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Getting Prepared for a Mortgage in Cambridge

Once you’ve saved enough for a mortgage deposit, the next step is preparation. Before you are ready to start your process, make sure your mortgage application is in the best position.

If you are a first time buyer in Cambridge, you will find this guide very beneficial to aid you with your mortgage application.

Also, this article will feature helpful tips to speed up your mortgage application for those looking to remortgage or move home in Cambridge.

Get Mortgage Ready in Cambridge

Up-to-date credit report

The first thing you should do is obtain an up-to-date credit report. Having an up-to-date credit report is essential for you to provide during mortgage application; ideally, you should try and get yours arranged prior to speaking with a mortgage broker in Cambridge. Your report will be reviewed by one of our mortgage advisor in Cambridge before forwarding you to a suitable lender. 

Agreement in principle 

Another thing that you should do before making an offer on a property is to obtain an agreement in principle. The good news is getting in touch with an expert mortgage broker in Cambridge like ourselves, we can often turn around an agreement in Principle within 24 hours of your initial appointment.

Proof of ID 

Make sure to produce a photo ID, the required documents will have to be photo identification such as a Driving License or Passport – though if you’re using one for proof of ID then it can’t be used as proof of address. If you are a non-UK national working in England on a Visa then this will also need to be presented. 

Proof of Address 

You will also be required to prove where you live. This is usually in the form of a utility bill or bank statement within the last 3 months.

Last 3 months’ bank statements 

Your bank statements should reflect your income and regular expenditures. It will be a displeasure to Lenders if they see gambling transactions on your account and they will also not be happy if you are seen to have surpassed an agreed overdraft limit or your direct debits have bounced regularly. The key factor is to get ahead of the game and get prepared as best as you can.

Not all lenders will ask to see your Bank Statements but it is an option that is available to them if they choose to utilize it – regardless of whether they do ask for your bank statements, they want to be confident that you take your finances seriously. The bank statements which you produce should consist if your salary going in and your bills going out.   

Evidence of deposit 

A vital step in the mortgage application is evidencing your deposit for Anti-Money Laundering purposes. To help the process it is best not to move finances around your accounts too much as this will make it a lot more difficult and may delay the process.

Lenders like to see that you are saving your money responsibly, but that doesn’t exempt you from having to account for any large recent deposits into your accounts.

If you have been gifted a deposit, then there will need to be written confirmation stating it’s a non-refundable gift. 

Proof of income 

The most pivotal point of the application is proving your income. If you’re in employment then sufficient evidence would be your last 3 months’ payslips, though some lenders will also ask for your most recent P60. Lenders will take into account regular overtime, commission, shift allowance and bonuses. Additionally, extra earnings may also be considered with some lenders such as part-time jobs or self-employment.

Many applicants are self employed in Cambridge nowadays – if you are a self-employed applicant then you may mean you will need to acquire your Accounts’ help to request your last two or three years’ proof of earnings from the Revenue. If you submit your own accounts then feel free to get in touch and we will be happy to advise you on how to go about downloading from the Government Gateway. 

Budget planner 

By working out an estimate of your expected outgoings after you move house means you can gain an idea of how much disposable income will be available to you to pay your mortgage after such things as regular expenditures, council tax, and utility bills have been paid out from your account. To help you with this, we are happy to send you our version of a Budget Planner to get you started.

Mortgage Broker in Cambridge

As seen, there are many steps you must take to prepare fully for your mortgage application deeming it not an easy feat but it doesn’t mean you should worry.

If you approach the mortgage application with plenty of time and use a mortgage broker in Cambridge, your process will be a breeze!

Your Essential Mortgage Guide: Answering Your Top Questions

Whether you’re a first time buyer in Cambridge or exploring options for a remortgage in Cambridge, uncertainties can arise.

Our primary goal is to address your pressing questions and provide insightful guidance, transforming your homeownership dreams into a gratifying reality.

How much can I afford to borrow?

Evaluating your borrowing capacity is a fundamental step. Consider factors such as income, expenses, and existing debts. While online mortgage calculators offer estimates, speaking with a dedicated mortgage advisor in Cambridge provides a tailored assessment, empowering you to make well-informed decisions.

What are the current mortgage interest rates?

Keeping abreast of interest rates is vital for informed decisions. Follow financial news, reputable websites, or seek advice from knowledgeable mortgage advisors in Cambridge for real-time updates. Understanding current market trends empowers you to make the best choices for your mortgage journey.

What types of mortgages are available?

Explore various mortgage types, including fixed-rate, adjustable-rate, and interest-only mortgages. Conduct thorough research and seek advice from mortgage experts in Cambridge to identify the most suitable mortgage type aligning with your specific needs and financial goals.

You can learn more in our article The Different Types of Mortgages.

How can I improve my credit score?

A strong credit score is essential for favourable mortgage terms. Pay bills on time, maintain a low credit utilisation ratio, and review your credit report regularly. If you face credit-related challenges, various resources are available to offer help in improving your credit situation.

You can learn more in our article Tips to Improve Your Credit Score.

What documents are required for a mortgage application?

Standard documentation includes proof of income, identification, bank statements, and employment history. Seek advice from mortgage lenders or experienced mortgage advisors in Cambridge for a personalised and seamless application process.

Should I use a mortgage broker in Cambridge or go directly to a mortgage lender?

Choosing between a mortgage broker in Cambridge and approaching lenders directly presents unique advantages. Consider your preferences, conduct research, and seek recommendations to make an informed decision aligning with your specific needs on your home buying journey.

What are the associated costs and fees?

Beyond the mortgage amount, consider expenses like arrangement fees, valuation fees, legal fees, and potential early repayment charges. Review fee schedules with guidance from mortgage professionals to gain a full understanding of all costs involved.

How can I save for a deposit?

Achieving a deposit for your home requires discipline and thoughtful preparation. Create a budget, identify areas for cost-cutting, and explore government schemes.

What is the difference between a mortgage agreement in principle and a formal mortgage offer?

An agreement in principle (AIP) offers an initial estimate, while a formal mortgage offer is a binding document. Both milestones are important in finalising the home purchase.

How long does the mortgage application process take?

The timeline for processing a mortgage application can vary. Work closely with your mortgage advisor in Cambridge, stay proactive, and be well-prepared for potential delays to ensure a smoother and more efficient process.

Get Mortgage Ready!

Equipped with key answers to your mortgage questions, you’re prepared to get started on your exciting journey. Seek guidance from trustworthy mortgage advisors in Cambridge, conduct research, and stay proactive throughout the process.

By following these steps, you can confidently pursue your dream of homeownership and take the necessary actions to make it a reality!

Do First Time Buyers in Cambridge Pay Stamp Duty?

Please note that the information contained in this article is for general guidance purposes only and should not be considered as legal, financial, or tax advice.

All information regarding Stamp Duty is taken from the government website and is in-line with the September 2022 Mini-Budget. The laws and regulations related to Stamp Duty are subject to change, and the information in this article may not reflect the latest updates or changes in the law.

The amount payable for Stamp Duty will entirely depend on personal circumstances. Please speak with the solicitor acting on your behalf, who will be more appropriate to advise on this.


Information Source: MoneyHelper


Stamp Duty Land Tax, commonly known as Stamp Duty, is a taxation system that may be applicable to residential property owners in England or Northern Ireland. It encompasses both leasehold and freehold properties, including those with mortgages or those purchased outright.

For prospective first time buyers in Cambridge, there’s good news regarding Stamp Duty. If the property’s value is £425,000 or less, you won’t be required to pay any Stamp Duty.

If the property’s value falls between £425,001 and £625,000, you’ll be exempt from Stamp Duty on the first £425,000, but you’ll need to pay Stamp Duty at a 5% rate on the remaining amount, up to £200,000.

However, if the property exceeds £625,000 in value, you won’t qualify for first time buyer relief, and you’ll be subject to the standard Stamp Duty rates. To be eligible for first time buyer relief in Cambridge, you must be purchasing your sole or primary residence, without prior property ownership in the UK or abroad.

It’s important to note that these regulations, as of the current date, are slated to remain in effect until March 2025. After this period, Stamp Duty will revert to the previous threshold levels.

Why was Stamp Duty relief introduced for first time buyers?

The government has taken steps to enhance accessibility to the property market by making significant revisions to Stamp Duty regulations for first time buyers.

As you may already be aware, accumulating the necessary funds to cover various expenses like mortgage applications, deposits, and conveyancing fees can be quite a challenging task.

Existing property owners often benefit from the equity they’ve built in their current homes, which can be leveraged to offset the costs associated with purchasing a new property.

However, the situation is different for first time buyers in Cambridge, many of whom are renters and may not have the same level of equity at their disposal.

Are there any exceptions to the rule?

It’s important to note that there are exceptions to this rule. If the property’s value exceeds £425,000 but is up to £625,000, you’ll pay a percentage of the amount over £425,000, and for properties over £625,000, you won’t qualify for first time buyer relief.

Regrettably, even if you’ve never owned a home before, you won’t qualify for first time buyer relief if you’ve inherited a property. The same applies if you’ve purchased a share in a property or if you’re buying jointly with someone else who isn’t a first time buyer in Cambridge.

Furthermore, if you’re considering a first time buyer buy to let property, you will be liable to pay Stamp Duty. This is because it’s considered a buy to let purchase rather than a residential property purchase.

The exact amount you’ll need to pay depends on your specific circumstances, so it’s advisable to consult with your solicitor for detailed information.

How do I pay stamp duty?

Typically, your solicitor will manage the Stamp Duty return and payment on your behalf, although you have the option to handle it yourself if you prefer.

In any case, it remains your responsibility to ensure the timely submission of the return. Even if your Stamp Duty liability is nil, it’s essential to submit a return unless you meet the criteria for exemption.

It’s worth noting that Stamp Duty rates and regulations can differ depending on the property’s location. To ensure you grasp the precise tax rules applicable to your property purchase, it’s advisable to consult with your solicitor or conveyancer.

Additional Costs for First Time Buyers: What Else to Consider?

In addition to considering Stamp Duty expenses, if you’re in the process of applying for a first time buyer mortgage in Cambridge, you might be curious about other potential costs. One significant expense is your deposit. Typically, most mortgage lenders will request a minimum deposit of 5%.

However, if you’ve encountered credit challenges or are seeking access to more favourable interest rates, it may be advisable to aim for a deposit in the range of 10% to 15%. Furthermore, you should anticipate incurring solicitors or conveyancing fees as a necessary cost.

Beyond these fundamental expenses, there are various other potential fees and costs, although they don’t necessarily apply to every case.

These may encompass a mortgage arrangement fee, which originates from your mortgage lender for setting up your mortgage. Additionally, you might encounter charges related to property valuation and surveys.

In cases where you engage a mortgage broker, they may sometimes levy a fee of their own, although this can vary depending on the specific circumstances. Furthermore, there are general expenses to consider, such as those associated with removals, potential repair work, furnishing, and home insurance.

It’s worth noting that many of these costs are not set in stone and, in some instances, may be optional. For a more precise understanding of the potential expenses you may encounter during your journey to homeownership, it’s advisable to consult with a mortgage advisor.

They can provide you with a detailed breakdown tailored to your specific situation.

Is there any support available for first time buyers?

First time buyers in Cambridge who are grappling with the challenges of entering the property market should be aware that assistance is readily available.

Not only does Stamp Duty relief exist for first time buyers in Cambridge, but a range of other schemes has been devised to facilitate the path to homeownership.

Among the more popular options is the Shared Ownership mortgage, where you purchase a portion of a property and pay rent for the remaining portion.

Additionally, there’s the Forces Help to Buy (FHTB) scheme, tailored to aid service members in borrowing up to 50% of their salary, capped at £25,000, without incurring interest.

If you are a council tenant, it’s worth exploring the Right to Buy mortgage, which grants eligible tenants the opportunity to buy their property at a discounted rate. In many cases, this discount effectively replaces the need for a traditional deposit.

Furthermore, the advantages of a Lifetime ISA deserve mention. This savings account permits you to deposit funds towards your deposit, with the government adding a 25% bonus, up to a maximum of £1,000 per year. You can contribute up to £4,000 annually to this account.

For more detailed information on the various schemes outlined above, as well as additional and more specialised options, you can visit the government’s Own Your Home website.

Alternatively, you can reach out to a reputable mortgage advisor, who can guide you through these opportunities and initiate the process of embarking on your personal journey to homeownership.

Renting vs Buying in Cambridge

Whether you are living with your parents/carers, or in rented accommodation you will wonder what is the next step up the property ladder. Do you continue renting or do you invest in a property and become a first time buyer in Cambridge?

In this article we discuss the positives and negatives to both renting and buying a property in Cambridge. Watch an in-depth discussion of the topic below in a MoneymanTV YouTube video.

Why should I consider buying a property in Cambridge?

If your plans involve staying somewhere temporarily, opting for renting is the logical choice. On the other hand, if you want to commit to a specific location, it’s advisable to save for a deposit and consider purchasing.

Having parents who themselves obtained a mortgage may also inspire you to become a first time buyer in Cambridge. Once you’ve accumulated sufficient savings for a deposit or have been fortunate enough to receive a gifted deposit, you may be encouraged to start your mortgage process!

Getting a mortgage in Cambridge

Monthly Costs

Mortgage repayments tend to be cheaper compared to rent payments. However, interest rates are subject to variation, which consequently influences the variability of your mortgage payments.

If you manage to secure a fixed-rate mortgage, you won’t face this problem. Opting for a fixed-rate mortgage guarantees consistent payments over a predetermined duration. When it comes to rent, you will typically see that the costs can stay the same or increase. It’s unlikely that they will decrease.

Security

Homeownership in Cambridge offers a profound sense of stability for individuals and their families. As long as you manage your payments, nobody can force you out of your home.

Being a tenant does offer certain safeguards, such as specific notice periods, but your options remain constrained if the landlord decides to reclaim the property. However, this arrangement becomes less appealing when considering family dynamics, work commitments, or proximity to schools.

In certain cases, landlords extend the option to purchase the property to their tenants before seeking external buyers. This approach not only benefits tenants but also saves landlords on estate agent fees.

Renting in Cambridge

Flexibility

Opting for renting in Cambridge can offer increased flexibility compared to property ownership. Giving notice to your landlord when you plan to relocate for a job opportunity in another region is relatively straightforward.

However, the situation shifts for homeowners. They face the dilemma of determining whether to rent out their property or sell it if they plan to move. The intricacies of selling a home and acquiring a new one involve both significant expenses and time commitments.

You should always be absolutely certain when buying a property in Cambridge. Don’t buy a property and immediately regret the purchase as the complications of buying a home and moving home in Cambridge straight away can be expensive.

Repairs

Landlords carry the responsibility to fix any repairs that are required on the property. However, the quality of this support can vary among landlords, and there might be instances where you end up conducting some repairs yourself.

Conversely, if you’re a homeowner, property maintenance rests on your shoulders. If anything needs repairing, you must arrange the repairs yourself.

Living With a Partner or Friend

Contrary to popular assumptions, property ownership doesn’t suit everyone’s circumstances. For instance, if you’re moving in with a friend or a partner, is taking out a mortgage together the right option. We like the question, “Have you tried living with each other?”. If not, renting could be a fitting choice for your circumstances before taking out a mortgage in joint names.

If you choose to take out a mortgage and things don’t go to plan, meaning that you have to remove someone’s name from a property, this process can prove challenging and there are lots of costs and fees involved. If this happens, it is important that you get specialist mortgage advice in Cambridge and speak with an expert in the field.

Getting on the property ladder in Cambridge

If you are thinking of purchasing a property in Cambridge, you should consider getting mortgage advice in Cambridge. It can be a stressful process, especially when it is your first time taking on the mortgage journey.

As a mortgage broker in Cambridge, our job is to take all of this stress away and find a perfect mortgage deal for your personal and financial situation. You should take your time when it comes to purchasing a property in Cambridge, they are a huge investment and you must be positive that it is the best decision for you.

Tips to Improve Your Credit Score in Cambridge

The credit scoring system frequently stirs concerns among both first time buyers in Cambridge and home movers in Cambridge. These individuals might perceive it as an inequitable method employed by mortgage lenders to assess loan applications.

It’s imperative to grasp that mortgage lenders possess a distinct perspective. Credit scoring empowers them to mitigate risks and achieve more consistent outcomes at a reduced operational cost.

If you find yourself feeling apprehensive about the potential impact of the credit scoring system on your mortgage application, there’s no need for undue alarm. It’s important to bear in mind that the landscape comprises a plethora of mortgage lenders, each employing their unique scoring systems and criteria.

To navigate this process adeptly, procuring a current copy of your credit report is highly recommended as you embark on your mortgage application journey.

Supplying your mortgage advisor in Cambridge with an up-to-date credit report from the outset significantly bolsters your chances of securing approval on your first application attempt.

This proactive approach equips your mortgage advisor in Cambridge with a comprehensive understanding of your financial history, thereby enabling them to provide tailored recommendations.

Keep in mind that credit reports are dynamic, shaped by an array of factors. As such, taking the initiative to review and rectify potential issues or disparities on your credit report beforehand can substantially enhance your overall mortgage application experience.

Rest assured that your mortgage advisor in Cambridge possesses the expertise to navigate the intricacies of credit scoring systems. They can guide you toward suitable lenders whose criteria align seamlessly with your financial situation.

By harnessing their knowledge and leveraging access to multiple lenders, you maximise the likelihood of securing a mortgage that perfectly suits your requirements while adeptly addressing any potential impediments presented by credit scoring.

Obtaining a Copy of Your Credit Report

Several credit reference agencies are available for your use, including well-known names such as Experian and Equifax. We recommend considering CheckMyFile for its comprehensive approach, which combines information from multiple agencies.

CheckMyFile offers a user-friendly platform for obtaining your credit report, providing a comprehensive view of your credit history and financial position. With a 30-day trial period, you have the flexibility to cancel at your convenience.

By using the provided link below, you can access a special offer that allows for an instant, complimentary PDF download of your credit report. This enables you to quickly review your credit information and address any potential discrepancies or issues.

This resource serves as a valuable tool, empowering you with the information needed to make informed decisions when applying for a mortgage or engaging in financial transactions.

Try it FREE for 30 days, then £14.99 a month – cancel online anytime.

Tips to Improve Your Credit Score

When setting out to improve your credit score, exercising caution with price comparison websites becomes crucial. These platforms can inadvertently trigger credit searches that have the potential to negatively impact your score.

Being mindful when using such websites is wise. If you’re planning to apply for a mortgage in the near future, it’s prudent to avoid seeking additional credit during this time.

While maintaining some credit and responsibly repaying it can certainly have a positive impact, mortgage lenders generally prefer not to see a recent surge in borrowing activities.

Enhancing your credit score can also be influenced by your presence on the electoral register. Ensuring the accuracy and up-to-date status of your name and address is important, as this information contributes to shaping your creditworthiness.

Thoroughly verifying the accuracy of all your listed addresses helps avoid any confusion that might inaccurately suggest you reside in multiple locations concurrently.

Maintaining a healthy credit score involves refraining from maxing out your credit card every month. Opting to use your card judiciously and settling the balance completely each month showcases responsible credit utilisation and can exert a positive influence on your score.

While closing dormant store or credit card accounts might result in a brief, initial dip in your score, this strategic move can yield long-term benefits by reducing vulnerability to fraud.

If you share financial obligations with a family member, friend, or former partner, such as joint accounts or shared fiscal responsibilities, their adverse credit history has the potential to impact your score.

For active accounts, severing these financial connections may not be feasible. You can request credit reference agencies to dissolve these financial associations if the respective accounts have been closed.

It’s important to recognise that the depth of information you provide to our esteemed and knowledgeable mortgage advisors in Cambridge significantly influences the quality of their guidance.

Equipping them with a comprehensive understanding of your financial landscape empowers them to provide tailored advice and assistance tailored to your unique circumstances.

By fostering transparent and open communication, you substantially enhance your chances of receiving optimal support throughout the entire mortgage journey.

How to Make an Offer on a Property in Cambridge

We typically find that first time buyers in Cambridge can get overwhelmed by the whole mortgage process. Once you have found a property that you are interested in, how do you make an offer?

There are many different questions like this and applicants sometimes get lost in all of the jargon, confusion and stress that can sometimes come with getting a mortgage. It is important to remember that there are experts out there that can help you and take all of this stress away.

For example, did you know that our mortgage advisors in Cambridge can help you make an offer on a property? We want to make your mortgage experience run as smoothly as possible and will do everything in our power to help.

Making an offer on a property can be a whole minefield. In this guide, we look at things you need to consider when making an offer on a property in Cambridge.

Prepare

Once you have found a property in Cambridge that you want to purchase, your estate agent will want to make sure that you have sufficient funds to continue with the sale. To prove this, you will be asked to provide an agreement in principle.

An agreement in principle (AIP) is a document that is issued by your mortgage lender that states that they are willing to let you borrow from them. This is agreed in principle of you providing supporting documents to evidence your income and overall affordability for a mortgage. We are able to obtain an agreement in principle for you within 24 hours of your free mortgage appointment.

Once you have issued your AIP to your estate agent, they will also carry out their own anti-money laundering checks. This check involves looking over your identification and proof of address. Essentially, they are checking that you are who you say that you are.

Some estate agents may be cheeky and try to sell you additional products and services. One example would be their in-house mortgage advice. Using an estate agents in-house mortgage advisor often comes with high fees; fees that could potentially be lowered when using a mortgage broker in Cambridge. We find that most homeowners nowadays are savvy enough to recognise these sales tactics and go elsewhere anyway.

This is why it is important to prepare when getting ready to make an offer on a property. Arrange your AIP in plenty of time, speak with a mortgage advisor in Cambridge and most importantly be vigilant and don’t fall for an estate agent’s tactics.

Build Relationships

Speaking directly with the seller and learning about their situation can be a great start when making an offer on a property. There is always an emotional side to selling a property and playing on that part of the process can be a great part of the negotiation process.

One example of playing on the emotional side could be if you were planning to raise a family in the property. If the seller has raised a family of their own in the property, this can build a positive relationship with the seller and create that emotional connection.

Taking time to understand the seller’s motivations for selling and their future plans can give you leverage when negotiating the purchase price.

Act Quickly

When making an offer on a property in Cambridge, you may find that the purchase is part of a property chain. This is where the seller of the home that you are looking to move into is waiting on their seller to move out of their property. This can go on and on, to the point where moving dates are pushed back.

If you are lucky enough that your purchase is not part of a property chain, you may want to speak with your seller or the estate agents and let them know that you can move into the property as quickly as possible. If the seller wants a quick sale and wants to move on from the property, this could encourage them to progress the sale much quicker.

In some cases, if there are several other buyers interested in the property, letting the seller know that you can advance through the purchase quickly, then they may favour your offer over others, you never know!

The “art of negotiation” comes into play here. Taking time to understand the seller’s situation can really help you when making an offer on a property in Cambridge.

Put a Price on it

The most important thing to consider when making an offer on a property in Cambridge is that you should never offer more than what the property is worth or more than you can afford.

The strategies that are commonly used are either;

1) Make your first offer your best offer to show that you are a serious buyer and to avoid a lengthy negotiation process.

2) Start off with a lower offer to leave some room for negotiation if your initial offer is declined.

The strategy that you choose will differ, the main factor being how much you want the property.

Be Confident

Have confidence in your offer! When you put forward your first offer, do not worry if it is below the asking price. Your offer is what you are willing to pay for the property, and if you are declined, don’t worry about it.

Most other buyers who have put forward an offer will have likely done the same. Sometimes, it can take more than one offer to be accepted, it’s perfectly normal.

If you are able to find out the other offers that have been made on the property, this could give you a good indication of what you may need to match. Again, this depends on how much you want this property in Cambridge.

If you feel unsure about how to make an offer on a property in Cambridge, don’t hesitate to get in touch with our team. Even if you are not a first time buyer in Cambridge and are planning to purchase your second home and need help, don’t worry, our job is to help you through your mortgage process no matter your situation.

Your Offer is Accepted

Unfortunately, just because your offer has been accepted by the seller, you are still not guaranteed to get the property until all of the documents have been signed and your mortgage lender accepts your mortgage application.

As a mortgage broker in Cambridge, if your offer has been accepted we would recommend requesting that the property is taken off the market so that other buyers can’t put in more offers.

To complete your mortgage application, you need to contact your mortgage advisor in Cambridge and speak to your solicitor to set a realistic target date for exchange.

Buying a House From a Landlord in Cambridge: A Comprehensive Guide

If you’re looking for specialist mortgage advice in Cambridge, it’s not uncommon to come across tenants who express their desire to purchase the property they currently rent from their landlord.

Selling a property to a tenant offers several advantages for landlords and can be an attractive option to consider before exploring the open market.

In this article, we will delve into the reasons why landlords may choose to sell to tenants and explore the benefits it offers for both parties involved.

Reasons Why a Landlord May Choose to Sell

The implementation of tax relief regulations brought about significant changes that motivated landlords to consider selling their properties. These regulatory changes increased the tax burdens for many landlords compared to previous years.

Consequently, some landlords made the decision to exit the housing market and explore alternative investment opportunities in different sectors.

Landlords who are dedicated and deeply committed to their role, and who believe in the enduring value of their properties, were more inclined to navigate the impact of these legislative changes. They view property as a sustainable, long-term investment.

On the other hand, more casual or novice landlords may have entered the market with a short-term profit-oriented mindset. If circumstances did not align with their expectations, they were more likely to opt for selling their properties.

The Advantages of Selling to a Tenant

Selling a property to a sitting tenant offers landlords several advantages. Firstly, it can lead to significant cost savings. By selling directly to their tenant, landlords can bypass the need to involve estate agents and avoid paying their commissions.

This reduces the overall expenses associated with the sales process, potentially increasing the landlord’s profits. Secondly, opting for this approach ensures a steady rental income. Throughout the transition period until the purchase is finalised, the tenant continues to make rent payments.

This provides landlords with a consistent income stream, which can be especially beneficial for those who rely on rental income to cover mortgage payments or other financial obligations.

Another benefit is the potential reduction in refurbishment costs. Since the tenant is already residing in the property, the need for extensive refurbishment before selling is often minimised or eliminated. As a result, landlords can save on refurbishment expenses, as the property is already in a liveable condition.

Overall, selling a property to a tenant allows landlords to enjoy cost savings, a steady rental income, and reduced refurbishment costs. It provides a mutually beneficial arrangement for both parties involved, streamlining the sales process and ensuring a smooth transition.

The Advantages of Buying as a Tenant

When considering the advantages of buying the property you currently rent from your landlord, there are several key benefits to consider. Firstly, as a sitting tenant, you have the advantage of being intimately familiar with the property.

Having lived in it, you have first-hand knowledge of its ins and outs, strengths, weaknesses, and overall suitability. This deep understanding allows you to make an informed decision about whether the property meets your specific needs and preferences.

Secondly, unlike other buyers, you don’t have to go through the process of finding alternative accommodation. Since you already reside in the property, you can avoid the delays and uncertainties associated with moving house.

This streamlined process allows you to proceed with the purchase smoothly and efficiently, without the need for relocation.

Furthermore, buying from the landlord may present an opportunity for a discounted price. As landlords can avoid certain costs associated with selling through traditional channels, they may be more willing to offer the property at a lower price to the sitting tenant.

This can provide a valuable chance to secure a home at a more affordable rate compared to properties on the open market.

Additionally, if the agreed-upon purchase price is below the market value of the property, there is potential for deposit assistance. Lenders may consider utilising the property’s equity to contribute towards your deposit, easing the financial burden.

In some cases, there may even be an option to proceed with the purchase without providing a deposit at all, further facilitating the homeownership process.

Navigating the Process: Expert Mortgage Advice in Cambridge

When contemplating the purchase of a property as a sitting tenant in Cambridge, it is crucial to approach the process with thoughtful consideration and seek the guidance of a professional specialist mortgage advisor in Cambridge.

Engaging in conversations with a mortgage advisor who possesses comprehensive knowledge of the local market can greatly help you in navigating the complexities of the transaction and making well-informed decisions.

A qualified mortgage advisor in Cambridge will carefully assess your individual circumstances, financial position, and aspirations, providing guidance on suitable mortgage options available within the city.

Throughout the process, they will provide valuable insights and expert advice, ensuring a seamless and efficient home buying experience.

It is essential to recognise that seeking professional mortgage advice in Cambridge is essential to maximise the benefits of this opportunity as a sitting tenant considering the purchase of the property you currently rent.

By doing so, you can potentially benefit from cost savings, leveraging your familiarity with the property, and securing favourable mortgage arrangements. This path offers a smooth transition from tenant to homeowner.

Therefore, by carefully evaluating your options and seeking professional mortgage advice in Cambridge, you can wholeheartedly embrace this unique opportunity and embark on a fulfilling journey toward homeownership.

How Long Does a Mortgage in Principle Last in Cambridge?

To obtain an agreement in principle, a reliable mortgage broker in Cambridge like us can assist you by acting on your behalf and communicating with the mortgage lender. You can schedule a free mortgage appointment with one of our experienced mortgage advisors in Cambridge either through our Get Started online form or by giving us a call.

During this appointment, your mortgage advisor in Cambridge will request proof of your income, employment, credit history, and other relevant personal information that will be helpful in assessing your eligibility for a mortgage.

Once you’ve provided this information, we can usually obtain your agreement in principle within 24 hours. This will give you an approximate idea of how much you may be able to borrow, providing you with confidence as you navigate the property market.

Obtaining an Agreement in Principle

Obtaining a mortgage agreement in principle can be a smart move before starting your property search, as it gives you a general idea of your borrowing capacity. This helps you avoid wasting time on properties that are beyond your financial means. As a first time buyer in Cambridge, this can save you a lot of time!

Additionally, having an agreement in principle can give you an advantage when making an offer on a property, as sellers and estate agents may view you as a serious buyer. However, it is important to note that an agreement in principle is not a guarantee of a mortgage, but rather a useful tool in the home-buying process.

When should I get an Agreement in Principle?

We recommend arranging your mortgage agreement in principle before searching for a new property. This pre-agreement provides you with a general estimate of the amount you can borrow, enabling you to avoid wasting time on properties that surpass your financial capacity.

Furthermore, holding an agreement in principle can enhance your position when making an offer on a property. Sellers and estate agents are more likely to perceive you as a committed buyer, granting you an advantage over those who lack an agreement in principle. When moving home in Cambridge, if another buyer has an AIP and you don’t, they may have the upper hand against you.

It is important to recognise that an agreement in principle does not guarantee a mortgage but serves as a valuable aid in the home-buying journey.

What information does a mortgage lender look at when you apply for an agreement in principle?

When applying for an agreement in principle, your mortgage advisor in Cambridge will collect personal information such as your full name, date of birth, current address, length of time at your current address, employment status, length of time in your current job, income details, regular outgoings, credit history, and more.

This information is used by the mortgage lender to assess how much they are willing to lend to you. The lender may also require additional information, such as bank statements or proof of income, before making a final decision.

What is the difference between an agreement in principle and a mortgage offer?

An agreement in principle is different from a mortgage offer. An agreement in principle provides an initial indication of the amount a mortgage lender is willing to lend based on the information you have provided. It is not legally binding and does not guarantee a mortgage offer.

A mortgage offer, on the other hand, is a formal agreement from a mortgage lender confirming that they will lend you the necessary funds after conducting a thorough assessment. It is one of the final stages of the mortgage process and sets out the terms and conditions of the mortgage.

Will having an agreement in principle taken out affect my credit score?

Typically, obtaining an agreement in principle for a mortgage will not significantly impact your credit score, as most mortgage lenders perform a soft credit check that is not visible on your credit report. However, some lenders may perform a hard credit check during the agreement in principle process, which could affect your credit score, especially if you’ve applied for multiple agreements in principle within a short time.

It is important to limit the number of mortgage applications you make and only apply for an agreement in principle when you are genuinely considering purchasing a property.

What are the benefits of having an agreement in principle?

Having an agreement in principle provides several benefits. It gives you a clear understanding of how much you can borrow, helping you search for properties within your budget and saving you time.

It can also give you a competitive edge when making an offer, as sellers may prefer buyers who already have an agreement in principle.

Additionally, it can expedite the mortgage application process once you find a property to purchase. However, it’s important to limit your applications and only apply for an agreement in principle when you are genuinely interested in buying a property.

Get an Agreement in Principle

Before making any property offers, we recommend speaking with a mortgage broker in Cambridge. By obtaining an agreement in principle beforehand, you can determine how much you can borrow and narrow your property search within your budget.

As a mortgage broker in Cambridge, we can provide an agreement in principle within 24 hours of your initial mortgage appointment. Book your free mortgage appointment today and let us assist you in obtaining your agreement in principle as you embark on your mortgage journey with the support of a trusted mortgage broker in Cambridge.

What is a Shared Ownership Mortgage in Cambridge?

As a trusted mortgage broker in Cambridge, we specialise in helping customers get a mortgage in Cambridge through the Shared Ownership scheme. Established under the Housing Act 1980, this government initiative aims to assist UK residents in purchasing their dream homes.

How Does Shared Ownership Work?

The Shared Ownership Scheme allows you to acquire a portion of a property, sharing ownership with a housing association. Typically, you can purchase between 10% and 75% of the property, while the housing association retains ownership of the remainder. By taking out a mortgage on your share, you pay a reduced rent on the remaining portion, making homeownership more affordable.

Shared Ownership Eligibility

To qualify for the Shared Ownership scheme, you must be a permanent UK resident, either a first-time buyer or a home mover in Hull. Additionally, your total household income should be less than £80,000 (£90,000 in London). Most properties available through Shared Ownership are leasehold, meaning they are owned for a specific period.

In recent years, the scheme has become more accessible. The minimum share requirement has been lowered from 25% to 10%, enabling more individuals to take advantage of this opportunity. Moreover, landlords now cover maintenance and repair costs during the first decade of ownership.

Applying for a Shared Ownership Mortgage in Cambridge

To determine your eligibility for the Shared Ownership Scheme, we recommend consulting with our expert mortgage advisors in Cambridge. They will assess your affordability, financial situation, and personal circumstances to guide you in making an informed decision. If Shared Ownership is not the ideal route for you, we will provide alternative options.

Our dedicated team will outline the costs associated with Shared Ownership and help you determine if it aligns with your specific needs and circumstances. Transparency and honesty are central to our service.

Pros and Cons of Shared Ownership Mortgages in Cambridge

As with any mortgage, Shared Ownership has its pros and cons. On the positive side, the deposit amount is based on the percentage of the property you are purchasing. Future opportunities to buy additional shares may also be available, subject to specific conditions. However, paying higher rent on a lower share and seeking permission for structural changes are potential drawbacks.

Selling a Shared Ownership Property in Cambridge

Selling a Shared Ownership property differs from selling a traditional home. In most cases, you must own 100% of the property to sell it, as the housing association retains partial ownership.

Is Shared Ownership Right for You?

Shared Ownership is an excellent option for first time buyers in Cambridge struggling to save for a deposit and meet conventional mortgage requirements. The lower deposit requirement makes homeownership more accessible. However, the availability of properties eligible for Shared Ownership can sometimes complicate the process. We will ensure you have a comprehensive understanding of Shared Ownership in Cambridge before making a commitment.

To explore the possibilities of a Shared Ownership mortgage, book a free appointment with our mortgage advisors in Cambridge. We offer flexible scheduling, including weekends, to accommodate your needs. Our team is committed to guiding you through the process and helping you achieve your homeownership goals.

For more information on the Shared Ownership Mortgage Scheme, visit the government’s OwnYourHome website.

What is a 95% Mortgage?

A 95% mortgage is as simple as the name would suggest; you are borrowing against 95% of the price of a property, and then you are covering the remaining 5% with your deposit. An example of this is if you looked at buying a property that was worth £150,000 with a 95% mortgage, you would be putting down £7,500 as your deposit and borrow the remaining £142,500 from the lender.

95% Mortgage Advice in Cambridge

Off the back of the March 2021 Budget, Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, making 95% mortgages more readily available from the bigger high street banks.   

This is fantastic news for First-Time Buyers and Home Movers alike, as this scheme will continue running until December 2022. Certain terms and conditions will apply though, which is something your Mortgage Advisor in Cambridge will be able to look at, to see if you qualify.    

All our customers who opt to get in touch will receive a free, no-obligation mortgage consultation where one of our dedicated mortgage advisors will be able to make a recommendation on the best possible route for you to take.

Can I get a 95% mortgage?

95% mortgages are usually accessible by both first time buyers in Cambridge & those who are moving home in Cambridge. Whilst saving for a 5% deposit sounds like a pretty straightforward concept, you’ll still need to have an acceptable credit score and prove that you are able to afford your monthly mortgage repayments, in order to access a 95% mortgage.

Improving Your Credit Score

A good credit score is essential in the process of obtaining any mortgage, especially a 95% mortgage. Things like paying any current credit commitments on time, ensuring your addresses are updated and checking that you’re on the voters roll, can all help with your credit score.

Affordability

Affordability is another one that is important to take note of. By giving the lender details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments, your lender will be able to get a general overview of whether or not you are able to afford this type of mortgage.

Can my family help me get a 95% mortgage?

Nowadays we see lots of family members helping each other get onto the property ladder, especially parents looking to further their children’s lives. The way this usually happens is by gifting the person looking to find their home, the deposit required.

Known through the industry as the “Bank of Mum & Dad, Gifted Deposits are only intended to be a gift, and not as a loan. The lender will need proof that this has been agreed, before it can be used towards your mortgage. 

How do I choose the right 95% mortgage?

When looking for a 95% mortgage, you want to make sure you have the right type of mortgage. Each mortgage type works differently, with that choice allowing you to find one that is most appropriate for your personal and financial situation. 

Some homeowners and home buyers prefer Fixed Rate or Tracker Mortgages, mortgage types which mean you either keep interest rates at a set amount for the term given or have your interest rates tracking the Bank of England base rates.

Alternatively, you might find that Interest-Only or a Repayment Mortgages are more your style. Interest-Only allows cheaper payments until you need to pay a lump sum at the end (mostly now used for Buy-to-Lets), whereas a Repayment mortgage (a normal mortgage if you’d like) means you’ll be paying interest and capital combined per month.

How can a bigger deposit help with my mortgage?

Seeing as a mortgage is such a large financial outgoing, you need to be prepared and need to be aware. You might find things like higher interest rates, remortgaging difficulties due to less equity and then negative equity all cropping up if you’re not. 

There is no need to worry though, as all these can be avoided if you’re savvy enough with your process to begin with. The more deposit you put down for a property, the less risk the lender will see you as. 

A larger deposit, of say 10-15%, would not only reduce the rates of interest by a noticeable amount, but would also give the property more equity and reduce the risk of negative equity, thanks in part to you borrowing less against the property. 

So, whilst the risks may seem intimidating, planning ahead and saving for a bigger deposit to access something like a 90% or even an 85% mortgage will be a massive help in your mortgage journey and something you’ll be able to reap the rewards from in the future. 

Cambridgemoneyman.com & Cambridgemoneyman 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: 10 Consort Court, Hull, HU9 1PU.

Authorised and Regulated by the Financial Conduct Authority.

We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk

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