Category: Mortgages

According to the Office for National Statistics, in 2019, 33% of the total UK workforce (around 10.6 million people) worked in key worker positions.

That’s a large portion of the population that may want or need to buy housing.

Key workers are notoriously paid less than their worth, and if you’re a key worker, you may experience this too.

If you work in the UK as a paramedic, doctor, nurse, care worker, social worker, educator, public serviceman, police, or crime agency staff member, you’re considered a key worker.

While your responsibilities are sure to be tough, there are several perks to being a key worker in the UK, with various housing schemes being one of them.

You may think that a key worker housing scheme makes homeownership easier, and it does.

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But you still have your work cut out to ensure that you find the right key worker housing scheme option for you and figure out which mortgage lenders will likely approve your application in conjunction with the housing scheme.

Below, we look at the various ins and outs of key working housing schemes and what you can expect.

Understanding how these schemes work and how you can get a mortgage through one of these schemes will help you invest in a property with confidence.

Are You Eligible for the UK Key Worker Housing Scheme?

One of the first things you need to consider is if you’re eligible for the key worker housing schemes that are available.

Not everyone is eligible for the key worker housing scheme just because they’re key workers.

You’ll need to meet certain eligibility criteria to qualify.

The requirements to qualify include:

• Your annual income must be £60,000 or less.
• You must be permanently employed and have proof thereof.
• Your retirement cannot be less than 5 years in the future.
• At least 5% deposit is required, and you’ll need to prove that you have this amount or how you will raise the amount.
• Proof showing that an affordable home cannot be bought at an affordable rate without financial aid within a reasonable travelling distance to work must be given.
• Citizens of the UK, applicants with indefinite leave to remain, or EU/EEA citizenship is preferred. That said, applicants without indefinite leave to remain can qualify in certain situations.
• Certain housing schemes only support first-time buyers, but this is not always the case.
• To apply, you will need a valid form of ID.

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What UK Key Worker Housing Schemes are Available in 2023?

Several housing schemes are available to key workers in the UK; some are open to other individuals, too, not only key workers.

The best way forward is to have a good understanding of the mortgages and schemes available, as certain ones may not specifically be advertised for key workers, but are ideal for such individuals.

1. Right to Buy

If you live in a council house or have social housing in the UK, you may be able to purchase the property at a large discount if you’ve lived in it for 3 or more years.

The longer you’ve lived in the home, the bigger your discount will be.

This scheme aims to build a new low-cost home for every home bought.

Not all homes have this option, but it’s worth investigating.

2. Shared Ownership

You can consider shared ownership if you can’t afford a mortgage on 100% of the property.

With a shared ownership scheme, you can buy a portion of the home between 25% and 75%.

You’ll then pay rent towards the balance of the property value.

Through stair casing, you could buy a higher home value later on.

It’s common for these properties to come with a 99-year lease, but this is not always the case.

Related mortgages guides: 

• What to do if your mortgage expires.
• Disadvantages of paying your mortgage off.
• Best mortgage brokers in the UK.
• Should you pay off your mortgage early?
• 50-year mortgages UK.

3. Help to Buy Equity Loans

To qualify for Help to Buy equity loans, you’ll need to be a first-time buyer and have a 5% deposit available.

This scheme is ideal if you want a mortgage but don’t have a lump sum to use as a deposit.

The government loan provided covers the rest of the deposit amount.

For 5 years, you won’t pay interest on the government portion of the loan.

You won’t have to make your first payment on that portion of your finance for the first 5 years of your mortgage.

4. 95% Mortgages

This government-backed guarantee mortgage allows buyers to purchase a home with only a 5% deposit.

5. First Homes Scheme for Key Workers

The First Homes scheme for key workers was introduced in 2021.

Most key workers in this scheme can buy a home at 30% less than its market value.

The next buyer of the home will also get the same discount.

This scheme is in place to help the community benefit from buying homes below market value.

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.

Can Key Workers with Bad Credit Qualify for Housing Schemes in the UK?

While it’s not impossible to get a mortgage or qualify for a key worker housing scheme, having a poor credit history may make it difficult to qualify for a scheme.

Before applying for a housing scheme or mortgage deal, take the time to check your credit score.

If your credit score is poor, you can do a few things to increase it, such as paying down debt, paying accounts on time, and ensuring that your information with the various credit bureaus is correct.

How to Get Onto a UK Key Worker Housing Scheme

If you want to get onto a housing scheme, you’ll need to search your local council for relevant schemes.

You can also consult with a property expert or mortgage broker, who can advise you of the relevant schemes you qualify for in your area.

Check Today's Best Rates >

Key Worker Housing Scheme Conclusion

If you’re a key worker in the UK and want to cut back on the costs of buying property or need a bit of financial relief so that you can buy a home comfortably, take the time to investigate the various housing schemes in your area.

Consult with a mortgage expert on the options available, too.

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

According to the Financial Conduct Authority in the UK, the total value of new approved mortgages in the first quarter of 2023 was 16.1% lower than in the previous quarter, and a whopping 40.7% lower than the previous year.

Since 2020, the value of UK mortgages is the lowest it’s ever been, in 2023.

This indicates that fewer people are applying for, and getting approved for mortgages, potentially due to inaffordability.

One must wonder what the market would look like if more options were available for blue light and key workers, who generally struggle to get full financing for a property.

Blue light workers in the UK are typically NHS, social care, armed forces, rescue services, and emergency services staff members and as such a worker, you may qualify for various blue light benefits.

The Blue Light Card Scheme is one program and while there’s no such thing as blue light card mortgages, your card can get you various discounts on estate agency and letting management fees with certain companies.

If you’re in possession of a Blue Light Worker card, you’re already a key worker and can take advantage of several housing schemes and mortgages that may suit your needs and situation (not specifically aimed at blue light workers).

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Mortgages Ideal for Blue Light Workers in the UK

While not all of these mortgages and housing schemes are designed specifically for blue light workers, they can provide various benefits for people working in blue light jobs.

As an NHS or blue light worker, you can effectively apply for the following mortgage types:

• Buy to let mortgages
• Residential mortgages
• Joint mortgages
• Mortgage schemes (Help to Buy and Shared Ownership, for example)

Do Blue Light Workers Get Mortgage Discounts?

While discounted mortgage deals for blue light workers aren’t widely advertised, they exist.

Some lenders – not all – provide discounted mortgages, lower fees, and reduced deposits for individuals working in the care field.

Working with a mortgage advisor is recommended to ensure that you know what discounts are available and can take advantage of them.

Blue light workers who may consider applying for discounted mortgages or special offers include the likes of surgeons, dentists, ambulance workers, police, mental healthcare workers, blood transfusion services, and various other trusts and NHS workers.

How to Qualify for Blue Light Mortgages

You’ll have to meet the same requirements as other applicants applying for discounted mortgage types or mortgages with additional perks.

To qualify, lenders may ask to look at your:

• Blue light career contracted hours
• Credit score
• Annual income (payslips and bank statements)
• The expected length of your contract (for contractors)
• What your blue light worker role is

Some lenders work differently from others and focus on assisting blue light workers.

It’s a good idea to find out which lenders are more likely to help a blue light worker, as each lender has a different scoring system for qualifying applicants.

Again, a mortgage advisor may be best suited to check which lenders you will most likely get a positive outcome from.

How Much Can I Borrow as a Blue Light Worker?

There’s no hard and fast rule about how much a blue light worker can borrow, as each person’s financial situation is unique.

That said, the general rule of thumb is that lenders provide between 3 and 5 times an applicant’s annual income.

You’ll need to undergo a standard affordability assessment to confirm that you can afford the expected monthly instalments without plunging your budget into distress.

Of course, it’s not just your pay band that determines how much you can borrow.

Your credit score and history will play a role too.

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.

How Long Must I Be a Blue Light Worker to Apply for a Mortgage?

You don’t have to have worked in the care industry for years to qualify for a mortgage.

In fact, you can possibly get a mortgage even if you’ve just started working in care.

The mortgage lender you apply with will examine your contract, proof of employment, or payslips/income.

The terms of your employment in an official appointment letter can be a suitable basis for applying for your mortgage.

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What is the NHS Key Worker Mortgage Scheme?

Many blue light workers remember a previously available housing scheme and assume they can still apply.

The NHS key worker scheme was a government initiative set in place to help NHS, and other care staff get a mortgage.

This scheme is no longer available, but you can consider several alternative mortgage options that offer low-interest rates and reduced deposits.

The NHS key worker scheme was disbanded in 2019.

Alternative Schemes for Blue Light Workers Interested in a Mortgage

Below are some alternatives to the NHS key worker mortgage scheme:

Help to Buy Mortgages

The Help to Buy scheme perfectly suits individuals who need help to raise a large deposit to buy a home.

If you qualify for this scheme, you can get a mortgage with just a 5% deposit.

The government will top up your deposit by adding 20%, bringing it up to 25%.

Shared Ownership Mortgages

Shared ownership mortgages are a good option for blue light workers who can’t afford a mortgage for the full value of the home they wish to buy.

With a shared ownership mortgage, you can buy a portion of the property and then pay rent at a reduced rate on the balance outstanding.

When buying a portion of the property, you can expect to be able to buy between 25% and 75% of the property.

You can later buy a larger share of the property if you wish to.

The perks of a shared ownership mortgage are that the deposit and monthly instalments are typically lower than on a mortgage for the property’s full value.

Related mortgages guides: 

• What to do if your mortgage expires.
• Disadvantages of paying your mortgage off.
• Best mortgage brokers in the UK.
• Should you pay off your mortgage early?
• 50-year mortgages UK.

Right to Buy

If you’re a blue light worker who rents a council house or a housing association residence, you may find that the Right to Buy scheme can help you purchase the property you’re already in.

You’ll be able to buy the property at a discounted rate, ensuring that you’re not out of pocket.

Check Today's Best Rates >

Blue Light Worker Mortgages Conclusion

Consulting with a mortgage advisor is the best way to ensure that you’re aware of the various blue light worker mortgages or options that are suited to individuals in your situation.

With the help of an expert, you can find out which schemes and mortgage types you’re likely to qualify for, and can get help with the process of setting everything in place.

Call us today on 03330 906 030 or contact us to speak to one of our friendly advisors.

According to Statista, the distribution of mortgages in the UK in 2022 shows that only 4.1% of properties bought with a mortgage are owned by people 65 years of age and older.

The same statistics show the following:

•  61.7% of homeowners 65+ bought the property outright
• In the age group of 25 to 34, only 1.5% bought the property outright while 22.5% bought property with a mortgage

This certainly shows that in the younger age brackets, the ability to afford to pay off an entire mortgage immediately is less likely.

It might seem like a brilliant idea to pay your UK mortgage early.

After all, you won’t be forking out cash every month.

But the question begs to be answered; is it a good idea to pay your mortgage early?

Below is everything you need to know to make a more informed decision.

Advantages of Paying Off Your UK Mortgage Early

Let’s first get to the good stuff.

If you can pay off your mortgage early, you might have come into an inheritance, earned a decent wage that’s allowed you to save, or made a lump sum through investment.

Regardless of the ‘how,’ you can now settle the outstanding amount on your home loan.

Check Today's Best Rates >

What are the advantages? We’ll tell you:

1. Get Out of Excess Interest

Along with the amount you borrow to pay for your UK home, you’ll have interest to pay. In most instances, the interest amount is sizeable.

Regardless of the type of mortgage you opt for, the longer the repayment terms are, the more interest you’ll pay.

Paying your mortgage off earlier than anticipated will reduce your interest costs by thousands of pounds.

However, remember that some mortgage companies in the UK penalise homeowners for paying off their mortgage early due to the interest (income) they will lose.

2. Living Without Debt

Most people’s UK home loan or mortgage is their biggest debt.

It’s likely your biggest monthly instalments and comes with the heaviest consequences if you miss payments throughout the year.

Clearing your mortgage could mean you have more cash to spend on other expenses.

The money you save on your mortgage could buy you that holiday you’ve always dreamt of, or help you refurnish your home.

3. You’ll Have a Genuine Place to Call Home

Once your mortgage is settled, the property is officially yours to do with whatever you want.

The terms restricting whether you can rent, sell, or give the property away all fall away, and you’ll have a place to call home – genuinely.

Disadvantages of Paying Off Your UK Home Loan Early

Paying your UK mortgage off early comes with definite benefits, but what are the downsides?

How to handle all financial situations comes down to an individual’s circumstances.

Financial decisions have advantages and disadvantages, so it requires a bit of forethought before deciding what to do.

With that in mind, here are the common drawbacks of paying off your mortgage early.

Related mortgage guides: 

• What to do if your mortgage expires.
• Disadvantages of paying your mortgage off.
• Best mortgage brokers in the UK.
• Should you pay off your mortgage early?
• 50-year mortgages UK.

1. Sneaky Early Settlement Penalties

Not everyone will have the opportunity to settle their UK mortgage early, so the idea of early settlement fees probably doesn’t come up.

These fees may be called ERC (early repayment charges) or “exit fees” on your mortgage contract.

When granting your mortgage, the lender carefully calculates their portion of income on the deal through the many months of interest charges that span the length of your loan contract.

When you cut the deal early and settle, they’ll lose out on all those months of income.

Naturally, everyone has bills to pay and wants their piece of the pie, so they mitigate the loss by imposing penalties on those who try to pay off their UK home mortgage early.

Check Today's Best Rates >

2. Losing Out on Tax and Interest Benefits

If your savings are currently earning interest, you should check if your interest is more than the amount you’re paying towards your home loan each month.

It may be beneficial to leave your savings in the account, accruing interest to make a profit (the difference between the interest you’re earning and what you’re paying towards your mortgage).

You could use the interest on your savings to pay your monthly mortgage instalments. Then there’s your pension to think about.

Depending on your age and pension pot, you may benefit more from contributing funds in your savings to your retirement instead of paying down your mortgage.

While it’s not always the case, there are scenarios where the tax advantage of doing so would be more beneficial.

3. Overlooking the Benefits of Prioritising Your Higher Interest Borrowing

Many people will be in multiple forms of debt, not just with their home loan.

If you compare your debt accounts carefully, you may find that you have other forms of debt with higher interest charges attached.

Car finance and credit cards typically come with higher interest rates attached.

You may find it more beneficial to pay your smaller debts off that have more significant interest rates than paying off your mortgage early.

You’ll then have extra monthly cash to pay down your mortgage.

I Want to Pay Off My UK Mortgage Early, How Can I Do That?

If you want to pay your mortgage off early, here are a few ways you can do that:

Full Lump Sum Payment of Your Mortgage

If you happen to have a sudden influx of cash and have the full mortgage amount available, remember to check with the lender what their penalties and early settlement fees are, as this will increase the amount you’ll have to pay over.

A full lump sum is often the easiest way to pay your mortgage early.

Remortgaging

This option is slightly different, as you won’t be free from your mortgage.

That said, when you remortgage your existing loan, you can negotiate better terms that could contribute to paying off your outstanding mortgage amount quickly.

Remortgaging can help you do one of two things as follows:

• Overpay your mortgage

If you choose to overpay your mortgage by 10% of the loan amount each year, in addition to your current instalments, you won’t incur fees or charges (this is only available with some mortgage providers).

This will help you settle your home loan sooner than anticipated.

• Offset your savings

Offset mortgages let homeowners host their savings accounts with their mortgage provider.

In such instances, you can offset your savings balance against the interest charged on your mortgage.

When your interest is paid faster with your savings, you’ll pay more into your loan balance each month.

Remember that remortgaging comes with fees, so you’ll need to calculate if this is the right option.

Popular articles: 

• How to buy someone out of a house UK
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Disadvantages And Advantages Of Paying Your Mortgage Off Conclusion

Whether you should pay your mortgage early in the UK will come down to your unique financial situation.

Take the time to consider your finances and do the calculations before making any big financial decisions.

It’s always recommended to consult with a mortgage broker, so you’re assured of making a decision will all the costs and terms/conditions in mind.

Call us today on 03330 906 030 or contact us to speak to one of our friendly advisors.

According to Statista, the distribution of mortgages in the UK in 2022 show that only 4.1% of properties bought with a mortgage are owned by people 65 years of age and older.

The same statistics show the following:

•  61.7% of homeowners 65+ bought the property outright
• In the age group of 25 to 34, only 1.5% bought the property outright while 22.5% bought property with a mortgage

This certainly shows that in the younger age brackets, the ability to afford to pay off an entire mortgage immediately is less likely.

It might seem like a brilliant idea to pay your UK mortgage early.

After all, you won’t be forking out cash every month.

But the question begs to be answered; is it a good idea to pay your mortgage early?

Below is everything you need to know to make a more informed decision.

Advantages of Paying Off Your UK Mortgage Early

Let’s first get to the good stuff.

If you can pay off your mortgage early, you might have come into an inheritance, earned a decent wage that’s allowed you to save, or made a lump sum through investment.

Regardless of the ‘how,’ you can now settle the outstanding amount on your home loan.

Check Today's Best Rates >

What are the advantages? We’ll tell you:

1. Get Out of Excess Interest

Along with the amount you borrow to pay for your UK home, you’ll have interest to pay. And in most instances, the interest amount is sizeable.

Regardless of the type of mortgage you opt for, the longer the repayment terms are, the more interest you’ll pay.

Paying your mortgage off earlier than anticipated will reduce your interest costs by thousands of pounds.

However, remember that some mortgage companies in the UK penalize homeowners for paying off their mortgage early due to the interest (income) they will lose.

2. Living Without Debt

Most people’s UK home loan or mortgage is their biggest debt.

It’s likely your biggest monthly instalments and comes with the heaviest consequences if you miss payments throughout the year.

Clearing your mortgage could mean you have more cash to spend on other expenses.

The money you save on your mortgage could buy you that holiday you’ve always dreamt of, or help you refurnish your home.

3. You’ll Have a Genuine Place to Call Home

Once your mortgage is settled, the property is officially yours to do with whatever you want.

The terms restricting whether you can rent, sell, or give the property away all fall away, and you’ll have a place to call home – genuinely.

Disadvantages of Paying Off Your UK Home Loan Early

Paying your UK mortgage off early comes with definite benefits, but what are the downsides?

How to handle all financial situations comes down to an individual’s circumstances.

Financial decisions have advantages and disadvantages, so it requires a bit of forethought before deciding what to do.

With that in mind, here are the common drawbacks of paying off your mortgage early.

Related mortgages guides: 

• What to do if your mortgage expires.
• Disadvantages of paying your mortgage off.
• Best mortgage brokers in the UK.
• Should you pay off your mortgage early?
• 50-year mortgages UK.

1. Sneaky Early Settlement Penalties

Not everyone will have the opportunity to settle their UK mortgage early, so the idea of early settlement fees probably doesn’t come up.

These fees may be called ERC (early repayment charges) or “exit fees” on your mortgage contract.

When granting your mortgage, the lender carefully calculates their portion of income on the deal through the many months of interest charges that span the length of your loan contract.

When you cut the deal early and settle, they’ll lose out on all those months of income.

Naturally, everyone has bills to pay and wants their piece of the pie, so they mitigate the loss by imposing penalties on those who try to pay off their UK home mortgage early.

Check Today's Best Rates >

2. Losing Out on Tax and Interest Benefits

If your savings are currently earning interest, you should check if your interest is more than the amount you’re paying towards your home loan each month.

It may be beneficial to leave your savings in the account, accruing interest to make a profit (the difference between the interest you’re earning and what you’re paying towards your mortgage).

You could use the interest on your savings to pay your monthly mortgage instalments. Then there’s your pension to think about.

Depending on your age and pension pot, you may benefit more from contributing funds in your savings to your retirement instead of paying down your mortgage.

While it’s not always the case, there are scenarios where the tax advantage of doing so would be more beneficial.

3. Overlooking the Benefits of Prioritising Your Higher Interest Borrowing

Many people will be in multiple forms of debt, not just with their home loan.

If you compare your debt accounts carefully, you may find that you have other forms of debt with higher interest charges attached.

Car finance and credit cards typically come with higher interest rates attached.

You may find it more beneficial to pay your smaller debts off that have more significant interest rates than paying off your mortgage early.

You’ll then have extra monthly cash to pay down your mortgage.

I Want to Pay Off My UK Mortgage Early, How Can I Do That?

If you want to pay your mortgage off early, here are a few ways you can do that:

Full Lump Sum Payment of Your Mortgage

If you happen to have a sudden influx of cash and have the full mortgage amount available, remember to check with the lender what their penalties and early settlement fees are, as this will increase the amount you’ll have to pay over.

A full lump sum is often the easiest way to pay your mortgage early.

Remortgaging

This option is slightly different, as you won’t be free from your mortgage.

That said, when you remortgage your existing loan, you can negotiate better terms that could contribute to paying off your outstanding mortgage amount quicker.

Remortgaging can help you do one of two things as follows:

• Overpay your mortgage

If you choose to overpay your mortgage by 10% of the loan amount each year, in addition to your current instalments, you won’t incur fees or charges (this is only available with some mortgage providers).

This will help you settle your home loan sooner than anticipated.

• Offset your savings

Offset mortgages let homeowners host their savings accounts with their mortgage provider.

In such instances, you can offset your savings balance against the interest charged on your mortgage.

When your interest is paid faster with your savings, you’ll pay more into your loan balance each month.

Remember that remortgaging comes with fees, so you’ll need to calculate if this is the right option.

Check Today's Best Rates >

Disadvantages And Advantages Of Paying Your Mortgage Off Conclusion

Whether you should pay your mortgage early in the UK will come down to your unique financial situation.

Take the time to consider your finances and do the calculations before making any big financial decisions.

It’s always recommended to consult with a mortgage broker, so you’re assured of making a decision will all the costs and terms/conditions in mind.

Call us today on 03330 906 030 or contact us to speak to one of our friendly advisors.

You love the property you’re renting, and you’ve really settled into life there, and it just seems like the natural next step to buy the property.

Can you ask your landlord if you can buy it?

Of course, you can! Keep in mind, though, that the landlord is not obligated to sell the property to you.

But, if you’re in a good financial position and can afford the property, you may find that you save on purchasing costs exponentially by approaching the landlord and striking up a deal.

Also, you won’t have to pay for removals – you’re already there!

And if you feel this way, you’re not alone! According to the Property Reporter, more than half of UK tenants want to buy the property from their landlord.

This means that your situation isn’t unique, and hundreds, if not thousands, of renters before you have successfully bought their rental properties.

Check Today's Best Rates >

Benefits of Buying the Property You’re Already Renting in the UK

Buying a property you’re already renting has some fairly specific benefits.

For starters, you won’t be competing with other potential buyers for consideration from the property owner.

There’s no need to hire an agent to process the sale, meaning you and the landlord cut costs.

If you’ve been a long-term tenant and have a relationship with the owner, you can better negotiate the selling price.

You’ll also have the pleasure of not moving to a new property.

You’re already where you need to be. Ultimately, you’re heading into a financial change, not a physical one.

Steps to Buying Your UK Rental Property

If you want to buy your rental property, there are a few things you should consider and processes to follow to get it right.

Follow these steps if you’re genuinely interested in purchasing your rental property in the UK:

Step 1: Make Enquiries with Your Landlord

The first step is to contact your landlord to determine if they have an interest in selling the property.

In some instances, landlords may initially say they’re not interested because they haven’t thought about it, but in other cases, it may be food for thought.

This could inspire a desire in them to sell the property.

If you have your heart set on the property, it’s worth asking your landlord before starting the house-hunting process for similar properties.

Related mortgages guides: 

• What to do if your mortgage expires.
• Disadvantages of paying your mortgage off.
• Best mortgage brokers in the UK.
• Should you pay off your mortgage early?
• 50-year mortgages UK.

Step 2: Determine the Realistic Value of the House

Before you make an offer or try to negotiate a price, it’s a good idea to have an understanding of the property’s value.

Online services like Rightmove or Zoopla make it a bit easier as they may have historical sale prices of the property.

Then, compare the properties in your area with similar specs. Another way to get to the realistic value of the property is to hire a professional to do an independent valuation.

If you decide to do this through an estate agent, ask more than one to appraise the property, so you have a good basis to go on.

Check Today's Best Rates >

Consult with a Mortgage Broker

If you’re paying for the property outright, you must find an affordable UK mortgage provider.

A mortgage broker can provide helpful information on finding the best possible financing.

Trying to decide on a finance deal for first-time buyers can be mind-boggling.

You’ll also need some know-how regarding reading and understanding the terms of your mortgage contract.

Brokers are the link between the many deals out there and you.

They help you find the best deal for your finances based on what they have calculated as your reasonable affordability.

As such, you must be upfront with your mortgage broker about your finances.

Lenders will do checks to verify the information provided, which can sway the result of your mortgage application.

That’s not all a mortgage broker does.

A mortgage broker can assist you with comparing lenders and ensuring that you’re applying for the right type of mortgage based on your financial situation.

Your chosen mortgage broker can also help you avoid negative marks on your credit file by applying for finance through too many lenders.

Related quick help remortgage guides: 

• Remortaging on maternity leave 
• How soon can I remortgage?
• Shared ownership remortgages
• How long does it take to remortgage?
• How to remortgage for an extension?

Make Your Landlord an Offer

If your landlord has indicated a potential interest, you can prepare an official written offer to purchase the property.

You’ll want to include your findings in terms of property value or make mention of your expected price. Offer them a fair market price, or you may reject your offer.

Make sure that everything is done in writing so that there’s a paper trail to follow in case of future queries.

It’s also a good way to ensure the deal goes through professionally and without a hitch.

If the landlord decides to proceed with the deal, ensure they have a clear copy of the terms and conditions of the sale/purchase agreement.

Have a Backup Plan

What happens if your landlord isn’t keen or the deal falls through?

In that case, you should have a plan B. If the property is too expensive for you or your landlord deciding they don’t want to sell the property, you might want alternatives to consider.

Look around at other properties to see if anything else on the market interests you within your price range.

You may find a better buy at a lower price in the same area or something that suits your needs better.

Check Today's Best Rates >

Can I Buy My Property From the Landlord? Conclusion

If you’ve fallen in love with the property you’re renting, there’s a chance that the landlord might want to sell it.

It’s not guaranteed, but it’s worth asking about.

Then, if you’re serious about buying it, follow due process and ensure your paperwork is in order.

Your much-loved rental could soon be your dream home!

Of course, consulting with a mortgage broker about your options and the process involved is always highly recommended.

Call us today on 03330 906 030 or contact us to speak to one of our friendly advisors.

Many first-time buyers in the UK don’t know this, but their mortgage offer could expire before they finalise their purchase, which could result in complications with their finance.

When you receive your mortgage offer, you may be so over the moon that you don’t even realise there’s an expiration date attached.

If you don’t finalise your purchase by that date, your mortgage offer may be invalid, which could mean starting the finance application process from the beginning again.

How Long Do Most Mortgage Offers in the UK Last?

Generally speaking, mortgage offers in the UK are only valid for between 3 and 6 months.

That doesn’t mean that every lender has the same terms.

In fact, every lender is different, so it’s a good idea to check the validity of the offer you receive.

It may seem you can process a property purchase swiftly once you have your mortgage offer, but that’s not always true.

There are various hoops to jump through, which can delay the entire application process.

Common Reasons Purchases Experience Delays Resulting in Expired Mortgage Offers

Reasons for a mortgage offer expiring include spelling errors on the mortgage application, the weather, and hiccups in the conveyancing process.

If you’re unable to push these processes along, you may miss that looming expiration date.

Here’s a closer look at the various reasons for mortgage offers expiring before finalising the purchase:

1. Reserving a New Build Property Early

According to Savills, approximately 255, 300 new build properties received full planning consent for 2023’s first quarter.

That’s just the first quarter! This means an astounding number of new builds will be ready for mortgaging.

Securing a new build property as early as possible comes with its perks.

For starters, you’ll have the pick of the batch and get the unit that you like best, instead of having to settle for what’s left.

That said, you may reserve a new build early and then find that the construction company doesn’t follow through on their projected plans and timelines, leaving you with a mortgage offer ticking down and not much you can do about it.

Sometimes the construction company isn’t entirely at fault and is at the mercy of their supply chain, waiting for materials or having to deal with being under-staffed.

In most instances, a new build can be completed within 6 months.

If the new build isn’t finalised within the time window, you’ll need to find a way of extending your mortgage offer.

Lenders, of course, are aware that this can sometimes happen, so some offer specific finance offers aimed at new builds that can extend the mortgage offer by up to 9 months.

Enquiring about this possibility with potential mortgage providers before choosing which one you will go with is a good idea.

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2. Errors on Your Mortgage Application

Your mortgage application will require extra care to be as thorough and accurate as possible.

If you include the wrong address or spell something incorrectly, it can start the back and forth of paperwork, leading to unfortunate delays.

Double-check every detail on your application before submitting it.

If an error is detected, every participant in the contract will need to be notified and then sign the contract again – this includes the seller, solicitor, and you.

Keep in mind that solicitors can be quite busy, which could mean they don’t get around to paperwork corrections as promptly as you’d like them to.

Most first-time and even seasoned property buyers in the UK use a mortgage broker to ensure their application is flawless.

They’re trained to be meticulous with processing applications, and so you may find it saves you a lot of time and trouble to consult with one.

3. At the Mercy of the Weather

The prompt finalisation of new property builds is undoubtedly the weather.

If it’s going through an unpredictable period where it’s wet or snowing, the completion date of the property is pushed back past the expiry date of the mortgage offer.

4. Conveyancing Delays

The conveyancing process can be quite unpredictable.

If the seller’s conveyancer is away or busy, it may delay the entire process.

Before using a specific solicitor, make enquiries about their schedules to ensure they won’t take any breaks or be unavailable during the process.

It’s the responsibility of your chosen conveyancer to ensure all building regulation approvals and planning permissions are in place and that your lender is furnished with the relevant details.

If they’re unavailable to do this, your mortgage provider won’t approve the loan request.

Related mortgages guides: 

• What to do if your mortgage expires.
• Disadvantages of paying your mortgage off.
• Best mortgage brokers in the UK.
• Should you pay off your mortgage early?
• 50-year mortgages UK.

5. The Valuation is Delayed

During the mortgage application process, the lender must arrange a mortgage valuation.

The entire process should take less than half an hour, but if the mortgage provider doesn’t make the relevant arrangements, it could delay the entire purchase.

Some lenders are disorganised or busy, and then you’ll find yourself waiting for the valuation to take place.

You can follow up with the lender to find out when the valuation will happen – sometimes, this does help speed the process along.

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Getting an Extension on Your Mortgage Offer

You’re likely to feel panicked if the expiry date of your mortgage offer is swiftly approaching and your purchase hasn’t been finalised.

The good news is that most mortgage providers are reasonable in their approach to delays.

That said, you shouldn’t leave it to the last minute to advise them.

Rather, let them know as soon as possible so that they can extend the mortgage in good time.

In most instances, the mortgage company will extend the loan offer by around 30 days, but in certain scenarios, you may be able to negotiate up to 3 months or more from the lender.

You’ll need to back up your reasoning for the extension, though.

Related quick help remortgage guides: 

• Remortaging on maternity leave 
• How soon can I remortgage?
• Shared ownership remortgages
• How long does it take to remortgage?
• How to remortgage for an extension?

Possible Reasons for Mortgage Extensions Being Denied

Mortgage providers in the UK are not obligated to extend mortgage offers just because you request it.

In some instances, the application for an extension can be rejected.

Of course, the process isn’t as simple as asking for an extension, and it is granted.

You’ll need to prove your earnings have stayed the same by providing your bank statements or payslips for the past 6 months.

This allows the lender to check that you’re still financially stable and haven’t experienced a change in your financial situation.

It’s best to advise the lender if your situation has changed.

For instance, if you’ve acquired additional debt, your income has reduced, or you’ve started working for a new employer, you’ll need to be upfront about this.

Minimising the Risk of Your Mortgage Offer Expiring

One of the first things you should focus on is not needing a mortgage offer extension in the first place.

Here’s what you can do to ensure that:

• Know your mortgage offer expiration date

When you start negotiating a mortgage deal, you should know your mortgage offer expiry date.

This will ensure you know how much time you have to motivate all parties to process your purchase timeously.

• Acquire the Assistance of a Mortgage Broker

Mortgage brokers are trained in all things mortgage related.

They’ll ensure that you know how much you can realistically apply for, which lenders to approach, and how to ensure that your application goes ahead smoothly.

They take the reins and ensure that they do all the chasing up and get the application process – you’ll be able to rest easy knowing that your application is in the hands of a professional.

• Track the Progress of Your Application & Advise Your Lender as Early as Possible

If you’re investing in a new build, keep in touch with the construction managers about the progress of the build.

If you expect there to be delays, you can let the lender know as soon as possible.

If you suspect that you’ll need an extension, simply let the lender know as soon as possible so that your lender has time to do the relevant checks in time.

What to Expect When Mortgage Offer Extensions Are Denied

In certain circumstances, mortgage providers will reject the application for an extension.

In such instances, the only way around it is to re-apply for a brand-new mortgage.

The downside of this is that you will likely forfeit the fees you’ve already paid.

This means you’ll be faced with fresh valuation, solicitors, and application fees to pay.

If the process is restarted and the lender valuation determines that the property is now worth more than before, you’ll have to raise a higher deposit amount as your mortgage amount will need to be higher, too.

Of course, there’s the option that, in some instances, the property value may have fallen, in which case you’ll pay a lower deposit and require a lower mortgage amount.

It’s not all doom and gloom when a mortgage offer falls through.

Despite the forfeited fees, you may actually find a better mortgage deal which could save you money in the long run.

What About Your Credit Report?

One of the biggest disadvantages of a rejected mortgage offer extension is that the initial failed mortgage will appear on your credit profile, and some lenders may see this as a risk factor.

While some lenders may be sticklers for the details and be wary of why the mortgage didn’t go through, others will understand the delays that can happen, especially if a professional mortgage broker is assisting you.

A mortgage broker can also help you find a lender most likely to assist you despite your failed mortgage.

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Mortgage Offer Expires Before Completion UK Conclusion

Ensuring that your mortgage is processed swiftly could be as simple as working with a professional mortgage broker and keeping a close eye on the progress of your purchase.

Letting the lender know as early on as possible about delays could be the difference between an approved and denied mortgage offer extension.

Call us today on 03330 906 030 or contact us to speak to one of our friendly advisors.

If you’ve already got one mortgage in the UK but have your eye on another property, you may wonder if it’s even possible to have more than one mortgage.

While having more than one mortgage is possible, it’s important to note that not everyone qualifies for a second mortgage.

For most, the thought of a second mortgage and the high-interest rates that will come with it can be off-putting.

But according to Reuters, the Bank of England says that Britons are coping with higher interest rates, which the bank pushed from 0.1% to 5% at the end of 2021.

Depending on your financial situation, you may be able to manage a second mortgage, but how do you go about getting one?

The best course of action is to know the qualifying criteria for a mortgage and what you can do to boost your chances of getting one or more.

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Second, Third, and Fourth Mortgages – What’s the Deal?

For many, applying for a second mortgage follows the same process as the first application, but you’ll be required to nominate which home will be your primary residence.

It makes more sense to have multiple buy-to-let mortgages for investment purposes than it does to have several standalone mortgages.

If you’re simply buying a second home without stipulating that it’s for investment purposes, the financial institution you’re working with may have a lot of questions regarding the reasons behind your purchase.

What’s great about buy-to-let mortgages is that you won’t be limited to how many you can have. However, the issue you may face is how much a lender is willing to give you.

Most lenders have limits per individual, as granting multiple mortgages could be a financially risky path for them.

Limited Companies and Portfolio Mortgages

If you’re specifically buying property to use for income purposes, you may want to consider running a limited company for property investment, or to use a portfolio mortgage which puts all the properties in your portfolio under one umbrella mortgage.

With this type of mortgage, it’s easier to state your case for borrowing more against your existing property portfolio.

Each portfolio mortgage lender’s criteria vary, but you’ll need to invest in three or more buy-to-let properties to qualify as a portfolio landlord.

You can expect to go through an affordability assessment to ensure you can afford the mortgage instalments.

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Are Commercial Mortgages an Option?

If you’re interested in investing in property for income, commercial mortgages may be your best option.

There’s no set limit to the number of commercial mortgages a person can have, and it’s sometimes easier to get approved for more than one commercial mortgage than for multiple personal mortgages.

Lenders have their own sets of criteria for commercial mortgages, but here’s what’s generally required:

• Minimum deposit of 25% with additional mortgages sometimes requiring up to 35% or more.
• Primary applicant must be between 18 and 75.
• Trading history of the company required for 2–3 years.

Types of commercial entities that generally make use of commercial mortgages are partnerships, limited companies, offshore companies, LLPs, and sole traders.

You can invest in more than just a residential home for renting out.

Commercial mortgages can purchase shops, retail units, hotels, guest houses, cafés, restaurants, offices, factories, warehouses, and even business parks.

Income Influences How Many Mortgages You’re Allowed

It’s important to stipulate what you’re buying the second property for.

For instance, if you’re buying a second home for residential reasons, you can expect the amount you’re earning to play a role in whether the mortgage is granted or not.

On the contrary, buy-to-let property mortgages won’t consider your personal earnings.

The property’s potential income is considered when determining if the property is a worthy investment to fund.

As a general rule of thumb, most landlords aim to charge rentals that cover 125-145% of the total mortgage amount each month.

Stamp Duties

Stamp duties may apply when you get a second mortgage in England or Northern Ireland.

This stamp duty is an additional amount added to the normal rate.

Stamp duties to be expected:

• Property up to £250,000: 3%
• Property of £250,001 to £925,000: 8%
• Property of £925,001 to £1.5 million: 13%
• Property of over £1.5 million: 15%

Before You Apply for Another Mortgage, Keep the Following in Mind

If you’re not financially stable, even one mortgage can be risky.

Having a second mortgage increases the risk for you and the lender.

You should consider several factors before applying for a second mortgage of any type.

These include:

1. Affordability

Take the time to draw up a complete budget and decide if a second mortgage is affordable.

2. Current Debt

Consider how long it will take you to clear all your debt if you add a new mortgage to the pile.

Are you making a sound financial decision, or should you hold off until you’ve paid down more of your current debt?

3. Credit History

If you have a good credit score, missed mortgage payments can tarnish it.

In fact, you could find your property being repossessed if you’re unable to keep up with payments, which will only damage your future creditworthiness.

4. Justifications for Multiple Mortgages

If the new mortgage is just an impulse buy or ego purchase, you may want to hold off.

Make sure you know what your motivation for getting a second mortgage is.

Is it a personal purchase or is it for investment and income purposes?

Related quick help remortgage guides: 

• Remortaging on maternity leave 
• How soon can I remortgage?
• Shared ownership remortgages
• How long does it take to remortgage?
• How to remortgage for an extension?

5. Funds and Available Time

Purchasing a second, third, or fourth property will require maintenance and drum up costs.

Have you calculated the extra financial cost of owning another property?

And will you have the time (or hire someone) to maintain the property?

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Can I Have More Than One Mortgage? Conclusion

Having more than one mortgage is entirely possible in the UK, but it’s a decision that should be made carefully with affordability in mind.

If you’re applying for a second mortgage, consider if a portfolio mortgage or commercial mortgage might be better suited to your needs and requirements.

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

Are you a first-time buyer looking to get on the property ladder or an existing homeowner looking to move, but you’re struggling to build up a sizeable deposit?

The mortgage guarantee scheme can help you get a mortgage with only a 5% deposit.

Read on to learn more about the mortgage guarantee scheme and how it can help you buy your first home or move.

What is the Mortgage Guarantee Scheme?

The mortgage guarantee scheme is an initiative by the UK government designed to help credit-worthy households struggling to save up higher deposits access mortgages.

The initiative was launched in 2021 to encourage lenders to offer 95% mortgages again after most were withdrawn during the Covid-19 pandemic.

How Does the Mortgage Guarantee Scheme Work?

Under the terms of the scheme, the government guarantees to compensate lenders for a portion of the net losses if homeowners fail to pay or default on their mortgage.

The guarantee applies to the portion of the property over 80%, meaning that with a 95% mortgage, the government guarantees 15%.

The scheme aims to reduce the risk associated with mortgages with small deposits and make lenders more comfortable offering low-deposit mortgages.

The initiative was intended to end in December 2022, but the government extended it until December 2023 to support buyers with smaller deposits and increase high loan-to-value (LTV) lending.

The guarantee is valid for up to seven years after the mortgage is originated, after which it will no longer offer any protection to the lender for any losses if borrowers default on the mortgage.

Related quick help remortgage guides: 

• Remortaging on maternity leave 
• How soon can I remortgage?
• Shared ownership remortgages
• How long does it take to remortgage?
• How to remortgage for an extension?

Who Is Eligible for the Mortgage Guarantee Scheme?

The scheme aims to help those struggling to save for mortgage deposits and is open to first-time buyers and home movers.

Mortgages eligible for guarantees must:

• Be taken out by individuals rather than incorporated companies
• Be residential mortgages and not buy-to-let or second homes
• Be on properties in the UK worth £600,000 or less
• Have a loan to value between 91% and 95%, meaning you’ll need a deposit from 5% to 9%
• Be repayment mortgages and interest-only mortgages
• Meet the lender’s eligibility criteria like the borrower’s ability to pay

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Is The Mortgage Guarantee Scheme Beneficial?

Yes!

According to HM Treasury, the scheme has helped over 24,000 households get onto the property ladder since its launch in 2021.

The Chief Secretary of the Treasury notes, “Extending the scheme means thousands more have a chance to benefit and get support as we navigate these difficult times.”

First-time buyers often find saving for a large deposit challenging, but the scheme helps them overcome this barrier and secure a home with a deposit as small as 5%.

It’s a lifesaver for many borrowers, making it easier for new buyers to purchase homes and for homeowners to move up to newer properties.

The scheme also helps support the wider housing sector, which has been affected by challenging economic times, by restoring consumer choice and competition in the market.

Does it Mean the Government Will Make Mortgage Payments for Me?

No. You’ll remain responsible for mortgage payments in the same way as a normal mortgage.

The guarantee is only for the mortgage lender and doesn’t protect you, so if you fall behind on repayments, they can still repossess the property.

In such instances, the government guarantees to compensate lenders for losses and reasonable costs suffered in foreclosure.

How Do I Apply for the Mortgage Guarantee Scheme?

You don’t need to apply for the scheme directly to the government.

You only need to apply for a 95% mortgage from a lender participating in the scheme, and you can do this directly or through a mortgage advisor with whole or market access.

Consulting an advisor is recommended to avoid getting declined, since lenders consider such mortgages higher risk.

An advisor can help you make a successful application and give you access to the best deals based on your situation.

Which Lenders Are Eligible for the Mortgage Guarantee Scheme?

The scheme is open to lenders with permission to enter into regulated mortgage contracts in the UK.

Lenders must pay the government a commercial fee for each mortgage in the scheme.

They must also offer five-year fixed-rate products as part of their range of mortgages offered under the scheme.

Some lenders offering mortgages under the scheme include:

• Halifax
• Lloyds Bank
• NatWest
• Barclays
• Santander
• HSBC
• Virgin Money

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How Does A 95% LTV Mortgage Work?

With a 95% LTV mortgage, you can borrow up to 95% of the purchase price of the property you wish to buy and cover the remaining 5% with your deposit.

You’ll not need to save a huge lump sum, making it easier to become a homeowner.

For example, suppose you want to buy a property worth £300,000. With a 95% LTV mortgage, the lender will lend you £285,000, and you’ll only need a deposit of £15,000.

What Are The Cons of 95% LTV Mortgages?

Lenders consider 95% LTV mortgages higher risk and can feature a few downsides.

Lenders usually increase the interest rates for such low-deposit mortgages to compensate for the additional risk, meaning you’ll need to make higher monthly repayments than mortgages with larger deposits.

You’ll also be at a greater risk of getting into negative equity, where the size of your mortgage exceeds the property’s value.

The home’s value or property prices don’t need to fall by much to leave you in negative equity when you buy a property with a 5% deposit.

It will make it difficult to move houses because the amount you can raise from selling the property will not be enough to pay off the outstanding mortgage and have enough to put down as a deposit for the house you want to buy.

Remortgaging to a better rate when your fixed-rate period ends can also be impossible, meaning you’ll have no alternative but to move to the lender’s more expensive standard variable rate (SVR).

Mortgage Guarantee Scheme Final Thoughts

The mortgage guarantee scheme can help you buy a home or move to a new property with a small deposit, and you can apply through an eligible lender with a deposit of as little as 5%.

An independent advisor can give you access to lenders likely to accept your application and increase your chances of success.

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

You’ve decided to buy your dream home or investment property to secure an income, but where do you start?

How do you apply for a mortgage?

What are the requirements? And is there anything you should know before you kickstart the process?

According to a recent report by Zoopla, not all private homes in the UK are mortgaged.

There are currently 11 million outstanding mortgages out of 29 million homes in the UK.

This means that 11 million people have already gone through the process you’re about to.

This guide provides an overview of everything you need to know when applying for a mortgage in the UK.

With a mortgage checklist, you can ensure you’ve completed all the steps required and know what to expect in every mortgage application process.

You can also catch possible errors and delays before they happen and amend your application to avoid them.

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Step 1: Prepare for Your Mortgage Application

When you apply for a mortgage in the UK, expect the lender to review your application with a fine-toothed comb.

Every aspect of your daily living and finances will be scrutinised to ensure you can afford the mortgage you’re applying for.

You’ll need to prepare for your affordability assessment, where the lender will require information on your income, employment, spending habits, and credit history.

It’s a good idea to ensure your house is in order at least 3 months before making your mortgage application.

Here’s what you can do:

• Whittle down your spending so that your cashflow is healthy
• Avoid spending money on questionable purchases (such as gambling)
• Do a check on your credit profile and ensure all the information on there is correct
• Gather as much money as you can for your deposit
• Ensure that you have adequate proof of income

Criteria to Apply for a Mortgage in the UK

All lenders have a unique set of requirements, but most require the following from applicants:

• Proof of income (payslips)
• Credit card statements (three months’ worth)
• P60 from your place of work
• Proof of ID
• Proof of address
• Self-employed individuals must provide a year’s accounts and SA302
• If you receive benefits, you must provide proof

Next Step, Understand Your Credit History’s Impact on Your Application

Your credit history can work for or against your application.

It’s important to keep your credit profile as healthy as possible before applying for a mortgage.

There are a few things that can positively impact your credit history in the UK. Some of these are:

• Ensure that the credit bureaus have the correct address for you
• Registering for the electoral role (this provides a good way to confirm your current address)
• If you have unused credit cards and bank accounts, close them
• Set up direct debits for your credit cards and ensure they’re paid in full every month

It’s not just your overall credit score that matters.

If a lender picks up on errors on your credit file, it could count against your application.

Bad credit borrowers can still acquire a mortgage, but the requirements may be stricter, and you can expect to pay a higher interest amount.

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Next, Select the Right Mortgage Type for You

You’ll find that there are several types of mortgages on the market, each suited to a different scenario or financial situation.

A mortgage advisor can provide you with insight and guidance, but it’s a good idea to have an idea of what type of mortgage you want before you make any initial applications.

Some of the most common mortgage types in the UK include repayment mortgages, buy-to-let mortgages, fixed-rate mortgages, guarantor mortgages, joint mortgages, standard variable-rate mortgages, offset mortgages, to name a few.

To choose the right one, make enquiries with your mortgage broker.

Some aspects to focus on when chatting include the total cost of the mortgage, including interest rates and fees, penalties for early and late payments, whether switching is an option during the mortgage term and any possible incentives.

Prepare for the Cost Implications of a UK Mortgage

You must be fully prepared for the overall cost of a mortgage.

You’ll go through affordability assessments with your mortgage advisor and the lender.

Still, further to that, you should scrutinise your budget to ensure you can afford the additional investment cost.

Some first-time buyers feel caught out by the sudden, unexpected costs involved.

Getting a mortgage means you’ll have to pay additional expenses such as the fees for the mortgage broker, stamp duty land tax, conveyancing, property surveys, and insurance.

Understand Typical Mortgage Terms

The “term” of a mortgage refers to how long the mortgage deal will run for. Most people opt for a 25-year mortgage, which isn’t a strict period.

Depending on your financial situation, you can opt for a longer term or a short term.

Most lenders in the UK offering mortgages allow for discounted rates for the first 2 to 5 years of the mortgage.

This offers exceptional peace of mind knowing that the rate is fixed for a set period – no surprises.

Repaying Your Mortgage

Keep in mind that all mortgages come with their fees, rates, and payment methods.

Some mortgages offer fixed interest rates, while others mirror the base rate of the Bank of England.

It’s best to find out if you’ll be penalised if you try to pay off your loan quicker than the expected loan term.

Some lenders allow it without penalties. Missing payments can result in a poor credit history and, in extreme circumstances, the property being repossessed.

Getting a Property Survey

One question that crops up is about property surveys – do you really need one?

Most lenders will arrange for a property survey to ensure the property is of acceptable value for the requested funds.

A mortgage survey is a basic survey that picks up on the property’s most apparent issues.

This doesn’t mean that the more intricate or harder-to-spot issues are caught. Further down the road, you may find issues cropping up that just weren’t obvious in the initial property survey provided by the lender.

For this reason, getting your own independent survey done before you sign the mortgage is always recommended.

You wouldn’t want to invest in a property with major structural damage, or that will need major repairs and replacements in the near future.

Related quick help remortgage guides: 

• Remortaging on maternity leave 
• How soon can I remortgage?
• Shared ownership remortgages
• How long does it take to remortgage?
• How to remortgage for an extension?

Several survey types are available on the market. The condition report is a basic report that is considered “entry-level.”

The homebuyer report is more expensive but provides a more comprehensive inspection and report on the property.

A building survey is the most highly recommended as it’s the most comprehensive option available but comes with a heftier price tag.

If the building is very old, getting the most comprehensive inspection possible makes sense. New builds can get away with a standard mortgage survey.

Mortgage Checklist UK – In Summary: 

To summarise the checklist:

• Prepare for the mortgage
• Ensure your credit profile is in order
• Ensure you meet the lending criteria
• Choose the mortgage type
• Understand the fees and costs involved
• Familiarise yourself with the mortgage terms
• Have a plan for paying the instalments
• Ensure you have a property survey carried out

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

Most people reach a stage when they’re ready to put down proverbial roots and buy themselves a home.

The process of buying a house in the UK can seem challenging if you’ve never done it before.

Every decision you make during the process could have good or bad financial consequences, so it’s essential to understand the buying process to eliminate possible surprises or confusion.

According to the Office for National Statistics, the interest rates on property in the UK have been steadily increasing since 2022 and will likely make borrowing expensive for many Britons.

Many Brits are jumping on board, trying to invest in the home of their dreams or investment property before another hike.

Part of protecting yourself is being informed and knowing just what to do when the time to buy is right for you.

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Steps to Buying a New Home

To help you get the most out of the buying process, we’ve compiled a checklist of the steps involved and what to expect at each stage.

Let’s jump right in!

Step 1: Decide if It’s the Right Time for You to Buy

If you decide to buy a house because you’re at “that” age, and it seems the next logical step, stop and think it through.

Not everyone is in the same financial position, so it’s better to calculate if now is the right time for you.

Most mortgages require a 10% deposit unless you’re on the government’s mortgage guarantee scheme, which requires just a 5% deposit.

There are other fees to consider, such as establishment fees, monthly service charges and valuation fees.

Step 2: Decide What to Do with Your Existing Home

If you’re already a homeowner, you need to decide when it’s best to sell your current home if you plan to.

For some, it’s best to sell the home before getting into a new mortgage, as the cash you make can pay off existing debt and help you jump on a property as soon as one catches your eye.

Buying and selling homes is a lengthy process, so it’s best to know your plan of action before you start.

There are certain benefits of selling your property before buying.

For instance, you’ll be in a stronger buying position; you’ll have better control over the sale of your house as you won’t be rushed to accept an offer.

You’ll also find you have more negotiating power and know precisely how much you can afford to spend on a new home.

Step 3: Know How Much You Can Spend

How much you can spend will often be determined by selling a previous property or how much cash you can get together for the deposit.

When trying to figure out how much you can spend, there are a few determining factors to consider as follows:

• Your income
• Your credit score (low credit scores can limit amounts lenders will offer)
• Total projected costs of moving and renovating (if required)
• General living costs and how that impacts your cash flow
• Existing collateral to offer the mortgage company

There are also several online mortgage calculators available to help you determine an affordable amount to spend.

Step 4: Arrange Financing to Buy a New Home

Financing is one of the most important parts of the process. Without it, no property purchase would be possible.

The bigger your deposit, the better your chance of getting financing. Many people borrow money from family and friends to get their deposit together.

You’ll need to investigate the various mortgages available on the market and decide which one is best for you.

Here are some to investigate:

• Repayment or interest-only mortgages
• Fixed rate mortgages
• Tracker mortgage
• Variable rate mortgage
• Discounted mortgage
• Offset mortgages
• First-time buyer mortgages
• Guarantor mortgages
• Green mortgages

Consulting with a mortgage broker can help you better understand the various mortgage options and make the right choice for you.

Apply for the mortgage you’d like and wait for feedback from the lender.

Getting a mortgage in principle before you find the property you want will give you a good idea of what the lender will potentially approve you for.

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Step 5: Determine What Area You’d Like to Live In

Researching the different areas you can live in is vitally important. If you make the wrong decision, you’ll likely become unhappy but be tied into a mortgage.

If you’re unfamiliar with certain areas but want to buy property there, go online and do your research. Visit the area and spend some time there to see if you like it.

Connecting with locals on their thoughts and feelings on the area is also a good way to determine how you’d feel living there.

Of course, if you plan to live in the same area as you currently do, you may already know all you need.

Making a rash decision on a property because it seems perfect without investigating the area thoroughly could be a poor financial decision.

Step 6: Make a Property Choice

Choosing the right property to buy will take more investigative work. At first, you might encounter a property that catches your eye online or at the property agent’s office.

Make an appointment to see the property, and don’t rush your visit.

Draw up a list of things to check and questions to ask before attending the meeting.

Being prepared will ensure you can do a more thorough investigation of the property.

You’ll want to know how long the property has been on the market and why the owners are selling.

You should also make reasonable enquiries about whether the price has recently changed, what the lowest amount the owner will accept and if there are any other offers, to mention just a few things.

It’s important to visit as many properties as you can so that you can make decent comparisons. It’s time to choose once you’ve found a property that checks all the boxes.

Step 7: Make an Offer

The offer you make can seal the deal or end it swiftly.

Of course, you don’t want to overpay, and while negotiating is expected, being too cheeky with your offer may see you losing out. It’s important to determine a realistic figure and put in an offer.

If the agent says that the owner rejects the offer, chat with them about possible further negotiation.

In some instances, the estate agent will ask you to pay a small holding deposit to see if you’re serious.

This is usually anything up to £1000 and will be paid back to you if the sale falls through. There’s no way to absolutely guarantee that the owner will accept your offer.

Step 8: Set Your Finance in Place

Now that you’re negotiating a price, you can contact your mortgage broker and ask them to action the contract.

This is assuming you have a mortgage in principle. If you don’t, you’ll have to work quickly to sort your finances out as quickly as possible.

You may lose out on the deal if you run into hiccups with finance. You can only exchange contracts with the seller when your mortgage broker offers official financing.

Step 9: Employ a Conveyancer to Handle the Legalities

Once you’ve made an offer on a property and the financing has been tentatively approved, you’ll need to get a solicitor or a conveyancer to handle the legal transfer of ownership of the property.

Some mortgage companies will allow you to choose your own conveyancer, while others have a panel of approved conveyancers that you can choose from.

While the property agent may recommend a conveyancer, you shouldn’t blindly go with it.

A professional conveyancer will handle searches with the local authority and the Environment Agency.

This is to confirm that the property doesn’t suffer any major problems.

Step 10: Order a Property Survey

Most mortgage lenders will require a mortgage valuation which is a quick overview of the property to determine if it’s in a good enough state to finance.

This is not an in-depth survey, and it’s recommended that you get a surveyor to evaluate the property’s condition so that you’re aware of any possible problems before you purchase and move in.

A survey is always highly recommended.

Related quick help remortgage guides: 

• Remortaging on maternity leave 
• How soon can I remortgage?
• Shared ownership remortgages
• How long does it take to remortgage?
• How to remortgage for an extension?

Step 11: Pay Your Deposit

Before you can finalise the deal, you’ll need to hand over your deposit.

Most mortgage lenders require 10% deposit unless you’re on a government scheme that will reduce the deposit amount. The deposit is handed over to your conveyancer or solicitor.

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Step 12: Go Ahead and Exchange Contracts

Once you have received the report from the surveyor and know whether major repairs need to be made, you can exchange contracts.

At the time of exchanging contracts, you must acquire a completion date from the seller – this is usually one month.

The moment you exchange contracts, your agreement to purchase the property becomes legally binding.

If you have a sudden change of mind, you can expect to be penalised – with the penalty usually being the full deposit.

Exchanging contracts only happens once the solicitor is happy with the searches, a formal mortgage offer is made, and the deposit has been made available.

It’s recommended that you take out buildings insurance from the day of the exchange as this is the moment you’ll become responsible for the property.

Step 13: Finalise the Arrangements

At this stage, you need to wrap up the smaller arrangements of the sale. For instance, if you’re buying appliances from the seller, you’ll need to negotiate that now.

Now, you’ll also need to start planning to have your telephone service, gas, water, and electricity set up.

Your solicitor or conveyancer will also be finalising everything with your mortgage provider at this point.

Step 14: The Sale is Completed

When the mortgage company pays the owner and you take ownership of it, the sale is completed.

At this stage, the deeds of the property are also transferred.

Step 15: Take Official Residence of Your Home

By the time the sale is completed, the seller has to vacate the premises.

You can collect keys and are free to carry out renovations or simply move in. The home is now officially yours!

Step 16: Finalise With Your Solicitor

You must ensure that your solicitor or conveyancer is paid up at the end of the process.

You’ll receive a statement detailing all the costs involved, including the stamp duties you must pay.

When the stamp duty is paid, the change of ownership is typically advised with the land registry.

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Steps to Buying a House UK Conclusion

Having an understanding of these 16 steps puts you in a better position to navigate the process of buying a house in the UK.

Of course, if you need any assistance along the way, a mortgage broker’s services should be employed.

Call us today on 03330 906 030 or contact us to speak to one of our friendly advisors.