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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Firstly, Congratulations! You have passed all of the necessary exams and are now a newly qualified teacher. Now all you have to do is find a teaching position and start gaining some teaching experience.
For some, to be closer to that job, you may be required to look at relocating to Doncaster. If you already own your own home, you may benefit from the help of a mortgage broker in Doncaster.
We have dealt with many customers who feel stressed trying to balance the strain of homeownership whilst settling down within your newfound role in teaching.
Hopefully, with the help of a mortgage advisor in Doncaster, your process will go a lot smoother and quicker, reducing your stress levels.
The challenging part is finding a lender willing to offer a mortgage to newly qualified teachers. Mian reason being NQT having little to no work history or being on a temporary contract.
The good news is, some lenders may even offer good deals with those working within the teaching industry from time to time and always a good idea to go to a mortgage broker. For instance, with the help of a mortgage broker in Doncaster, they can search thousands of deals and match your situation to the right lender’s criteria.
The different types of mortgage available for newly qualified teachers commonly include:
Here are some things that lenders may consider during your process:
Our team of mortgage advisors in Doncaster have much experience working throughout this industry, helping various people with similar situations such as yourself.
Most importantly, there are lots of benefits to home buyers using a trusted first time buyer mortgage broker in Doncaster.
For more information get in touch, and we can book you in for a free mortgage consultation. From there, we take some details from you to determine whether or not you have a chance of obtaining a mortgage suitable to your circumstances.
No matter your mortgage situation, it’s essential to seek mortgage advice in Doncaster at the start of your mortgage journey, whether you are a first time buyer or looking to remortgage in Doncaster.
Getting expert mortgage advice can be the difference between an application getting accepted and being rejected. Taking matters into your own hands can work against you as you aren’t as experienced in looking for certain things.
Our team can search through thousands of mortgage deals for you, which will hopefully save both your time and money during your mortgage process.
It’s the job of your dedicated Mortgage Advisor in Doncaster to find you the mortgage deal that is the most appropriate for your circumstances. Some say that there’s no significant difference between an advisor and a broker, which is partially true and untrue.
Mortgage advisors are trained professionals working either for a mortgage broker, independently or for more prominent banks or building societies. The difference comes into play when looking at the companies those advisors work for, compared to Doncastermoneyman.
However, here at Doncastermoneyman, we can tell you our team of specialist mortgage advisors in Doncaster are authorised and regulated by the Financial Conduct Authority and have access to a large panel of various mortgage lenders pick and choose a deal depending on how appropriate it is.
Many of those advisors working directly for the lender will only offer their products, along with biased advice.
Our mortgage advisors in Doncaster have in-depth knowledge of lending criteria and experience providing expert advice to customers with all types of individual situations.
For first time buyers looking to take that first step onto the property ladder, the process can be confusing.
It’s here where our dedicated mortgage advisors can take the reigns and walk you through every step, supporting you through the most stressful moments, leading up to when you get your keys and, if necessary, beyond.
It may be that you need mortgage advice in Doncaster because you are looking to remortgage for home improvements/release equity or purchasing your next property to move into or add to your portfolio.
Our team of specialist mortgage advisors in Doncaster in Doncaster can help find suitable mortgages for a landlord looking at buy Let mortgages.
One of the many benefits of using a mortgage broker in Doncaster is that the process will likely go a lot smoother than it would’ve been if you had opted to go alone. Buying a home can be a very stressful experience, and our customers like to know they have got someone on their side to answer all their questions and queries. Here are some other ways we are also able to help:
Our mortgage advisors in Doncaster job is to ensure you have the highest chance of being accepted the first time possible. Nothing is ever guaranteed, but with our help, you’ll hopefully be one step closer.
We are proud to have the quality of service we provide to our customers seven days a week.
We put our people at the heart of our business and always aim to exceed their expectations. Get in touch with your mortgage broker in Doncaster today and benefit from a free mortgage consultation with a member of
A 95% mortgage is as simple as the name would suggest; you are borrowing against 95% of the price of a property, and then you are covering the remaining 5% with your deposit. An example of this is if you looked at buying a property that was worth £150,000 with a 95% mortgage, you would be putting down £7,500 as your deposit and borrow the remaining £142,500 from the lender.
Off the back of the March 2021 Budget, Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, making 95% mortgages more readily available from the bigger high street banks.
This is fantastic news for First-Time Buyers and Home Movers alike, as this scheme will continue running until December 2022. Certain terms and conditions will apply though, which is something your Mortgage Advisor in Doncaster will be able to look at, to see if you qualify.
All our customers who opt to Get in Touch will receive a free, no-obligation mortgage consultation where one of our dedicated mortgage advisors will be able to make a recommendation on the best possible route for you to take.
95% mortgages are usually accessible by both First-Time Buyers in Doncaster & those who are Moving Home in Doncaster. Whilst saving for a 5% deposit sounds like a pretty straightforward concept, you’ll still need to have an acceptable credit score and prove that you are able to afford your monthly mortgage repayments, in order to access a 95% mortgage.
A good credit score is essential in the process of obtaining any mortgage, especially a 95% mortgage. Things like paying any current credit commitments on time, ensuring your addresses are updated and checking that you’re on the voters roll, can all help with your credit score.
Affordability is another one that is important to take note of. By giving the lender details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments, your lender will be able to get a general overview of whether or not you are able to afford this type of mortgage.
Nowadays we see lots of family members helping each other get onto the property ladder, especially parents looking to further their children’s lives. The way this usually happens is by gifting the person looking to find their home, the deposit required. Known through the industry as the “Bank of Mum & Dad, Gifted Deposits are only intended to be a gift, and not as a loan. The lender will need proof that this has been agreed, before it can be used towards your mortgage.
When looking for a 95% mortgage, you want to make sure you have the right type of mortgage. Each mortgage type works differently, with that choice allowing you to find one that is most appropriate for your personal and financial situation.
Some homeowners and home buyers prefer Fixed Rate or Tracker Mortgages, mortgage types which mean you either keep interest rates at a set amount for the term given or have your interest rates tracking the Bank of England base rates.
Alternatively, you might find that Interest-Only or a Repayment Mortgages are more your style. Interest-Only allows cheaper payments until you need to pay a lump sum at the end (mostly now used for Buy-to-Lets), whereas a Repayment mortgage (a normal mortgage if you’d like) means you’ll be paying interest and capital combined per month.
Seeing as a mortgage is such a large financial outgoing, you need to be prepared and need to be aware. You might find things like higher interest rates, remortgaging difficulties due to less equity and then negative equity all cropping up if you’re not.
There is no need to worry though, as all these can be avoided if you’re savvy enough with your process to begin with. The more deposit you put down for a property, the less risk the lender will see you as.
A larger deposit, of say 10-15%, would not only reduce the rates of interest by a noticeable amount, but would also give the property more equity and reduce the risk of negative equity, thanks in part to you borrowing less against the property.
So, whilst the risks may seem intimidating, planning ahead and saving for a bigger deposit to access something like a 90% or even an 85% mortgage will be a massive help in your mortgage journey and something you’ll be able to reap the rewards from in the future.
At the beginning of the Coronavirus pandemic, the Government made a promise that all borrowers would be allowed a three-month mortgage payment holiday if deemed necessary. Most lenders followed along with the Government’s guidelines and did what they could to help their borrowers during what was a difficult few months.
We felt it appropriate to write a summary of what mortgage payment holidays are, what lenders are doing and who will be able to provide help and guidance through these next few months.
We feel that it is best to summarise what mortgage payment holidays are, what lenders are doing, and who can provide you with help and guidance through these next few months.
Mortgage payment holidays are an agreement entered into with your bank, building society or mortgage lender to defer your monthly mortgage payments for a set period. In this case, 3-months.
It does not mean you never have to pay the amount back, but the interest you defer is added back onto the loan amount, while your capital balance will not decrease. In other words, your mortgage amount will increase slightly, and you will continue to attract interest on the whole amount.
When you are ready to continue the payments, this could mean that either your monthly payments are recalculated at a slightly higher level, or your mortgage term is increased somewhat. Most lenders will probably prefer not to extend your mortgage term as this could take you past their standard retirement ages, but the detail on this will follow in due course.
Dependent on your mortgage deal, you may be able to pay off a lump sum later in the year to bring your mortgage back to where it would have been.
Mortgage Payment Holidays are available both for those with residential or buy-to-let mortgages, which means landlords also have assistance if rental payments are affected.
The full proposal is in detail below:
• Mortgage lenders will offer an automatic 3-month mortgage payment holiday for customers impacted, directly or indirectly, by COVID-19.
• The mortgage payment holiday will apply to customers who are up to date on their payments, not in arrears, and wanting to self-certify that COVID-19 impacts them.
• This means that lenders will not complete an income and expenditure assessment, or evaluation of alternate payment options as ordinarily required under MCOB.
• This proposal will allow lenders to be more responsive to customer needs and offer forbearance in a simple way to customers in an environment where COVID-19 also impacts the operation of collections teams made.
• Customers will be made aware that interest will accrue in the holiday period and they will need to make up deferred payments in the future.
• Customers who wish to undertake a full assessment of their ability to pay or financial difficulty may still do so.
We would recommend speaking to your Mortgage Advisor in Doncaster. They will asses your financial situation first before looking to defer your payments as your situation may not yet be pressing.
Approaching a Mortgage Broker in Doncaster like us will allow you to explore all of your current mortgage options and could make things feel a lot less stressful.
For a customer, up to date with payments, not in arrears and impacted by COVID-19:
• The customer would contact the lender and inform them that they are affected by COVID-19.
• The lender would accept these details from the customer and offer an automatic 3-month mortgage payment holiday.
• no evidence will be sought from the customer.
• The lender makes the customer aware that interest will accrue and will be contacted at the end of the three months to complete an assessment of the customer’s circumstances.
• At the end of three months, an arrangement to pay will be agreed with the customer according to their circumstances to recover any shortfall, while ensuring that the mortgage remains affordable and sustainable.
• The lender notifies the customer that if they wished to complete a full assessment now, there might be other forbearance options more suitable to the customer.
In some cases, a mortgage payment holiday can have a negative impact on your credit score, but most lenders have now said that for cases linked to the virus, they will ensure that this is not the case.
You must ask this question to your lender directly and record the response, including the date and the name of the person you are speaking to avoid confusion later. Different lenders are doing different things.
At first, everything seemed like it would remain exactly the same and you would still be able to make changes to your mortgages as normal. This has changed in the last couple of days and lenders have been asking borrowers to avoid making changes whilst you are within a mortgage holiday period. So, at the moment they are not allowing mortgages and product transfers.
Borrowers nearing the end of their existing product may be forced to move on to the higher lenders variable rate. This could mean that borrowers who act too early could find themselves on a mortgage payment holiday that accrues interest on a costly variable rate.
We would highly recommend speaking to your Mortgage Advisor in Doncaster they will determine the best course of action based on your personal and financial situation. If possible, arranging your mortgage transfer first then asking for the holiday would seem to be the most sensible way forward.
At the moment, no Lenders have withdrawn mortgage offers; in fact, some are extending offers past the standard six-month expiration date.
You should not pull out of your purchase unless, for example, you are worried about losing your job as a result of Coronavirus. We are advising everyone to proceed as usual for now and “wait and see” – you are not committed to completing your purchase until contracts get exchanged.
In some cases, lenders can offer you a temporary switch to interest-only in order to reduce your monthly payments but not to add any further to the loan amount by still servicing the interest payments each month.
It may not be necessary to convert all your mortgage to interest only, and it may be that putting part of the mortgage on this basis could give you the breathing space you need.
People with savings may find that remortgaging onto an offset basis could give them a helping boost they were looking for, they will be cutting down on their monthly payments whilst keeping hold of their savings.
For example, someone with a £400,000 loan and £100,000 in savings would only pay interest on £300,000. This will massively reduce their monthly mortgage payments.
For others, a straight remortgage to another lender, calculating the cost of any early repayment charges, may well be enough to ease the burden or simply extending the term of your mortgage.
If you still have any other questions on mortgage payment holidays or just want general Mortgage Advice in Doncaster, give us a call today. We want to help you and your mortgage journey through these tough few months ahead. Speak to an experienced Mortgage Advisor in Doncaster today.
Looking for specialist mortgage advice in Doncaster to boost your credit score? The higher your credit score, the more chance you have of your mortgage application will be accepted. No one is guaranteed to get taken though, and Lenders have their internal scoring systems.
Each Lender has developed its system of scoring over the years. Don’t worry if you fail with one Lender. Other mortgage lenders may be more forgiving. It is your Mortgage Advisor in Doncaster’s job to match you to the right Lender, hopefully, first time, but this is not an exact science. Both you and your Mortgage Advisor in Doncaster want the same thing, which is that you end up with the best deal available to you.
There are several different credit reference agencies in the UK, including Experian and Equifax. It is a good idea to check as many of these agencies as possible to get a rounded picture of your credit score. Also, one of the agencies may be holding incorrect data. Checking with several agencies will help you identify any such discrepancies.
There are some excellent practices listed below regarding things you can be doing
Multiple credit searches can harm your score. Be careful when using price comparison websites which are significant culprits of credit searching on individuals. If you know you want to apply for a mortgage soon, it is wise to avoid using for any other credit. While having some credit and paying it back is a good thing for your score, in the long run, Lenders do not like to see you increasing your borrowings just before making a mortgage application.
Being on the electoral roll adds many points onto your score. It indicates stability and Lenders like that. Ensure your names spelt correctly and that it’s your current address registered at, not an old one. If you are not logged, it’s easy to do so online.
If you max out your card each month that will reduce your score. Using a credit card and paying off the balance in full each month is preferable. In any case, this indicates that you are good at managing your money. Worst of all would be exceeding an agreed card limit or overdraft. Lenders want to know that you take your finances seriously.
Quite often it can appear that you are living in two places at the same time on your credit report. In any case, this occurs because you may have forgotten to tell one of your credit providers that you have moved to a new house. Check all addresses are spelt correctly. If you have lived in a flat, this can be tricky as the flat/apartment number can be formatted in different ways.
You should contact the providers of store/credit cards you no longer use and get the account closed. In the short term, this can harm your score briefly as the credit reference can’t tell if it’s you closing the account down or the provider. Don’t worry, though, and it’s one step back to take two forward. This is also a good thing to do to reduce your chance of falling victim for fraud should you not notice you have lost a card you don’t use regularly.
If you have a family member or ex-partner connected to you, then this could be affecting your score. You won’t be able to get the financial association removed if the account is still live though. To remove one of these links, you should contact the credit reference agencies and make a request.
Many consumers feel that credit scoring is an unfair way of Lenders assessing applications. Lenders feel differently. It is much cheaper for them to operate this way and computers give more consistent outcomes.
Send an up to date copy of your credit report to your Mortgage Advisor in Doncaster upfront, and you will increase your chances of being accepted the first time. The more your Advisor knows about your finances, the better. Also, there are still some smaller Lenders out there that do not credit score. These Lenders do it the old-fashioned manual way, although they will even have specific rules about the number of defaults and CCJ’s they will allow.
The ‘gig economy’ has an ever-growing portion of the general public working within this section and working over short term contracts, because of this it means, they are not eligible for some benefits which employees might be such as sickness or holidays. The professions within this economy are varied, ranging from both skilled and unskilled workers, with the highest percentage being in professional services.
Because of the basis of the gig economy, it’s marginally harder for these workers to get a Mortgage in Doncaster as Lenders perceive these people to be self-employed. If you’re working within this type of economy to give yourself an increased chance of gaining a mortgage is to build up a track record of self-employment. You’ll most likely need one year’s history to qualify for a mortgage unless your contract has gone on for a longer duration.
If a Lender decides to view you as a Sole Trader, you will then need to produce evidence of your net profit – this is the amount you have earned minus your expenses in which you may need an Accountant to help you with this.
However, If you have set up your own Limited Company, then most Lenders will focus on the salary that you have paid yourself plus any dividends that are declared.
In contemporary times, Lenders are now becoming more flexible in the way they assess contract workers now that there are so apparent within the economy.
If you have been operating this way for a while and are currently in a contract. Then they will consider your ‘day rate’ as a way to assess your income, depending on the industry.
How Lenders will assess day rates will typically be that they will times the given rate by five then 46 weeks. They won’t include a full 52 weeks as contract usually doesn’t work the entire year, and neither do they get paid holidays. This method works well for IT contractors who tend to have a selection of contracts which they want to take.
Additionally, it is a good idea for any gig workers and self-employed applicants in Doncaster to get organized ahead of time before they start the mortgage application process. Tax can be a bother, but Lenders like to see a healthy level of sustainable earnings.
It’s also possible to get a mortgage on zero-hour contracts. Again, Lenders will want 12 months’ earnings before you can apply and will consider taking an average of your earnings over a full year.
If you’re a First Time Buyer in Doncaster and have saved up for your deposit (or got the green light from “Bank of Mum and Dad”, you may be wondering; what’s the next step? The answer is simple… Getting prepared for a mortgage.
We’d recommend speaking to an experienced Mortgage Broker in Doncaster as early on in the process as possible, so you know how much you can borrow for a mortgage and how much it will all cost. Obtaining an up to date credit report should also be at the top of your list, you don’t want a meaningless squabble with your mobile phone provider holding you back from buying a home. Taking the above two steps will give you a meaningful expectation of how possible this is going to be and what your budget is.
Your Mortgage Broker in Doncaster will obtain a fully credit-checked Agreement in Principle on your behalf but you’ll have to prove who you are, where you live and how much you earn. There really is loads of paperwork for you to get together so it’s a good idea to open a file for yourself and start collecting everything in advance.
In terms of proving who you are you’ll need to produce some photo ID such as a Driving license or passport, if you’re a non-UK national working over here on a Visa you’ll need that too.
In addition to the above you’ll need to prove where you live. You’ll need to produce a utility bill or original bank statement dated within the last 3 months.
Further to the Mortgage Market Review of 2014 the analysis of your spending habits has become one of the most important determining factors in whether you’ll qualify for a mortgage or not. Your bank statements should evidence your income and regular expenditures. Lenders will not be happy to see gambling transactions on your account, nor will they like it if you go over an agreed overdraft limit or if your direct debits bounce regularly.
You will have to prove you have the funds in place for the deposit and also evidence this for anti-money laundering purposes. Try not to move monies around your various accounts too much as it will make evidencing the audit trail more difficult. Lenders like to see your savings building up so you’ll need to account for any large credits into your accounts.
Quite often money for deposits has been gifted by family members. These funds need to be evidenced also and the “donor” will need to sign a letter to confirm it’s a non-refundable gift not a loan.
In terms of affordability the most important thing is to be able to prove your income. If you are employed this tends to be by way of your last 3 months’ payslips and most recent P60. Lenders can take into account regular overtime, commission, shift allowance and bonus.
If you are self-employed then you’ll need your Accountant’s help to request tax year overview.
It’s a good idea to do your homework and write down an estimate of your anticipated outgoings after you move house. You can work out an idea of how much the council tax and utility bills will be plus your regular expenditures such as food and drink and demonstrate how much disposable income you have available to pay your mortgage from.
As you can see from the above, it’s a real paper trail when you are applying for a mortgage but if you want your application to run like clockwork you’ll need to put the time aside to get everything together.
Our view is that it’s better to get all this at the outset and collate everything that the Lender could possibly ask for. As this saves time and frustration later down the line if you’re subsequently asked for paperwork you could have had ready at the outset.
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