Whether you are looking at your options as an inexperienced first-time buyer in Cambridge searching the market for your first home or are looking to move home, it’s likely you will have discovered that some of the larger estate agents and builders would prefer it if you used their in-house mortgage advisor and conveyancing services.
As a standalone mortgage broker in Cambridge, we have spent many years working hard to help out our customers. We’ll hear from a large amount of customers who have felt themselves being pressured by an estate agent to opt into that companies personal financial services. Here are just some of the instances we’ve heard from people who get in touch;
A lot of estate agents across the industry have a reputation for refusing to put an offer forward if you pass up on their in-house mortgage advisor and go with an external mortgage broker instead.
As if this act wasn’t bad enough, some have even gone as far as to refuse putting an offer through because another client who actually said yes to their in-house service has also made an offer on the same property.
Something else we hear all too often is the ridiculous quotations they have been known to give for their services. Unfortunately there have been customers we’ve spoken to who weren’t aware these were overpriced and went forward with them. One notable customer was charged £1,500 for a simple purchase with a particular estate agent.
A member of our dedicated mortgage advice team got right onto this and we were able to get this cost down. Off of this incident, we recommended that the customer use another conveyancer in the area near the property and we were able to drop the cost of the service to a significantly less £750; the estate agent was charging double this amount!
Once you’ve made an offer on a property, the common train of thought would be that pretty soon you’ll get a phone call detailing whether or not your offer has been accepted. What often happens with estate agents instead, is they will call up and demand to know the conveyancer you have chosen.
Their questionable methods don’t end there, as following this they have a habit of refusing to take the property off the open market until you agree to use their in-house mortgage services.
As touched upon earlier, though these will be far overpriced, many crumble under the pressure and simply agree to please the agent and avoid losing their home (even though that shouldn’t happen). This is common with first-time buyers in Cambridge who want their first mortgage experience to go smoothly.
As you’ve seen here, estate agents are notorious for making the process difficult and bordering on near harassment. A dedicated mortgage broker in Cambridge can help you with these situations and in some cases, bring the costs of other services down to a level that is fair. Now to answer a question you may be thinking at this point…
Absolutely not. These are highly illegal ways to conduct business. As a customer, you have the right to use whichever companies you would like during your home buying process. You have full freedom to use any mortgage broker or conveyancing solicitor that you wish to, it’s your personal process and personal choice.
Unless you explicitly sign a contract in the beginning to say you will only use their services (which you won’t be offered anyway), you have zero obligation to use their services for anything other than the sale process between yourself and the seller of the property.
Please always remember, when negotiating on the purchase price of a property; Should the people selling the property you’re looking to buy really know your personal financial circumstances, as well as the amount a lender is willing to let you borrow? This is a fact they will use to their advantage when pushing their in-house services.
Be wary and if you definitely don’t want to use their service, put your foot down and do not succumb to the pressure. Your future family home and financial situation all depends on how well your mortgage process goes.
We will always have your best interests at heart, keeping you informed throughout and jumping through those hoops on your behalf, so you can stay relaxed and happy. The information provided here is based on a genuine history of tactics used, that we wouldn’t wish others to go through if they can avoid it.
For all your mortgage needs, please do get in touch and we’ll do our very best to help you out, hopefully securing a great deal and your future family home in the process.
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.
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.
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.
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 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.
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.
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.
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.
Here you’ll find out the basics that you need to know about agreements in principle, including the pros and cons of getting one. For more information, get in touch and speak with one of our expert Mortgage Advisors in Cambridge today. An Agreement in Principle (also known as an AIP or Decision in Principle) is where you pass a Lender credit score to qualify for a mortgage.
By obtaining an Agreement in Principle, you prove that you are ready to support any offers you make as a First-Time Buyer in Cambridge. It may also help negotiate a lower price if you have one of these, as it shows the seller you are serious and have the means to continue with the process.
The more commonly seen methods of credit scoring are via soft searches rather than a hard search. These may still affect your credit score, though a hard search will usually be more likely to do this than a soft search.
Reasons come down to a hard credit search that can leave a credit footprint, whereas a soft search does not. Regardless, you can rest assured that whichever is used by the Lender is done with the best intentions.
Having your credit checked via a hard search every so often should not make too much difference. It becomes an issue if you take too many of these within a small amount of time. On the flip side, if you know you have a good credit score and the best path to take with a lender, this should not be a problem.
Whilst the prospect of this would be excellent, there are no guarantees that having an Agreement in Principle will allow you to get a mortgage. The Lender will still require seeing all your documents, and only then will an Underwriter make the very final decision.
Often we find that customers contact us after they got declined at the application stage due to missing some small print in their Agreement in Principle. You will need to provide ID to prove that your identity, payslips to prove your income and bank statements to prove you are smart with money before a lender offers your case.
Though you can make an offer without an Agreement in Principle, we would not advise doing so. Any credible Estate Agent will want you to prove you can progress onward.
It is possible to obtain an Agreement in Principle within 24 hours of getting in touch with an experienced mortgage advisor in Cambridge.
Typically, an Agreement in Principle will expire after 30-90 days. The good news is that this doesn’t mean you should apply for the first house you find. If your Agreement in Principle expires, it’s not difficult to obtain another ahead of making an offer.
Finding a mortgage only to be declined a mortgage can cause understandable disappointment. With this in mind, we recommend getting an Agreement in Principle as early as possible.
A credit score is a numerical value that lenders use to determine your affordability for a mortgage, loan, credit card, etc. Although different lenders have different credit scoring models, the credit score that will be listed on your file will usually range from 300-800+.
If you have a credit score above 670, it’s likely that a lender will see no problem lending to you. On the other hand, if your score is less than 670, you may struggle to get the competitive deals that other applicant’s with a higher score are accessing.
As a Mortgage Broker in Cambridge, we deal with specialist cases all of the time. It’s often the case that mortgage applicants come to us after being declined by their bank due to a low credit score or something similar. Our job is to step in and help these struggling customers and their application back on its feet.
There are lots of different reasons why you could have a low credit score. The most common reason that we come across is that the applicant is the subject of a county court judgement (also known as a CCJ). If you fail to repay a loan/borrowed money, it’s likely that you will get a CCJ. A CCJ can leave a harmful dint on your credit file for 6 years or more, so we strongly advise that you make sure that you pay off your debt before applying for credit. It will undoubtedly pop up on your file and the lender will start asking questions.
Failing to stick to credit agreements can be bad too. Failing to keep up with your mobile phone contract payments will even cause damage to your file. Sometimes the little things can cause damage too, for example, dipping into your overdraft every month could cause a long term negative effect. Even using price comparison websites can sometimes impact your score.
These are just a few things that could negatively impact your credit rating, there are lots of other reasons to why you could have bad credit, however, our job is to help you improve your score so you get the chance to move into your dream home! There are multiple ways to improve your score to try and get you up into that next bracket that lenders will be looking for. Don’t give up just because you have a low score, it’s still possible to secure a mortgage in some cases!
Trying to improve your credit score can be a difficult task, but with the help of this handy guide, you may just be able to level it up a notch. We must warn you that every lender has their own lending criteria so your score may impact what deals you can access. This also means that just because you have a great score doesn’t mean that you’ll match every deal, it’s sometimes down to personal circumstances. At the end of the day, it’s all up to your lender and their criteria.
Every time that you go directly to a lender and their in-house mortgage advisor puts you through for a deal, they will perform a soft or hard credit search on you, and this search will leave an imprint on your credit file. If for any reason, your application is declined, the credit search performed could have a negative impact on your credit score. Multiple searches may lower your chances of getting accepted for a mortgage in the future.
This is where a Mortgage Broker in Cambridge will come in handy. Here at Cambridgemoneyman, we aim to get it right the first time, which means that we will take a look at your credit score and only approach lenders that hold criteria we know that you will pass.
Applying for credit can sometimes backfire on you, especially if you don’t have a reason for doing so. If you can pay back the credit that you’ve borrowed, it may look good on your application, however, flip the situation on its head, and your credit score could end up in trouble if you fail to meet the credit payment deadline.
During your mortgage application, we strongly advise that you hold off applying for credit. In some cases, you may be able to get away with it, but in other scenarios, lenders may believe that you are struggling for money. They could think that you are putting it towards your deposit or using it to aid your mortgage payments.
Here’s a nice and easy way to improve your credit score; make sure that you are registered on the voter’s/electoral roll. Being registered on the roll shows that you are who you say you are. All you need to do is go to the government’s electoral roll page, it’s easy to get registered from there. This could be a great way to boost your score!
You must provide accurate information when registering on the voter’s/electoral roll, so make sure that everything is filled out correctly. You will need to use your current living address, not your previous address.
During the mortgage application process, we always recommend that you check that all of your accounts and details are linked with your current address. This won’t affect you as much if you are a First Time Buyer in Cambridge and this is your first application. However, if you are Moving Home in Cambridge from rented accommodation and you still have your parents address linked with any of your accounts, your lender will pick up on it straight away. This is why it’s important to change your addresses and make sure that they’re up-to-date before applying. Being linked to a wrong address could impact your credit score.
If you go down the broker route, your Mortgage Advisor in Cambridge will help you out with this step. They will make sure that everything is updated with you to ensure that you have the best chance possible of being accepted for a mortgage.
Maxing out your credit card(s) each month will heavily impact your credit score. Your lender will like it if you can pay off your credit card balance each month as it shows that you can manage your money.
If a lender can see that you are exceeding credit card limits and always dipping into your overdraft, they may think that you don’t take your finances seriously. This could threaten your ability to get accepted by them.
If you are still financially linked to an ex-partner or family member, your credit score could be getting harmed without you even knowing. If the account is still active and live, you won’t be able to remove your links. The only way to remove your link is if you get in touch with the credit reference agencies and make a request.
Depending on the lender and how strict their lending criteria is, they may be lenient and allow some wiggle room. If there are some personal reasons involved, your lender may be considerate and factor them into your application, it’s entirely up to them what they do.
A Mortgage Broker in Cambridge like us will always be transparent with you and factor in every bit of detail. Even if you have a score that is on the lower end of the spectrum, our hardworking team of Mortgage Advisors in Cambridge are still determined to try and secure you a deal that will suit you. We have access to specialist mortgage deals through our huge panel of lenders; we are sure that we will find one that matches your mortgage needs.
If you need further assistance or Credit Score Mortgage Advice in Cambridge, feel free to get in touch with our team.
If you are a First-Time Buyer in Cambridge or are looking at Moving Home, you will know that several forms of mortgages are available. Some of them are more common than others, and some may even be difficult to find. We have assembled a list of some of the most common forms of mortgages. You will also find one of our MoneymanTV episodes useful for learning more about these.
A fixed-rate mortgage means that for a specified time, the mortgage rates will remain the same. You should decide your period, usually 2, 3, or 5 years or more, for your payments. You know your mortgage balance will typically be the largest outstanding one, regardless of inflation, interest rates, or the economy.
Your interest-rate shall track the base rate of the Bank of England by using a tracker mortgage. In other words, the lender does not fix the rate itself. You pay a sum above the base rate of the Bank of England. An example of this is where the basic rate is 1%, and you are tracking at 1% more than the basic rate, you pay 2%.
If you carry out a repayment mortgage, you pay capital and interest together every month. So long as you carry the full term of the interest loan, you will pay the mortgage debt at the end, and the property shall be yours. This is the risk-free way of paying the lender back the money.
The interest you are paying in the early years, and particularly with a period of 25, 30, or 35 years, your balance would decrease very slowly. In the last 10 years or so, this scenario changes, where your payments pay more capital than interest and your balance falls even faster.
While some transactions allow mortgages on an interest-only basis, residential property is even more difficult to obtain on an interest-only basis. Lenders are also less likely to sell a product that is interest-only. However, it may be an alternative under some conditions.
This involves reducing the amount of money you pay out as you’re older or have other savings. When it comes to offering these items, lenders are very strict now, and the valuation loan is much smaller than before.
You can build a savings account alongside your mortgage account for an offset mortgage. How this works, is you pay interest on the difference, for example, you pay £80,000 for the balance of £100,000, and £20,000 is deposited in your bank account. This can be a very successful way to manage your capital.
Believe it or not, your bank statements are some of the most important documents that you will need to provide for your mortgage application. They can be the deciding factor to whether or not you’ll be accepted for a mortgage.
When you give your lender your bank statements, you can expect them to look for a variety of things. However, their primary objective is to assess whether you are the sort of person who manages their money responsibly and is likely to keep up with their mortgage payments.
As a Mortgage Broker in Cambridge, we get a lot of different questions from applicants regarding their bank statements and what lenders will look for. Although, one question stands out the most: “Do gambling transactions look bad on my bank statements?”. Here are some of the most common questions we get asked about bank statements:
Whether you have an annual flutter on the grand national or regularly use internet betting sites, clearly there is nothing illegal about property licensed gambling. We are aware that a lot of people gamble as a hobby or pastime and there is nothing wrong with it. However, you still need to be careful with how much you gamble and that’s why the gambling agencies urge customers to “gamble responsibly”.
This is something to keep in mind when applying for a mortgage. A lender may be put off if they see that you are frequently gambling and risking losing your money. Of course, you shouldn’t let a lender tell you how to live your life and spend your money, but they do have a right to turn you away based on this factor. They also have a duty to lend responsibly.
If lenders need to prove to the regulators that they are making prudent lending decisions, it isn’t entirely unreasonable of them to expect the people they lend to adopt a similar approach when it comes to their personal finances. If you think that this is unfair, just think about it… If you were lending your own money would you lend it to the applicant who gambles or the one who doesn’t?
Like we mentioned above, it’s not illegal to gamble, so it’s very unlikely that the occasional gambling transaction on your bank statements will impact your mortgage application. Your lender will determine whether these transactions are reasonable and responsible. They are going to look at how often you gamble, the size of the gambling transactions in relation to your income and the impact that gambling has upon your account balance. If you are dipping into overdrafts from gambling, lenders will not be too happy.
If you gamble infrequently, these transactions will make no significant difference to whether or not your lender will accept you for a mortgage. They are likely to be disregarded by your lender. On the other hand, if you are constantly betting and going into your overdraft, it’s likely that a lender will see you as irresponsible and decline your application.
As a Mortgage Broker in Cambridge, we know exactly what lenders look for on bank statements and we know that you need to earn their trust. They are lending you their money after all. We never advise that you change how you spend your money, we just tell people to be responsible.
Your lender will examine everything on your bank statements, but what are they mainly looking for?
Remember, lenders are financial institutions that, either directly or as part of a wider group, often sell current accounts, overdraft facilities credit cards and personal loans, so understand that these things can all play a part in prudent financial planning. The key for a mortgage applicant is how these facilities are managed. For example, occasionally dipping into your overdraft, as long as you don’t overuse it, is not inherently a bad thing. However, regularly exceeding the overdraft limit is not so good. Thus, lenders will look for excess overdraft fees or returned direct debits because these would normally show that the account is not being well conducted.
Lenders will also look for large credit transactions from things such as loan agencies. Having “undisclosed” loan repayments on your record could be a problem, lenders will want to dig deep and try and find out how much you owe and how much will be going out each month. You will need to consider all of your other credit commitments before committing to another one.
Another important thing that lenders will look for is bounced direct debits. This is where a company tries to take money out of your account but you have insufficient funds so they can’t charge you. This usually happens when applicants forget about subscription services or memberships. So make sure that you avoid bounced direct debits in the months leading up to your mortgage application.
The most simple answer is to be sensible and, if possible, plan ahead. Most lenders ask for three months’ bank statements, so if you are applying for a mortgage in the near future, be wary of this.
These bank statements are going to show your salary credits and regular bill payments. So, you could even consider taking a break from gambling for a short time to make your bank statements stand out to lenders.
As a Mortgage Broker in Cambridge, it’s our job to help you through the mortgage process and view your application and bank statements before submitting them to a lender. If you go directly to a lender, they may decline you straight away and that’s why we recommend that you get a second pair of eyes on your application. We might spot something that you missed; a lender wouldn’t help you out with that!
If you are a First Time Buyer in Cambridge who doesn’t know a lot about the mortgage process and want to us to double-check your documents, you should get in touch and claim your free mortgage consultation. A Mortgage Advisor in Cambridge will be more than happy to try and steer you and your mortgage application in the right direction.
During the mid-2000s, mortgages were ridiculously easy to obtain. You could approach a lender with a small deposit and still get accepted, the truth is that these applicants really couldn’t afford a mortgage and shouldn’t have been granted one. In spite of these events, the treacherous credit crunch came knocking at the door and the mortgage market began journeying down a spiral of decline. It got to the point where it was practically impossible to get a mortgage.
Eventually, rules and regulations were put into place which let the market catch back up to speed. The government introduced the Help to Buy schemes to try and give applicants that confidence that they needed. 95% mortgages crawled back into play making the future look bright again for the mortgage market. This is generally where mortgage percentages settle, 95% mortgages are offered by most lenders (unless you are using a specialist lender because of bad credit, etc).
When we say a 95% mortgage, we mean that you put down a 5% deposit and the 95% is your mortgage loan from the government.
As an experienced Mortgage Broker in Cambridge, we know that meeting your minimum deposit can often prove challenging, especially if the economy is performing badly and lenders are only offering mortgages less than 95%. It’s more common to see First Time Buyers struggling to save up for their deposit as they are often living in rented accommodation and can’t afford to move out. Don’t panic, there will be thousands of other applicants in the same boat as you. We have put together a list of the most common we get asked regarding mortgage deposits, we hope that they help:
Yes, a higher deposit will always increase your chances of being accepted for a mortgage. You are showing that you can afford more than the minimum expected; in their eyes, this shows that you are going to be more than capable of meeting your payments hence presenting yourself as less of a risk to them.
Lenders using offer mortgages in bands of 5%. In other words, from least expensive to highest, you will get 95% mortgages, 90%, 85%, etc.
As a professional Mortgage Advisor in Cambridge, this is something that we don’t recommend you do, even though in some circumstances you can. The reason why some lenders won’t let you do this as you are technically loaning 100% of your mortgage. This is why we suggest that you save up for your deposit. Your lender will also be able to see that you’ve been saving up and built up a deposit, not just borrowed the whole amount.
Firstly, a gifted deposit is a certain amount of money that is gifted to you to put towards your deposit. A gifted deposit can only be gifted by family members or friends. This sum cannot be a loan it strictly has to be a gift.
Gifted deposits are becoming more and more popular, they tend to be make up the majority of First Time Buyer’s deposit. If you are lucky enough to receive one, you can use it as part of your deposit. Sometimes applicants are offered a gifted deposit and already have the minimum deposit required, so by adding your gifted deposit to your own deposit, you should make up a deposit greater than 5%. This can greatly increase your chances of being accepted by your lender.
The mortgage market quite often relies on gifted deposits. Without them, the number of First Time Buyers struggling to take that first step onto the property ladder would be a lot higher. So yes, lenders do accept gifted deposits for a mortgage; as a Mortgage Advisor in Cambridge, we would say that they are the perfect stepping stone for your mortgage journey.
You will always need to prove where you deposit has come from. Your lender will ask to see your bank/savings account statements so that they can see both your deposit and how much your monthly outgoings are. They will analyse your statements carefully and take into account all of your current financial outgoings and commitments.
Proving the source of the deposit (audit trail) can be the trickiest part of the application sometimes. If you are selling a property, then the memorandum of sale given to you from the estate agent is your proof.
If you have made any large deposits into your bank account recently, you will need to prove where this has come from. For example, if you have sold a car, you will need to show your lender a receipt of this transaction; the sale price must match the exact amount that was transferred to your account. The longer that you have had funds in your account for, the more impressed a lender will be.
As an experienced Mortgage Broker in Cambridge, we know that lenders aren’t a big fan of large cash deposits. They will be more curious if you deposit a big lump sum of cash into an account then apply for a mortgage straight away. A lender will see this and take it that you haven’t really saved up for your deposit, therefore are you reliable? Lenders will always think smart, they have to be completely certain that you can afford a mortgage and will not take any chances if they have any doubts that you will be able to meet your mortgage payments.
If you are interested in a Help to Buy mortgage and you qualify for the equity loan scheme, you must know that it is always a 5% minimum deposit. Your deposit is always topped up by 20% through the government loan. You can always put down more than a 5% deposit if want to, the government will make up the rest to make up a total of a 25% deposit. This makes your total mortgage 75%.
Getting a mortgage through the Help to Buy equity loan schemes should allow you to access competitive rates.
The percentage that the government loaned you will have to be paid back. You get 5 years to pay off the loan interest-free, however, if you don’t manage to pay it off you will start receiving interest on the amount that is owed. This rate starts at 1.75% and can increase every year.
Sometimes you won’t sometimes you will, it completely depends upon your circumstances and the lender. For example, if the property price was listed with a £100,000 price tag but has been offered to you for £90,000, some lenders may accept this as your deposit.
This can work in your favour if you have the Right to Buy from the local authority or another social landlord.