying for a mortgage in Durham, it is key that you pay close attention to your credit score. The general rule is the higher that your credit score is, the higher chance you have of being accepted for a mortgage by a mortgage lender.

There are many aspects of keeping a good credit score including maintaining monthly payments, limiting gambling transactions and many more. A main factor that is usually left is making sure that all of your addresses are up to date.

Having too many addresses on your record can be seen as a negative factor to many. This is true to an extent, however, many people have approached this in a way that could cause their credit score more harm than good.

On a regular basis, we see mortgage applicants especially younger First Time Buyers in Durham who have moved out of their parents’ home to move into their own rented accommodation and haven’t changed their address. This has resulted in many of their post being delivered to their family address instead.

This includes things like bank statements, credit cards and electoral roll information and more. Usually this is accidental but we do find that it’s intentional. This isn’t a good idea as they will always be a record of your address somewhere.

Think about it, if you are setting up new contracts or getting post delivered from Amazon or eBay, it will be shown your new address on your credit file. As a result, when a mortgage lender carries out credit checks on you, they will see that this address exists and will show them that you’re living in two places at once.

Check Before You Apply!

Make sure that before you look at applying for a mortgage where you will be credit search, you have thoroughly checked that nothing has been left which could create a negative impact on your credit and harm your chance of getting a mortgage.

This will involve you logging into all of your accounts like credit cards, current accounts, shipping details, water and electric bills and importantly, the electoral roll (this has a significant impact!) to check that they are all updated with your new residential address.

Obviously, this only applies to those who have moved out and are living in their own place first. This is because people who are still living with their parents and haven’t moved yet can’t change to a new address they don’t have yet. In the case that you’re a First Time Buyer in Durham, don’t worry!

Whatever circumstance you are in, you need thoroughly check all these things before applying for your mortgage. We do find that many people forget about the electoral roll information which is something that you need to do as it can make a big difference.

Furthermore, check if the dates are correct too, that you know the specific dates you moved into your rented property and the day you left it.

You need to get the dates right too, knowing the exact date you moved into your rented property and the day that you left it. In the case that you make a mistake with this and there are time that overlap, a mortgage lender may feel like you are living in two places at once.

Impress Your Mortgage Lender

Through making sure that every bit of information you have on your accounts is up to date, you are demonstrating to a mortgage lender that you are serious about your mortgage journey and understand what you are doing. As well as this, you are making sure that you only have one consistent address at any given time.

By doing this, you are having a more open and honest approach when getting your mortgage application going. The goal for you is to try and impress your mortgage lender as best you can, put yourself in a good position so it’s key you keep these points in mind.

If you are still needing assistance with your mortgage advice process, book online for a free mortgage appointment and our team will connect you with a trusted Mortgage Advisor in Durham today!

Through our experience as a Mortgage Broker in Durham, we find that a First Time Buyer in Durham gets in touch with our team because they have no mortgage experience and are finding the process daunting so are looking for a helping hand.

When you book your free mortgage appointment in Durham you will be able to speak to an expert Mortgage Advisor in Durham and they will be your guide throughout your mortgage journey.

Mortgage Advice in Durham