Every now and again, we come across various mortgage hurdles. They’re not completely impossible to work around, but can often prolong the process. Below we have compiled a list of the top 5 hurdles we’ve come across in our time as a mortgage broker in London.
Through our experience of providing first time buyer mortgage advice in London, we’ve found that families are not normally turned down for a mortgage because of childcare fees. That being said, it is extremely common for a lower mortgage amount to be offered.
This becomes more apparent when parents have gone back to work and are paying out for childcare costs, as sometimes these can cost hundreds of pounds per month. These costs are considered by lenders as regular outgoings, the same as they would treat something like car repayments.
Even if there are no nursery fees to pay, parents on lower-income still generally get offered less than those who do not have children. The good news though is that the amount that families using this service can often be in receipt of tax credits and some lenders will also take these into account as well as child benefit.
There are lenders out there that have their own unique approach and don’t treat the nursery costs as a specific outgoing, opting to rely more upon Office of National statistics data for typical outgoings. This as you may expect, can often lead to a higher maximum mortgage amount.
It’s always a shame when a partnership ends, but often it’s for the better. Where it can cause problems, however, is when you have made joint financial commitments. Trying to fix that side of things does not always run as smoothly as you maybe would like.
Here are the three main questions we get asked regularly;
More often than not, there are ways around these and is somewhere we may be able to help, providing that you have enough income available and also are young enough for the mortgage payments to be affordable.
All lenders have their own views on benefit income and how much of it can be assessed. You may be pleased to find that all benefit income such as child tax credit, working tax credits, disability benefits, pension income can be taken into account in some form, when it comes to a mortgage. This is where the help of an experienced mortgage advisor in London can prove invaluable, helping you throughout the process.
Usually with a new job comes a bigger salary and the extra income to put towards a mortgage. Any gaps in employment and a new job can cause some problems for various mortgage lenders.
There are lenders who will work from a newly signed employment contract though, even if you’ve only just started or are soon to start a new job. They’re also usually okay with probationary periods.
For any purchase, all mortgage lenders require you to prove your deposit, as a means of showing you can in fact proceed. This is to satisfy UK Anti-Money Laundering Legislation. Your solicitor and estate agent may ask you to provide evidence of your deposit also.
We believe, that evidencing your deposit can often be the most complicated part of applying for a mortgage. Whether your deposit is from savings, premium bonds, the sale of another property, gifted from a family member or friend, from overseas family, or is from a personal loan, you are required to show exactly where your funds came from before you can go forward with a mortgage.
Please remember that the above information is for reference purposes only and is not to be viewed as personal financial or mortgage advice.