When was the last time you tried to get a mortgage? If you’ve been in your current home for a while now, or are still renting and haven’t dipped your toe into the home-owning market, you may not remember or have not yet encountered the process. If that’s the case, I can tell you that these days it isn’t necessarily a walk in the park.
Say you and your partner or friend you’re buying with have steady reasonably-paid jobs and you’ve managed to scrape together a fair old deposit from savings. It’s reasonable enough to assume this is enough security for a mortgage company to lend you the right amount to buy your dream house, isn’t it? OK let’s say you also have an existing property to sell that will cover a proportion of the cost of the new home. You’d think that would put you into a pretty strong position as a sound contender for a mortgage loan.
Avoid prior spending sprees
Well, wrong! Mortgage providers these days look at all sorts of other factors as well. Such as in the example of a friend of mine, who was in the strong financial position I’ve mentioned above, but the one thing going against her was her spending history in the previous 12 months. The year in which she’d got married. So as you can imagine, she’d spent, spent, spent! It all came out of savings of course, and she never had to go into debt to help finance her big day and honeymoon. But the fact she had a large spending history caused not just one – but three – mortgage providers to either refuse her and her husband a mortgage – or drastically reduce the amount they could offer.
They looked at her spending and assumed that her annual spend would always be what amounted to the outgoings in her wedding year.
And for first-time buyers, securing a mortgage can be even more like balancing on a tightrope. Don’t get me wrong, I think it’s great that financial legislation has tightened up since the financial crash of 2008-9, but the rules mortgage providers have to follow now can be very restricting for the consumer.
But the good news is, there’s a much easier path that potential homeowners can follow to secure the right mortgage from the right-minded provider. Instead of approaching each individual mortgage provider separately, and then being restricted to only those products that banks or building societies offer, you can go direct to an independent mortgage broker, who will be aware of providers and products that you may not know about or have access to. When your independent mortgage broker is your one point of contact, you don’t need to approach several different lenders and get your head around all their different products. Your broker contacts the providers for you, and armed with all your financial information, they can check your eligibility with multiple banks and building societies.
Unconventional mortgage applicants
If you’re in a slightly different position than the conventional mortgage seeker, for example, you’re self-employed or over 50 (or both!), your broker will be familiar with the institutions that have products catering specifically for you.
Russell from independent broker Fresh Mortgages says, “Because I have several years’ experience in finding loan providers in the mortgage, re-mortgage, buy-to-let and first time buyer scenarios, I already have an inkling which bank to approach for every different customer background.”
Raising extra cash
He continues, “I’ve helped older people get financing to take money from their home which they own, mortgage free, and I can help homeowners with a mortgage raise a bit extra to maybe go on a special holiday or finance their childrens’ wedding. I also know where to go to get financing for young people who haven’t yet bought or for long-term renters who finally want to get on the ladder.”
So whatever your reason for wanting a mortgage loan – a new home, upsizing, or a rental property at home or abroad, go to an independent mortgage broker, such as Fresh Mortgages, to get moving.
Fresh Mortgages is an Independent Mortgage Advisor in Hertfordshire