Could 2020 be the year of the first time buyer mortgage?

Friday, 22nd November, 2019
first time buyers

It’s official (according to a report from Post Office Money, at least). First time buyers are taking less time to save a deposit.

The report, which outlines how the average first time buyer in 2019 took 3.6 years to save up enough to afford their first home compared with 3.8 years in 2018, is positive news – particularly as we head into a new year, which is a time when property sales tend to spike.

Of course, there are a number of reasons why those applying for a first time buyer mortgage are reaching their goal quicker. The report lists overtime, a helping hand from parents and even selling unwanted items on sites such as eBay as being behind the boost. However, regardless of what’s driving the push, it would seem that demand for first time buyer mortgages is likely to increase in 2020.

If you fall under the category of first time buyer and are looking to apply for a first time buyer mortgage in 2020, then there are two things that we recommend you do:

1. Sign up to receive our newsletters, then download our comprehensive first time buyers guide, which includes 13 key tips on things that you should be thinking about or getting in place in advance of submitting your first time buyer mortgage application.

2. Call a member of the Complete Mortgages team on 01483 238280 or email info@complete-mortgages.co.uk to discuss next steps and how to make sure your first time buyer mortgage application goes through seamlessly.

And, while we’re covering top tips, this article also provides the perfect opportunity to remind first time buyers about the government’s Help to Buy ISA, which will close to new savers on 30 November.

For savers that aren’t aware of the scheme, it is open to those saving to buy their first home and sees the government top up your savings by 25% (up to £3,000) – without any pressure on you to pay it back!

The eligibility criteria states that the property you eventually buy must:

1. Have a value no more than £250,000 UK wide or £450,000 if the property is in London

2. Be the only property you own

3. Be where you intend to live

With less than two weeks to go until this offer is withdrawn, the team at Complete Mortgages recommends you act fast and apply for a Help to Buy ISA today. You can review the different products via Money Saving Expert here.

In the meantime, if you have any other first time buyer-related questions, concerns or points you’d like to discuss with a Guildford mortgage broker, then contact us today.


Are high LTV mortgages good or bad?

Friday, 28th June, 2019
high ltv mortgage

In many ways, the mortgage market is similar to the fashion industry.

Just as denim jackets seem to make a comeback every decade or so, high loan to value (LTV) mortgages seem to be widely available once again.

For those of you who may not remember the impact of the financial crash of 2007/8, such as young first time buyer mortgage hunters, then I’ll just say that it was a very challenging time and one that went from lenders offering very high LTV mortgages to lending almost nothing at all.

However, high LTV mortgages are on the rise and it hasn’t gone unnoticed by the Prudential Regulation Authority, which has raised concerns about lenders’ willingness to increase their risk in order to maintain profit margins.

For example, Moneyfacts recently reported that the average two-year fixed-rate at 95% LTV has fallen from 5.33% to 3.25% over the past five years. Similarly, at 60% LTV, average two-year rates have fallen from 2.96% to 1.90%, making both 90% and 60% LTV mortgages more accessible.

As the debate opens up around ‘risky’ high LTV mortgages, here’s Complete Mortgages’ view.

1. Apples and pears

Lenders often talk of income multiples in order to ascertain a mortgage applicant’s affordability threshold – and the current debate around the acceptability of lending six times income is gathering momentum. However, given how low the Bank of England base rate currently is, then a multiple of six times income based on today’s available mortgage rates requires lower monthly mortgage payments than five times income based on the interest rates prior to last decade’s financial crash.

2. Helping the next generation of homeowners

Getting on the property ladder has become increasingly difficult. Property values have outstripped salaries, the result of which has priced out young people from getting a first time buyer mortgage. High LTV mortgages, which typically only require a 5 – 10% deposit, help first time buyers become homeowners, which is important.

3. Current earnings don’t necessarily reflect future earnings

First time buyers, who are relying on buying a property with only a 5 – 10% deposit, may have to go down the high LTV mortgage route as their earnings may be small in relation to the sum they’re looking to borrow. However, it doesn’t take young professionals long to move up the career ladder and increase their salaries, thus reducing their level of mortgage risk by default.

4. Post-crash regulation

Despite what is being reported in the news, structures imposed by regulatory bodies, such as the Mortgage Market Review, make it very difficult for mortgages to be handed out to those who are unable to afford the repayments.

High LTV mortgages may have increased, but so too have the number of variables and considerations that mortgage applicants are now assessed on. It is, of course, important to note that the Bank of England base rate is very low and could change at any time, however any changes to interest rates are quickly integrated within lenders’ affordability tests.

If you’re about to apply for a mortgage, looking for a professional mortgage adviser in Guildford or think you need to apply for a high LTV mortgage but are concerned by the potential risks, then contact the team at Complete Mortgages, who can assess your affordability levels prior to your mortgage application going to the lender.

We help our clients secure high LTV mortgages, buy to let mortgages, limited company buy to let mortgages, equity release mortgages and adverse credit mortgages.  Contact 01483 238280 or email info@complete-mortgages.co.uk for more information.

By Mark Finnegan, Director at Complete Mortgages


A boost for first time buyer mortgage seekers

Saturday, 20th October, 2018
first time buyer

Interest rates have gone up, but so too have the chances of first time buyers getting a mortgage with a small deposit.

Data from Moneyfacts has revealed that the average rates for 95% loan to value mortgages – mortgages for those with only 5% deposit to put down on a property – for two and five-year fixed rate terms have reached the lowest levels on record.

Whilst the period of recorded data only dates back to 2007, when Moneyfacts began recording it, 11 years is still a long time and this newfound accessibility for hopeful homeowners with a small mortgage deposit is significant.

Two-year fixed rate mortgages, for example, have fallen from an average of 4.16% in September 2017 to 3.73% today. Likewise, five year fixed rate mortgages have dropped from 4.57% in 2016 to 4.08% today.

You may think that this is at odds with the two recent interest rate rises, and to a degree you’d be right. However, there is speculation that lenders are keen to keep the first time buyer close so that they become the go-to lender at latter stages in the applicant’s property ownership lifecycle.

You could liken this to the motor industry, whereby those buying a car at the lower end of the manufacturer’s price range are nurtured as years go by in the hope that they stay loyal and buy something requiring a bigger budget as they progress in life.

Of course it’s all relative, and we shouldn’t forget that in today’s market, where there is a huge swathe of competitive mortgage deals on offer, 3.73% and 4.08% is still significantly higher than the ‘standard’ mortgage. That said, if you’re someone who’s looking to enter the property market and you only have five% to put down, then at least there are now more attractive first time buyer mortgage deals to get you on the property ladder.

As a mortgage broker in Guildford that specialises in first time buyer mortgages – including some of the more specialist mortgages such as mortgages for teachers and mortgages for self-employed people – Complete Mortgages is here to help.

If you have a 5% deposit then contact a member of the team on 01483 238280 to discuss your options and find out how you, too, can get two feet on the property ladder. Alternatively, email info@complete-mortgages.co.uk.


Godalming tops UK list of biggest property price risers

Tuesday, 20th June, 2017

Firstly, and on a purely personal level, I have to point out my satisfaction with the recent announcement that Godalming has been crowned top of the charts* when it comes to property value growth.

Not only because the Complete Mortgages team and myself continually manage Godalming mortgage applications on behalf of those looking to get a mortgage in Godalming. Nor is it because I also happen to live there and have benefitted from a rise in property values. It’s because Godalming is genuinely a wonderful place to live.

Whilst Complete Mortgages is not technically a Godalming mortgage broker, given how we’re based in Guildford, our close proximity to the area and the amount of mortgages in Godalming that we arrange means that have seen first-hand borrowing requirements increase in line with booming prices month on month.

And the fact that property prices are continuing to rise at the same time as more and more people from London are taking up residence in Godalming is no coincidence.

Good schools, excellent transport links to and from London and the convenience of having the both the countryside and the capital on your doorstep all add to Godalming’s rapidly growing allure.

This is all common knowledge to those who already live there, of course, but what about those wanting to move to the area? How will steadily increasing property prices affect your chances of getting a mortgage in one of Surrey’s gems?

There are currently three things in a Godalming mortgage applicant’s favour:

1. The market

There is no shortage of competitive deals entering the market on a regular basis. Whilst this may be a lot to digest for those tackling the mortgage application process on their own, an abundance of mortgage deals generally means improved affordability in relative terms.

2. The summer

Why think about home buying when you can think about holidaying? At least that’s the sentiment shared by many. And that’s not necessarily a bad thing, as it means that you can steal a march on the summer slowdown and take advantage of a less competitive marketplace.

3. The election 

At the time of writing, it has been announced that the outcome of the general election is a hung parliament. The likely fallout from this is a period of indecision and a lack of market movement, which means that, similar to point two, those looking to buy a property in Godalming may have greater bargaining power.

When it comes to securing a mortgage on a property in Godalming, Complete Mortgages recommends that you act fast, take advantage of the three points listed above and get in touch to discuss your options. Whether you’re looking for a first time buyer mortgage or to remortgage, we can help.

Contact us on 01483 238280 or email me at darren@complete-mortgages.co.uk to find out more.

By Darren Wordsworth, Godalming Mortgage Adviser at Complete Mortgages

*http://www.getsurrey.co.uk/news/property-news/uks-biggest-spike-house-prices-12910950


How to ditch the property chain without ditching your next home

Friday, 31st March, 2017
bridging finance

How many times have you – or people you know – been affected by the dreaded breakdown in a property chain?

Unpleasant, right? Particularly if you’re weeks (if not months) down the line and have all but physically moved in to what you hoped would be your next new home.

The good news is that personal bridging loans provide a way in which to beat the housing chain and reduce your exposure to any last minute nasty surprises.

At the current time it’s not a method that is commonly used as a way in which to ‘bridge the gap’ – and not for any particular reason other than most people don’t really know about it. Or, if they do, they tend to feel that it’s out of their reach. Well it isn’t, and here’s why.

What is bridging finance?

Chain breaking bridging finance solutions represents a fantastic route to keeping on track when it comes to buying your next property.

A bridging loan is essentially a short-term finance arrangement that enables people to complete the purchase of their property even if they’ve been let down by their buyer.

As you might expect, the rate of interest is typically higher – but if you’ve already invested time and money in a process that’s got you right to the finish line, you might be reluctant to throw the towel in.

Can I get a bridging loan?

Landlords and amateur property developers, including those who purchase at auction and need quick access to finance after grabbing a bargain, generally use a short-term bridging loan. However, it has become more popular amongst the general public given the tightening of regulation around lending, and the longer waits for lenders to approve a mortgage application following the introduction of more stringent frameworks around mortgage lending.

Is there an age limit for bridging loans?

People are now living longer than ever before, and with that comes the understanding that people over 75 may also need access to bridging finance, too. However, restrictions on lending has also meant that mainstream mortgage products are more difficult for the elderly to secure, which is why bridging is a useful route to finance.

Interestingly, the rules that restrict the lending of traditional mortgages to those of a certain age do not apply for bridging loans, as interest payments are deferred until the loan is redeemed when the sale finally takes place.

Other than that, anybody is able to apply for bridging finance.

Do your research – and use a broker

As with most mortgages and finance products, much depends on the individual applicant. If you’re considering applying for a bridging loan or are wondering if bridging finance is the right option for you, simply give us a call.

If you have decided on using a broker, then one important piece of advice I’d like to offer is to always use one that is Financial Conduct Authority-regulated – like Complete Mortgages – as bridging loans are a niche product and may not be suitable for everyone.

Interested in something other than bridging finance? We also specialise in buy to let mortgages, first time buyer mortgages, sub prime mortgages, equity release mortgages and self build mortgages. Call us on 01483 238280 or email info@complete-mortgages.co.uk to find out more.

Commercial and bridging loans are processed through our subsidiary company, Complete Mortgages Property Limited.

By Mark Finnegan, Director at Complete Mortgages


Time to buy a property in Bournemouth?

Thursday, 6th October, 2016
Bournemouth mortgage broker

The property market is, as Jimmy Greaves would often say about football, a funny old game.

And similar to football, it’s littered with ups and downs, peaks and troughs, winners and losers. Some people may find themselves living in an area that housing market intelligence states is – or is soon to be – thriving. Others may find themselves in an area that, according to industry reports, is experiencing a slowdown.

Some live in both, as is the case with Bournemouth.

Back in January of this year Bournemouth experienced the sharpest increase in house prices out of all areas across England and Wales, with Your Move stating how the average Bournemouth property price went up by 2.9%, which was faster than anywhere else1. Fast forward to this month and it would appear that Bournemouth and other southern cities including Oxford and Cambridge are ‘leading a slowdown’ in the UK’s property market2.

Talk about a fall from grace.

However, we need to keep in mind how UK property values fluctuate on a continual basis and that nothing lasts forever. In fact, as a Bournemouth mortgage broker, I see this as an opportunity for those looking to buy a property in the region.

When it comes to the stock market, investors live and die by the sword. If they buy low and sell high, they make money. Conversely, if they buy high and values drop then they can lose money. The trick is to buy at the right time. The housing market isn’t so fickle in as much as we rarely see property prices fall, however the recent slowdown provides the opportunity for property investors looking to arrange a buy to let mortgage – or even those looking to secure a first time buyer mortgage – to enter the Bournemouth property market before property prices once again begin spiralling out of reach and before housing intelligence reveals that Bournemouth has fallen back into favour.

The reason for Bournemouth’s boost in property values at the beginning of the year was a result of the region’s growing digital economy, or the ‘silicon beach surge’, which saw a 212% in new digital companies enter Bournemouth and Poole between 2010 and 2013. This kind of growth trajectory simply doesn’t end overnight.

Equally, if we take a look at the recent reasons given for a slowdown in Bournemouth’s property prices then it mainly comes down to the EU referendum’s fallout, the fears of which have been allayed by national newspapers stating that the post-referendum impact wasn’t as drastic as many had anticipated.

From my perspective, as a mortgage broker in Bournemouth, I would say that this ‘downturn’ represents an opportunity for those who have been thinking about applying for a mortgage to get the ball rolling whilst we’ve been afforded this ‘pause’ in house growth.

After all, when prices begin to rise again – and they will – it simply means in real terms that the value of your deposit will diminish.

If you’re looking for Bournemouth mortgage advice or are ready to apply for a mortgage, regardless of whether you’re a first time buyer or a seasoned property investor, Complete Mortgages can help find the right mortgage deal for you. Contact the team on 01202 049661 or email enquiries@complete-mortgages.co.uk. 

1 International Business Times

2 The Telegraph

By Jo Frankowski, Senior Mortgage Broker at Complete Mortgages Bournemouth office