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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.

Help to Buy Mortgage Schemes

Help to Buy Mortgage Advice in Durham

After the unfortunate event that was the 2008 credit crunch, our government opted to create a backup plan, in a bid to try and restart the pulse of the mortgage market. Their focuses were on first time buyers, introducing ways to help them get onto the property ladder, referring to these as government ‘Help to Buy Schemes’.

There are various different Help to Buy Schemes available, some that you might find you are better suited for and others you won’t qualify for. Here is a list of the Help to Buy Schemes available to home buyers and a bonus scheme that might be useful.

Help to Buy Equity Loan

The Help to Buy Equity Loan is the most popular of the schemes available to customers. If you are a first time buyer in Durham and are looking to get started on your mortgage journey, this could very well be the scheme for you.

Help to Buy Equity Loan Mortgage Advice UK | MoneymanTV

First of all, you must be first time buyer to be able to qualify for this scheme. You must also be purchasing a new-build property too, as this scheme does not apply to regular properties. You will be required to have a minimum of a 5% deposit.

The way this scheme works, is that you will put down a 5% deposit (or more if you can, that usually works out better for home buyers) and then the government will provide you with a loan to make up a total of a 25% deposit. This changes depending on how much you put down, i.e., if you then put down a 10% deposit, they’ll loan you 15%.

Overall, this will leave you with a 75% mortgage and the loan provided by the government to pay off. You get 5 years interest-free to pay back your loan. If you are unable to pay this back within the 5 years, you will start gaining interest on the amount of the loan that is left to pay off, starting at a rate of 1.75%.

As a trusted mortgage broker in Durham, we know that balancing your mortgage payments and the equity loan repayment at the same time can be quite a difficult task. There are many different ways around this, for example, some customers look to remortgage to raise capital for this loan, however, this route will increase your monthly mortgage payments.

Help to Buy Shared Ownership Scheme

The Help to Buy Shared Ownership scheme was introduced as a means of allowing applicants to purchase a percentage of a property and then pay back the remaining amount as rent.

Help to Buy Shared Ownership Mortgage Advice UK | MoneymanTV

You will usually have to own between 25-75% of the property in question. The remaining percentage will be owned by an outside party, namely the local housing association or council. This share can possibly be increased further down the line, if you happen to find yourself in possession of some more money.

The way that your payments work is that you will be paying back your monthly mortgage payments, but also a monthly rental cost. This basically means you are paying 100% of the ground rent and service charge on your new home. This will still apply, even if your share is the minimum amount.

Help to Buy Armed Forces Scheme

The Armed Forces Help to Buy scheme was introduced in 2014 after the roaring the success of the Help to Buy Equity Loan scheme. This scheme aimed to utilise the same basic concept as the one that came before it, however, this one was focused in on members of the armed forces.

Help to Buy Armed Forces Mortgage Advice | MoneymanTV

If you do fit into the criteria of the scheme, this is something that could provide a real advantage to you when trying to get onto the property ladder. The government has now extended the deadline/review date of the scheme to December 2022 and we have high hopes that it stays around, as the scheme is incredibly helpful to existing armed forces members who are in need of the extra help.

Bonus: Lifetime ISA

The Lifetime ISA is often a scheme that people forget. It’s not everyone’s immediate go-to scheme, however, it’s still useful to have some knowledge of it, as it could be the scheme that helps you secure a property as a first time buyer in Durham.

Lifetime ISA Mortgage Advice UK | MoneymanTV

A Lifetime ISA is more or less a savings account where your money grows, completely free of tax. The government will also provide you with a top-up to your savings with an extra 25%. This means that if you meet the £4,000 maximum amount, you will receive a rather welcomed £1,000 bonus to your savings.

You have to pass specific mortgage criteria in order to gain access to this mortgage scheme. All of these details are readily available on the Lifetime ISA website.

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.

Mortgages for Newly Qualified Teachers (NQT’s) | Mortgage Advice in Durham

Mortgage Advice for Newly Qualified Teachers

Many schools now only offer newly qualified teachers (NQT’s) a 12-month initial contract as standard. This can prove a problem for many teachers if they want to buy a property as a First Time Buyer in Durham. This is because most of the high street mortgage lenders will class them as a “contract worker”. As such teacher mortgages will require you to have 12 months in the role.

Fortunately, some smaller lenders are more sympathetic to this situation and will consider a First Time Buyer’s application without the 12-month history. On the other hand, you could consider a Help to Buy scheme in Durham.

Things to consider:

  • No previous employment history required (so it’s fine if you have been studying up until now)
  • A 12-month first post-contract can be treated the same as a permanent role
  • Mortgages available up to one month before the start of the first contract (so you can apply in the August for example)
  • Up to 95% loan to value

If you are a newly qualified teacher and would like to discuss your mortgage options then please don’t hesitate to contact us for Specialist Mortgage Advice in Durham.

How to Get a Mortgage Agreement in Principle?

What is an Agreement in Principle?

What is a mortgage agreement in principle?

A Mortgage Agreement in Principle (AIP) is essentially a document to prove you have a mortgage in place. To the Estate Agent, it proves you are creditworthy as you have passed the lenders credit score. However, it is not a guarantee that you will definitely get a mortgage as a full application will require further background checks.

The value of a mortgage agreement in principle

How having your mortgage agreed at the outset can help you negotiate on an asking price.  A Mortgage Agreement in Principle is essentially a document to prove you have a mortgage in place. It is something we obtain for all of our clients and almost all Lenders offer them.

A Mortgage Agreement in Principle is not a guarantee that you will definitely get a mortgage as your full application will require further background checks (such as evidence of income) and a satisfactory valuation of the property itself.

However, it is a good idea to get one done at the earliest opportunity for the following reasons:

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

Negotiating power with a mortgage agreement in principle

When you are ready to make an offer on a new home most Estate Agents will undertake due diligence and ask you to produce evidence that you have funds available to complete the purchase. This will take the form of bank statements and also an Agreement in Principle certificate that we can provide for you. Once you have provided them with all this documentation the Estate Agent will then normally stop marketing the property and put a “Sold” or “Sale Agreed” board up.

If you already have a Mortgage agreed before you make an offer you are making yourself appear as an attractive proposition as this proves you are not making an offer on a “whim”, you’ve thought about how you’re going to fund the purchase and do something about it. This might persuade a seller to accept an offer you put forward on their property underneath the asking price.

Avoid disappointment with a mortgage agreement in principle

When it comes to buying a house some clients have always “put the cart before the horse”.  They go full steam ahead and make an offer on a property without first checking that they can actually proceed.  This can lead to terrible disappointment if the mortgage application fails. By that time they have really got their heart set on their new family home. This disappointment can be avoided by contacting us at an early stage.  Sometimes there are things that are causing a mortgage to decline that can be overcome given a little time.

For example, there may be a niggling issue on your credit report, perhaps a disputed mobile phone bill that can be easily rectified. Maybe you thought you were on the Voter’s roll and you’re not – once again that can be sorted out given a few weeks.

Or maybe you can’t get a mortgage at all! But if that’s the case it’s better than you know now rather than mess people about and we’ll be able to tell you what you need to do to improve your credit-worthiness for the future.

Knowing your limits with a mortgage agreement in principle

Ok, so you know you’ve got a good credit rating because you’ve never been turned down for credit, you’re registered on the Voter’s role and you’ve always made your credit card payments on time – so what can go wrong?!

Well, you could approach 10 different Lenders these days and get 10 different maximum mortgage amounts! They all calculate affordability in their own unique ways. If you’re self-employed it really is a minefield: some Lenders take your net profit, others your salary and divided. Some use your latest year, others an average over 3 years.

Still, think it’s simple?!

Knowing your borrowing limits is important as then you know for sure what your price range is. We’ll be able to advise you of the maximum mortgage available to you.   Also, more importantly, together we’ll work out how much you can afford to pay back each month.

If you would like to have a chat, give us a call as we are more than happy to help!

Durhammoneyman.com & Durhammoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.

Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk

The information contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.
Should you have cause to complain and you are not satisfied with our response to your complaint, you may be able to refer it
to the Financial Ombudsman Service, which can be contacted as follows

The Financial Ombudsman Service, Exchange Tower, London, E14 9SR
www.financial-ombudsman.org.uk

© 2022 Durhammoneyman

Durhammoneyman – Portland House, Belmont Business Park, Durham, DH1 1TW

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