Getting a mortgage with bad credit

Saturday, 9th March, 2019

Do you remember the heady days of pre-2007; a time (for a decade or so leading up to the ‘credit crunch’) when there was unfettered access to mortgages and mortgages were granted on the basis of what the applicant stated they earned?

I do, as it was only 2006 when I launched Complete Mortgages as a mortgage broker in Guildford, so I was able to witness the pre-crunch and post-crunch scenarios in a very short space of time.

Pre-2007, those who wanted to buy into homeownership could do so with relative ease. Post-2007, mortgage lending dried up and a more forensic approach was taken when it came to analysing the affordability levels of those applying for a mortgage. So much so, in fact, that adverse credit mortgages, formerly known as sub-prime mortgages, all but dried up completely.

However, after mortgage lending reform, the introduction of tighter legislation and a deeper understanding of how to avoid ending up in a similar situation again, the subprime mortgage is no longer frowned upon. In fact, adverse credit mortgages have quickly become a mainstay amongst mortgage lenders and mortgage brokers UK-wide.

Importantly, those applying for an adverse credit mortgage will need to be able to fully evidence their earnings. The days of self-certification mortgages really are over. Instead, adverse credit mortgages have been designed to help the following groups of people:

1.Those with a history of defaulting on payments

It’s no secret that failing to pay your bills on time is generally frowned upon. However, as we all know, it’s very easy to do. Overlooking payment dates is a common occurrence for many – but should they really be locked out of home ownership because of it.

2. Those who have had County Court Judgments (CCJs)

A CCJ is a type of court order that can be filed against those who owe money yet have failed to pay it back. If you receive a CCJ but fail to pay the amount stated back within 30 days, it is entered on your credit record for six years and is regarded as a serious black mark.

3. Those who have arranged Individual Voluntary Arrangements (IVAs)

Whilst not quite bankruptcy, it is a form of insolvency that’s based on a formal, legally binding agreement to pay off your debts over a period of time. As the courts and the creditors have agreed it, you have to stick to it.

4. Those who have declared themselves bankrupt

The big ‘B’. This one is generally viewed as the end of the line and taken very seriously by mortgage lenders. After all, if someone has been declared bankrupt then they are often viewed as high risk.

5. Those with a thin credit file

If you are new to borrowing – regardless of your age – then there can be little (or zero) history available to enable lenders to build up an accurate financial picture of those looking to borrow. This factor is assessed on a case-by-case basis, but it can have a negative impact on your ability to apply for a mortgage.

If you are hoping to get a mortgage but fall under one of the five areas above, then the good news is that all is not lost. However, you may have to consider applying for a subprime mortgage.

Our team of adverse credit mortgage specialists are on hand to discuss any concerns you may have and help you overcome any mortgage obstacles you’re currently facing. Simply contact us on 01483 238280 or email info@complete-mortgages.co.uk. We can also help with standard mortgages, buy to let mortgages, mortgages for self employed people and commercial mortgages, too.

By Mark Finnegan, Director at Complete Mortgages

Are equity release mortgages good or bad?

Tuesday, 11th December, 2018
equity release

The simple answer to what is a rather broad question is that it all depends on where you are in life in terms of finance, goals and objectives.

What can’t be avoided, however, is that the equity release mortgage is growing in popularity.

According to the latest Equity Release Council figures, homeowners released over £1bn of equity from their homes in the third quarter of 2018 – and £11m of property wealth is being ‘cashed in’ on a daily basis. As a Guildford mortgage broker we’ve certainly seen equity release mortgage applications rise.

Whilst the figures are compelling, we are regularly asked, ‘Is releasing equity in my property a good thing?’ So, to help you make your own mind up, we’ve provided a list of equity release pros and cons.

However, before we look at the fors and against equity release, let’s start by briefly explaining how equity release works (note: for a more in-depth equity release mortgage Q&A click here).

What is equity release?

If you’re a homeowner aged over 55, equity release enables you to release money from your property – without having to move. You can take a lump sum, as a drawdown (taking smaller amounts at different times) or as a home reversion plan (selling part of your property to the lender in exchange for money).

The pros 

1. Staying put

If you don’t want to leave your property, but need more money in order to continue living there, then equity release mortgages enable you to stay where you are whilst providing you with the funds required to do so.

2. No negative equity – guaranteed

Lenders who are members of the Equity Release Council – and Complete Mortgages tends to only work with those that are – have to include a no negative equity guarantee, which means that if there ever was a crash and the value of the property became less that the value owed, the lender would cover it, not you.

3. Beat inheritance tax

Nobody really likes the idea of being taxed on inheritance, so releasing equity against the value of your property can represent a way in which to pass on your wealth in a tax efficient way.

The cons

1. Compound interest

Equity release mortgages do not work in the same way as residential mortgages. Whereas homeowners with residential mortgages typically pay off the interest charges on a monthly basis, equity release mortgage interest is typically added to the overall debt. This means that the outstanding equity release mortgage balance can rise quickly.

2. Hard to go back

If you thought early repayment charges on fixed mortgages were high, then you might be surprised to learn that early repayment charges on equity release mortgages can be as high as a quarter of the amount borrowed. As a result, you need to be absolutely sure that equity release is for you before going down that route – and also that your mortgage broker goes through everything with you in detail.

3. Benefit or no benefit?

Those who receive means-tested benefits may find that a sudden cash injection results in these being taken away. Make sure you understand the wider financial implications before committing to a long-term decision.

Still not sure? Why not contact the Complete Mortgages team to find out more on 01483 238280 or by emailing info@complete-mortgages.co.uk.

Complete Mortgages also specialises in other mortgages over and above equity release mortgages. We can also arrange mortgages for the self-employed, mortgages for teachers, adverse credit mortgages, buy to let mortgages and limited company buy to let mortgages.

By Mark Finnegan, Director at Complete Mortgages

A stress-free mortgage zone

Tuesday, 27th November, 2018
mortgage advice

It’s always bittersweet on reading research that indicates that the mortgage sector – and those working within it – could be doing better.

It’s bitter in the sense that as a mortgage professional, I would like to see the sector working as efficiently and as proactively as possible. When it appears that in some quarters this isn’t the case, then I can’t help but feel disappointed.

However, it’s also sweet as whilst it may reveal failings by others, it also reinforces my view that Complete Mortgages, as a Guildford Mortgage Broker, is amongst the mortgage brokers who are operating at the highest level when it comes to standard setting.

Research recently published by a UK mortgage broker* revealed that stressful mortgage applications are not only causing homeowners anxiety, but also putting them off remortgaging – something that can save homeowners money in the long-term.

It also revealed that approximately 2.5 million people suffered stress during their mortgage application, that 14% of homeowners said they rarely understood where they were in the mortgage application process and that 13% claimed that the way deals were advertised was confusing.

Whilst the research has been commissioned by a mortgage broker to reveal findings that no doubt support their own objectives, we can’t overlook the fact that it’s revealed that there are a phenomenal number of people suffering from mortgage stress when they simply don’t need to.

For those who read Complete Mortgages’ news pages, then you’ll know that we’re not ones to blow our own trumpet, opting instead for guides, mortgage tips and general content that we feel adds value to those who read it. However, in light of this research, we feel that it’s important that brokers who pride themselves on excellent communication and delivering an impeccable service should also be heard.

So, by way of a response to the findings, here’s Complete Mortgages’ own mortgage promise.

Whether you’re looking to apply for a residential mortgage, a buy to let mortgage, equity release mortgage, or even if you want to apply for bridging loans and commercial mortgages, Complete Mortgages will:

  1. Handle 100% of the mortgage paperwork on your behalf
  2. Proactively chase ALL mortgage applications and update you at every step of the way
  3. Talk you through the process at every stage of the mortgage application

Our customer satisfaction survey, based on the feedback of over 250 clients during the past 12 months, has given us an average customer satisfaction score of 98.82%.

Not only are we really proud of it, but it also demonstrates that there are excellent mortgage brokers out there – and that you really shouldn’t need to settle for second best, nor put up with mortgage stress at any point.

For stress-free mortgage advice contact the experienced Complete Mortgages team on 01483 238280 or email info@complete-mortgages.co.uk. Remember, we also specialise in specialist mortgages in Guildford and the surrounding areas such as self-employed mortgages, adverse credit mortgages and limited company buy to let mortgages, too.

*Trussle

By Mark Finnegan, Director at Complete Mortgages

Second Countrywide broker joins Complete Mortgages

Monday, 6th August, 2018
Mortgage Broker Knaphill

Guildford mortgage broker, Complete Mortgages, has lured yet another high-flying mortgage specialist from the UK’s largest single mortgage brokerage, Countrywide, as part of its continued growth plan and following a series of national mortgage industry award wins.

Sam Man, who takes the Complete Mortgages team to 14 people, spent one-and-a-half years at Countrywide after taking over the role of mortgage and protection consultant from Lee Cousens when he left the firm to join Complete Mortgages in 2017.

Prior to working at Countrywide, Sam established his career as a senior banker and protection consultant at Lloyds TSB and Natwest.

Building on Complete Mortgages’ relationship with Surrey’s network of 17 independent estate agents, Seymours, which has seen senior Complete Mortgages brokers permanently located in the estate agent’s offices, Sam will operate out of Seymours’ Knaphill office from August 2018.

On joining the team, Sam comments: “Complete Mortgages is a Guildford Mortgage Brokerage with a national reach and a growing reputation for securing great mortgage deals for its clients. This, combined with its award-winning service levels, makes Complete Mortgages a great company to work for and an opportunity that I’m looking forward to develop as I make it the ‘go-to’ mortgage broker in Knaphill.”

Complete Mortgages has grown significantly since it was established in 2005 and become nationally renowned for providing access to a diverse range of mortgage products, from first time buyer mortgages and buy to let mortgages to adverse credit mortgages and equity release mortgages. It also continues to win prominent Mortgage Intelligence Awards year after year.

Mark Finnegan, Director at Complete Mortgages, adds: “We’re delighted to have once again appointed a high-profile broker from a high-profile brokerage and we now look forward to building on our success, growing our client base and continuing to deliver an award-winning mortgage broker service.”

If you are looking to arrange a mortgage in Knaphill contact Sam via sam@complete-mortgages.co.uk or call 01483 238280.

 

How to increase your chances of getting a mortgage

Saturday, 28th July, 2018
guildford mortgage broker

Firstly, this isn’t a cheat or a piece that advocates – or even encourages – you to try and pull the wool over a mortgage lender or broker’s eyes, and that’s for the very simple reason that it’s impossible and won’t work.

You will not be able to trick a lender into giving you a mortgage or awarding you with the best mortgage deal.

However, just as an athlete prepares for an event, there are a number of things that you can do to help get you mortgage fit. Here are a few pointers to get you started.

1. Score points with your credit score

One way a lender can check if you have what it takes to repay your mortgage and honour your commitment is to check if you have good credit history.

In general, your credit report is what it is and made up of a number of sources including credit card history, loans taken and overdrafts used.

Before you apply for a mortgage it’s worth checking to make sure it’s a) up to date and b) correct.

If you spot anything glaringly inaccurate then at least you have the opportunity to fix it in the short term before it scuppers your chances long-term.

2. No vote, no chance

If you’re not registered to vote than you’re unlikely to get a mortgage. This one’s really easy to prepare for, too. If you’re going to fall down at one of the hurdles then don’t let it be this one. Click here to register to vote.

3. Don’t let the past affect your future

Joint current accounts, loans and other commitments carry joint responsibility. If you’re linked to any of these via an ex-partner – and the ex-partner has defaulted on a payment or done something that would have a negative consequence – then you’re going to be affected, too.

The best way forward in this instance is to check if you’re still linked in any way and, if you are, get yourself disassociated.

4. Be careful with your credit

Just because you have a credit limit of £12,000 doesn’t mean you need to spend £12,000 on credit. At least that’s the view of lenders, who would typically prefer your overall credit card debt to be no more than 50 per cent of the amount available (the lower the better).

When it comes to credit card debt, then it’s better to pay it off – however don’t leave yourself with zero debt and huge credit limits; lenders worry that you may one day go one a huge spending spree!

5. Be diligent with your admin

We’ve all had accounts that we don’t use and rather than close them down, we’ve simply cut the associated cards up and thought that that was it.

Having multiple bank accounts open with nothing in them isn’t advisable, especially if the details attributable to those accounts are out of date and could be disadvantageous to you.

6. Don’t apply for credit just before you apply for a mortgage

The more credit searches you have on your file in a short space of time, the more chance a lender has of thinking you’re in desperate need of credit – even if you’re not.

We would advise that you get a mortgage before you get the new car!

7. Bills don’t pay themselves

So make sure you pay yours – on time.

Not paying a bill on time stays on your records for six years, so don’t let an innocently missed payment result in a missed mortgage offer.

8. Use a mortgage broker

This one really is simple.

As a Guildford mortgage broker, we see people battling with mortgage applications on their own day in, day out, all when they could let us do the legwork on their behalf. As mortgage brokers do this every day and know what’s required (and, importantly, what’s not) they can simply fast-track the process.

Why waste your time when you can hand it over to a professional!

If you’re thinking of applying for a mortgage, or if you’ve been struggling to get a mortgage, contact the Complete Mortgages team on 01483 238280 or email info@complete-mortgages.co.uk. We can help with first time buyer mortgages, buy to let mortgages, commercial mortgages and adverse credit mortgages.

By Mark Finnegan, Director at Complete Mortgages

Are interest only mortgages good or bad?

Tuesday, 3rd July, 2018

Interest-only mortgages are a bit like life. They’re not simply all bad or all good, they’re not clear-cut and they’re often right for some people, but not others.

However, from recent reports that suggest that the interest only mortgage is making its comeback, you could be forgiven for thinking that UK homeowners are about to revert to the pre-crash days and readopt the interest-only approach to home ownership.

In fact it wasn’t that long ago that interest only mortgages were commonplace.

It was only the financial crisis of 07/08 that provided what is now seen as a much-needed reset. Up until that point, people were applying for a mortgage on the strength of what they said they could afford as opposed to what they really could afford.

What made this palatable was that house price growth created a safety net as interest-only homeowners were banking on significant equity growth to pay down their mortgage when the time came. However, given the slowdown in property growth over recent years, this is less of a dead cert.

So what’s the difference this time, then?

Well, first of all a little context is needed. Data recently published by Moneyfacts, the financial analyst and comparison site, has revealed that 33 lenders now offer interest only mortgages – up from only 12 offering the product in summer 2013.

However, as stated by a Moneyfacts finance expert in a recent interview with industry title Mortgage Strategy, there were 73 lenders offering interest only mortgages back in June 2008, which reveals we have a long way to go before we reach those levels.

Furthermore, unlike days of old, to apply for an interest only mortgage today you have to have a low loan to value ratio – something that rarely got in the way of a deal pre-crash and certainly before the introduction of the Mortgage Market Review, which resulted in a severe tightening up of the mortgage market after it was put in place.

Yes, interest only mortgages seem to be gaining ground once again – however this type of interest only mortgage seems reserved for those who aren’t banking solely on property growth to pay for their mortgage decades down the line, as you will need to have a repayment strategy in place at the outset that is acceptable to the lender. Evidence also suggests that in addition to a large deposit, those looking to get an interest only mortgage will also need to earn a large salary.

Back to the original question, then: are interest only mortgages good or bad?

As a Guildford mortgage broker that has witnessed the ups and downs of the mortgage market both pre and post-crash, I’ll say that it completely depends on the individual’s circumstances. And for that reason, we would always advise that anyone thinking of applying for a mortgage – of any kind – appoints the best mortgage brokerage they can to help guide them through that process and provide that peace of mind.

If you’re considering applying for an interest only mortgage contact a member of the Complete Mortgages team on 01483 238280 or email info@complete-mortgages.co.uk. Remember, we also specialise in buy to let mortgages, commercial mortgages, adverse credit mortgages and limited company buy to let mortgages, too.

By Mark Finnegan, Director at Complete Mortgages

Is the robo-adviser redundant already?

Thursday, 28th June, 2018

At a time when there is continual debate around whether or not the human workforce will eventually be replaced by robots, I have to admit that I experienced a degree of pleasure this week upon reading an article that called into question the efficacy of robo-advisers.

The Financial Conduct Authority has issued a warning that robo-advisers could be misleading customers over fees and the nature of the advice offered – something that those applying for a mortgage should now be taking note of.

In a world where apps are standard fare, automation has become de rigueur and the perception that automation equates to better, this warning shot from the city’s watchdog pulls into focus the delicate – and often complex – nature of mortgage guidance.

It also raises the question of whether or not a service so nuanced and personal, such as that offered by experienced mortgage brokers, can simply be replaced by apps or web-based platforms.

As a Guildford mortgage broker we are all too aware that getting a mortgage is a big decision – and one that is underpinned by many variables, most of which cannot be expressed or picked up on through an automated process. A personal approach, such as that available via face-to-face meetings or even via a telephone call, enables the mortgage adviser to pick up on the small aspects that make up the bigger picture.

It also enables the adviser to ascertain the mortgage applicant’s own understanding of their obligations and commitments with respect to the nature and size of the mortgage they require. An automated platform is a standardised approach and one that doesn’t take into account swathes of people who, for example, may be more vulnerable when it comes to making big financial decisions and who, therefore, would benefit from a conversation with an expert.

I’m not anti-automation. In fact, I wholeheartedly believe that there are many services and aspects of modern life that have improved since becoming automated. However, in my opinion, mortgage advice and mortgage brokerage services do not – and should not – fall within this category.

If you want to speak with actual people when it comes to getting a mortgage in the UK, contact Complete Mortgages on 01483 238280 or email info@complete-mortgages.co.uk. We specialise mortgages for the self-employed, mortgages for teachers, adverse credit mortgages, buy to let mortgages and limited company buy to let mortgages.

How to get the best equity release mortgage advice

Thursday, 24th May, 2018

Equity release mortgages have well and truly arrived.

As recently pointed out in our last equity release article, which includes a five point guide as to what you need to know about equity release loans, it is estimated that the value of UK equity release mortgages increased by £10bn last year.

However, it’s important to note that wherever there’s an opportunity, there are always opportunists, which was my first thought on recently watching a series of equity release adverts on TV.

One advert was proudly selling access to equity release mortgages for a fee of ‘only’ 1.95%. Whilst this doesn’t sound that high, it typically equates to around £1,395 – £1,495, which is, in fact, a relatively high charge.

As a Guildford mortgage brokerage that specialises in helping our clients to get an equity release mortgage, we believe that our fees are much fairer and transparent. For example, our flat fee structure means that we can help you apply for an equity release mortgage for only £699 – regardless of the complexity of the mortgage and value of the loan amount.

What’s more, our team of Guildford mortgage brokers now includes three equity release specialists. All three advisers have secured the highly coveted Certificate in Regulated Equity Release (CeRER) qualification, which ensures that Complete Mortgages can offer a wider selection of equity release mortgages to a wider section of the population.

It also means that we can help those who have traditionally taken out interest-only mortgages – and who are on an interest-only mortgage right now – to transition to an equity release deal without having to refer to a third party.

Whether you’re currently on an interest-only mortgage and thinking of switching over to equity release, or you’re simply considering your options and think that equity release could be a route you’d like to take, the first thing you need to do is contact a trusted – and qualified – mortgage brokerage.

Why not contact us to find out more on 01483 238280 or by emailing info@complete-mortgages.co.uk.

Complete Mortgages also specialises in other mortgages over and above equity release mortgages. We can also arrange mortgages for self-employed people, mortgages for teachers, adverse credit mortgages, buy to let mortgages and limited company buy to let mortgages.

By Mark Lucas, Equity Release Adviser at Complete Mortgages

Is time running out to get a competitive fixed rate mortgage?

Wednesday, 14th March, 2018
guildford mortgage adviser

Have you recently switched – or considered switching – your mortgage?

If you haven’t then you’re not alone. However, it may be worth considering your options as the debate around whether or not a new interest rate rise is imminent (many are saying it is) gains ground.

Whilst we don’t know when, exactly, or by how much, the Bank of England will increase interest rates, we do know that another two are planned before 2020.

If the first, relatively modest, rise of 0.25% wasn’t enough to get you thinking about fixed rate mortgages then the second one might.

As a Guildford Mortgage adviser, we’ve seen an influx of people from across Guildford and the southeast enquire about getting a fixed rate mortgage. Lenders have increased their mortgage rates since the last interest rate rise, however it’s not too late to get the ball rolling and apply for a fixed rate mortgage.

With access to some of the most competitive mortgage deals in the UK, Complete Mortgages is still seeing a number of options which, if you were to act now, would mean that you would still benefit from an excellent mortgage rate – and would be well placed to beat the rise (if and when it happens).

We’re seeing demand for three year fixed mortgages, five year fixed mortgages and even 10 year fixed mortgages increase significantly, which indicates that people are now beginning to think seriously about locking themselves into consistent monthly mortgage payments – something that we haven’t seen on this scale for a decade.

Of course, it’s all down to affordability.

Analysis by estate agent Savills suggested that a 1% rise in interest rates would add approximately £10bn to mortgage repayments in the UK – or an average of £930 a year (£77.50 per month) to the cost of servicing an average mortgage.

Depending on your financial circumstances, you may prefer to have the flexibility that comes with other products such as tracker mortgages. Either way, if the much-deliberated rise has made its way to the front of your mind then it’s certainly worth picking up the phone and calling a member of the Complete Mortgages team, who will be able to advise you on the right fixed mortgage for you.

In answer to the original question regarding whether or not time is running out to get a competitive fixed rate mortgage, I would say that there is still time – however I would also recommend that you don’t waste time.

Complete Mortgages also specialises in other mortgages over and above fixed or tracker mortgages. We can also arrange mortgages for self-employed people, mortgages for teachers, adverse credit mortgages, buy to let mortgages and limited company buy to let mortgages. Contact us on 01483 238280 or email info@complete-mortgages.co.uk for more information.

By Mark Finnegan, Director at Complete Mortgages

Self-employed friendly mortgages

Monday, 5th March, 2018

Sometimes, it’s as though those who take the most risks are penalised the most.

At least that seems to be the sentiment of 71% of self employed people who feel that they are discriminated against when it comes to getting a mortgage, according to new research from The Mortgage Lender.

Yes, mortgages for self-employed people seem to be that little bit harder to come by, which is a huge shame – particularly when it’s this demographic who play key roles in growing the UK economy and given how, according to new research by Data Line for Business, there are now record numbers of self-employed people in the UK.

Data Line for Business’s research highlighted how:

  • One in seven people now work for themselves
  • The number of self-employed people have grown by a million since a decade ago
  • Self employed women have grown 24% to 300,000 since Q2 2013

Whilst this is great news when it comes to the UK’s entrepreneurial spirit, it’s very much at odds with the barriers – and the perceived barriers – to self-employed mortgages.

What’s the problem with getting a mortgage if you’re self-employed? 

We often get self-employed people asking, ‘Why is it hard to get a mortgage, even when my monthly mortgage repayments would be significantly less than my current rental outgoings?’.

The truth is that lenders find it hard to assess self-employed people as they might pay themselves different amounts at different times. Some may choose not to pay themselves much at all in order to keep cash in the business.

Prior to the financial crash, self-certification mortgages enabled business owners to get a mortgage relatively easy. After the crash, lenders became less inclined to lend on the basis of what the applicant claimed they earned.

However, there are a number of accessible self-employed mortgages on the market right now. Also, as a Guildford mortgage broker that specialises in contractor mortgages and mortgages for the self-employed, we are well placed to help all business owners – from sole traders to owners of limited companies – get a mortgage.

Our advice would be to get in touch on 01483 238280 or email us on info@complete-mortgages.co.uk. Also, in advance of speaking – or meeting – with a member of the Complete Mortgages team, we would recommend that you gather the following documentation in readiness: –

1. Two years’ accounts (if you have a Limited Company or Partnership)

2. SA302 forms and Tax Year Overviews for the two past two years. Here’s a link for more information on how to obtain them

3. Proof of a deposit (or equity in your property, if remortgaging) of at least 5%

Getting a mortgage if you’re self-employed isn’t unachievable. It just requires a little more work. However, as a mortgage adviser in Guildford, we’ll handle the legwork on your behalf.

Remember, Complete Mortgages doesn’t just specialise in mortgages for self-employed people. We also specialise in mortgages for teachers, adverse credit mortgages, buy to let mortgages and limited company buy to let mortgages.

By Mark Finnegan, Director at Complete Mortgages