Author: Dax McLean

According to Statista, mortgage rates increased at a record pace in 2022.

In fact, reports show that rates for 10-year fixed mortgages doubled between March and December 2022.

On June 22, 2023, the Bank of England had a base rate increase from 5% to 5.25%.

What does that mean for you and your monthly mortgage payments?

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Do Mortgage Payments Increase with the Interest Rate?

In short, yes, certain mortgages will increase when interest rates hike.

The mortgage types affected by increases in interest rates include variable and tracker mortgages.

Tracker mortgages follow the ebbs and flows of the Bank of England’s base rate.

The moment the base rate increases, a tracker mortgage will increase. Average tracker mortgages are estimated to be up by around £23.71.

Standard variable mortgages aren’t as predictable, as it’s up to the mortgage provider how they will hike their interest rates.

In most instances, they may choose to increase their interest rate, too, which could be more or less than the Bank of England’s base rate.

Industry investigations show that after the recent interest rate hike, standard variable rate mortgages have risen by around £15.14.

Fixed-rate mortgages, however, aren’t impacted by fluctuations in the Bank of England’s interest rate.

Fixed Rate Mortgages

When acquiring a fixed-rate mortgage, your interest rate is set for a specific period.

This means that your mortgage won’t increase if the Bank of England increases its base rate.

Having a fixed-rate mortgage still requires you to keep an eye on the interest rate fluctuations, though. Remember that fixed-rate mortgages only last for a certain period.

When that period is up, you may face significantly higher interest rates than your original offer.

When is the Next Expected Interest Rate Hike?

Around every 6 weeks, the Bank of England carries out reviews on the interest rate. This means that the rate is reviewed 8 times per year.

Upcoming confirmed review dates by The Bank of England (which could change without warning) include the following:

2023:

• November 2, 2023
• December 14, 2023

Generally, the Bank of England keeps inflation set at approximately 2%.

With the cost of living crisis raging, the percentage increase has been less than anticipated in the last few reviews.

Should I Remortgage Now, Just to Be Safe?

Whether you should remortgage now will depend on what your current mortgage deal is.

The current base rate is at 5.25%, and because of this, and taking your unique situation into account, there could be an opportunity to save.

Those who have fixed-rate mortgages that are due to finalise in the next few months may want to secure a new deal instead of waiting for the deal to end.

This means you will have some time to compare deals and make sure you’re taking up the best option.

For those who have a standard variable rate mortgage and want to avoid the negative impact of potential upcoming interest rate hikes, remortgaging to a fixed rate mortgage now may be a good idea.

This may give you peace of mind, knowing exactly what your upcoming costs will be for the next few years.

Consulting with a professional mortgage broker will ensure that you get sufficient advice and guidance on which mortgage options are best for you and whether you should remortgage now or let your current contract run out.

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FAQs

What is the Reason for Raising Interest Rates?

Inflation is the reason interest rates rise. The higher the inflation rates are, the more likely interest rates will increase.

Lenders will require higher interest rates to compensate for the reduced purchasing power of money that they’re paid in the future.

How Does The Bank of England Increase Interest Rates?

The Bank’s Monetary Policy Committee determines whether to raise, reduce, or keep current the interest rate.

The committee consists of 9 members who meet 8 times yearly to discuss the current interest rate and decide what to do with it.

The minutes of these meetings are always published and made public.

Who Benefits from Inflation?

Inflation can benefit both borrowers and lenders.

Regarding lenders, inflation creates a demand for increased credit, which comes with increased interest.

For borrowers, inflation enables them to pay back money worth less than when they originally accessed the money, which is beneficial.

Which Debts Should I Pay Off First During Inflation?

While all debts should be paid off according to your agreement in place with the lender, when inflation rises, it’s recommended to pay off variable-rate loans as quickly as possible as these generally have a higher interest rate.

What Are the Main Benefits of a Fixed-Rate Mortgage?

With a fixed-rate mortgage, you’ll have peace of mind knowing just how much you’ll be expected to pay towards your instalments each month.

Fixed-rate mortgages allow first-time buyers to budget for a fixed period, making buying a first property less daunting.

Also, with a fixed-rate mortgage, you’re protected from possible interest rate hikes.

What Should I Do If I Can’t Afford My Mortgage Increase?

If increases in interest rates mean that you can no longer afford your mortgage payments, you’ll need to advise your lender as soon as possible.

You can extend your mortgage’s terms or even take a payment holiday to get a bit of a breather.

You will find that your lender will work with you to devise a solution.

How Do I Calculate How Much My Mortgage Will Increase?

If you’d like to know what your mortgage will cost you with an upcoming increase, there are several online mortgage calculators that you can use.

These typically allow users to adjust the settings and parameters to calculate mortgage payments based on certain factors.

Alternatively, consulting with a professional mortgage advisor can be helpful.

Such professionals will help you understand the ins and outs of mortgages available to you and will ensure that you have a good idea of what to expect in terms of monthly mortgage instalments.

Mortgage advisors can also ensure that your application is properly prepared to help you avoid potential disappointment.

Call us today on 01925 906 210 or contact us to speak to one of our friendly advisors.

According to the Office for National Statistics, out of 19 million families in the UK in 2022, 2.9 million of them are single parent families.

That means 2.9 million single parents are faced with deciding on living arrangements based on one salary.

As a single parent faced with growing bills and living expenses and just one salary to live on, you may think it’s impossible to get a mortgage, but this is not always the case.

With the right advice and guidance, you can apply for a mortgage and will likely get approval if you meet the lender’s requirements.

While being a single parent is challenging, it shouldn’t deter you from living a full life, complete with the home you want your children to grow up in.

One thing to be aware of is that affordability assessments apply to single parent mortgages, and without the right approach or knowing which mortgage companies to approach; it may prove challenging to meet the requirements of these checks.

Every lender has its own unique requirements, which means that some are more lenient on certain types of lenders and their requirements.

With the help of a mortgage advisor, you can find out who to approach and how to prepare your application for the best possible outcome.

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Passing Single Parent Affordability Assessments

Meeting the lender’s requirements is vitally important when applying for a mortgage as a single parent.

Single parents typically are on the back foot when it comes to affordability as they’re on a low income, have higher expenses than couples, or work part-time.

Mortgage lenders limit how much they provide, regardless of whether the application is for a single person or a joint application.

This is usually between three and five times the applicant’s annual income.

However, some lenders will reduce the amount they allow depending on how many children the applicant has.

Of course, this isn’t discriminatory but based on the expected higher outgoings of a single parent with many children. Affordability is at the heart of every approved mortgage.

That said, there is no guarantee of how a mortgage provider will respond to an application.

Some single parents who manage to keep their monthly outgoings very low may be able to apply for a higher mortgage amount than a single parent with the same number of children but a higher monthly outgoing.

An overview of your financial situation will be carried out to determine your debt-to-income ratio, which will indicate whether you can afford the mortgage you’re applying for.

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Can I Use Tax Credits or Child Benefits as Income Towards Single Parent Mortgage Applications?

If you’re a single parent, you may be on some kind of benefits and wonder if you can use these towards proving your income for your mortgage application.

Many single parents assume that benefits can’t count towards income, but they can.

In fact, adding proof of benefits and additional income can bolster your application.

Single parents can use the following as part of their proof of income:

• Tax credits
• Maintenance contributions from an ex-partner
• Child benefit payments
• Full time or part-time work income
• Universal credit

As all lenders have unique terms and restrictions, some may have “rules” on how child benefits can be used towards income.

As an example, some mortgage providers won’t allow you to use your child benefits as a form of income if you earn more than £50,000 or if your children are older than 13.

In some instances, some mortgage lenders won’t accept universal credit or tax credits as a suitable form of income.

Mortgage providers will take your income, additional income sources, credit history, and outgoings into consideration before determining if you’re a suitable candidate for a mortgage and just how much you’re eligible for if you’re approved.

Which Mortgage Types are Best Suited to Single Parents in the UK?

Of course, no mortgage provider offers a mortgage specifically for single parents.

But there are several types of mortgages that may be best suited to single parents. Some of these include:

• Shared ownership schemes – If you don’t have enough deposit to get a mortgage to cover the full cost of a home, you may reduce your spend with a shared ownership scheme. This is a type of mortgage based on a part buy, part rent basis offered by the government. Eligible applicants can buy 25% to 75% of the home from a local council or housing association.
• Guarantor loans – If a friend or close family member is willing to sign as a guarantor on your mortgage, lenders may provide a better interest rate or provide a higher mortgage amount. The risk is lessened for you, but the guarantor takes on higher risk.
• Family springboard mortgages – These mortgages generally require the applicant to pay a 0% deposit but require savings held in a savings account for five years that are at least 10% of the property’s value. After five years, the savings are returned to your family members with interest.
• Gifted deposit mortgages – Some lenders will accept a deposit that doesn’t come from your own savings if you can prove that you were gifted the money from a family member and aren’t required to repay the amount.

While these are all great options for single parents, there are many other types of mortgages available that may suit your situation better.

Chatting with a qualified mortgage advisor may help you determine which mortgage type is best suited to you.

Check Today's Best Rates >

Complexities of Applying for Single Parent Mortgages

Applying for a single parent mortgage can be complicated, especially when it comes to providing affordability.

Approaching mortgage providers individually can result in wasted time, multiple rejections, and a tarnished credit score.

To avoid approaching lenders that can’t help you in your specific scenario, it’s best to chat with a mortgage advisor.

A professional mortgage advisor can help you prepare your application and ensure you only approach mortgage providers likely to consider your application seriously.

Call us today on 01925 906 210 or contact us to speak to one of our friendly advisors.

According to the Office for National Statistics, out of 19 million families in the UK in 2022, 2.9 million of them are single parent families.

That means 2.9 million single parents are faced with deciding on living arrangements based on one salary.

As a single parent faced with growing bills and living expenses and just one salary to live on, you may think it’s impossible to get a mortgage, but this is not always the case.

With the right advice and guidance, you can apply for a mortgage and will likely get approval if you meet the lender’s requirements.

While being a single parent is challenging, it shouldn’t deter you from living a full life, complete with the home you want your children to grow up in.

One thing to be aware of is that affordability assessments apply to single parent mortgages, and without the right approach or knowing which mortgage companies to approach; it may prove challenging to meet the requirements of these checks.

Every lender has its own unique requirements, which means that some are more lenient on certain types of lenders and their requirements.

With the help of a mortgage advisor, you can find out who to approach and how to prepare your application for the best possible outcome.

Check Today's Best Rates >

Passing Single Parent Affordability Assessments

Meeting the lender’s requirements is vitally important when applying for a mortgage as a single parent.

Single parents typically are on the back foot when it comes to affordability as they’re on a low income, have higher expenses than couples, or work part-time.

Mortgage lenders limit how much they provide, regardless of whether the application is for a single person or a joint application.

This is usually between three and five times the applicant’s annual income.

However, some lenders will reduce the amount they allow depending on how many children the applicant has.

Of course, this isn’t discriminatory but based on the expected higher outgoings of a single parent with many children. Affordability is at the heart of every approved mortgage.

That said, there is no guarantee of how a mortgage provider will respond to an application.

Some single parents who manage to keep their monthly outgoings very low may be able to apply for a higher mortgage amount than a single parent with the same number of children but a higher monthly outgoing.

An overview of your financial situation will be carried out to determine your debt-to-income ratio, which will indicate whether you can afford the mortgage you’re applying for.

Check Today's Best Rates >

Can I Use Tax Credits or Child Benefits as Income Towards Single Parent Mortgage Applications?

If you’re a single parent, you may be on some kind of benefits and wonder if you can use these towards proving your income for your mortgage application.

Many single parents assume that benefits can’t count towards income, but they can.

In fact, adding proof of benefits and additional income can bolster your application.

Single parents can use the following as part of their proof of income:

• Tax credits
• Maintenance contributions from an ex-partner
• Child benefit payments
• Full time or part-time work income
• Universal credit

As all lenders have unique terms and restrictions, some may have “rules” on how child benefits can be used towards income.

As an example, some mortgage providers won’t allow you to use your child benefits as a form of income if you earn more than £50,000 or if your children are older than 13.

In some instances, some mortgage lenders won’t accept universal credit or tax credits as a suitable form of income.

Mortgage providers will take your income, additional income sources, credit history, and outgoings into consideration before determining if you’re a suitable candidate for a mortgage and just how much you’re eligible for if you’re approved.

Which Mortgage Types are Best Suited to Single Parents in the UK?

Of course, no mortgage provider offers a mortgage specifically for single parents.

But there are several types of mortgages that may be best suited to single parents. Some of these include:

• Shared ownership schemes – If you don’t have enough deposit to get a mortgage to cover the full cost of a home, you may reduce your spend with a shared ownership scheme. This is a type of mortgage based on a part buy, part rent basis offered by the government. Eligible applicants can buy 25% to 75% of the home from a local council or housing association.
• Guarantor loans – If a friend or close family member is willing to sign as a guarantor on your mortgage, lenders may provide a better interest rate or provide a higher mortgage amount. The risk is lessened for you, but the guarantor takes on higher risk.
• Family springboard mortgages – These mortgages generally require the applicant to pay a 0% deposit but require savings held in a savings account for five years that are at least 10% of the property’s value. After five years, the savings are returned to your family members with interest.
• Gifted deposit mortgages – Some lenders will accept a deposit that doesn’t come from your own savings if you can prove that you were gifted the money from a family member and aren’t required to repay the amount.

While these are all great options for single parents, there are many other types of mortgages available that may suit your situation better.

Chatting with a qualified mortgage advisor may help you determine which mortgage type is best suited to you.

Check Today's Best Rates >

Complexities of Applying for Single Parent Mortgages

Applying for a single parent mortgage can be complicated, especially when it comes to providing affordability.

Approaching mortgage providers individually can result in wasted time, multiple rejections, and a tarnished credit score.

To avoid approaching lenders that can’t help you in your specific scenario, it’s best to chat with a mortgage advisor.

A professional mortgage advisor can help you prepare your application and ensure you only approach mortgage providers likely to consider your application seriously.

Call us today on 01925 906 210 or contact us to speak to one of our friendly advisors.

For some, buying a home that once belonged to a serial killer is thrilling, but for obvious reasons, it’s not the ideal situation for others.

While the UK is a safe place to live, there’s no denying that we’ve had our fair share of horrific serial killers.

Jack the Ripper, Myra Hindley, and Peter Sutcliffe make for great stories unless you live next door to them at least!

The chances of knowing that you’re living next door to a serial killer are slim. It’s not like serial killers are out there, proudly boasting about their kills or plans to kill.

In fact, most people only find out there’s been a serial killer living next door or nearby when they’re caught.

That said, you may be interested to see what real estate costs in the areas where the world’s most notorious serial killers reside.

You can use Map Fact’s Serial Killers of the World map to see where well-known serial killers have lived in the United Kingdom.

If nothing else, it makes for an interesting, and somewhat chilling, visual display!

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Have Serial Killer’s Homes Been Put Up for Sale in the UK?

Yes, in fact, they have.

In 2013, Dennis Nilsen’s flat, located in Muswell Hill, North London, was put up for auction with a £100,000 discount due to the property’s history.

Nilsen is said to have murdered at least 12 men and boys.

According to the Daily Mail, Nilsen’s home was sold for £1.48 million in 2023 and is in the process of being converted into a 6-bedroom family home.

While not quite the same, one murder house at 8 Sunnybank, Helmshore, Lancashire, sold quite quickly. This is where a mother of two, Sadie Hartley, was murdered.

The house is said to have sold after news of the murder meant £50,000 was knocked off the sale price in 2016.

Also, if you live near 22 Somerset Road in Droylesden, you might find it interesting that it’s the former home of the notorious police killer Dale Cregan.

After Cregan was charged and imprisoned, the two-bedroom property was put up for auction with a guide price of £40,000 but sold for more at £71,000.

The funds from the sale were dedicated to funding police work.

In some cases, the homes of serial killers have been destroyed. Take 25 Cromwell Street in Gloucester, for example.

This was the residence of Fred and Rose West who murdered several young women and buried them in the garden and cellar prior to February 1994.

The property was acquired by the council in 1996 and instead of being put up for sale, it was razed to the ground.

Are UK Estate Agents Required to Disclose Murders at a Property to Buyers?

It might be quite the anti-climax to find the house of your dreams, sign and seal the deal, and finally move in, only to discover that 17 people were previously found buried in the garden!

When shopping around for a home to buy in the UK, you may wonder if estate agencies are legally required to inform you of any murders that happened at the property or if a serial killer lived at the property you’re interested in purchasing.

The good news is that you most likely won’t be caught off guard by moving into a home that’s previously been a murder crime scene.

Under consumer protection regulations, estate agents are duty-bound to inform buyers of any information that might affect their final decision.

And, of course, murders would fall into that category.

How Are Sale Prices of Homes Affected by Murders at the Property?

According to an article by Vice, a property that’s served as a crime scene can expect to experience a drop in sale value.

This drop is usually around 15 to 20%. In most instances, murder houses do sell, but they may take longer.

They may be snatched up by people who like to collect murder homes, but more likely by people looking to snag a deal and save on the cost of real estate.

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Can I Get a Discount on a Property That Was a Murder Scene or Home to a Serial Killer?

Here’s the reality; you can ask for a discount on any property, even those that don’t have a dark past.

But…there’s no guarantee that you’ll get a discount. The point is that it comes down to the property owner and what their lowest price is.

In some instances, if the home was a crime scene, the owner may not actually be the suspect, and they may want to offload the property at a lower-than-market-average price.

In such instances, you have a higher chance of negotiating a lower price on the property.

The best piece of advice here is that it doesn’t hurt to ask!

Getting the Best Price on a Property, Regardless of its Background

Of course, when looking into the various properties available for purchase, your focus should be on affordability and how suitable the property is to your needs, especially if you’re planning to take personal residence.

To avoid possible time-wasting and to ensure that you get the best possible rate, getting an agreement in principle might be a good step.

This will give you an idea of how much you’re likely to be granted in funding when approaching mortgage providers.

A professional mortgage advisor can assist you with the process and help you to better understand what you can afford and how to go about getting the best possible price on a property.

Call us today on 01925 906 210 or contact us to speak to one of our friendly advisors.

According to Statista, in July 2023, the number of mortgage approvals in the UK sat at 49,000.

While this seems like many approvals, it doesn’t include the thousands of mortgage applications rejected yearly.

Most Brits feel a sense of relief and security when they receive an agreement in principle.

The benefits of an agreement in principle are two-fold, of course.

The first benefit is that you’ll know how much you can borrow, and the second is that sellers will know that you’re a serious buyer if you have an AIP in place.

Once you’ve got an AIP, you might think you’re 50% of the way there – you’ve got the financing. But the reality is that’s not always the case.

Some mortgages can still be declined after an AIP has been granted. If that happens to you, what’s the next step? Here’s what you need to know…

What is an Agreement in Principle?

An agreement in principle isn’t a guarantee but a provisional agreement between a borrower and lender.

Generally, it’s a basic understanding of how much you can borrow to purchase a property.

The idea of an AIP is so that the mortgage company has your details and has determined how much they can advance you if you meet the lender’s criteria.

The AIP will detail the amount and what the terms of the contract are.

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Reasons for a Declined Mortgage After Getting an Agreement in Principle

Lenders provide AIPs to borrowers they have the intention of providing funds to, but this is not a guarantee that the mortgage will be approved in the end.

The AIP is based on initial checks, but when the mortgage application is submitted once a property is found, more in-depth checks are carried out.

It’s at this point that mortgages can be declined.

A declined mortgage application after an AIP can be time-consuming and costly. You may even lose out on the property you want to invest in.

The best way to avoid a possible rejection after an AIP is to be as upfront as possible during the initial application.

Inform the mortgage provider about your credit score and history and any gaps you’ve had in your finances. It’s also important to check that you meet the lender’s criteria.

Mortgage applications after an AIP can be rejected for seemingly simple reasons.

For instance, perhaps there’s a spelling mistake on your application, or your employment/income has changed since the initial application.

It could also be because the lender discovers financial information about the applicant that wasn’t disclosed when applying for the AIP.

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Here’s a more in-depth look at the reasons for a declined mortgage after an AIP:

Change in Income

One of the lender’s main focuses is whether the applicant can afford to pay the capital debt and interest of the loan, which means that income is an important aspect.

Lenders are always cautious of fraud. If your initial application for the AIP states a certain income amount different to what they can verify during the referencing stages, the lender may reject the application.

Discrepancies in income can result in requests for further proof of earnings or re-application.

Employment Changes

Changing jobs can be seen as a risk factor for lenders, even if your new salary is higher than in the previous job.

This is because the longer you’re employed at one company, the more stable your income appears to a lender.

If you plan to change jobs after applying for an AIP, it’s best to inform the lender upfront.

Insufficient Deposit

If you made an initial AIP application and indicated that you have a certain amount available for the deposit, but your situation changes in the meantime, the lender may reject the application.

When applying for an agreement in principle, it’s a good idea to indicate only a deposit amount you’re certain you can afford.

Failing the Final Credit Check

Final credit checks are typically more thorough than preliminary checks, which means something may turn up on the credit check that indicates you no longer meet the lender’s criteria.

Lenders use a variety of bureaus to check credit, which means what you see on your credit profile may differ from what the lender sees in a final check.

This is a common problem for applicants who have an AIP. Common problems that may turn up on the final credit check include:

• You’ve applied for multiple forms of credit, resulting in numerous credit checks against your name. This can include credit cards, loans, store accounts, and similar. Lenders may view your debt-to-income ratio as unsuitable when acquiring additional credit cards, loans, and accounts.
• Poor credit management is also marked on your credit profile. Missing payments, paying late, or having gaps in your finances are viewed negatively by lenders.

Before applying for an AIP or mortgage, check your credit report with each of the leading bureaus (Experian, Equifax, and TransUnion).

Ensure the details are correct and update any bureaus that may have incorrect information.

If you do happen to fail the final credit check, it’s a good idea to improve your credit rating before applying again.

You can do this by:

1. Registering on the electoral roll.
2. Paying bills in full and on time.
3. Increasing your credit limit on your credit cards without spending more on your card.
4. Reducing the amount of credit you’ve utilised. Lenders prefer borrowers that use 50% or less of their available credit limit.

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What to Do If Your Mortgage is Declined After an Agreement in Principle

If you’ve got an AIP, but your final mortgage application is declined, you’re bound to feel panicked.

Rest assured that declined mortgages are common at this stage and don’t necessarily mean you’re out of options.

The first step is to slow down and consider your options. Applying for a new mortgage immediately may result in another rejection, which will appear on your credit report and negatively impact your creditworthiness.

One lender may have rejected your application, but that may be a case of being matched with the wrong lender.

Other lenders may still be happy to assist you, but you’ll need the advice and guidance of a mortgage advisor who can point you toward the right lender.

When using the services of a professional mortgage advisor, all you need to do is provide them with accurate information and let them handle the rest.

Your chances of being matched with the right lender are greatly increased, and you’re more likely to get an approved mortgage.

Call us today on 01925 906 210 or contact us to speak to one of our friendly advisors.

If you’re not traditionally or formally employed but still generate a decent income, you may become frustrated that you cannot apply for a mortgage without hiccups.

In the UK, a non-standard mortgage is known as a “complex income”, and this type of income is notorious for introducing hurdles when applying for any sort of credit, including a mortgage.

Of course, complex income mortgages exist, and if you know where to find them, what the eligibility criteria are, and how to apply for them, you’re on the right path to getting the mortgage you’re dreaming of.

Below, we provide an overview of complex income mortgages and everything you need to know before you make that first application.

What is Complex Income?

Speak to a freelancer, self-employed individual, or investor who earns their income through alternative means about acquiring finance, and you’ll most certainly get sighs and rolled eyes.

These individuals are often considered high-risk or find it nearly impossible to prove affordability and get loans.

It’s true; having a full-time salaried job makes it far easier to prove earnings and get a mortgage when presenting payslips. Driving your own source of income makes things trickier.

When earning a complex income, the application process for a mortgage is more challenging but possible.

You’ll need to provide additional documentation and put in a little (or a lot of) extra work to ensure your application is approved.

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Does a Complex Income Make a Mortgage Impossible?

Most freelancers, contractors, and self-employed individuals shy away from applying for finance due to the challenges presented by the application processes.

But that doesn’t mean you should let your dream home or property slip by because you assume your application won’t be processed.

It’s entirely possible to get a mortgage with a complex income. Proving your income amount is the most important part of the process.

The biggest challenge comes in when mortgage providers use automated approval systems or basic approval processes instead of granting loans on an individual basis, focused on the merit of each case.

That’s where a broker comes in. If you have a mortgage broker, they can bypass the standard and automated processes and help you acquire a mortgage, even though your non-standard income is considered “complex” or risky.

What Mortgage Providers Want to Know About Your Income

Mortgage providers will want to know two main things:

• Do you earn enough to cover the monthly instalments of your loan?
• How secure is your source of income? Will it maintain or sustain for the duration of the mortgage?

If you’re new to freelancing, for instance, how can the lender be sure that in 30 years’ time, you’ll still be freelancing and generating the correct amount to cover your mortgage payments?

With these questions in mind, proving to the lender that you can satisfy their requirements may be easier. There’s no stipulation that you must have a full-time job to apply for a mortgage.

The following income types are generally accepted by lenders, even though the processes may be more challenging:

·      Self-Employed

If you’re self-employed, lenders see this as riskier than having a salaried monthly income.

That’s because self-employment income can fluctuate. One month, you could make a very high income; the following month, you could make nothing – there are no guarantees.

The standard request from mortgage providers is to see 3 years of financials for your business.

If you don’t have 3 years of financials because your business is newer than that, there are some lenders who will accept 12 months financials or less, or will settle for a letter from your accountant, detailing the amount you generate each month for the last stipulated period.

·      Contractor

Contractors typically work on projects over a specified period. Mortgage providers will accept contractor work if you can present your contract detailing the term of the contract.

In some instances, lenders will want to ensure there is a specific amount of time left on the contract or the possibility of renewal.

·      Zero Hours Contracts and Temporary Workers

Temporary work and zero-hour contracts can pose challenges when applying for a mortgage, as it’s difficult to prove that the income you receive is and will be regular.

Applicants can provide recent payslips and bank statements to prove historical work hours.

If these show that you’re working and generating a certain amount, the lender may view the application more favourably.

·      Income from Child Maintenance

If you want to apply for a single-parent mortgage, you can use child maintenance as proof of a portion of your income.

The lender will want to see that the maintenance payments are regular and sufficient.

In most instances, the mortgage provider will want to see the court order or CMS letter stipulating the maintenance terms, but if you and your ex-partner have a private agreement, legal evidence of this will be required.

Of course, this income can only be used if the maintenance payments are expected for the foreseeable future.

You’re less likely to get approved if there’s only a year or two remaining maintenance payments.

·      Living Off Benefits

Several government benefits can be used as proof of income when applying for a mortgage.

Applying for a mortgage on benefits can be challenging, and it’s recommended that you use a mortgage advisor to help you approach the right lenders and ensure that your application is perfect before submitting it.

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·      Living Off Investment Profits

Most lenders will accept income that’s generated from a trust fund, share portfolio and other investment profits.

It won’t be possible to prove income through payslips, but you can provide bank statements, tax returns, and portfolio statements.

Mortgage providers will want to see how stable the investments are and the likelihood of sustaining these figures for the duration of the mortgage.

·      Dividend Income

If you own a company, you may choose to pay a small salary to yourself and then make up the balance of your income through dividends.

Because most people do this for the best possible tax outcomes, and it’s not a true indication of a low salary, most mortgage providers will consider dividend income as suitable income.

·      Income Earned Through Apprenticeship

Apprenticeship incomes are typically low, which means that using it as income proof may be possible, but the mortgage amount you’re offered will be low.

You can mitigate this problem by asking a family member to sign as a guarantor or by entering into a family offset mortgage.

Another viable option is to apply for a shared ownership, which means that the required income and deposit for each individual will be lower.

Additional Must-Know Details About Complex Income Mortgages

Below are a few additional snippets of information that may prove helpful if you’re considering a complex income mortgage:

• You cannot use funds earned though professional gambling or cash-in-hand jobs as proof of income.
• Most lenders will provide mortgages of up to 4 to 4.5 times your annual salary, but it’s not always guaranteed with complex incomes. The offers may be lower due to the lender’s perceived risk.
• While rare, you can get a mortgage with zero income, but you’ll need to show how you will pay for the loan. Perhaps you have a contract starting in the future or receive an allowance – chatting with a broker about your options is important in this type of scenario.
• Some lenders will accept commissions and bonuses as income, but only acknowledge a certain portion. For instance, they may only count 50% of your annual bonus towards your income.

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Complex Income Mortgages in the UK Conclusion

Speaking with a professional mortgage broker about your individual situation is the best way to ensure that you’re pointed in the right direction.

While complex income mortgages are more challenging than regular mortgages, they’re certainly possible and achievable if you go about them in the correct manner.

Call us today on 01925 906 210 or contact us to speak to one of our friendly advisors.

If you have your heart set on buying a property with a large amount of land (acreage), you’ve probably already thought about the complexities of getting a mortgage to cover the cost.

Many Brits dream of owning rural property.

Running a horse farm, setting up holiday cottages for a business, or even having your own smallholding where the entire family can live in comfort are all valid reasons for seeking out large acreage properties.

If this is your desire, know that you’re not alone. Millions of Britons invest in the same lifestyle.

According to the UK Department for Environment, Food, and Rural Affairs, as of 2020, around 12 million people in Britain live in a predominantly rural area – 21.3% of the population.

Large acreage mortgages are quite different to regular mortgages, and not all mortgage providers offer this type of product.

It becomes even more complicated if you want to use the rural land for business.

While every lender has its policies and terms in place, there are a few basics you can understand before you apply for a mortgage on a large acreage.

If you want to know how to get a large acreage mortgage or need more understanding on how to get a mortgage on a smallholding with land, consulting with a mortgage broker is always advised.

In the meantime, here’s what you need to know.

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Do Lenders Offer Mortgages on Large Acreage Properties?

In the UK, there’s a general trend towards only a few lenders offering large acreage mortgages.

When enquiring with mortgage providers, lenders may stipulate a limit to the property size they’re willing to mortgage.

Very few mortgage providers in the UK will finance properties over 10 acres.

Some will consider properties up to 10 acres, but these cases are considered on individual merit. In most instances, leading lenders will cover properties up to 3 acres.

Type of Mortgage Required When Buying Large Acreage Property

In some instances, it’s possible to purchase a property with acres of land on a regular residential mortgage.

Lenders that offer this will usually require the following:

1. The land should be held on a single legal title
2. The land cannot be affected by any planning requirements or occupancy restrictions
3. The land will not be used for business or commercial purposes

If you plan to use the land for business, say a holiday property or campsite, you’ll need to apply for a commercial mortgage, semicommercial mortgage, or B&B and guest house mortgage.

You’ll need to apply for an agricultural mortgage for commercial farming purposes.

For commercial farming purposes, you’ll need to apply for an agricultural mortgage.

What to Do if You Want to Remortgage Large Acreage Properties?

Remortgaging property is fairly common in the UK, and it’s also possible on large acreage properties.

The most important aspect to consider is if the use of the land now is different from when you got your original mortgage.

The simplest route is undoubtedly for those who purchased large acreage property with a standard residential mortgage and don’t use the land commercially.

You can process a straightforward residential remortgage with a new mortgage product.

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It’s much the same if you have a commercial mortgage and use the property for commercial purposes.

The difficulty may come if you have a residential mortgage but wish to remortgage and use the property for commercial purposes, or you have a commercial mortgage and wish to remortgage the property and use it for residential purposes only.

You’ll then need to change your entire mortgage type.

Remortgaging with a different mortgage type is trickier than standard remortgaging onto the same product type.

In such instances, the assistance of a mortgage advisor is strongly advised.

Related reading: 

• Reasons for remortgaging.
• Remortgaging to release equity.
• Remortgaging to buy another property.
• Remortgaging with bad credit.
• Remortgaging for home improvements.
• I own my house outright can I remortgage? 
• Capital raising mortgages.

Mortgage Providers in the UK Offering Large Acreage Mortgages (Including Properties Over 10 Acres)

The following lenders in the UK are known for offering mortgages on large acreage properties.

Of course, these are considered on a case-by-case basis, so it’s not guaranteed that they will mortgage your large acreage property.

·       Bluestone Mortgages

Sometimes mortgage properties up to 40 acres large.

·       Atom Mortgages

You could get a mortgage on a property up to 10 acres.

This lender will require a very detailed overview of the property, what it will be used for and if it has any restrictions.

·       Saffron Mortgages

Known to assist with mortgages up to 20 acres as long as they’re for non-commercial purposes.

·       Marsden Mortgages

For non-commercial properties up to 15 acres, this lender often provides assistance.

·       Tipton Mortgages

Known for providing mortgages on large acreage properties with no limit on property size.

·       Staffordshire Railway Building Society

In some instances, this lender provides mortgages on properties over 10 acres.

They require detailed overviews of the property and any restrictions it might have.

How to Apply for a Large Acreage Mortgage in the UK

Applying for a large acreage mortgage in the UK usually follows these simple steps:

Step 1: Consult with a Mortgage Broker

In some instances, specialist lenders are required, especially if you have planned a specific purpose for the property.

Consulting with a mortgage broker will ensure that you know what type of mortgage to apply for, whether it is a residential mortgage, agricultural mortgage, B&B mortgage or otherwise.

Applying for the wrong mortgage type can be time-consuming.

Step 2: Prepare the Application & Be Patient

Large acreage mortgage applications are very rarely swift.

If the property is intended for commercial use, it can take several months for the mortgage to go through.

Expect lenders to require a detailed business plan, our projected financials and your industry experience leading you into the business idea and subsequent application.

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Step 3: Find a Lender

Finding a lender to mortgage your large acreage property comes down to more than just the cost.

In some instances, your property may not fit the requirements set out by certain lenders, so while they offer the lowest rates, your application may be rejected based on their criteria for land mortgage applications.

The best way to avoid wasting time and ensure that you get the best rate possible for your situation is to have a professional mortgage advisor on your side.

These professionals already understand the complexities of large acreage mortgage applications and can do the legwork to ensure that you apply for the right product and get the best deal possible.

Getting a Mortgage on a Large Acreage Conclusion

Take your time to find out what type of mortgage and amount you qualify for before you start hunting for the right large acreage property for you.

This way, you avoid the possible disappointment of falling in love with a property you simply cannot get a mortgage for.

Consult with a professional mortgage advisor today!

Call us today on 01925 906 210 or contact us to speak to one of our friendly advisors.

If you’ve been renting for years and have never bought a property before, buying a house can be exciting and overwhelming.

Understanding mortgages takes a little bit of know-how, and that’s why we’ve pieced together this guide.

Average mortgage rates in the UK have seen many fluctuations over the years, and with some understanding of how they work, you can ensure you secure the best deal available to you.

Below, you’ll learn more about mortgages, how the repayments are determined, how to determine the amount you’re borrowing, and the interest rate you’ll be faced with.

When putting your first footstep onto the property ladder, the mortgage is the most important aspect to understand.

You’ll want to know what you can afford to spend – or what the bank will offer you.

Certain factors influence mortgage repayment amounts, with two factors being the most important:

• Actual amount borrowed
• Interest rate offered

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What Are the Factors that Influence Mortgage Repayment Instalments?

When you purchase a property using a mortgage, three things come into play to determine the amount you’ll pay each month in instalments.

These three things include the total amount you borrow (the cost of the house), how much interest the bank or financial institution adds to the borrowed amount (usually a percentage of the total called “interest”), and the term that’s agreed.

While you may be drawn to the seemingly cheaper monthly instalments when taking out a lengthy mortgage, keep in mind that you’ll pay the loan back over a longer time, which means you’ll end up paying more in interest over the total of the loan contract.

Interest is the tipping scale. Your property could cost you thousands less if you get a good interest rate.

You could pay thousands more if you don’t have the best credit score or can’t get a good interest rate.

There are several reasons why a mortgage provider might offer you a high-interest rate.

If they consider you a risky borrower, you don’t meet all the criteria, if the property market is under stress, or if you’ve had financial hiccups that show on your credit record – these are just a few reasons.

While you don’t have to use a mortgage broker, you may find that a professional with industry knowledge can secure you the best possible interest rate and mortgage deal.

Understanding Interest Rate Calculations

You’ve found the house, and you think you can afford it, but when you apply for the mortgage, you find that the interest rate offered pushes the monthly cost of the house way out of your budget.

Now what? It’s a good idea to understand how interest rates are calculated and how you can get the best possible offer, before you apply for any mortgages.

The interest rate you’re presented with will be determined by the product you choose and how risky the lender sees you as.

You can, of course, reduce the level of risk perceived by the mortgage provider by doing certain things, including:

1.   Increase the deposit you pay

In the UK, most mortgage providers expect you to pay a 10% deposit upfront on your buying property. This is the minimum.

You can expect to receive a better interest rate if you’re willing to pay more.

2.   Take care of old debts

If you’ve got a credit card you haven’t paid, a store account you’ve forgotten about with instalments racking up, or any bad credit, get it sorted out as soon as possible, so it can be cleared from your credit record.

If your credit history shows you’ve been responsible enough to sort out outstanding debts and correct the wrongs, your interest rate may be better.

3.   Understand the risk factors

Unfortunately, sometimes, it’s not easy to avoid a higher interest rate.

For instance, if you’re self-employed or have a complex income or contract and don’t have proof of income in payslips or an employment letter – the lender may see you as a risk, which will reflect in the interest rate.

Sometimes, there’s a way around this, such as having a co-signatory, but it can’t be avoided in other instances.

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4.   Get a professional mortgage broker on your side

Using a professional mortgage broker takes the guesswork out of getting a good mortgage deal.

They know the different mortgage packages, understand how to negotiate the best interest rates, and can assist you with finding the right product for your financial situation.

The Type of Mortgage You Choose Will Impact the Overall Cost

The following types of mortgages are available, each with their own impact on interest rates.

·      Variable Rate Mortgages

Variable-rate mortgages come with interest rates that fluctuate throughout the contract term.

·      Fixed Rate Mortgages

These mortgages feature an interest rate that doesn’t fluctuate for a specific period. It could be 5 years or 10 years, depending on the lender.

For many, there’s security in knowing exactly how much the monthly instalments will be, but this can result in an interest rate higher than the variable because you’re paying for that peace of mind.

·       Tracker Rate Mortgages

Tracker rate mortgages are a version of variable rate mortgages. The interest rate is linked, in most instances, to the Bank of England’s base rate.

·       Interest-Only Mortgages

For many, these mortgages are the most attractive because the monthly instalments are the lowest. The low instalment is due to only paying the interest amount each month.

You can pay more towards the capital amount – that’s your choice.

Once the term of the mortgage comes to an end, the capital amount must be paid off.

The mortgage agreement will stipulate how this is to be done.

·       Part-and-Part Mortgages

This type of mortgage involves paying a portion into the capital debt and a portion into the interest over the term of the contract.

Examples of Mortgage Costs

Using a mortgage broker’s mortgage calculator or asking for assistance in running calculations is a step in the right direction when trying to calculate mortgage costs.

Some examples below are based on mortgage interest rates.

1% Mortgage Rate

On a property of £100,000, you can expect to pay £598,49 per month over 15 years, £459,89 per month over 20 years, £376,87 per month over 25 years, and £321,64 per month over 30 years.

3% Mortgage Rate

On a property of £100,000, you can expect to pay £690,58 per month over 15 years, £554, 60 per month over 20 years, £474,21 per month over 25 years, or £421,60 over 30 years.

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Consult with a Mortgage Broker

Of course, the above estimations are just estimates. Several factors will play into the final interest rate and instalment amount on your mortgage.

For more personalised advice and guidance when seeking out a mortgage deal, consult with a professional mortgage broker today.

Call us today on 01925 906 210 or contact us to speak to one of our friendly advisors.

While mortgage protection insurance isn’t compulsory in the UK, it’s certainly worth some consideration, especially if you don’t have hefty savings that will cover your mortgage instalments if you find yourself out of work for a while.

In such instances, you’ll face a financial burden and the added stress of being unable to afford your accommodation.

According to the House of Commons Library, employment levels fell by 207,000, with the unemployment rate now at 4.3%.

This indicates that 1.46 million people in the UK, 16 years and older, are unemployed.

For some, a gap in employment is unavoidable, and there’s no knowing if that unavoidable situation may be yours anytime in the future.

Death, disability, and sickness are all very uncomfortable and unfortunate scenarios that may present financial hurdles that affect mortgage repayments.

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For many, there are strong arguments to avoid mortgage protection insurance.

For instance, some people investing in a property may already be financially strained and consider insurance a non-essential additional expense.

Others may feel that job loss, death, or similar will never be an issue they’ll have to face.

While these may seem like viable reasons to avoid insurance when everything is running smoothly, no one can genuinely be sure when or if emergencies and financial downturns might strike.

Ensuring that you have a plan in place for emergencies or unforeseen circumstances is important when investing in property.

If you face unemployment or financial hiccups, you may be forced to sell the property or other assets to cover costs. Having mortgage protection insurance in place can provide peace of mind.

Important Things You Need to Know About Mortgage Protection Insurance

There are a few things you need to know about mortgage protection insurance in the UK before you start looking for the right policy.

The mortgage protection insurance policy will stipulate all the terms of your agreement.

In most instances, the policy will only kick in if you’re out of work or unable to pay for a certain time, usually 30 to 60 days.

This is the exclusion period, which means that the policy must be at least 30 to 60 days old before you can process any claims.

If this is the case, your insurance will pay a certain amount each month.

In some instances, when cover is included for additional bills, the insurance provider will pay out 125% of the mortgage instalment.

Most policies will have a cap on the time it pays out. For instance, some providers will pay for 12 months and others for 24 months.

Mortgage protection insurance protects your mortgage payments, which means the money is paid directly to you, not your lender.

Types of Mortgage Protection Insurance Available to UK Property Buyers

There are several types of mortgage protection insurance products for homeowners to choose from. Some of these include:

1. Critical Illness Insurance

If you happen to fall ill or become disabled, a lump sum can be paid out.

No tax can be charged on this type of insurance payout and can be used to help cover the costs of daily living, medical expenses, and so on.

Each insurance provider specifies critical health conditions covered, affecting your payout after diagnosis.

Common illnesses in critical illness insurance include stroke, organ transplants, and heart attacks.

2. Income and Redundancy Insurance

When becoming ill, injured, or losing your job, the last thing you want to worry about is losing your home too!

And that’s where income and redundancy insurance comes in.

This type of insurance is useful if you lose your job, can’t work due to injury/illness, or become temporarily unable to work due to an accident.

The insurance will kick in and help you cover bills, including outstanding loans and mortgage instalments. Income and redundancy insurance will cover lost income until you get back on your feet.

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3. Mortgage Life Insurance

If you have a partner, children, or family members who you want to spare from the cost of your mortgage if you pass away, having mortgage life insurance is a good option.

The lump sum provided will usually cover the outstanding amount of the mortgage.

In some instances, depending on how you set the policy up, extra funds may also be provided to help with additional expenses the family might face.

Related reading: 

• Reasons for remortgaging.
• Remortgaging to release equity.
• Remortgaging to buy another property.
• Remortgaging with bad credit.
• Remortgaging for home improvements.
• I own my house outright can I remortgage? 
• Capital raising mortgages.

Factors Affecting the Cost of Mortgage Protection Insurance

Several factors affect the final cost of mortgage protection insurance each month.

These include:

• Current age
• Salary
• Job
• Mortgage instalment amounts

An individual, who works in an office job, is less likely to become injured due to work.

Therefore, the cost of their insurance may be less than someone who climbs buildings or trees for their work.

You could also pay more if you want special conditions such as a reduced waiting period or additional scenarios that may stop you from working.

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How Do I Find the Right Mortgage Protection Insurance for Me?

Setting mortgage protection insurance in place is important for safeguarding you and your family from financial distress in the future.

While it’s not compulsory, it is considered a responsible financial step.

Finding the right mortgage protection insurance will take a bit of planning and forethought.

If you don’t have mortgage experience or aren’t familiar with mortgage protection products, it’s in your best interests to consult with a mortgage advisor.

When approaching a mortgage advisor, have your current mortgage amount available along with your personal particulars.

Call us today on 01925 906 210 or contact us to speak to one of our friendly advisors.