High Demand – lots of mortgage availability.
Well we have been very busy which means there is a lot of demand for people buying houses and refinancing which is great news. The mortgage market has become more competitive which means that lenders are trying their best to entice new customers by offering favourable deals. There is definitely no shortage of mortgages out there at the moment as long as you tick all the boxes.
In comparison to the last 10 years, mortgage rates are at their lowest which has made borrowing relatively cheap. However a few of the most competitive deals are starting to disappear.
Over the last 2 weeks we have seen a few small rises in the rates that mortgage lenders are offering. This is in reaction to figures from the bank of England Inflation report which shows that they predict that interest rates may rise early than previously thought and may rise sharper than previously expected.
One of the biggest changes this year has been the amount of requirements that the lenders are asking for on a mortgage submission. If you are looking to apply for a mortgage then it would be worth starting to collect the following.
- 3 months payslips (Employed)
- Accounts and SA302’s if self employed
- 1-3 months bank statements showing income going into account.
- Proof of deposit (Bank statement)
Most lenders will not even start to assess a case until they have the following, so it is worth collecting the information early and giving it to your mortgage broker.
As ever it is always worth checking your credit report before you go to a mortgage broker/ advisor. Firstly if you check your credit report then it will not leave a footprint on your report and will have no affect on your credit report.
Adverse credit ?
Different lenders have different criteria but there are more lenders that will take some adverse credit history into account compared to 2 years ago.
Lenders are now putting more attention on to how you pay your mortgage if it goes past your retirement age. You may not think that this would affect you but if your mortgage term takes you over your retirement age then it needs to be considered. Different lenders have varying ages and criteria that define retirement ages and the type of proof that is required to satisfy their affordability rules.
Deposits – Help to Buy
With the help to buy scheme mortgage guarantee there are 95% mortgages available which is great news for first time buyers. These schemes require the applicants to have no adverse or credit impairment whatsoever. Most lenders will ask for 3 months bank statements and if they see that you have gone over your overdraft without authorisation then this in itself can lead to a decline. So if you are applying for a 95% mortgage through help to buy then please ensure that you check you check your credit report and bank statements with your broker.
All mortgage lending is based around your affordability, in a nutshell this is assessing the amount that you can borrow based on your incomes and liabilities and expenses. The amount that you can lend will vary depending on the lender that you approach. Always ensure your mortgage broker assesses your affordability before they apply for a mortgage. They should look at the amount that you can borrow before they get you to commit to a credit check.