There seems to be a rise in awareness of credit scoring from first time buyers and other consumers. This is from the increasing attention credit rating is getting from the general public. Our team has also found that when people get in touch with us, the majority have already viewed their credit reports online.
Experian or Equifax seems to be the two most common credit reference agencies but there are more out there. Check My File is something we do recommend to new clients. When they sign up, they get a 30 day free trial and after the 30 days will then be £14.99 a month, however, this can be canceled anytime. The color-coded report provides an easy-to-follow document that collates a range of information.
We find that clients have become more aware of the fact that too many credit searches can negatively impact their credit score. Therefore, our clients often ask if our mortgage advisors in Doncaster will do a credit search on them. Even though lenders always carry out credit checks, your dedicated advisor will require the client’s permission before doing any checks.
Banks provide two types of credit searches; hard search or soft search.
A hard credit search is when they take an in-depth look at your credit report and any financial institution carrying it out soon as you permit the financial institution to do so. The advantage of a hard credit search would be that the lender is looking into your situation quite carefully and if you pass the credit score, you increase your mortgage application’s chance of success.
As long as you have provided satisfactory documentation to back up the information you have disclosed and you haven’t provided false details, the search can be a success.
The footprint doesn’t state if your application was successful or not, however, if you have carried out a number of searches over a few weeks, this could cause the lenders’ system to decline.
Another benefit is that your credit file will have a record kept stating that you have carried out a hard credit search which is good when someone needs to look at your report. However, a credit file that states that there have been multiple searches carried out in a short period of time isn’t great because it could looks like you have applied for a vast amount of credit at the same time.
Having the odd hard footprint on your record isn’t bad. That’s why you shouldn’t worry too much about it, it’s just best to be cautious in having too much.
Unlike hard searches, a soft credit search provides a ‘lighter’ look at your financial situation. This type of search would normally be used on price comparison websites to provide which options you have or it could be used as a source to verify your identity. You may find some mortgage lenders carry out soft searches and it seems that more lenders are changing to this type of search.
With soft searches, you don’t get offered as much information as you would if someone carried out a hard search. A soft search wouldn’t leave any impact on your credit file if you fail. A lender will obtain less information compared to if they carried out a hard credit search. If you come out with an agreement in principle, the difference between the two doesn’t matter.
One factor that is helpful is that even though you would be able to see soft searches that got carried out on you, these searches are not visible to other financial institutions like banks. Therefore, you can apply for an agreement in principle without damaging your credit score regardless of if it is successful or not.
In the case where you are wanting to make an offer on a property, our mortgage advisors would suggest having an agreement in principle in place prior to you contact the estate agent. You should give yourself the chance to get the property you want at the lowest possible price.
A big advantage you can have on your part is if you have demonstrated that you have finances in the right place. Having an agreement in principle can also deter the agent from attempting to ‘cross sell’ their in-house mortgage services to you.
It’s unfortunate when you’re in a situation where you and your partner decide to part ways which means you need specialist advice. Getting specialist advice is important because you have joint financial commitments, and unwinding that side of things isn’t very straightforward.
Below are the top three questions we get asked on Divorce and Mortgage Advice regularly:
Getting a mortgage is a big financial commitment and making changes to your mortgage in the future isn’t always easy. Because of this, a lot of people aim to buy a house with their partner as a means of splitting the financial burden between two parties.
In circumstances that involve children, the partner who spends more time raising the children like a ‘stay at home’ parent will often stay in the property. It may be the case that the individual occupying the original home would prefer to take over the mortgage in their own right. This is not always easy!
You may be able to pay the mortgage and have the ability to demonstrate that you can independently. It does not, however, change the fact that you bought the property jointly. In other words, in the event of mortgage arrears, there are 2 people the lender is allowed to pursue.
The remaining applicant needs evidence that they can afford the mortgage before removing a party from a mortgage. This will give confidence that the remaining applicant can keep up the mortgage in the future. As well as this, the lender will need to assess your income even if you have kept up your mortgage payments in the past.
It’s common in these situations that someone will step in to replace the ex-partner like the family member or potentially your new partner.
When it comes to assessing the applicant’s affordability of the mortgage, many lenders have slightly different ways of doing this. Therefore, don’t lose heart if your current lender declines, we still may be able to help you.
Firstly, you need to understand that you are still responsible for any joint financial commitments you took out with your ex-partner, even if you are not a current occupant in the family home.
This rule is still in place even if you have come to an agreement with your ex that they will make all the payments.
If you are looking to buy a new property in the future, the mortgage payment for your old property will still be taken into consideration. Due to this, it’s important that you take mortgage advice before making an offer.
When it comes to how much you could be given by the lender, some are more generous than others. We will, however, take this into consideration when recommending the most suitable lender to apply for a mortgage agreement in principle with.
You can have 2 mortgages. Before lenders offer you a mortgage, they would use their own credit scoring systems and take many factors into account and ongoing financial commitments is just one of these.
As well as any other loans and credit commitments you may have, the monthly payments of the mortgage you will hold with your ex will need to be inputted.
After we have sorted all this for you, the maximum amount you are able to borrow will be confirmed to you by the various lenders’ systems. This will allow you to know your budget at the beginning and how much deposit you will need to put down.
Despite it being difficult to move on from your previous joint financial commitments, it’s good to remember that it’s all about risk from the lender’s point of view and their main intention for doing this is to avoid repossessions situations at all costs.
When you’re looking for a new home as a first-time buyer in Doncaster or a home mover in Doncaster, there is probably a list of things you will consider. This could be personal finances, mortgage arrangements, and the most suitable deal for you. When finding your dream home, you may be finding that perfect location, amenities and looking at what you can get for your money. Below is a list of factors to consider when you start hunting for your new home.
Your perfect location could be in the city or a more quiet, rural environment. What the location looks like might be a preference, however, it’s important to consider if the location will fit well with your day-to-day life. This could include the commute to work, access to shops or schools.
As mentioned before, your commute to work may be a factor to consider. Looking at transport links such as bus or train and finding the motorway links you may need to use can help in deciding if the location is best suited for you.
The quality of the school can be a key factor when deciding where to live. Fortunately, there are some brilliant schools in Doncaster. Many people like to look into the school league tables to decide which school they feel is best for their children to attend. It’s important to look at the catchment areas to see if it’s within the proximity of your new home.
Everyone’s lifestyle is different, so you need to look at the area your potential new home surrounds to see if it fits within your lifestyle. You will want to look at the places you need and see if they are within a reasonable distance to your home.
This could include shops, supermarkets, and restaurants. Then you may want to look at the things you would like to have, with popular preferences amongst buyers being a gym, open space or local parks. Creating a list of what you need and what you would like could be best when you’re deciding which house fits your day to day life.
This factor can depend on your circumstance and is something you decide to prioritise. This factor may be part of some people’s criteria when thinking of their dream home with situations like family support with the school run and childcare being important.
Value for money could be something to consider when deciding on a property. Looking into what you are getting out of the house, if it is the size of the house or if it has a back garden, in comparison to the price, can allow you to seek the best deal for you. In some instances, compromising on location may be the way to go if you feel it will benefit the amount you are paying on the home.
To some, a ‘community feel’ is something they look out for. The ‘wishlist’ you have compiled may fit your interests. Looking out for events such as clubs, book fairs, and markets, etc. can give you an idea of the overall community within the area you are looking at. Therefore, check out what happens within that area or ask an estate agent to find out for you.
It’s common that people look at their new home as a long term investment with the expectation that housing prices will rise. Check out the area to see if there are any investment plans such as developments, shops, sports facilities and new road links. Looking into any companies investing in the area could be important to you as this could affect your future house value.
If you are gifted money to cover the portion or full amount of your deposit, this is called a gifted deposit. This can be given to you by a friend or family member, however, there needs to be an agreement that you don’t need to repay the money.
Gifted deposits are helpful if you can afford the monthly payments but not the initial deposit. The chances of getting better rates can be higher if you have been gifted a large amount of the profit.
In circumstances where you can afford the monthly repayments but can’t save for your initial deposit due to being on a lower salary, this can be very beneficial.
Usually, your parents, be this birth or adopted, gift a deposit. This method can be referred to as “The Bank of Mum and Dad”.
Alternative family members could be available to gift you a deposit. It’s possible to do this but it does depend on the individual lender. Furthermore, trying to find the right one requires care.
An equity release in Doncaster can be a way of gifting you a deposit, providing that the family member or friend who is gifting to you is over the age of 55.
The option of their parents being able to help with their mortgage is a concept many clients don’t know about or sometimes they feel like they can’t ask their parents for help.
Usually, many parents are happy to lend a helping hand with their children’s property dreams.
It’s widely believed to be more beneficial for people to take out a mortgage compared to renting. This may be because you would be able to pay less per month.
A lot of the time we find that gifted deposit comes from inheritance, however, parents may gift it earlier in life. In some instances, they may have saved up enough or have released a certain amount of equity from their own property.
One thing that lenders don’t always feel is best to do is using a loan in order to pay your deposit. The reason for this is there is the risk that you won’t have enough disposable income to not only the mortgage but the loan at the same time.
The maximum amount of the deposit you want to gift is up to you. Some lenders, require 5% of the deposit to be from your own pocket.
First time buyers in Doncaster and home movers in Doncaster can benefit from a gifted deposit. Depending on the lender, the Help to Buy Scheme can be useful to have alongside a gifted deposit. This is because the scheme requires a 5% deposit, so paying that via a gifted deposit could be an option.
You are required to have a Gifted Deposit form to give to the lender. You might be required to show additional proof & ID (donor ID/bank statements and so on), however, this depends on the lender.