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Understanding the breakdown of a mortgage payment can feel confusing. As a mortgage broker in London, a common question we get is how much of that monthly payment is going towards interest.
In this article, we answer this question and look at how mortgage interest works and how much you pay off with each of your mortgage repayments.
Mortgage interest is the cost you pay to borrow money from a lender to purchase your home in London.
It is calculated as a percentage of the outstanding balance of your loan. This percentage, known as the interest rate, can vary depending on your lender and the type of mortgage product you choose.
In London, with its higher property prices, understanding how interest is calculated is essential, as even small changes in rates can significantly impact your overall mortgage costs.
Our mortgage advisors in London will run through your mortgage repayments and break down how much interest you will be paying each month.
In the early stages of your mortgage, a significant portion of your monthly payment typically goes towards interest.
This is because interest is calculated on the remaining balance of your loan, which is highest at the start.
Over time, as you pay off the principal, the interest portion decreases, and more of your payment goes towards reducing the balance of your loan.
Yes, the amount of interest you pay reduces over time as you gradually repay your mortgage balance.
This is because interest is calculated on the remaining loan amount, which decreases as you make payments.
Early on, a larger portion of your payment covers interest, but as the loan balance shrinks, the interest portion decreases, and more of your payment goes towards the principal.
There are several ways to lower the interest on your mortgage in London.
Overpaying your mortgage is one option, as it reduces the principal and the overall interest charged over the term.
Another effective approach is to explore remortgaging in London to secure a more competitive rate.
Many lenders offer attractive deals to new customers, and as a mortgage broker in London, we can help you navigate the market to find the best options for your circumstances.
Additionally, improving your credit score and providing a larger deposit when possible can increase your chances of securing a lower interest rate.
Several factors influence your mortgage interest rate in London:
Interest payments are higher at the start of your mortgage because they are calculated on the full balance of your loan.
In the early years, the outstanding balance is at its highest, meaning the interest portion of your payment is larger.
As you repay the principal over time, the interest is recalculated on the smaller balance, resulting in lower interest payments later on.
This structure is standard for repayment mortgages, which are the most popular mortgage options, particularly amongst first time buyers in London.
Choosing between a fixed or variable interest rate depends on your financial situation and goals.
A fixed rate offers stability, with consistent monthly payments over a set period, making it easier to budget.
This can be particularly helpful in London, where living costs are high. On the other hand, a variable rate can fluctuate with market conditions, potentially offering lower payments at times while posing the risk of higher costs if rates rise.
Speaking with a mortgage broker in London like us can help you decide which option suits your needs best.
Navigating the property market in London can be complex, especially when dealing with a property chain.
A property chain occurs when multiple property transactions are interdependent, meaning the sale of one home relies on the purchase of another.
This connected series of buyers and sellers can create a domino effect, where delays in one transaction can impact the entire chain.
Understanding how property chains work in London is crucial for home buyers and sellers aiming for a smooth and successful move. In this article, we will explore the concept of a property chain and how it can affect buying a property in London.
Property chains are a series of linked property transactions where each sale is dependent on the preceding one.
When a buyer purchases a property, the transaction often hinges on selling their existing home, which then relies on the buyer’s ability to complete their purchase.
This creates a chain of interdependent sales, where a delay or issue in one part of the chain can affect the entire sequence.
If you are buying as a first time buyer in London, you are not involved in a property chain because you are not waiting for your property to be sold before you can move in.
Being part of a property chain carries several risks. Firstly, any delay in one transaction can ripple through the entire chain, causing significant hold-ups for everyone involved.
Secondly, there’s the risk of a chain collapse, where one party withdraws or fails to secure financing, potentially derailing multiple transactions. This can result in financial losses, wasted time, and increased stress for all parties.
Additionally, fluctuating market conditions can impact property valuations during the chain, leading to potential renegotiations or failed deals.
If a link in the property chain falls through, it’s essential to act swiftly. Communicate with your estate agent and solicitor immediately to assess the situation and explore potential solutions.
You might need to find a new buyer or seller quickly or consider bridging finance to keep your purchase on track.
Flexibility and contingency planning are key. If the chain cannot be salvaged, understanding your legal rights and options can help mitigate losses and plan your next steps effectively.
Property chains come with several common challenges. Delays in obtaining mortgages, legal issues, and disagreements over property surveys can all cause holdups.
Additionally, when moving home in London, coordinating multiple move-in and move-out dates can be logistically complex. Miscommunication between parties can exacerbate these issues, leading to further delays and frustrations.
Lastly, changes in market conditions can affect property values, sometimes necessitating renegotiations that can stall the entire chain.
Managing a property chain in London requires careful planning and proactive communication. Here are some tips to help:
Minimising delays in a property chain involves several strategic steps:
By following these tips and being proactive, you can better manage a property chain and navigate the complexities of buying or selling a home in London.
An Individual Voluntary Agreement (IVA) operates as a legally binding arrangement between somebody who is struggling with heir debts and the creditor that they owe their debt to.
The primary aim of an IVA is to establish a well-organised structure for you to pay back your debts on a monthly basis, typically spanning over a period of roughly 5 years, with the goal to help you get your debts under control.
An Insolvency Practitioner plays a very vital role as a representative of you in this situation, engaging with creditors to guarantee the timely and consistent fulfilment of your outstanding payment commitments.
While having an IVA (Individual Voluntary Arrangement) can present challenges when seeking a mortgage, it is not an insurmountable hurdle. In such situations, we strongly recommend consulting with a mortgage broker in London to explore available options.
Engaging with a professional is essential, primarily due to the terms and conditions outlined in your IVA agreement. Committing to an IVA involves various agreements that can impact your eligibility for loans, including mortgages.
These terms typically remain in effect until you have successfully repaid all outstanding debts. Seeking guidance from a mortgage broker becomes key to navigate complexities and explore viable solutions tailored to your circumstances.
Affordability is the primary consideration in an IVA. Creditors require assurance that you can sustain your repayments while maintaining sufficient disposable income to cover housing and other essential living expenses.
Considering an IVA often implies a history of significant credit challenges, and obtaining a mortgage in London with an IVA might pose difficulties. Mortgage lenders are typically cautious about lending to individuals deemed high-risk due to past credit issues.
Alongside assessing your credit history, lenders scrutinise your disposable income. With an IVA, a substantial portion of your income is likely allocated for debt repayment.
Combining this with potential mortgage payments may raise concerns about having enough remaining income for essential living expenses. People who are looking at moving home in London may want to consider waiting to make any decisions.
As a strategic approach, we recommend reducing a significant portion of your debt before exploring mortgage options.
After settling your IVA, it’s advisable to assess your current financial situation thoroughly before diving into the mortgage process. Rebuilding your credit score, accumulating a deposit, and carefully planning your move into a new home are important steps.
Affordability remains a priority in the home-buying process, and confirming your financial means for a mortgage is essential.
Our team of specialist mortgage advisors in London is ready to help evaluate your mortgage affordability, explore suitable options, and tailor a solution that aligns with your unique personal and financial circumstances.
Feel free to connect with a mortgage advisor in London for a free consultation online or via phone.
The era of 100% and even 125% mortgages feels like a distant memory. With the credit crunch now in the past, lenders have regained confidence and are once again willing to offer 95% mortgages to first time buyers in London.
Demonstrating a consistent ability to save each month is a reasonable expectation. It not only provides a sense of financial discipline but also assures lenders that you have a stake in the process, indicating a commitment to meet your mortgage obligations even in challenging times.
We understand that saving for a deposit can be a daunting task for many individuals, often serving as a significant hurdle for those aiming to enter the property market. This challenge becomes especially pronounced for individuals with families or those currently residing in rented accommodation.
A larger deposit typically translates to a lower interest rate, making it a more cost-effective and advantageous choice in the long run. This is primarily because a substantial deposit signals reliability to lenders.
Different bands in interest rates exist, influenced by factors such as the size of your deposit.
The percentage of your mortgage relative to the property’s value provides lenders with insights into your commitment.
Higher deposits lead to lower interest rates, ensuring a more secure and satisfying home purchase experience in the long term.
In certain limited scenarios, successfully achieving a mortgage with a smaller deposit is possible. The lender may consider the monthly payment as an additional credit commitment, allowing for a reduced mortgage amount.
However, this approach is generally met with resistance from most lenders, as it essentially involves borrowing 100% of the purchase price.
Many lenders accept gifted deposits, including those from family members and friends. The sender of the gift needs to confirm that it is indeed a gift, not a loan, and must provide identification and proof of funds for anti-money laundering purposes.
Some individuals turn to the “Bank of Mum and Dad,” where parents gift funds to their children as a contribution towards the deposit.
Bank statements play an important role in evidencing funds for anti-money laundering purposes. Lenders prefer a clear picture of how the money has been accumulated, offering genuine insights into your financial situation.
Documentation supporting significant deposits, such as receipts from asset sales, ensures transparency and strengthens your financial credibility. Large cash deposits may pose challenges, but a well-documented audit trail can simplify the application process.
Generally, genuine discounted purchases, such as acquiring a property below its market value, can be accepted by some lenders as the guaranteed deposit.
For example, if a property is worth £100,000 and is offered at a discounted price, like £90,000, certain lenders may recognise this as a valid deposit.
This is particularly relevant for individuals eligible for Right to Buy Schemes from local authorities or other social landlords, where our mortgage advisors in London can help in finding suitable Right to Buy mortgages in London.
Taking the initial step onto the property ladder can be an intimidating process, particularly for those planning to purchase a property individually.
To address this, we often hear from first time buyers in London considering the option of buying a property with a friend or partner. This approach allows the consideration of both incomes when determining the maximum mortgage amount, increasing the likelihood of mortgage approval.
However, it’s important to bear in mind that if one party defaults, the other may become fully responsible for the entire mortgage. As your trusted mortgage broker in London, we offer valuable insights on factors to consider when entering a property arrangement with another individual:
Some lenders permit up to four individuals to jointly co-own a property. However, it’s essential to exercise caution in selecting co-owners, as a higher number increases the likelihood of someone withdrawing from the arrangement.
Additionally, if you decide to increase your mortgage later, unanimous agreement from all borrowers is necessary. Therefore, considering your future plans and the duration of your stay in the property is key.
Joint tenancies are typically preferred by civil partners or married couples, where the property automatically transfers to the surviving owner in the event of one’s death. Joint tenancy aligns both owners as a single entity in legal terms.
This arrangement is common among married couples, ensuring smooth ownership transfer in unfortunate circumstances. However, for relatives or friends who jointly purchase, ‘tenants in common’ may be an alternative.
In this scenario, both parties equally own the property, but they aren’t obliged to hold equal shares. This allows for individual actions, such as selling or transferring one’s share.
Mortgage lenders assert that all borrowers are jointly and severally liable. If one party fails to contribute their share of the mortgage, the others are obligated to cover the shortfall and pay the full amount.
Despite the intent not to split up in the future, unforeseen circumstances may arise, necessitating changes to the mortgage. When children are involved, the remaining party may wish to take over the mortgage independently.
Efficient remortgage advice in London becomes important in such cases. The lender will need to confirm the remaining applicant’s ability to afford the mortgage independently, even if past payments were made without assistance.
In situations involving a change in ownership, a mortgage advisor in London can guide through the process.
In the event of separation or divorce, all parties remain responsible for joint financial commitments, including the mortgage on the family home.
Even if an agreement is made for one party to make all payments, lenders consider the mortgage on the previous property when assessing eligibility for a new mortgage. Seeking mortgage advice in London before making an offer is essential in these instances, as lenders vary in their lending policies.
Our mortgage broker in London considers these nuances when recommending suitable lenders for mortgage agreement applications.
A mortgage broker in London’s job is to help you through your entire mortgage journey, from start to finish. They will not only help you find a mortgage product tailored to your personal and financial situation, they will try to find you a deal that saves you time and money.
As a mortgage broker in London, we are able to search through 1000s of mortgages on your behalf to find you the perfect mortgage for your property. Via our large panel of lenders, we are able to access both high street and specialist mortgage products and deals.
If you were to go to a bank, they would only be able to access their own in-house products. There are many different options out there and you may be able to save money by exploring your other options. We can even access specialist categories such as buy to let mortgages in London or mortgages for those using a government scheme.
We offer free flexible mortgage appointments, allowing you to speak with a mortgage advisor in London 7 days a week. Our appointment slots go from early in the morning to later at night, meaning that you can pick a slot that works around you and your busy working and personal schedule.
You can now book your free mortgage appointment online too -we’ve made it simple and easy! Alternatively, if you would prefer to book your appointment over the phone, that’s fine too!
During your free mortgage appointment, your mortgage advisor in London will perform an affordability assessment on you to work out how much you are able to borrow and what deals you are able to access. Once we find the perfect deal for your circumstances, and you are happy to continue with us and the mortgage deal, we can begin to prepare your mortgage application.
We will help you prepare the required evidential documents to support your income and affordability. Our team will be right by your side throughout and will answer any questions that you have. Once we send off your mortgage application, we will keep you updated on the progress of your application. As soon as we hear back from the lender we will be in touch straight away to give you the good news!
Our mortgage advisors in London are able to sort an agreement in principle within 24 hours of your free mortgage appointment! You will need an AIP during the build-up towards your mortgage application to support any offers that you make on a property.
AIPs usually last between 30-90 days; if yours expires, just get back in touch with our team at Londonmoneyman and we can renew it straight away for you.
When it comes to the point of your remortgage in London, we will be back in touch to make sure that you are still on the best rate available for your individual circumstances.
We will reassess your mortgage situation and look at your options with you, making sure that you make an informed decision that benefits you and your finances.
If you have any questions whatsoever, give our team a call and we will be able to pass you on to a mortgage advisor in London who will be able to give you tailored advice based on your individual situation.
Getting mortgage advice in London should be at the top of your list when it comes to buying a property, especially if you are a first time buyer in London. It is always worth taking advantage of our free mortgage appointment and getting an idea of what your options are.
For many first time buyers in London and home movers in London, credit scoring can feel like an unfair way for mortgage lenders to assess their applications. On the other hand, mortgage lenders view credit scoring as a cost-effective and consistent method to minimise their risk.
If you find yourself concerned about the credit scoring system when applying for a mortgage, there’s no need to worry. The good news is that there are numerous mortgage lenders out there, each with their own unique scoring systems and criteria.
To ease your worries and improve your chances of being accepted, it’s a wise move to obtain a copy of your credit report when applying for a mortgage.
By sending an up-to-date copy of your credit report to your mortgage advisor in London upfront, you can give them a clearer picture of your financial standing and increase the likelihood of a successful application.
Keep in mind that having a copy of your credit report will also enable your mortgage advisor in London to identify any potential issues or areas that may need improvement, allowing you to address them before applying for a mortgage.
This proactive approach will not only boost your chances of approval but also provide you with more confidence and peace of mind during the entire mortgage process.
Remember, every mortgage lender has its own set of criteria, so don’t be discouraged if one lender rejects your application. Your mortgage advisor in London will work with you to find the best fit among the various options available in the market.
When checking your credit report for mortgage purposes, there are several credit reference agencies available, including Experian and Equifax. We highly recommend using CheckMyFile as it offers a comprehensive overview based on information from multiple credit agencies.
By opting for CheckMyFile, you can access a 30-day free trial, which allows you to review your credit report without any cost during this period. And the best part is, you can cancel the trial at any time if you choose to do so.
This way, you can make an informed decision about your creditworthiness and ensure your mortgage application stands on solid ground.
If you use the link below, you’ll receive a free, instant PDF download.
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Improving your credit score is crucial when applying for a mortgage, and there are several steps you can take to boost your creditworthiness. First and foremost, be cautious when using price comparison websites, as they can generate credit searches that may negatively impact your score.
To avoid any potential red flags for mortgage lenders, it’s best to refrain from applying for other forms of credit in the immediate future.
One way to positively impact your credit score is by being on the electoral register. Ensuring your name and address are accurate and up-to-date can help boost your score. Mistakes in addresses can give the impression that you live in multiple places simultaneously, potentially affecting your creditworthiness.
Additionally, managing your credit card usage wisely can significantly impact your credit score. Maxing out your credit card every month can lead to a reduction in your score, so it’s advisable to use it responsibly and pay the balance in full each month.
While closing down store or credit card accounts you no longer use may cause a short-term dip in your score, it can be beneficial in the long run and reduce your vulnerability to fraud.
Furthermore, financial connections to family members, friends, or ex-partners can affect your credit score, especially if their credit history is poor. If you no longer have active financial associations with these individuals, you can request that credit reference agencies remove these links.
When seeking mortgage advice in London, providing our trusted and experienced mortgage advisors in London with comprehensive information about your finances will enable them to offer the best possible guidance and support throughout the mortgage application process.
With their expertise and your improved credit score, you’ll be well-positioned to secure the ideal mortgage for your needs and financial situation.
A mortgage in principle, known more commonly as an agreement in principle (AIP), is a helpful tool to estimate how much you could borrow before formally applying for a mortgage.
It usually involves a soft credit check, so your credit score is unlikely to be affected, and you are under no obligation to proceed.
At Londonmoneyman, we can usually obtain an AIP for our customers within 24 hours of their initial mortgage appointment. The AIP typically lasts for 30-90 days, but if it expires, we can help you renew it.
To obtain a mortgage agreement in principle, you can either contact a mortgage lender directly or seek the help of a trusted mortgage broker in London, like us. You can book a free mortgage appointment with our expert mortgage advisors in London by getting in touch today.
During the appointment, you will need to provide details about your income, employment, credit history, and other personal information to assess your eligibility for a mortgage and get an estimate of your borrowing capacity.
Our team can usually obtain your AIP within 24 hours of the initial appointment.
Prior to beginning your property search, it is recommended to obtain a mortgage agreement in principle to estimate how much you can borrow, which will prevent you from looking at properties that are out of your budget range.
Furthermore, having an agreement in principle can give you a competitive edge when making an offer on a property, as sellers and estate agents may consider you as a serious buyer.
An agreement in principle is not a guarantee of obtaining a mortgage, but it is a useful aid during the home buying process.
To obtain an agreement in principle, a mortgage advisor in London will require personal information from you to forward to the mortgage lender.
This includes your personal details such as your name, date of birth, and current address, as well as your employment status and income details.
Mortgage lenders will also need to know about your regular outgoings, credit history, and affordability, to determine your eligibility for a mortgage. It is important to note that further documentation, such as bank statements or proof of income, may be required before a final decision is made.
An agreement in principle (AIP) is a document that shows how much a mortgage lender may lend you, based on the information you’ve provided. Do remember though, it does not guarantee that you’ll receive a mortgage offer, nor does it mean there is any legal obligation for you to proceed.
On the other hand, a mortgage offer is a formal offer from a mortgage lender that confirms their willingness to lend to you after conducting credit and affordability checks. This is one of the final stages in the mortgage process.
If you accept the mortgage offer, it becomes a legally binding document that sets out the terms and conditions of your mortgage, including the interest rate, the term of the mortgage, and any associated fees and charges.
To get to this stage, you will need to provide the mortgage lender (through your mortgage broker in London, if you choose to use one) with more detailed information and undergo a full credit check. Additionally, the mortgage lender will require a valuation of the property you intend to purchase.
Once you receive your mortgage offer, you can proceed with the property purchase, subject to meeting any conditions specified in the offer.
In summary, an agreement in principle provides an estimate of how much you can borrow, while a mortgage offer is a legally binding agreement between you and the mortgage lender that sets out the specific terms and conditions of your mortgage.
Typically, obtaining an agreement in principle for a mortgage will not have a significant impact on your credit score. This is because most mortgage lenders only conduct a soft credit check during the AIP process, which does not leave a visible mark on your credit report.
It’s important to be aware that some mortgage lenders may perform a hard credit check as part of the AIP process, which can leave a visible record on your credit report. If you apply for multiple AIPs with different mortgage lenders in a short period of time, this could potentially impact your credit score.
It’s important to keep in mind that a mortgage application itself will usually involve a hard credit check, which can also affect your credit score.
Therefore, it’s generally advised that you limit the number of mortgage applications you make and only apply for an agreement in principle when you are serious about purchasing a property.
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Obtaining an agreement in principle for a mortgage can provide several benefits for you when it comes to the home buying process.
Firstly, it allows you to determine the amount you can realistically borrow, helping you focus your property search within your price range. This can save you time and prevent the disappointment of finding a property that you cannot afford.
Secondly, having an AIP can give you an advantage over other buyers. Sellers may be more inclined to accept an offer from someone who already has an agreement in principle, as it demonstrates that they are a serious buyer actively seeking a mortgage.
Finally, an AIP can help expedite the mortgage application process once you have found a property you wish to purchase. Since the mortgage lender has already assessed your financial situation and eligibility, they may be able to process your application more quickly and efficiently.
Overall, obtaining an agreement in principle can be a valuable tool for anyone looking to buy a property, as it provides clarity on how much you can borrow, increases your chances of being accepted as a buyer, and can streamline the mortgage application process.
Getting an agreement in principle for a mortgage is usually free. It’s just a document that specifies the amount a mortgage lender is willing to lend you based on the information you’ve given them. You are not obliged to make any financial commitment with an agreement in principle.
If you are declined for a mortgage agreement in principle, it indicates that the mortgage lender has determined that you do not qualify for the amount of mortgage you have requested. There may be various reasons why this has occurred.
It is crucial to identify the cause of the rejection. You may need to reassess your financial situation or credit history, or you may need to provide additional information to the mortgage lender.
In some cases, it may be necessary to look for a different mortgage lender who is willing to lend close to, if not the full amount that you are seeking. Keep in mind that being refused an AIP does not automatically imply that you will be denied a full mortgage application.
When you submit a complete application, the mortgage lender will examine your financial situation and credit history more closely, and they may offer you a different amount or a different type of mortgage.
Moreover, applying for multiple agreement in principle with different lenders can have a negative impact on your credit score. As a result, it is important to conduct research ahead of time.
Having a mortgage broker in London can help you in locating the right mortgage lender, hopefully on your first attempt.
If you are considering first time buyer mortgages in London or home mover mortgages in London, it is advisable to speak with a mortgage broker in London to obtain your agreement in principle, before making any offers on a property.
Our team can typically secure an AIP for you within 24 hours of your initial mortgage appointment, providing you with valuable information as you progress through the mortgage process.
Book in for a free mortgage appointment today and we’ll work to obtain your agreement in principle as soon as possible, as you embark on your mortgage journey with the support of a trusted mortgage broker in London.
A CCJ is a County Court Judgement, which is a court order that you will be issued if you fail to back money that you owe. A CCJ can look very back on your credit file and can often impact your ability to get a mortgage.
If you have a CCJ attached to your name and were hoping to take out a mortgage, you should seek specialist mortgage advice in London. We recommend this so that you get the chance to speak with a professional who will be able to find out whether it is still possible for you to get a mortgage or not.
As a mortgage broker in London, we can take a look at your situation and work out what is the best option for you. Our mortgage advisors in London are specialised in complex situations like this, we can take a look at a variety of factors before looking at whether you can get a mortgage or not. These factors may impact your ability to get a mortgage:
You will receive a CCJ if you fail to pay back money that you owe. It doesn’t matter how much you owe or have already paid off, if there was a deadline that you missed, it’s likely that you will be faced with a CCJ. Unfortunately, even if it is only a small amount you have not paid off, you can still receive a CCJ.
If you receive a CCJ, you will get a 30-day period to pay it off (satisfied CCJ). See this as a final warning; if you manage to get it paid off within this timeframe the CCJ may be removed from your credit file, however, if you fail to meet this deadline, the CCJ will remain on your file for a total of 6 years (unsatisfied CCJ).
A CCJ can leave a very bad mark on your credit score, so we would advise that you try and pay it off within this period.
In some cases, yes it is still possible to get a mortgage with a CCJ in your name. With the help of an expert mortgage broker in London, you might just be able to get over that completion line.
If you managed to get the CCJ stripped from your records by paying off the money that you owe within the 30-day window, your chances of getting a mortgage will have increased. If you failed to meet the payment deadline, your chances may have been lowered.
Generally, often depending on the size of the CCJ and how much is left to pay off, the longer that you have the CCJ, the less of an effect it will have on your ability to get a mortgage. For example, if you have just been issued a CCJ, it will be very hard to get accepted for a mortgage, whereas, if you were issued with a CCJ 4 years ago, you’ve managed to pay off what you owe and you have been keeping on top of your finances, it’s more likely that you’ll be able to get a mortgage in London.
If you consider the lender’s point of view, they would be lending to someone who could not meet a previous credit commitment. A mortgage is one of the biggest financial commitments that you will ever make, so they are just being wary and making sure that you can actually afford to take a mortgage in London out.
As a mortgage broker in London, we are able to access specialist mortgage lenders that hold deals available to applicants with CCJs. To speak with a specialist mortgage advisor in London and find out whether or not you are able to access these types of mortgage products, get in touch with our team at Londonmoneyman today.
If you receive a CCJ that was wrongly issued, with sufficient evidence, you may be able to remove your CCJ from your records.
Reopening the case can cost you however, so you need to make sure that you have enough evidence to prove that it was wrongfully issued. If you manage to get it removed, then it will massively benefit your credit file and your chances of being able to get a mortgage. The CCJ will be completely removed from your credit history and your name.
To appeal your CCJ, you’ll need to complete an N244 form and send it to the court.
Your unsatisfied CCJ will eventually be removed from your file after 6 years have passed since the date that it was issued. As mentioned before, the longer that a CCJ has been in your name, the more likely it may be for you to be able to get a mortgage in London. You must know that this also means paying back what you owe, preferably as soon as possible.
The quicker that you pay off the CCJ, the better. If you have a CCJ in your name, but you paid it off years ago, your chances of getting a mortgage may increase. Not all mortgage lenders will think like this however, some mortgage lenders will not even work with you if you have a CCJ.
Rebuilding your credit score is the first step to getting a mortgage with a CCJ in your name. Keep making your payments and try to pay your CCJ off as early as you can.
There are many different ways to improve your credit score and you may need a few years to rebuild it, however, it will pay off. If you need to point in the right direction of where to start with rebuilding your credit score, our specialist mortgage advisors in London would be happy to help. Simply give us a call or ask us a question online.
The UK government designed the Shared Ownership Scheme with the intention of helping individuals to purchase own property. This type of mortgage is available to permanent UK residents, including both first time buyers in London or former homeowners who are finding it difficult to purchase a new home.
In order for you to be able to qualify for a Shared Ownership mortgage in London, your household income must be less than £90,000. This may differ in other areas of the country.
Additionally, you will almost always be purchasing your property on a leasehold basis, which means you will be purchasing it for a set period of time.
Under the Shared Ownership Scheme, you are able to purchase a portion of your homes value, via your Shared Ownership mortgage in London. The percentage that you purchase will typically be between 25-75% of the property value.
The remaining portion that you don’t purchase will be paid as a rental cost, including any service charges or ground rent, which will be charged at a lower cost than market value and is paid to a local housing association.
The Shared Ownership Scheme went through some fairly significant changes in April 2021, as part of the UK government’s Affordable Homes Programme. These changes are particularly noteworthy if you’re familiar with how the scheme once worked.
Among the changes to this, the minimum percentage that is required for a property share purchase was lowered, meaning in some cases, you can purchase as low as 10%, down from the previous 25%.
Furthermore, it is now possible to purchase shares in 1% increments, as opposed to previously where you could only purchase 5-10% minimum.
In addition to the latter, the fees that typically come along with purchasing these extra shares has also been reduced, with maintenance and repair costs typically now being covered for the first 10 years of your home ownership, by the landlord, rather than yourself.
If you had previously taken out a Shared Ownership mortgage in London before these changes took effect, it is entirely possible that these new rules could actually now apply to you, but it’s always recommended you check with your mortgage lender first, as this may still vary per case.
Before you look at taking on the mortgage side of your process, you will first need to make sure that you can even qualify for Shared Ownership in London. In order to do this, you’ll first need to contact with an agent in the area you wish to purchase your home in.
When you speak to this agent, you will usually need to provide them with various bits of information, such as what your income is, the amount of budget you have, which area your preferred property would be in and your credit history.
Once your eligibility is confirmed, it’s time to make a start on your mortgage.
A trusted and experienced mortgage broker in London would most likely be your best port of call when it comes to this, as not every mortgage lender offers deals on a Shared Ownership in London. The amount you can borrow typically depends on things like income and other fees included, such as rent.
As is often the case with most mortgages, there are both pros and cons to having a Shared Ownership mortgage in London. To give this a balanced view, it’s worth noting as said above, that not all mortgage lenders will offer mortgage deals to those using a Shared Ownership in London.
That being said, there are still more than enough mortgage lenders out there, including ones we have on panel, that can offer these types of mortgages. Furthermore, Shared Ownership mortgages in London can offer a sense of long-term stability, as you become both owner and occupier, simultaneously.
Deposits may often be an area of concern, especially for first time buyers in London, as saving for one can be challenging. Thankfully, deposits for Shared Ownership mortgages are typically much lower than they would be for open market purchases.
Whilst your deposit may still need to be, for example, 5%, it’ll only be 5% on the shares you’re purchasing. If you only want to purchase a 50% share, you’d be paying 5% on whatever 50% of the property value is.
Shared Ownership mortgages in London also make mortgages more accessible to those who are perhaps on a lower wage bracket.
Whilst these positives sound good, you have to remember that you would also be you would be paying for ground rent and service charges. Typically speaking, you can take part in “staircasing”, where you buy more shares as time goes on, when you come into the funds.
In most cases, you will be able to purchase up to 100% of the property price, where at this point, you would no longer need to pay a monthly rent. That said, your mortgage, ground rent and service charges would still apply. In other cases, you may only be allowed to purchase up to 80%.
Further to the last point, once you hit the 80% mark or higher, you will have to pay stamp duty land tax, though if you’re a first time buyer in London, this may not apply, depending on where in London you’re going to be living. Speak to a mortgage advisor in London to learn more.
Even though stamp duty can prove to be quite a costly addition to the other fees you will already have, your monthly mortgage payments can still be much cheaper than paying for an outright mortgage. It can also even be cheaper in some regards, than privately renting.
Speaking of privately renting, you will also benefit from having a tenure security, unlike you would going private. So long as you maintain all of your monthly mortgage payments, you will be able to remain within your home for your lease’s duration, which is typically between 99 and 125 years.
Because your home will be part owned by someone else, you will need to obtain permission from the appropriate housing provider prior to making any structural changes to your home. This can take away a sense of freedom you would otherwise have, by owning it outright.
After you have owned your home for a while, you may eventually decide that you do not wish to remain there and look to sell the property, before you look at moving elsewhere. With the majority of mortgage types, this would be fairly simple, so long as you have gone through your fixed period.
When it comes to Shared Ownership in London, it works a little differently.
Your ability to sell a home with a Shared Ownership mortgage in London will entirely depend on how much of the property you actually own, from the shares you have purchased. You’ll typically need to own 100% of the property, before selling the property can be an option for you.
It is important that you remember, however, that the housing association generally receives ‘first refusal’ rights, for the first 21 years after you have purchased your home. This means they are, by law, able to make a property purchase offer to you, before you put it on the open market.
If you do not own 100% of the property, you will have to look at purchasing all of the remaining shares, before you can look at selling the property.
A Shared Ownership mortgage in London can be great for first time buyers in London, who have been dreaming of getting their own property, but only have a smaller deposit to work with. Using a Shared Ownership in London can help you to achieve all of your goals.
That being said though, having a Shared Ownership mortgage in London can often prove to be a complicated journey and there can be a lot for you to work with, especially when you include all the potential fees. You must make sure that you are fully prepared and aware of all the contract details.
At the end of the day, it all comes down to personal preference. By booking in for a free mortgage appointment with a trusted and dedicated mortgage broker in London, you’ll get to speak with an expert mortgage advisor in London, with plenty of time to prepare!
You can learn more about a Shared Ownership mortgage in London by visiting the government OwnYourHome website.
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Londonmoneyman.com & Londonmoneyman 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: 9 Gallows Lane, Beverley, United Kingdom HU17 7FJ.
Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk.
© Londonmoneyman 2025.
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