I hope you’ve had a great weekend and that you are not feeling too sick after all your trick or treats.
Here’s an update on what we have been up to this week.
You may be aware that we held an open session with our experienced mortgage advisor Emily Francs this week.
Here is the feedback from Emily’s mortgage session.
Firstly I wanted to thank you all for having me on Tuesday evening. It was lovely to meet some of you and hear your questions. As promised, below is a summary of what we discussed and answers to some of your questions. These are not to be classed as personal advice, purely a guide. You can reach out to me directly for private responses.
Emily @ Salus Mortgages
- You cannot own another property or must be selling it/coming off the mortgage; then, it is down to the developer’s discretion.
- These are notoriously difficult to achieve with adverse credit/defaults/CCJS- you are better off going down the help to buy route.
- Challenging with one income and dependants as you have to take the rental amount into affordability considerations
- Some developers/Local authorities will have a restriction saying you can never own more than 80% of the property. Being restricted to owning a maximum of 80% is acceptable with a few lenders on the proviso that they can take 100% of the property value in the event of repossession. As a client, you will never own more than 80%.
HELP TO BUY
- You need a 5% deposit, and the Government will provide 20% over 5 years interest-free.
- I usually recommend a 5-year fix to fall in line with the expiry of the interest-free period on the help to buy loan to give you a better chance of absorbing the loan at the remortgage stage.
- There are exceptions to the 5-year guide, and you can partially settle the loan in 10% increments should you wish to
- You don’t have to remortgage to pay it off; you can do so at any time with savings.
- Remember: when redeeming a Help to Buy Equity Loan- it’s 20% of the current property value, not the price you paid for it. You will need an RICS Approved Surveyor to value the property and provide a report- this will be at your expense. You cannot use a mortgage valuation. It MUST be independent.
- Several lenders will consider clients using the help to buy loan who have poor credit.
RIGHT TO BUY
- You don’t always need a deposit! Some lenders will use the discount as your deposit.
- You can have more than two people on the mortgage, providing they are named on the right to buy offer document (up to four)
GENERAL MORTGAGE HINTS AND TIPS
- 5% deposit is the minimum currently with few exceptions
- Gifted deposits don’t always need to be from family.
- You can have up to four people and four incomes on a mortgage.
- You can have close family members help you out with affordability without being on the deeds (Joint Borrower, Sole Proprietor)
- You can release funds from your existing home to purchase another one; this is known as ‘LET TO BUY.’
- If you choose the let to buy option, you can claim back stamp duty if you sell the property again within a certain number of years.
- Defaults/CCJS/Debt Management Plans- it’s still possible to get a mortgage; just be prepared to have at least 15% deposit and rates above 4%
- Benefit Income- We can use universal credit/DLA/PIP/Child Benefit. Most lenders will accept this.
YOUR BROKER SHOULD
- Be someone you trust and like- it’s a very intense relationship for something that lasts around 13- 16 weeks, sometimes longer.
- Put you at ease- we can handle everything from talking to your lawyers to talking to the estate agents and surveyors. You’re paying us a fee to look after it!
- Explain things simply, clearly and effectively. You should know all your costs upfront, it’s okay to forget, but before application, you should know precisely what needs paying and when.
- Advise you of their fee upfront (mines £199 on completion and is a lifetime fee). There are free brokers, and there are expensive brokers- some charging £2000! Neither is better than the other, and we are all paid a procuration fee by the lender. Usually, charges are in place for administration- hence why mine is lifetime. Once I have your file set up, remortgaging isn’t much effort on a brokers part.
I hope you found this helpful.
For more information,
Join our Facebook group by clicking here: https://www.facebook.com/groups/2745798899014715
Check out Emily’s website here: Www.salusmortgages.co.Uk
Or, email Emily at: Emily@salusmortgages.co.uk
Check out our new podcast – Eggs, Options and the Eternal Optimist: https://anchor.fm/lndependentmumshandbook/episodes/Eggs–Options-and-the-Eternal-Optimist-e19ih60
Enjoy your week