Whether you are local to the London area or are moving from outside of London, one of the main factors when moving home in London is knowing more about the area you are looking to live in.
Of course this is beyond just simply looking at where you would like to live. You will also need to look at how the area currently looks, what any of the nearby facilities are, what would be included in your dream property?
To help you to create a better understanding of the type of area that you would prefer to live in, we have put together a detailed list of the different types of factors that you, as a home buyer, need to look out for when you are looking to find a new home in London.
Make sure to come up with an idea of the type of area you would like to start living in, after all you will likely be living within that property for a long time.
Seeing as London is mostly made up of city properties, it is perfect for those who prefer a more urban lifestyle. Of course if you prefer the country life, that’s going to be a little more challenging, as you may need to move slightly further afield towards the outer areas of London.
Tying into the previous point, if you are looking to move more to the outside of London, rather than closer to the center, you will of course need to make sure there are plenty of transport links, especially if you do not drive.
Whether it is for work, to see family and friends or for the night life, transport is key to any area. Fortunately, because of the significance of London, you will find plenty of transport links allowing you to commute to and from the city itself.
Whilst that in itself is a positive, there is a cost element. What type of public transport are you taking? How much does it cost to get there and which method is most cost effective?
If you are driving, how much fuel will you need to pay for per week? These are all important things to bear in mind before making a decision.
If you are a home buyer who has their own children, you should do some research on what the nearest schools are. Review the school league tables and any Ofsted reports, in order to get a better idea of what they may be like.
If you currently don’t have any children, whether it’s on the cards for the future or not, it’s always worth checking this just in case, as a way to future proof yourself.
When you are making plans to live within a certain area, it is important to prepare for various facilities you would like to have nearby. Making a list of this is always handy, noting which ones are essential and which ones you just really want.
For example, if you would like to have any nearby shops or gyms, take a look at the local area to see what is there. Closer to the center of London, you are likely to find most of what you are looking for. The downside is that these things may be busier or cost more.
Of course if you’re living further away from London, you may need to prioritise what is essential, but you will have the benefit of these possibly costing less. Remember that shops probably outweigh facilities like a gym, due to the needs of general living.
Some people will factor in how far away their family and friends are, into where they are looking to live. Many will want their family and friends nearby, especially if they have kids. Others may prefer a quiet life, only socialising sporadically.
This relates back to the transport links topic too, as even if you are a little bit away from family and friends, you may still be within viable travelling distance, due to the amount of transport options around the area.
Everyone wants to have something that is worth the money they are paying for it. This will entirely depend on the area you are looking to live in, especially when you consider London property prices.
Generally some people may look to go for a cheaper property initially, compromising on features and facilities they would’ve liked, in order to save some money, before moving later down the line.
With London being as expensive as it is, one of your compromises may be the area itself, if you would prefer the urban life. This is because these houses tend to be at a premium cost, and you are probably getting more value for money further out of the city.
An area is often defined by the local community. Some may prefer a quieter life, staying to themselves, whereas others may prefer to have a much busier community. It’s always worth speaking with an estate agent to learn more about what it’s like.
Additionally, there may be a community Facebook page or local newsletter to take a look at, as those have become more popular over recent years. Once again, because of London and the wider areas significance, a lot of information and opinion can likely even be found online.
A lot of home buyers will be looking for a new home because they will have found or will be on the search for a new career. It is important to look at the level of distance between your new home and your new workplace.
As touched upon, many people will commute to work in London from the outskirts, with plenty of transport links to choose from. This makes quieter, more affordable living a much more viable option. Some people prefer to work from home, so this may reduce the need to travel to work.
There are various different types of property that are available on the property market, with the area you are looking to buy in being a factor in which type is more prevalent.
Some will prefer to live on an end-terrace with a garden to relax in on a sunny day, whilst others would much rather live in a modern flat or a studio apartment.
Make sure you review all of the different options that are out there for you. Look at the viewings to get a good idea of what sort of property you would prefer to live in.
Any information you can obtain regarding future improvements in the area you’re looking to live in is also useful to have, especially if you’re looking to build a life within that new home and stay there for a number of years.
Online research will definitely be worth your while when you are looking to find any future investments. It’s important to consider whether or not these will be beneficial to you and your lifestyle.
If you prefer a quiet country life, your ideal perfect world may be turned upside down if there’s any plans for a sudden big housing development nearby.
When the time comes to start making offers on a property and getting yourself a mortgage, it is worth getting yourself booked in for a free mortgage appointment. Our fast & friendly mortgage advisors in London will be glad to help!
We work from early until late, every day of the week and including some weekends and bank holidays, subject to appointment availability.
Whether you need help as a first time buyer mortgage in London or are moving home in London, we will be more than happy to help you along with your mortgage journey.
Fixed-term contracts were once considered to be more of a less conventional form of income, though nowadays they’re a lot more commonly found.
As a general rule of thumb, the only difference between this fixed-term contract employment and regular employment, is how the contract that you have is structured.
Regular employment generally will typically mean you have to sign a contract at the start of your employment, which will remain in effect until you are either terminated or you hand in your notice to the employer.
If you are employed on a fixed-term contract, this will mean you are only a contracted employee for a specific length of time, as opposed to permanently. That being said, you’re still classed as PAYE, which is similar to what a teacher on a per year contract.
Yes, it is absolutely a potential option. It may be a little challenging if you are looking for a first time buyer mortgage in London, though we do still have mortgage lenders on panel who will consider these types of circumstances.
How long your current contract length is can have an impact on whether or not you can obtain a mortgage. If your contract is a short-term one, you may find it even more difficult to take out a mortgage.
The reason for this, is because you are not guaranteed any sort of long-term employment. Coupled with a large, long-term outgoing such as a mortgage payment, this could be a risk to a mortgage lender.
Most mortgage lenders will want to see consistent, longer term contracts one after another. This will showcase to the mortgage lender that you are likely to keep on with regular contracted work, which in turn will help you in maintaining your mortgage payments.
In addition to this, you can further increase your chances of having a mortgage application accepted by having written confirmation from your employer that once your contract has ended, it will be renewed with the same employer.
If you have had or are currently having any breaks in employment, mortgage lenders may see this as a problem due to their uncertainty of whether or not you can maintain your monthly mortgage payments.
On the off chance you have had any significant employment gaps over the course of the last 12 months, you may not be able to get a mortgage. This is dependant on the mortgage lender and their own criteria, though a more sustainable income may work in your favour more with some lenders.
Further to this, what is defined as a gap in employment will vary per mortgage lender. Some will see a week as a gap of employment, whereas others may deem 4 to 5 months as a gap.
An expert mortgage broker in London will be able to check lender criteria and match you up with the most appropriate one.
In order for a mortgage lender to consider accepting your application for a mortgage, you will need to provide them with multiple pieces of identification.
The types of documentation you will need to submit to a mortgage lender, include;
An expert mortgage advisor in London will be able to take a look at your documents in advance, to make sure it is all suitable for passing along to a mortgage lender.
If they require any other forms of ID from you, they will let you know so that you are more prepared for your mortgage journey ahead.
It is very likely that, providing you have a solid history of consistent employment, with very few or no gaps and a contract with a good amount of time left on it, you will be able to apply for a 95% mortgage, only putting down a 5% deposit.
Unfortunately, because it is deemed to be a risk to the mortgage lender, if your contracts are more short-term or you have some gaps in your employment, you may need to put down a much larger deposit in order to secure a deal with a mortgage lender.
Perhaps you are already a homeowner. If this is the case and you are on a fixed-term contract, heading towards the end of your fixed mortgage period, you may be curious of the options you have present.
It is at this stage that we would greatly recommend getting in touch with remortgage experts like ourselves and benefitting from remortgage advice in London.
This is because on top of the possibility of new deals that you may be able to access, there may well have been a change in your income. Maybe you aren’t working as often as you were in the past? Is your average income lower than it used to be?
It is elements like this that can have an effect on your ability to remortgage your property. Depending, you may have limited options, perhaps even with extra costs.
Enquiring for remortgage advice in London with expert mortgage advisors is definitely recommended ahead of jumping in to remortgage your home.
For anyone who is curious about whether or not it is possible for a home buyer or homeowner to obtain a mortgage whilst on a fixed-term contract, the simple answer to this question is yes, it is.
In order for you to have a much better chance of getting a mortgage with these circumstances, book a free mortgage appointment today with a dedicated mortgage broker in London and we’ll see how we are able to help you.
Taking your initial step towards finally owning your own home as a first time buyer in London can be quite a stressful activity to undertake, especially if you don’t quite know what you’re doing.
Whilst this thought process commonly occurs amongst first time buyers and even some home buyers, though it’s our job to reassure you that this doesn’t always need to be the case!
You should always make sure that you’re ‘mortgage ready’, so that you’re best prepared for your home buying experience.
Below we have compiled 9 questions that you may want to ask when you are buying a house as a first time buyer in London.
It’s always better for you to seriously think about a property before you commit to a purchase, as taking out a mortgage in your name, will likely be the most significant financial commitment that you’ll ever make.
One thing that you should definitely find out more information about, is how much interest has actually been shown in your potential new home. If it isn’t very popular, you can probably take some time to decide.
If on the other hand, it is a popular property, you may have to decide a lot quicker than you otherwise would’ve liked to.
If there happens to be multiple property transactions happening at one time, completely reliant on every sale and purchase being completed in order to proceed, you have found yourself a property chain.
Your mortgage process can be affected by a property chain if you find yourself in one, as this could slow down your ability to get a mortgage or potentially mean you lose out on the sale of your own property if you are moving home in London.
Luckily if your home is a new build, you won’t have to worry so much about a property chain, and you may be likely to move along the process a lot quicker, due to not having to wait for people to move out.
First time buyers in London will have the advantage even more so, as even if a small chain occurs, they won’t be selling a home to move into one. This is a good thing to mention when discussing property price with the seller.
You’ll quite frequently find that when some homes are purchased, the previous owner will have chosen to leave some items behind.
Items that tend to be left for the next owner, include electronic goods such as washing machines, fridges or freezers, as well as sometimes finding that a shed has been left in the garden.
This won’t apply to new build properties, as they are generally built on the conditions that are agreed upon before the work commences.
The advantage of this for first time buyers in London, is that you’re getting free items that often will be working just fine. The downside is having to pay to remove them if you don’t want them.
If you happen to be buying a new build property, there might additional items you can ask to be put in ahead of time, so they’re ready for when you move.
Another factor to think about, is what the neighbourhood is like. Do you have good neighbours or are they unfavourable? Things like this can impact your decision to actually move to an area.
If you are moving into a property that is on a new build estate, then you and your neighbours will be the building up an entirely new community, which could be a risk as it presents an unknown element.
The running costs of the property can often affect whether or not you decide to buy a property. These costs will be dependant on the area you are looking at, so it’s always best to ask in advance.
Make sure you ask about the costs of Council Tax, as well as the typical utility costs and other things like that. This can help you budget as you go around looking at properties.
The way that your house is facing can also have an impact on your decision to buy a property. Some would much prefer to be able to relax during the summer evenings in their garden, reading a good book or enjoying a nice beverage.
You’ll often find that south facing gardens will cost a lot more money, due to the fact they’ll be getting much more sunlight during the day.
The amount of work that may be required after you have moved in might also affect your budgeting for the property. Here are some of the most common things that home buyers should keep their eye out for;
The house buying process will, generally speaking, begin with property price negotiations between you and the seller. It is important that you are prepared for this so that you are in with the best chance of your offer being accepted on a home you really like.
If you would like to learn further about the best ways to improve your chances during negotiation, please do not hesitate to get in touch. As soon as you are “mortgage ready”, you can begin making offers on properties you wish to buy.
The best way to learn whether or not the offer you are planning to make is too high, it to have a conversation with the seller themselves or even the estate agent, to discuss other offers that may have been made and rejected.
Having a date in mind for when you can move in will allow you to plan everything else around it. You may need to instruct a conveyancing solicitor, pack up your belongings and then finally move them.
Speaking to the seller and finding out the earliest date that you could move in will allow you to be much more organised and prepared for the journey that lies ahead.
At present, there are over a million people in the UK now working in the ‘gig economy’ as contracted workers. Considering this career is technically freelance and they’re working short term contracts, a lot of these people aren’t entitled to many benefits that permanent, full-time employees get like any sick pay or holiday pay.
We’re finding that most of these workers are either operating in some form of professional service, are both skilled and unskilled manual workers (e.g., carpenters, electricians etc.), and due to the increase of internet based shopping, many are now taking up careers as couriers and delivery drivers.
Unfortunately, gig economy workers will naturally find it a lot more difficult when trying to obtain a mortgage, because the mortgage lenders will be treating them as Self Employed Mortgage applicants.
For you to increase your chances of having a successful mortgage application, an applicant will need to demonstrate a strong history of employment. One year’s history is probably the minimum that will be required to qualify for a mortgage, unless you have an upcoming contract set to last for quite a long duration. If your contract is due to last a few years with the same company, you may not be seen as self-employed, depending on the lender.
If a lender opts instead to treat a mortgage applicant as a sole trader, then you will need to provide the lender with proof of your net profit. This is the amount that is earned in total, with expenses taken off. For this, you may find that you need the services of an accountant.
If the person applying for the mortgage has set up their own limited company, then the majority of lenders will be making their calculations based on the total of declared salary plus dividends.
The way that mortgage lenders are choosing to assess contract workers seems to be a lot more flexible now, likely due to the high number of them currently existing within the economy. If a person has been working this way for a while and currently holds a contract, then depending on the industry, some may have their incomes assessed through their ‘day rate’.
If day rate is assessed, they will take that amount and then times it by 5 and times that total by 46. The reason for this, is lenders know that a Contractor is unlikely to work 52 weeks a year, even if they are not paid for any holidays they take. As such, they work off a 46 week basis. This method of calculating works well for IT contractors especially, as they have the options to choose what contracts they take and when.
If an applicant is Self Employed in London, it is advised to be organised as best as you can, collating what is needed in advance prior to applying for a mortgage in the same way that a contractor applicant would. It’s also important to remember that if you are wanting to apply for a mortgage, a potential lender will be wanting to see healthy levels of earnings that are sustainable. As such, you may end up paying a bit more tax.
Regarding the place of zero-hour contracts in all this, it is possible for someone with these who is applying for a mortgage to obtain one too. Once again, a mortgage lender will want to see 12 months’ earnings before it is possible to apply for a mortgage. They will consider taking an average of earnings, rather than a full year.
Once you have completed all of the required exams and can proudly shout about becoming a Newly Qualified Teacher, it’s time to look at the next step. For you, this will be to make use of your new skills and find yourself a job using your well-earned qualification!
Depending on whereabouts you are going to be working, you may need to start exploring the different options that are available for you with Moving House in London, as you could possibly be working further away from where you currently live.
Soon enough you will find yourself looking to live elsewhere, perhaps maybe finding it a little more challenging than you would’ve expected to create a balance between homeownership and getting into your new role.
This is not something only you will be feeling, however, as we have worked with a lot of home buyers and homeowners throughout our time as a mortgage broker, all of whom needed someone to take the stress away whilst they keep their minds on their new career.
It’s not always so easy trying to search for a mortgage lender who will be happy to offer a mortgage to someone who is a newly qualified teacher.
Problems tend to crop up due to either the fact that there isn’t really any work history they can look at or because they only have a temporary contract.
Although these can be an issue, there are still plenty of options for Newly Qualified Teachers who are looking to obtain a mortgage. Our dedicated team of Mortgage Advisors have helped many NQTs in their quest for obtaining a mortgage over our time as a mortgage broker.
Every once in a while, you may find that there are some mortgage lenders out there who have preferrable deals specifically suited to public sector workers such as teachers.
The key to making sure everything goes to plan here, is ensuring that you are with the best mortgage lender for your situation, which in this case is usually what would be the most challenging part of the mortgage process.
When issues like this arise, our experienced mortgage advice team in London will step up, taking the time to search through thousands of mortgage deals for you, doing everything we can to find you the perfect deal for your situation.
You should always bear in mind that whilst yes, mortgages can be complex for Newly Qualified Teachers, you are not completely restricted in what is available to you on the mortgage market.
Here are some of the types of mortgages that we find that crop up the most when we are working with cases referring to Newly Qualified Teachers:
The lender may look at a handful of other factors as well regarding to NQT mortgages. There are some known mortgage lenders out there who do not need to see previous employment and may allow you to obtain up to a 95% LTV (loan-to-value).
Depending on the mortgage lender that you go with, you may find that a 12-month first contract is treated the same as a permanent job role, rather than it just being seen as a temporary contract.
Finally, there may be a selection of mortgage lenders around the country who are willing to get started on your mortgage before you officially start your job, though to do this you will have to provide evidence of a signed contract and a confirmation of your start date.
This can come in quite handy, as you may potentially be prepared to start making your first mortgage payments at the time when you are due your first months wages from your new job, by the time your mortgage has completed.
Our open & honest team of dedicated mortgage advice experts in London have extensive knowledge and experience of helping customers across the mortgage and property markets, providing help to lots of first time home buyers with their mortgage needs
There are a great deal of benefits to using the services of a trusted Mortgage Broker in London. We always strive to take away your stress, looking through thousands of different and tailored mortgage deals for you, our customer, suggesting possible conveyancing solicitors for you to use and more.
Find out what you may have available to you as a first time home buyer, by getting booked in online for a free mortgage appointment with an experienced and reputable mortgage advisor in London, who will collect information from you and help you onto the next step of your journey.
Mortgage Protection Insurance is a term used to encompass various types of cover designed to protect borrowers from events that could severely impact their ability to maintain mortgage payments.
There are different variations but when connected to a mortgage they are all there to provide peace of mind and usually fall into the following categories:
As a rule, if the policyholder dies within the term, then the sum assured should be enough to pay off the outstanding mortgage balance and ensure the borrower’s dependents aren’t left with a debt they might not otherwise be able to manage.
Our Mortgage Advisors in London can run through all the different types of life cover and recommend the most suitable plan for you.
Critical Illness Insurance works in a similar way to Life Assurance, in that it is usually taken for a specific term of years and can have different options such as level/increasing etc.
It is designed to pay out a lump sum and, like Life cover, for borrowers, it is typically taken on a decreasing term basis in line with the reduction of your mortgage balance.
The key is that the benefit is paid if you fall victim to one of a number of specified critical illnesses and pays out whatever the long-term prognosis of that illness.
The type of illnesses covered vary from company to company, that’s why this type of insurance cannot be solely price-driven and advice is recommended.
In practice, many companies will offer Life and Critical Illness Critical cover as a combined policy and would usually payout on the “first event” i.e. whatever happens first | either death or a serious illness | the pay-out is made. They can also be written on a single or joint life basis.
Whereas Life and Critical Illness cover pay out a lump sum, Income Protection pays out a monthly sum designed to replace your wages in the event of you being unfit to work.
Unlike Critical Illness cover, there are no restrictions on the illnesses or injuries covered, the only factor being whether they make you unfit to work. There are however restrictions on how much you can cover and how quickly benefits would start to be paid.
Like Life and Critical Illness cover, these policies are underwritten based on your health and lifestyle at the time you apply. All income protection policies are written on a single life basis.
There’s an adage that says you can never have too much insurance. Certainly, many people have one or more of the different types of policy and it would be wrong to think of Mortgage Protection Insurance as just an “either/or” choice.
However, in the real world, affordability plays a massive part, so whilst it would be fantastic to cover yourself for every potential opportunity, our Mortgage Advisors in London will help you and tailor the type of cover to be the most suitable combination to your family’s priority and budget.
Being a first time buyer in London the process of buying a home, you will have no need to go to an Estate Agency Advisor. The Agent themselves may put forward the words implying that you will lose the property if you go with someone else but that isn’t the case. Estate Agents earn commission from when additional services are utilised by customers.
What they will not tell you is that there are several other ways you can arrange a mortgage without using the Estate Agent and in this article, we’ll help you decide who to use for your mortgage and how to make sure you are receiving the full value for your money.
Options are available online such as price comparison websites to let people know of available rates. Though it’s important to keep in mind that you will need advice at some point during the process because buying a house is a very big deal and it’s important that you get it right.
The option of arranging a mortgage with your bank is also an option. Many people do this but it is less common nowadays. The trust that people hold towards banks is less frequent than what it used to be.
Some homebuyers can be reluctant if they have to hand over their financial details to an Estate Agent and become dubious that the vendor may find out they are in a strong financial position and end up paying more than they should for the property.
Some Estate Agents might imply that their vendor would prefer you to go along and arrange a mortgage in-house. Although this won’t be entirely true, the vendor simply cares about the individual being in a financial position to proceed.
Make sure to see a Mortgage Broker in London which isn’t connected to the Estate Agent and ask for an Agreement In Principle. From this, you will then be able to provide this document to the Estate Agent to prove that you are in a ‘proceedable’ position. You will also be asked to evidence your deposit and ID.
A reliable Mortgage Broker in London will offer to guide you through the full process of buying a home to make sure that you are provided with transparent, open and honest Mortgage Advice in London. Be sure to take up the advantage of a free mortgage consultation and find a Mortgage Advisor in London you like and trust.
There are various different reasons why someone may want to move home, ranging from common to unique. For the purpose of this article, we are going to narrow them down to the most common reasons that we have come across throughout our time as a mortgage broker in London:
Over our years of service within the mortgage industry, we’ve heard of many borrowers that wanted to move home down the size of the property they currently live in.
This is something that we often foresee with customers, as first time buyers in London usually go for a smaller property to start with, only for circumstances change down the line and leave them needing a much bigger living space. An example of this is that they may be looking to start a family and are in need of some extra room. Alternatively they might just generally want a bigger home than they currently have.
Rather than moving home in London, some homeowners look to raise capital by taking out remortgage in order to fund home improvements, such as to build an extension/conversion. This is an increasingly popular option, especially with growing families and could give that extra bit of space you need, whilst retaining a place that no doubt has grown in sentiment over time.
It seems to be quite commonplace for parents to look at converting their loft into a bedroom for a child, leaving any available spare rooms free to be converted into something like a home gym or home office.
There are endless possibilities. People may also take out a remortgage for home improvements, in order to raise the value of the property, just in case they ever look to sell it. This creates opportunity for turning a larger profit from the sale.
In the occasional case, we hear that some homeowners simply wanted a change of scenery and were quite intrigued to try out completely different areas.
You’ll commonly find that this section of borrowers tend to once again be first-time buyers, who had a limited budget and stuck with a lower-end property for the time being, due to slightly more reasonable house prices. It’s likely that these borrowers now have a higher income than they used to and are wanting to live in a more affluent location.
People don’t really factor in the choice of schools on offer when moving into their first home, as at that point in time, the notion of starting a family might not have even been a thought. Homeowners who have started a family of their own or have definite plans to will always make sure they research accessible education within the area they’re interested in moving to.
When taking out their free initial mortgage consultation, some customers tell us that the reason they wanted to move is to be closer to both their friends and family. This sort of situation comes up when couples start their family.
If both parents have full time careers, then they will tend to ask their own parents to help them out with childcare, as a means of cutting costs. Private nurseries are rather expensive to factor into your regular outgoings, especially with a mortgage in tow, and sometimes parents find it hard to work around nurseries due to the travel times.
If you are thinking of moving home in London, you may be interested to know roughly how much moving home will cost. Get in touch with a mortgage advisor in London and they will help you calculate your maximum borrowing capacity, giving an estimated quote on what your monthly payments could be.
For those looking at remortgaging, potentially for home improvements, get in touch today and speak to a dedicated remortgage advisor in London.
For the most part, married applicants will choose to take out a joint mortgage, rather than one half of the couple taking out a sole name mortgage. The reason for this is because in a lot of cases, utilising two salaries together will allow for you to qualify for larger mortgages, which can be used for larger or more expensive property.
That being said, you may find that there are situations where one salary is more than enough to justify the amount you’re looking to borrow. There may also be other reasons as to why one applicant doesn’t want to go on the application.
A common occurrence that we find pops up during these circumstances, is that one applicant has a previous credit problem, such as bankruptcy or a CCJ. This can unfortunately stop some applicants getting a mortgage. In these cases, taking out a sole name mortgage could be necessary to purchase a home, though this would mean that the spouse or partner would not be connected financially.
It is important to note that creating a financial association with your partner is risky, as if they handle their finances poorly, your credit score could be affected.
Another example of where it may be beneficial to make a sole name mortgage application might be when one person is out of work. Generally speaking, the maximum amount a couple will be allowed to take out (borrowing capacity) is lower than it would be if the working applicant happened to take out the mortgage in their sole name.
Age can also become a factor of the calculation, especially if one of the applicants is over the age of 50. An example of this, is let’s say you are a first-time buyer in London who is planning to buy with a younger partner.
If your partner is earning a substantial amount, being tied to someone who is a bit older may limit the amount they could earn, thus leading them to apply in their own name.
You may find that there are stamp duty or other tax implications which could lead to an applicant having the preference to apply on their own.
Some lenders may have stricter criteria when it comes to married applicants having to apply for mortgages in joint names. The reason for this is because they are very likely to be concerned that this could in some way affect their future security, especially if the couple were to ever unfortunately split up.
Luckily not all lenders share this view, as it is a little prejudicial. If you would like to discuss your circumstances and get the ball rolling on your mortgage, please get in touch. Our experienced mortgage advice team are here to help all customers, whether you be moving house in London or a first-time buyer in London, 7 days a week.
If you are looking to figure out roughly how much you are able to borrow for a mortgage based on your household income, it may be worth your time taking a look at our free mortgage calculator.
If you would prefer to have a more accurately estimated mortgage affordability figure, please get in touch and we’ll book you in for a free mortgage consultation to speak with one of our mortgage advisors in London.
As an experienced mortgage broker in London, the two most common questions we find that first-time buyers in London and home movers in London ask us are, “can I get a mortgage in my situation?” and “how much can I borrow?” In this mortgage guide, we will be taking a closer look at the latter of the two, in which we will take a look at how things were historically, followed by what happens now.
To skip past the historic rules and just see where we are today, please click here.
Taking a look back to the 80s and 90s, pretty much all mortgage applications were manually underwritten. What this means is that the process of approving mortgages was very much left to real people and not just machines. You would call up your local building society, book in for an appointment with your building society manager, and they would interview you to discuss the case you have presented them with.
From there you could probably guarantee that this would inevitably turn into a sales pitch, where they would encourage you to start saving with them for a while until you can prove to them that you are creditworthy. The manager would then grant you what was a past equivalent of today’s Agreement in Principle. Following this, the customer would then be given some advice on the amount that they may be able to borrow.
Whilst from the outside looking in this sounds very much like a highly personalised process with a simple and common-sense approach, it had a habit of leading to rather inconsistent decision-making. The manager had the discretion to interpret the lending manual in the way that they wanted to. In other words, it was realistic for you to approach the same building society in a different location altogether and leave, having obtained an entirely different outcome than the more local branch you had gotten in touch with.
To make sure this was prevented and more importantly, to cut any costs that weren’t necessary, lenders moved to automated affordability calculations. We saw caps introduced, which were applied as a means of allowing to lend customers sometimes 3 or even 4 times their annual income.
As we headed towards the 2000s, lenders relaxed themselves even more, becoming arguably even too generous in how much they would be willing to lend their customers. Some lenders would offer out self-certified mortgages, a process that meant no background checks would take place and the customer could self-certify their own income, even if the amount they were declaring was falsely inflated.
The market fell apart and these kinds of practices brought about the infamous Credit Crunch of 2008. The years that followed, between then and 2010, were incredibly challenging times. This was especially the case if you were trying to get onto the property ladder for the first time. It was at this point lenders had to change and much stricter lending criteria had to be put in place.
Through lots of dedication and perseverance, the market recovered. In 2014 the regulator launched the Mortgage Market Review (MMR), a brand new and completely revised set of guidelines for lenders to follow in order to prevent the Credit Crunch from happening again. No longer were the old-style income multipliers available, which took little account of household spending habits.
It may come as quite the surprise, but prior to 2014, whether their credit histories were good or bad, two applicants that were earning the same income could more or less be able to borrow the same as each other. This was also not factoring in how much they were regularly spending. From that point came all-new affordability models, taking a much more forensic view of how exactly those who are applying for a mortgage handle their finances.
As well as this new cap, typically the majority of mortgage lenders will no longer go past 4.75 times your annual income, and they prefer to have an in-depth analysis of your spending habits. Your habits may entirely depend on your individual situation, such as having high childcare costs, a potentially large amount of credit commitments, and in some cases, any student loans to pay off. In cases like these, a mortgage lender will most probably offer you less than say your work-colleague who has far less outgoings.
We are always surprised by the large differences between lenders in how much, or little they will lend to some customers. From time to time, some lenders have been known to penalise low-earners. It could just be that they are not looking for that type of applicant. Some take pension contributions as a fixed outgoing so may lend, for example, a public sector worker with a significant pension deduction, less than a private sector worker.
Each of these different lenders have their own unique lending criteria, and each customer has their own situation unique to them. If you need to maximise your borrowing capacity to have a chance at buying your dream home, then you’ll definitely benefit from the expert advice of a dedicated and experienced mortgage broker in London. Our team will be able to search the market on your behalf, to try and match a you to various lenders criteria.
If you find yourself wanting to know exactly how much you should borrow for a mortgage and are ready to go, please do get in touch and speak to one of our mortgage advisors in London today. We’ll sit and work out your finances with you, to ensure you are comfortable with the amount you’ll be paying back each month.