A Guide to Offset Mortgages in Doncaster

What is an Offset Mortgage?

The overall desire for using offset mortgages has dwindled since the 1990’s, though they are still viable options for customers who are looking to put aside a portion of disposable income.

They’re also really handy if you believe at some point you are going to come into a lump sum of money.

How Do Offset Mortgages Work?

In order for a mortgage lender or any kind of loan provider to be able to lend money to clients, they need to have a source of funds to draw from.

That is the point of savings, and is why you gather interest on what you pay in. In exchange for having an account with them, you are rewarded.

The way that an offset mortgage works, is that you will be given a savings account by a mortgage lender (typically one who is a bank or building society), alongside your mortgage balance.

When you pay into your savings, your mortgage balance decreases by how much you paid in. If you take out of your savings, that mortgage balance increases by how much you took out.

You still pay a monthly mortgage payments towards reducing your balance, as you would on a standard mortgage, but you only pay interest on what is remaining on your balance, not your savings.

For example, if your mortgage is worth £100,000 and you have £50,000 in savings, then you pay interest on the remaining £50,000.

If, hypothetically, after a while you were able to pay off some of your mortgage, bringing that amount down to £45,000, but then draw £15,000 out of your savings, your balance increases to £65,000 and you receive a new set of mortgage payments per month.

This also means you’ll be paying more on interest, as there is a higher amount remaining in your mortgage balance. In addition to this, the general interest on the mortgage side of things, will typically be higher than a standard mortgage anyway.

Is an Offset Mortgage a Good Idea?

Offset mortgages don’t tend to be that popular anymore, but they are still really handy to have in certain situations. Perhaps you are due a lump sum at some point in the future, such as a future inheritance from a family member.

Because this account allows you to freely deposit and withdraw your money as you see fit and is interest-free, it’s a handy place to store any additional savings until you know what you want to do with them.

Another circumstance where these can be very beneficial, is if you have a well-paying career and are due monthly, quarterly or annual sizeable bonuses from your job, that don’t factor into day-to-day living expenses.

You can place this disposable income into your savings account, lower your monthly payments, meaning you are paying interest on a lower amount.

Overpaying Your Mortgage

An offset is also an excellent opportunity for First Time Buyers in Doncaster who want to overpay on their mortgage.

Overpaying allows you to reduce your mortgage payments for your next mortgage term, leading to a reduction on your interest rates too, with any additional mortgages you take out.

The difference with regular overpayments, is that you won’t have a savings account, you’ll just be paying off your balance. This means you can’t dip into it as an emergency fund if you need to, or if you change your mind on that overpayment.

Offsets are great for people who want to do this as you do have a savings account. This means if you want to overpay and reduce your balance, you can just pay into that savings account. If you want to take out some of what you paid in for any reason, you have the freedom to do so.

So, if you’re looking to make regular additional payments on your mortgage over time, we would absolutely recommend taking advantage of an offset savings account as you go.

Help From an Expert Mortgage Broker in Doncaster

Speaking to a trusted and experienced mortgage broker in Doncaster like us, is a good way to understand what options are available to you ahead of time.

Offset mortgages are great, but they might not be right for you, which is something a mortgage advisor in Doncaster will check before you proceed.

Generally speaking, we find that customers who have offset mortgages, won’t remortgage in Doncaster, as they will just keep their current mortgage going.

If you have any questions or need any help regarding offset mortgages, book your free mortgage appointment today using our online booking feature, and we’ll see how we can help you out. We are here from early until late every day, subject to appointment availability.

7 Questions to Ask When Buying a House in Doncaster

Moving Home Mortgage Advice in Doncaster

Whether you’re a first time buyer or are moving home in Doncaster, buying a property can be stressful and overwhelming. It shouldn’t be this way though, you should be able to enjoy the whole experience.

It would be extremely beneficial if you could prepare yourself during the lead-up to your home buying journey. You should start by asking questions about the property and where it is located.

1. How much interest has been shown in the house

New build properties tend to be more popular and in higher demand. If you come across a new build that you’re interested in, take a property viewing before you go any further.

You need to find out how many people have been interested in the property; you have to ask the question, or it may show you online. If there’s been no interest in the property, there may be a reason for it, e.g. it could be overpriced or there’s something wrong with it.

2. Is there a property chain?

A property chain is where you are waiting for your seller’s purchase to go through before you can move in. This can go on and on; your seller’s seller could always be in the same situation as you. If you aren’t in a chain, you may be able to move through your process quickly.

It can sometimes be hard to find out if there is a property chain, however, it’s always worth asking the question as the seller may tell you.

If you are a first time buyer in Doncaster, you will not be part of a chain as you are not selling a property, only buying.

3. Included in the Sale?

Some homes may come with ‘extras’ or incentives to persuade you to buy the house. This could be something like them asking what appliances you would like in your kitchen.

Older homes may come with unwanted appliances owned by the seller. It’s wise to check with the owner what these appliances are and whether they are included in the sale or offered at an additional price.

It’s wise to clarify as you may be left with unwanted items that you then need to remove and dispose of.

4. What are your new neighbours like?

Try to speak with the neighbours and get a feel for how they are and their opinion on the area.

On new building developments, this may be a little more difficult.

5. Running Costs

You will want to find out about the running costs that are involved with the property too. What are the costs for gas, heating, electricity, water (particularly if it’s a newer home with a water meter). Also, things like Council Tax charges.

6. Your Garden

When viewing the property, get a good look at the garden, make sure that it’s what you’re looking for. Everyone enjoys spending time in the garden, even if it is mostly in summer!

Ask whether the garden is southern-facing and check how well natural light enters the garden etc.

7. Home Improvements

During your property survey, damages and repairs should be highlighted, however, it depends on which survey you took out. Ask lots of questions, particularly with older properties, as you want to make sure that you aren’t buying a property that’s going to need lots of repairs.

As with any property purchase, in the future, you may need to make improvements to energy efficiency, insulation, garden work etc.

Ask More Questions When Moving Home in Doncaster

Whenever you get the chance to, ask lots of questions before you buy a home. You want to learn everything about the property you could spend your whole life in!

Estate agents and the seller should be happy to answer your questions, and if they are, maybe it could be a warning sign if they are withholding information. If you do find out information about the property that could reduce its overall price, don’t be afraid to negotiate. Don’t be too keen and offer to high to start with and remember to take into consideration other factors such as when you would be able to move in and that fits your expectations.

Buying a Property with a Partner or Friend(s) in Doncaster?

Tips for Buying a House/Apartment with a Partner or Friend(s)

First Time Buyers in Doncaster who struggle to get onto the property ladder by themselves may feel that the most practical solution is to move in with a partner or friend. There can be many benefits to doing so. It will take less time to save for a deposit, and lenders prefer two or more people to buy a property together, sharing the equity in it and the responsibility for the mortgage payments.

How many people can jointly own a property?

In some cases, you’ll find that some mortgage lenders may allow up to four people to co-own property together. But, because multiple parties are involved, this can cause some discussion with changes in circumstances. If one borrower decides to stop their contributions to the mortgage payments, the lender will still pursue the rest of your group for payment.

All the joint owners still hold a legal right to stay within their home unless a court rules otherwise. Even if someone is withholding their contribution, they’re still part-owner of the property.

With this in mind, you need to be very selective about whom you buy with.

If one of the co-owners wishes to increase the mortgage further down the line, all borrowers need to consent. It is best practice to plan for down the line, just if someone ends up with a different plan in mind or a change in circumstances.

Joint tenancy or tenancy in common?

It is familiar for couples who are married, in civil partnerships or simply cohabiting to opt for joint tenancy on a mortgage. Tenants are often relatives or friends looking to buy a house together. You will need the other applicant’s consent if you want to sell or remortgage the property further down the line.

Both co-owners will jointly own the property for a tenancy in common, but there is no legal requirement to do so in equal shares even if one party earns significantly more per month than the other.

If you are a tenant in common, you can freely sell or give away your share of the property to someone else if you wish to remove yourself from that setting.

In these cases, if one of you were to pass away, the property will own the other owner on the mortgage. We always recommend taking out life insurance during their mortgage process. The beneficiary can use life insurance to pay off a mortgage.

What happens if one party stops making mortgage payments?

All mortgage borrowers are jointly and equally liable for keeping up to date with the mortgage payments. If one party stops paying, the remaining parties have to make up for the remaining to prevent possible mortgage arrears.

It’s essential to keep on top of every payment. The reason for this is that falling into arrears could stop you from getting another mortgage further down the line. If you interpret it to view your mortgage situation like this, you don’t own 50% of a property. You own 100% of it jointly.

Removing a Name From Your Mortgage

If things don’t mainly go how you’d intended them to, whether it be a disagreement with your co-owners or the breakdown of a marriage/relationship, you may look to either remove others from your mortgage or remove yourself from their mortgage.

When this happens, it is worth speaking to a trusted Specialist Mortgage Advisor in Doncaster to see what your options might be. Please see our article “divorce & separation mortgage advice for more information on divorce and mortgages.”

Agreement in Principle: Frequently Asked Questions

A Brief Summary of an Agreement in Principle

An Agreement in Principle is the first step to getting a mortgage. You can obtain one of these from a mortgage lender. As the name implies, the lender will agree in principle to let you take out a mortgage with them.

Any Agreement in Principle gets carried out before the final checks, and whilst it is not a guarantee that you will get accepted for a mortgage, it is a good sign that you are on the right track on your mortgage journey.

Despite what people say, a Mortgage in Principle, a Decision in Principle, and the abbreviations AIP and DIP all mean the same thing.

Once armed with your Agreement in principle, you will be fully prepared to increase your odds of having your offer accepted on a property against any other potential First Time Buyer in Doncaster.

You may also even open yourself up to the chance of negotiating with the seller at a lower price. As you have demonstrated to the property seller, you are looking to purchase that you are a serious buyer and do have the funds to proceed.

Frequently Asked Agreement in Principle Questions:

Will obtaining an agreement in principle affect credit score? 

We regularly see more lenders choose to go with soft searches instead of hard searches. The main reason is that a soft search won’t affect your credit score, as they don’t usually leave a footprint, whereas a hard search does.

Having too many hard searches can cause more harm than good, especially if you don’t pass each time. That’s not to say a soft search will not affect you, but it can happen.

A soft search does not go as in-depth as hard searches. However, no matter which one the lender chooses to use, they will have their reasons for selecting either a soft or hard search.

Should I avoid hard credit checks? 

If you do not have hard searches done regularly, then having one done shouldn’t make too much difference. The main issues are when you start having loads of hard searches taken out on you within a short space of time.

It’s essential to understand that if you are well aware that you do have a good credit rating, you should put off on the idea of getting one done, especially if a mortgage lender says that a hard credit search is the most suitable option for you.

Is an Agreement in Principle a guarantee that I can get a mortgage? 

Unfortunately, even armed with an Agreement in Principle in hand, we cannot guarantee you’ll be successful as other factors come into play. For example, the lender still needs to see all your documentation and evidence to make a final decision.

We receive regular phone calls from customers after getting declined during their application process, as they have failed to read the small print in their Agreement in Principle.

On top of always reading the small print, you will need to provide your mortgage lender with proof of ID, the last 3 months payslips and bank statements to show evidence that you can handle money responsibly, all before a lender will offer your case.

Please remember that the required documentation for a Self Employed Mortgage Applicants in Doncaster is slightly different.

Can I make an offer without an Agreement in Principle? 

You can make an offer without an Agreement in Principle to hand. However, we believe you would be much better off having one with you.

Any credible estate agent will ask you for one of these, as they will want to know that you can go ahead with the mortgage process.

How long does it take to get an Agreement in Principle? 

One of our team of Mortgage Advisors in Doncaster can usually obtain you with an Agreement in Principle within 24 hours of your initial appointment.

How long does an Agreement in Principle last for?

An Agreement in Principle expires between 30-90 days after being obtained. That said, you don’t just have to jump at the first house you see. Take your time when looking for a home. A mortgage will be one of our most significant financial commitments.

If your Agreement in Principle has expired, one of our Mortgage Advisors in Doncaster can quickly get you a new one.

Finding your dream home only to be declined by a lender can be both frustrating and disheartning. This is why we always recommend to new/existing customers to get an Agreement in Principle as early as possible, to ensure you are prepared for the mortgage process.

Agreement in Principle Mortgage Advice in Doncaster

For more information regarding an Agreement in Principle and how they can help improve your chances of getting an offer accepted, Malcolm has put this video together.

What is an Agreement in Principle? | MoneymanTV

Shared Ownership – What is it? How does it work?

Shared Ownership Mortgage Advice in Doncaster

The Pro’s and Con’s of Shared Ownership Mortgages | MoneymanTV

What is shared ownership?

Help to Buy Shared Ownership is a government scheme that helps First Time Buyers in Doncaster and Home Movers purchase a percentage of your home (usually from 10% to 75% of the home’s value), and pay rent on the remaining share. Later on, you can buy more significant shares when you can afford to do so.

If eligible for this scheme, partial homeownership is an excellent way for First Time Buyers in Doncaster to get onto the property ladder and a way of owning your home without the need for a heavy deposit upfront. 

How does the scheme work?

Firstly, a deposit needs to be put down on the property. The minimum deposit that you need to put down can vary. For example, the percentage can change for better or worse depending on how good your credit score and financial situation is.

This scheme will still require you to take out a mortgage, but only on the percentage that you’re buying. For example, if you plan to buy 40% on a property worth £170,000, you’ll only need to take out a £68,000 mortgage.

Furthermore, rather than providing a deposit based on the full house price, you only have to put down a deposit based on the mortgage you have taken out. So, in this example, a 5% deposit would be £8,500.

You will start paying off your mortgage once the offer you put down gets accepted and you have moved in the property. As mentioned before, you will also have to pay rent on the remaining share of the property.

Despite having two sets of payments, your overall monthly costs should not be as expensive as taking out a ‘regular’ mortgage.

Costs and fees

When taking out a mortgage, you will need to consider lots of different costs. Shared Ownership mortgages will likely come with set-up/arrangement charges, booking and solicitor fees. Make sure to double-check that you are aware of these additional costs.

Of course, the costs can vary depending on the property that you are buying. As well as the deposit size, monthly payments, arrangement fees can differ from property to property.

How can I apply?

To make sure you are eligible to qualify for the Help to Buy Shared Ownership Scheme, here are the requirements:

  • You have to be at least 18 years of age.
  • Living outside of London, your total household annual income must be less than £80,000.
  • You are a First Time Buyer, you used to own a home but can’t afford to buy one now or are an existing shared owner looking to move.
  • If you can afford to purchase a property on the open market, you will not access this scheme. 
  • You must prove that you are not in any arrears, such as mortgages and rent.
  • You must provide evidence supporting a good, clean credit history—having a CCJ on your credit file or any other credit-related issues will look bad. 

Although this may appear like a lot, it’s the same as most Help to Buy Schemes. Each schemes’ differ from the other, as they are targeting applicants in different situations.

If you have credit problems, you may need to look at other ways to get a mortgage. There are lots of different government mortgage schemes out there that could help you get a mortgage.

For more information on these schemes, feel free to navigate to our website’s Help to Buy Mortgage Advice service page.

Get in touch with a Mortgage Broker in Doncaster today

Our mortgage advisors in Doncaster have helped many buyers secure a mortgage through the Shared Ownership scheme. We have been helping First Time Buyers for over 20 years now!

If you are looking for Help to Buy Mortgage Advice in Doncaster, we can check whether you match any schemes’ requirements.

Please take advantage of our free mortgage consultation by booking yourself in for a mortgage appointment today.

The Different Types of Mortgages Explained

Mortgage Advice in Doncaster

Whether you are a first time buyer in Doncaster looking to buy a property, moving house, or are ready to remortgage, you’ll soon begin to realise there are many options out there for you when it comes to taking out your mortgage.

This article will feature a comprehensive list of the most popular mortgages available to customers currently on the mortgage market.

If you have any questions regarding any of the mortgage options below, please do not hesitate to get in touch. You can now book yourself in for a free mortgage appointment to speak with a dedicated mortgage advisor in Doncaster, at a time that suits you and your lifestyle.

What is a fixed rate Mortgage?

What Is A Fixed-Rate Mortgage?

A fixed-rate mortgage will mean that your monthly mortgage payments will stay the same for the duration of your mortgage term.

The length you want to fix your payments is your choice, with typical options being around 2, 3 or 5 years or longer.

No matter what happens to inflation, interest rates or the nationwide economy, you know that your mortgage payment, which is usually your single biggest outgoing, will not change.

What is a tracker mortgage?

What Is A Tracker Mortgage?

A tracker mortgage will provide you with an interest rate that mimics the Bank of England’s base rate.

That means neither you nor the mortgage lender will set the rate and change as and when the base rate does.

You will be paying back at a percentage that is above the Bank of England base rate. If we use this in an example, the base rate is 1%, and you are tracking at 1% above the base rate, which means you will be paying back your interest rate of 2%.

Even though these deals aren’t as popular anymore, consider that your mortgage payments will increase if the base rate increases. If it goes down, yours will go down too. Of course, this will benefit you.

What is a repayment mortgage?

What Is A Repayment Mortgage?

When you take out a repayment mortgage, you will be paying back a combination of both the interest and capital each month.

Going off the basis that you can keep your payments going for the mortgage term duration, you will be guaranteed to have paid it off in full and own the home of your dreams by the end of it.

That said, this is generally considered the most risk-free way to pay your capital back to the mortgage lender across the industry. Early in your term, the amount you’ll be paying will be mostly the interest, with your balance reducing at a slower rate, especially if your period is 25, 30 or 35-years.

The process quickens up within the last ten years or so of your mortgage, where you will be paying back more capital than interest, with the balance reducing at a far quicker rate.

What is an interest only mortgage?

What Is A Interest Only Mortgage?

While we do still regularly encounter many buy to let mortgages being set up on an interest-only basis (this is an option that works out much better for many landlords), it is increasingly difficult to get a residential property on an interest-only basis mortgage.

The reason for this is because once you reach the end of your term, you will still have the entire mortgage amount to pay off all in one go, with no additional income to fund the amount you’re required to pay.

There are various unique circumstances where this can be a suitable option for customers, including downsizing when you are older or if you happen to have other investments you can use to pay back the capital.

Lenders are often stringent when offering these products now, and the loan to values tend to be much lower than they were in previous years.

What is an Offset Mortgage?

What Is An Offset Mortgage?

The way an offset mortgage works is that your mortgage lender will set you up with a savings account that will work in tandem with your mortgage account.

For example, let’s say that you have a mortgage balance of £100,000 and you deposit £20,000 into your savings account, you will only be paying interest on the difference between those figures, which would work out at £80,000.

This can be a very efficient way of managing your finances, especially if you want to be paying higher rates of tax.

What is a capped rate mortgage?

What Is A Capped Rate Mortgage?

Like fixed-rate mortgages, capped rates have a maximum amount that a customer will pay each month with a maximum interest rate. With that in mind, if you’re capped at, say, 5%, you’ll never go higher than 5%.

These can be more beneficial if interest rates start to drop, so, for example, if the rates drop to 4%, 3% or 2%, then your mortgage will do the same.

What is a flexible mortgage?

What Is A Flexible Mortgage?

Flexible mortgages allow you to underpay and overpay by unlimited amounts. Underpayments are only allowed if you’ve overpaid first and have agreed with a lender to do so.

Overpayments can be reasonably beneficial, though, as you could end up paying off the mortgage early and with significantly less interest. Mortgage flexibility is usually a feature of offset mortgages.

Mortgage Broker in Doncaster

Armed Forces Help to Buy Scheme in Doncaster

Forces Help to Buy Mortgage Advice in Doncaster

Some really great news for any personnel of the military, as according to Army Families Federation Defence Secretary Ben Wallace the current Help to Buy scheme that was created as a means to help military personnel get onto the property ladder has been extended.

It was originally introduced back in 2014, with a huge £200 million put into the scheme. The intention was to provide a boost to anyone from the forces who needed some help in purchasing a home. The project was supposed to be brought to an end in December 2019.

To show their gratitude for the military’s commitment to their Queen and country, our government chose to extend this scheme further, choosing instead to bring it to an end in December 2022.

Who Can Apply For Forces Help To Buy Scheme?

Anyone who has served some time in the military may be able to access the scheme and borrow a deposit of up to half their annual salary (a maximum of £25,000), free of any interest.

Of course you do have to be eligible, with this all depending on the length of the term served, how much you have left to serve and medical categories.

The Armed Forces Help to Buy Scheme can be used to either purchase their first home purchase or to move into a new home if you already own one.

Whether you previously thought you could or not, you now have a home buying lifeline if you are indeed eligible for it.

One of the best parts about this mortgage scheme, that is appealing to many home buyers, is that you don’t actually need any current savings in order to find your footing on the property ladder.

The funds will be raised from the loan that you receive via the Armed Forces Help to Buy Scheme and can be used to put towards your deposit as well as any other costs, including but not limited to;

  • Stamp duty
  • Estate agent fees
  • Solicitors fees

This scheme is a lot more relaxed than some other schemes available, and the Forces Help to Buy loan can be paid back over a duration of around 10 years, so you have no reason to feel rushed about paying it back.

For more information on this scheme from the government, click here.

How a mortgage advisor in Doncaster may be able to help

As an experienced mortgage advice team in Doncaster, we will have your back from the first time you call up, right through until competition and even beyond that.

Your dedicated advisor will take care of you all throughout your mortgage journey, ensuring that you end up with the most appropriate mortgage result for your personal and financial circumstances.

We truly do pride ourselves on being able to provide a fast and friendly customer experience that is free of stress and worry. Get in touch with us today and we will see how we are able to further you and your home owning dreams.

It is important to remember that the Forces Help to Buy is not the same as the typical UK Help to Buy scheme.

What is a Tracker Mortgage?

Tracker Mortgage Advice in Doncaster

If you have done your research prior to getting in touch with an open and honest mortgage broker in Doncaster, you may have come to realise there are a lot of different mortgage types available to first-time buyers, all varying on the circumstances they are appropriate for and who is eligible.

Throughout this article, we are going to take a more in-depth look at the tracker mortgage, how it could benefit you and your mortgage situation, as well as why it is a popular choice amongst homebuyers.

First of all, please remember that a mortgage deal is only as good as the circumstances it matches up with, so though it may seem good on the surface, it may be the wrong path to take entirely.

To give out an example of what we mean here; Initially you could take out a tracker mortgage, only for you to later decide that fixed payments would’ve been your preferred option (via a fixed-rate mortgage). Once you’re at this point, you have already locked yourself into a contracted agreement and making changes wouldn’t be an option.

As a reputable, experienced and hardworking mortgage broker in Doncaster, we will always recommend that you get yourself prepared and making sure you are well researched prior to your mortgage journey getting underway.

We feel like home buyers would truly benefit greatly from taking up expert first time buyer mortgage advice in Doncaster.

As an alternative to our article, we also have a YouTube video on the same topic readily available for people to watch. Feel free to head on over to our moneymanTV channel to view more helpful video guides, presented for free by the ‘Moneyman’ himself, Malcolm Davidson.

What is a Tracker Mortgage? | MoneymanTV

What is a tracker mortgage?

Well, now let’s get down to business. I’m sure the first thing you want to know is; What is a tracker mortgage?

So if you were to find yourself on a tracker mortgage, your interest rate would move along with the Bank of England’s base rate and typically with an additional percentage added on top by your mortgage lender.

Your lender cannot choose the rate, as this is usually an externally set rate and will have to be followed strictly.

An example of this would be if the Bank of England’s base rate was running at 1%, your lender would have to add on another set amount, let’s say 1%.

This means that regardless of what the Bank of England’s rate percentage is, your interest rate will always remain just above that figure.

Will a tracker mortgage in Doncaster benefit me?

A tracker mortgage can be incredibly useful if the Bank of England’s rate is running at a slightly lower rate. It will generally sit around 0-1%, though as the year goes on it will naturally go up a little bit.

Previously, during the credit crunch in 2007-2008, the market plummeted and interest rates went sky high. At it’s highest, it was sitting around 5%.

Of course when adding on the percentage that your lender would add on top of this figure, you could’ve ended up with a rather sizable 6% interest on your monthly mortgage repayments.

On the other side of the coin, looking back to March 2020 (around the start of the coronavirus), the mortgage market had a similar scare when the Bank of England’s rate dropped significantly, dropping a down to an incredibly low 0.1%.

If you were on a tracker mortgage during this period of history, the chances are that you would’ve also dropped down to an interest rate of somewhere around 1.1%.

Naturally because of this, a lot of lenders simply stopped offering this mortgage type to their customers, as really it would’ve been too good to be true. A mortgage lender is still a business at the end of the day and need to turn a profit.

Nowadays the market seems to be almost back in full swing and customers do have better chances now of obtaining a tracker mortgage than they would’ve before, especially one that will be well suited to your financial circumstances.

A tracker mortgage does have both it’s ups and downs, as it will rely pretty massively on the economy. If anything happens to the market and the Bank of England’s rate goes high once again, a tracker mortgage is definitely not the sort of mortgage to go for.

On the flip side of that argument, if the situation is that the economy is doing extraordinarily well with a low Bank of England base rate, a tracker mortgage is one we could definitely look at for you, as you may benefit well from it. Again though, this also depends on what you’re looking to do.

Different Types of Mortgages in Doncaster

There are a wide variety of mortgages types available out there for prospective first time buyers in Doncaster and existing homeowners alike, it’s just finding the one that is right for your personal and financial needs.

Before taking the big leap into any mortgage deals, we would definitely suggest that you speak to a trusted mortgage advisor in Doncaster about what paths are open for you to walk. They will try and find you the best deal they can.

If you are a first time buyer in Doncaster, we believe you’ll benefit immensely from our dedicated mortgage advice service. We have over two decades of experience in the mortgage world and have expert knowledge on various mortgage lender criteria.

We are also available to speak with and provide assistance to any customers looking to remortgage or move home in Doncaster. We hope you will find our mortgage advice service invaluable.

As your hardworking and responsive mortgage advisors in Doncaster, we will work alongside you from beginning until end, offering you mortgage guidance and support all throughout your journey.

Agreement in Principle | Mortgage Advice in Doncaster

What is a Soft Credit Search for a Mortgage?

What is an Agreement in Principle?

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.

What is a Hard credit 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.

What is a Soft credit search?

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. 

Do Gambling Transactions Look Bad on My Bank Statements?

Why does the lender need my bank statements? 

No matter the mortgage route that you end up taking, you could be a first time buyer in Doncaster, home mover or looking to remortgage, your mortgage lender will always request a copy of your bank statements. In fact, they will ask for numerous pieces of evidence to support your affordability for a mortgage.

Lenders look at bank statements for multiple different reasons. They will need to measure your mortgage affordability, reliability and determine whether you are someone who manages their finances responsibly.

The planning stage of your mortgage journey matters the most. As a mortgage broker in Doncaster, we would strongly advise that you think about your bank statements and consider what you want to show on them in the months leading up to your mortgage application.

Furthermore, when it comes to what a lender is looking for on your bank statements, a big thing that will catch their eye is gambling transactions.

What has it got to do with the lender whether l gamble or not?

Although gambling is not illegal, lenders do seem to judge your mortgage application less favourably if they can see large amounts of gambling transactions on your bank statements.

There’s a big difference between spending a little bit here and there when the grand national is on to frequently betting lots of money every weekend. This is why, especially during your mortgage application and the months leading up to it, you should remember to ‘gamble responsibly’.

A mortgage broker in Doncaster like us, nor a lender can ever tell you how to live your life, all we can do is ask for you to be careful. Lenders do have a duty to lend responsibly. 

Lenders need to prove to regulators that they’re lending to responsible applicants, therefore they will never lend to someone who can’t take care of their own finances. Would you lend to someone who is constantly gambling over an applicant who hardly gambles?

Will gambling affect my chances of getting a mortgage?  

The odd gambling transaction here and there shouldn’t affect your ability to get a mortgage. Lenders will look at the size of the transactions and how frequent they are.

They will also look at how these transactions affect your overall account balance. Do they make you dip into your overdraft? Are you borrowing money to gamble/gambling money that you don’t have?

If you’re acting irresponsibly with your money in the lead up to your mortgage application, the lender will notice all of these transactions straight away.

What will lenders be looking for on my bank statements? 

It’s not just gambling transactions that lenders will look for, they will also be looking for different things on your bank statements:

  • Loan repayments
  • Exceeding into your overdraft
  • Other current accounts
  • Credit cards
  • Recurring payments

They need to be sure that you are the type of applicant that they want to lend to. From monitoring your accounts to asking you questions about your transactions, they need to be certain that they can trust you.

On the other hand, if you do happen to dip into your overdraft now and again, it shouldn’t have too much detrimental effect on your mortgage application. It’s when you are constantly dipping into your overdraft and are struggling to get out of it.

What can I do to show the lender I am reliable? 

Being reliable and sensible is exactly what a lender is looking for. Plan ahead, show the lender that you’re serious about the mortgage process and want to present yourself the best that you can.

Usually, you will be asked to provide up to three months of your most recent bank statements. With this in mind, during these months, make sure that you take care of finances and be responsible and sensible.

If you gamble regularly, perhaps it could be an idea to take a break for a little while. Betting apps often hold betting limit features; this could be something to think about. As well as aiding your mortgage application, this may also be good for your mental health. 

Get in touch with a mortgage broker in Doncaster 

Our job as a mortgage broker in Doncaster is to help you through your whole mortgage process, from the very start! We will take a look at your evidential documents with you, making sure that you are presenting yourself in the best way possible for your situation.

Our mortgage advisors in Doncaster will hold your hand throughout your application. We have availability 7 days a week, so don’t hesitate to get in touch.

Doncastermoneyman.com & Doncastermoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.

Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk

The information contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.
Should you have cause to complain and you are not satisfied with our response to your complaint, you may be able to refer it
to the Financial Ombudsman Service, which can be contacted as follows

The Financial Ombudsman Service, Exchange Tower, London, E14 9SR
www.financial-ombudsman.org.uk

© 2022 Doncastermoneyman

Doncastermoneyman, 3 Cavendish Court, South Parade, Doncaster, DN1 2DJ.

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