By its own definition, a broker is a business that can arrange or negotiate for something in particular, on behalf of their client. A mortgage broker in Essex is a business that functions in that same way, for a homeowner, home buyer or landlord who is looking to take out a mortgage on their property.
A mortgage is a loan that you have secured against your property, which as a property owner, you will pay back over a particular length in time, through monthly mortgage payments.
Although a homeowner, home buyer or landlord are able to search for and apply for their own mortgage, you much more frequently find that they will look to utilise the services of a mortgage broker in Essex, because of the different services they can offer their customers.
Probably one of the most important jobs a mortgage broker in Essex can do, is that they are able to cross-reference your information against 1000s of unique products, across many different mortgage lenders. If you went directly to a bank, you will only be limited to deals from that company.
This isn’t completely a negative, as the best deal with that mortgage lender could still be the best one for you, but this can’t always be guaranteed. A mortgage broker in Essex is able to compare on your behalf, usually coming along with exclusive deals only available with that mortgage broker.
The job of a mortgage broker in Essex is more than this though, as there are lots of jobs that a mortgage broker in Essex can do, before and during your mortgage application and after your mortgage offer. They will also vary between companies; Not every mortgage broker works the same way!
For example, an area that we stand out in, is we are able to recommend suitable insurance options for our customers. Whilst it is an additional, optional cost (you don’t have to do it!), our mortgage and protection advisors have a duty of care to make sure you don’t lose your property, no matter the situation.
When your mortgage process begins, you will most likely be speaking with the appointment booking team of a mortgage broker in Essex. Their role will be to take some general information from you & help you to find a suitable time slot for you to speak with a mortgage advisor in Essex.
As an alternative to this, you are usually able these days, to bypass the need to call up first, as many mortgage brokers in Essex (much like ourselves) have a user-friendly and simplified appointment booking system online, where you can typically choose what type of appointment you would like.
Once you have gotten booked in, the next step will be to attend your mortgage appointment with your mortgage advisor in Essex. Generally you will provide them with some further information to help them better understand what you are looking to do, so that they can help you progress.
From that point, they’ll start looking at a variety of mortgage deals, to help you find the most suitable one for what it is you wish to do. Some mortgage brokers in Essex offer their customers a limited supply of obscure mortgage lenders, others offer more, with some offering a whole of market service.
Whilst we can’t say we are a whole of market company, we can confidently say that we have a greatly sized panel of mortgage lenders, with mortgage products that range from standard mortgage enquiries, to specialist, and everything else you’ll find in-between.
Your mortgage advisor in Essex will provide you with a recommendation on the deal they believe is right for you. If you like that deal, they will look to obtain an agreement in principle (AIP) for you. Our mortgage advisors in Essex are usually able to get this within 24 hours of your appointment.
Estate agents will want you to provide them with this when you make an offer on a property and it will also show the person that is selling the property that you are committed to the offer you have made and are in a position to go forward with the sale.
Also, when you are at this point, you will need to go ahead and submit your documents to the mortgage broker in Essex you are working alongside. The documents that are required can usually vary between each mortgage lender and what you wish to achieve in your mortgage process.
Standard document requests will include proof of ID, proof of your income and deposit, last 3 months’ bank statements and payslips, as well as proof of VISA or right to work in the UK, if you happen to be a foreign national (this is usually done with a share code if you have migrated from the EU).
Documents that are typically requested in more niche situations, include a P60 (not all mortgage lenders will need this), business bank statements and tax calculations/year overviews if you are a self-employed applicant, and possibly also an employment contract depending on what your job is.
After you have achieved all of the latter steps, a mortgage broker in Essex will then work to verify your documents and provide you with their mortgage illustration, which will detail the agreed deal before they move on to submission.
Following on with this, they will progress on to your mortgage application submission, to the mortgage lender. From there, it’s a bit of a waiting game until they get back in touch with your mortgage broker in Essex to confirm if you have been approved or not.
The work won’t be stopping there, as mortgage advisors in Essex still have further steps to complete. They will send copies of your documents to your mortgage lender, as well as liaise with solicitors. During this time, our mortgage advice team can recommend property surveys to you.
You will generally come across 3 different types of property survey. Basic valuation, which will work out the value and resale value of the property, home buyers valuation, which will goes a little more in-depth and a full structural survey, which alerts you to any areas that perhaps you need to look at.
Much as they had done when it came to your mortgage deal in your initial mortgage appointment, your mortgage advisor in Essex will be able to best recommend which property survey is right for you to have taken out.
As you wait for the conclusion of your mortgage application process, you may also have queries or concerns, about what is actually going on. Mortgage advice teams with good reputations will make sure you are informed regularly, often via email, so you are always in the loop with your mortgage progress.
Eventually, the mortgage lender will come back to us with an outcome on your mortgage application, hopefully a positive one! If your mortgage application is successful, you will then receive a formal mortgage offer from the mortgage lender.
From here, the job mostly goes on over to your solicitors to complete your mortgage deal, so that you can eventually be comfortable in your home. There is still more that a mortgage broker in Essex can do for you though.
Here at UK Moneyman, when you reach about the 6 month mark, before your mortgage deal is due to end, if you had previously took out your mortgage with one of our mortgage advisors, we will be back in touch to offer you remortgage advice in Essex and help you take the next mortgage step.
As is clear, there is much a mortgage broker in Essex can do for you, such as saving you time and money on your mortgage process, whilst they work to reduce your stress levels and bring you one-step closer to completing your mortgage.
We are proud to say that here at UK Moneyman, we really do care about our brilliant customers. After all, there is no Essexmoneyman, without you! We always put your best interests first, doing whatever we are able to do, to put you in the best position financially for your property goals.
To give you an example of this, if you wanted to take out a remortgage and got in touch with us for remortgage advice in Essex, but your mortgage advisor in Essex felt like you would benefit from taking out a product transfer, they will say so, as it is always about your best interests.
Furthermore, a mortgage broker in Essex may be able to get a mortgage lender to waive some of your mortgage fees, or maybe even look at incorporating them into your overall mortgage balance.
When you are in an appointment with one of our mortgage advice team, they will take a look through all of the costs and fees involved with your mortgage process, during your free mortgage appointment with a mortgage advisor in Essex.
Really, this is all down to you. If you would like to save time and money, stress and worries, then it may be beneficial to let an expert professional such as a mortgage broker in Essex, take on the bulk of the work for you.
We often find ourselves providing customers with expert mortgage advice in Essex, whether they be looking at first time buyer mortgages in Essex, to those looking for a buy to let mortgage in Essex and even more than that.
Book online today and speak with a member of our mortgage advice team, using our handy online booking feature, to benefit from a free mortgage appointment or remortgage review with a dedicated mortgage advisor in Essex today.
First-Time Buyers in Essex may find that their first experience of entering the world of home ownership can be stressful. It doesn’t always have to be that way though.
To help you make the most of any upcoming house viewings and to be as prepared as you possibly can be, we’ve put together a list of nine common questions that are worth asking when it comes to buying a house in Essex.
There is nothing wrong with taking your time to have a think about whether or not you would like to buy a property before committing to a purchase. It’s understandable, as doing something like this will be one of, if not the most important financial commitment you ever make.
A good starting point is to find out how many people have viewed or enquired about the property you have your eye on. This can give you a more accurate idea of how much time you have to ponder before making a final decision.
If it isn’t too popular, maybe you can take some time before deciding. If it’s popular, maybe you should decide sooner rather than later.
If the property is currently stuck within a chain, it may possibly cause some significant impact on different areas of your mortgage process.
If there is no onward chain, chances are your process will be able to continue smoothly, especially if you are not part of a chain yourself. On top of this, if the process is not reliant on you selling your property first, you will have more advantage as a home buyer.
This is because you will not have any part in holding up the home buying process. Definitely remember to mention this when negotiating a price with a seller.
Depending on who the previous homeowners were, you might find that they have left some items behind to save on costs. This could definitely benefit you.
The items generally left behind are what is called “white goods”. This includes things like washing machines, freezers, fridges and kettles. You may also find that the seller has left their shed behind in the garden.
If the appliances are all working well it is perfect for new buyers who are looking to save a bit of cash until they get their own items and modernise the place a bit. Alternatively, if you don’t want or need these items, it will be up to you to get rid of them.
On the flip side to this, if you are a First-Time Buyer in Essex, looking to buy a new build property, it is worth asking about optional extras. Doing so can see your new home potentially furnished, ready for when you are able to move in.
When you are moving into an area that you don’t know too much about, it is definitely worth your time to try and get a feel for what the neighbours are like, as a good or bad neighbour experience can often be one of the more vital “make or break” instances of your home experience.
Once again, if you are looking to move into a new build property, you and your neighbours will be the ones creating the community. This is a bit of a risk, as you will be building a neighbourhood from scratch with strangers.
Of course, first impressions are not the be all end all, but it’s always important to at least have a friendly dynamic with neighbours as you both will be presumably living next to one another for a considerable amount of time.
The running costs for the property you’re looking to live in can very much depend on the specific location in Essex, especially with it being a county. Therefore, it is important to do plenty of research and ask some questions.
For example, find out how much you could be looking to pay on council tax, as well as the average spend on utilities. This can generally be achieved by asking the seller or doing some online research.
Having this information will help you out when it comes to budgeting for a property.
Perhaps you are fond of relaxing in the garden on a late summers evening. Maybe you would even like to read a book in the natural light. Whether it is one of these or something else entirely, the direction that the house is facing can make quite the difference.
That being said, some locations can often mean that you have to pay a more premium price for a south-facing garden, due to the fact that they receive the most sun throughout the day.
Once again, this is a factor that can definitely have an impact on your budget. Therefore, it is important that you find out a bit more information about the following;
Making negotiations on the price of a property is a fairly standard part of the house-buying process. With that in mind, it’s essential to make sure that you are as prepared as possible to make any offers on a property.
It is also worth having a conversation with the seller or estate agent to determine what kind of offer may be considered too high or too low for the property in question. Find out if anyone else has made any offers prior to your enquiry, and if they’ve been rejected.
By putting aside a date in your diary, you will be able to put together a structured plan for your other jobs, such as instructing a conveyancing solicitor, boxing up all of your belongings and arranging a removal van to collect everything from your home and take it to your new one.
A gifted deposit is money given to a homebuyer to buy a property and can equate to some, or all of their deposit needed, with an understanding that you don’t need to repay the person who gave it to you.
Gifted Deposits are beneficial when you can afford your monthly repayments but struggle to afford the initial deposit; this is common for lower-income people. Having more gifted deposit available may also enable you to receive conceivably better rates from a mortgage lender.
It’s usually birth or adopted parents and carers who can gift you the deposit. You may have come across this referred to as the “Bank of Mum & Dad”. Additionally, other family members could also get acknowledged. It depends on the individual lenders, so your dedicated mortgage advisor in Essex needs to be accurate.
We often find that customers don’t know that their parents can support them out with their mortgage or don’t have the confidence to ask for help. Some parents will be more than happy to help their children, it’s a massive chapter in there lives, and their gifted deposit will allow them to live a sheltered life in a property they can call home.
Generally speaking, buying a house is a long term commitment. However taking out a mortgage often works out better than renting, you could potentially be paying less per month. Although parents can sometimes gift it earlier on in life if they already have enough saved or have released a certain amount of equity from their own home, the deposit usually is from inheritance.
Most lenders will not accept a loan to pay off your deposit. It comes down to the lender being uncertain that you’d have enough disposable income to pay back both the loan and the mortgage concurrently.
There is no maximum limit on the amount that someone can give you as a gift, with more deposit often giving you better rates, at least one lender that insists you put in at least 5% deposit from your income.
The people who reap the most benefits from this tend to be First Time Buyers and Home Movers in Essex. It can also be beneficial when used in conjunction with the Help to Buy Scheme, as the required 5% deposit, depending on the lender, can be paid via gifted deposit.
For the most part, all lenders will require a gifted deposit form. Depending on the lender, you may ask to provide additional proof and ID (things like donor ID or bank statements).
Have you ever thought of using a mortgage broker in Essex? Well, you may not realise it initially but the fact is there are some good reasons for it. Although, it is quite possible to proceed by directly contacting the lender, most people prefer dealing with a mortgage broker.
People often consider it a great chance to save money by not hiring a mortgage broker. It seems a cost-effective idea to proceed with everything on your own.
So you may also be one of those who prefer going directly to the Bank or Building Society. Another pro that was previously in the minds of the people was that “the Bank Manager knows my finances inside out”, although this changed when credit scoring was introduced.
It is also true that some lenders have various mortgage products only for the people who directly reach out to them. The main intention behind such ideas is to attract the consumers directly and grab their attention with exclusive offers.
Ultimately, it serves as a great tool to spread the business. The interesting part is that it is equally enticing to speak with a mortgage broker as well. Some offers can be found only through a mortgage broker.
From 2014 onward, it was not possible for the lenders to sell mortgages to anyone on a non-advised basis. At that time, it was a common perception that non-advisors were forcing their advice on the customers and not letting them benefit from consumer protection benefits that should come with speaking to a professional mortgage advisor in Essex.
There’s also the fact that taking an appointment with a bank can sometimes take months to happen. A mortgage broker in Essex can often get you booked in within that week.
Now you can easily understand how these kinds of issues gave rise to the importance of mortgage brokers and diverted the minds of the people towards them. As a result, more and more applicants started relying on the mortgage brokers and were quite willing to pay their fees.
Now they had more trust for the mortgage brokers who are often able to offer their services the same day, like ourselves. We are always ready to help you, so Get in Touch and we will put you through the qualified mortgage advisors either immediately or within the same day if we can.
You might be wondering: what can be the reasons that make some mortgage applications far more difficult than they should. So let’s have a look at some of the examples:
In the past years, it was much easier for the lenders to get the competitive edge by just presenting more enticing offers than their competitors. But it is not as simple now and the thing that distinguishes one lender from the other is the lending criteria.
To make all this easier, all you need to do is to discuss your situation with an experienced and professional mortgage broker and ask them whether they encountered a similar situation in the past or not. After a lot of research and hard work, a mortgage broker will hopefully be able to help you through and recommend the most suitable mortgage that matches with your budget and does not break the bank.
Here it is worth mentioning that even if the application is simple, we have more experience and knowledge that will surely help you in getting the most appropriate deal. For example, we have a professional team of mortgage advisors in York that will guide you about other professional options and services such as solicitors. When you keep yourself in touch with us, we will also update you about the surveys and protection information available to you.
Our distinguishing feature is that we are far more fast and responsive compared to the other mortgage brokers. The biggest reason why customers often need the mortgage help is that everyone nowadays is very busy and needs someone who can lift off the weight. Our mortgage advisors will do that for you quite smoothly and you will definitely appreciate the benefits of having an expert on board.
Ready to discuss your mortgage plans? Feel free to Get in Touch with your specialist mortgage broker in Essex. We are available 7 days a week, to help you out in finding the right mortgage deal.
After the introduction of the Help to Buy Mortgage Scheme, a lot of home builders started putting up their newly built homes for sale on a leasehold basis other than a freehold one. After a while, the government decided to intervene after seeing how wrong the system was.
Some of the major housebuilders in the UK have been accused of neglecting social conscience in a bid to make profit. These housebuilders tend not to care that the country needs new houses, but are rather interested in making profit. The media have accused them of intentionally waiting for the market to be favorable without building new homes, a term referred to as “land banking”.
The consolidation of the industry has made builders inherit lands that are on leasehold into their organization. They claim to provide both leasehold and freehold properties up for sale to buyers to help them make informed decisions.
Alot of persons began feeling as though the property market had shifted a lot towards leasehold houses as soon as they got an idea of how much the builders have been making from the leases. Alot was exposed after it was discovered that a chief executive of one of leading builders in UK made about a £100m in bonus.
After asking for permission to make certain alterations in their homes, some of the leasehold owners discovered that they had received thousands of pounds in quotes. The fees were charged by leasehold management companies.
The owners also discovered that the annual ground rents would double after ten years and they would find it difficult to sell their homes in the future after this increase.
They were able to notify their MPs and the subject was debated in parliament; it was agreed by the government that anyone buying a house (not an apartment or a flat) will most likely be a freehold.
So, if you own one of these houses and you are not aware it is a leasehold then it’s important you know that you can inform the free holder of your house if you have interest in purchasing the freehold off them.
You will have to negotiate a deal with the free holder if you’re interested in buying. The length of time that you have lived in the property would have to be factored in as well.
Service charges are also another major issue alongside leasehold house. When housebuilders get permission from the council to build on a plot of land, certain areas such as roads, grass verges are usually left out.
These areas would then need to be outsourced to other companies, saving money for the homeowners and builders. The owners of the leasehold property would then have to contribute on top of their council tax. This could happen to either leasehold or freehold houses.
The costs of service charges may rise as well and this is another expenditure that will be added on your taxes as well. In some case, the residents would have to come together into an association that would allow them pick another service provider.
As trusted Help to Buy Mortgage Advisors in Essex, it’s important you consult your solicitor first concerning the lease if you intend to buy leasehold houses. It’s quite easy to get excited about buying a home, it’s important you realise that this is a major investment and the decision should be done carefully.
Regardless of whether you are a First Time Buyer in Essex looking to make that initial jump onto the property ladder, or are going through the process of Moving House in Essex, it will soon become apparent that there are multiple different types of mortgage available to customers.
Some options are a little more popular than others and some are quite hard to come across. We put together a list of mortgage types we find that we encounter the most frequently and that you will likely come across in your search for a mortgage. You will also see each section accompanied by one of our MoneymanTV episodes, which we hope you will find very useful ahead of the mortgage process.
We have a collection of Helpful Mortgage Guides on moneymanTV here, as well as our “Mortgages Explained” playlist here.
A fixed-rate mortgage means that your mortgage payments, for a specific period of time, will stay the same, giving some consistency to your process. The length of your fixed payments is completely your choice, with generally homebuyers choosing common lengths of anywhere around 2, 3 or 5 years or longer.
Regardless of any changes to inflation, interest rates or the economy you can rest easy knowing that your mortgage payment, often your single biggest outgoing, will not drastically change, giving you some normality.
A tracker mortgage means that the interest-rate of your mortgage will follow the base rate of the Bank of England. What this means is that the lender that you are with do not choose interest-rate and neither will you. Instead, you will be paying a percentage above the Bank of England base rate, something which can change slightly. A prime example of this, is if the base rate is 1% and you are tracking at 1% above base rate, that means you will be paying a rate of 2% on interest.
When you take out a repayment mortgage you will be paying back capital and interest combined each month of your term. So long as you keep your payments going for the full length of the mortgage term, you will be guaranteed to have your mortgage balance paid off by the end, with the property then becoming yours to own.
In regards to mortgage payments, this is considered to be the most risk-free way to pay your capital back to the mortgage lender. Early on into your mortgage term, you will primarily be paying back the interest portion of the payments, and your balance will start to go down really slowly. This is especially the case if you have taken out a longer term of around 25, 30 or more.
Where this changes for you, is when it comes to the last ten years or so of your mortgage. Your monthly mortgage payments will be more capital than interest, with the balance coming down much faster.
Whilst many modern day buy-to-let mortgages are set up on an interest-only basis, you’ll find it a lot harder trying to get a residential property on the same basis. The likelihood of a mortgage lender offering an interest-only product to customers these days is not very high, though in some cases it is possible.
Situations where this might apply to a customer include downsizing when you are older or have other investments that can be used to pay back the capital. Lenders have strict rules when it comes to offering these products now and the loan to values are a lot lower than they used to be back in the day.
With an offset mortgage, the lender will set you up a savings account that will function alongside your mortgage account. The way that this works is that, for example, let’s say you have a mortgage balance of £100,000 and £20,000 is deposited into your savings account, you only pay interest on the difference between this, which in this case is £80,000. This can be a very efficient way of managing your finances, especially if you pay a higher rate of tax usually.
When customers get in touch, we often find that they’re that they are looking for specific Specialist Mortgage Advice in Essex. A large portion of our customers are currently renting from a landlord who is looking to sell their property, with the renter willing to be the one to buy it.
From the perspective of a landlord, selling a property to their current tenant can be a much easier and more beneficial process. As such they may present the tenant with the option of buying the property before it goes on the open market.
Because of government tax relief clamps, many landlords are now paying more tax than they would have done in the past, leading some to quit the housing market and go find other investment opportunities elsewhere.
Property investors are really serious about their jobs and pride themselves on keeping the property market going. As such they find themselves going through these legislative changes. Serious Buy-to-Let landlords see their ventures as long-term investments, whereas amateur landlords are more likely to sell if things don’t quite go their way.
There are also benefits to the sitting tenant, not just the landlord. These include:
If the price you both agree on is below the value of the property, a lender may accept putting the equity in the property towards your deposit. If there is enough equity in there, there may be a chance you don’t even need a deposit at all.
If you have any further questions relating to buying your landlords property as a sitting tenant, Get in Touch and we’ll see how our mortgage advisors in Essex can help.
In the beginning of your mortgage process, if you choose to use a large estate agent, they will likely try to persuade you to use their in-branch Mortgage Advisor and their recommended conveyancers. You are under no obligation, however, to use their in-house advisor and you can still get the same or better deals from elsewhere! Unfortunately, First Time Buyers are often the ones that get caught out and end up being tricked into using services that they don’t want or need.
Searching for your own Mortgage Advisor in Essex could ultimately be the best path for you to take. An estate agent’s advisor will be biased to only their products, whereas a dedicated mortgage broker in Essex will be able to give you more perspective of each side.
If you do your research and still end up back with your in-house advisor, that’s your call and is far enough, though you should always remember that you have other options you can choose from, should you want that.
Our view consists of both transparency and efficiency, as we want to provide the best possible customer experience and also the best advice for your individual financial situation, whilst still delivering both a fast & friendly mortgage advice service.
If you do go down the route of using your estate agent’s in-house mortgage advisor and conveyancer, you need to take a look at where the cost of their service is coming from. They could be charging you for their services without asking you and adding it to additional fees, with the hope that you don’t notice.
Speaking with a trusted mortgage broker in Essex will eliminate these concerns, as you get exactly what you paid for, no strings attached. Your dedicated advisor will gladly break each cost down for you and relieve any uncertainty you may be feeling.
Even though it is a highly illegal tactic, if you choose not to take the estate agents in-house mortgage advice, they may refuse putting your offer forward on a property you are fully capable of being accepted on. For example, you could be using a broker and they may push another offer to completion over yours, simply because you aren’t using their services. Again, please note that these situations are illegal.
Estate agents may try even more underhanded tactics by doing things like trying to charge you with extortionate in-house conveyancing fees. Even with a straightforward purchase, they have been known to try and charge you with fees upwards of £1,500. If something like this happens during a purchase, you have full rights to ask them where they have got these prices from and for them to provide a full breakdown of where the costs have come from.
A trusted mortgage broker in Essex only has your best interests at heart, meaning a lot of the problems caused by going with an estate agent can be avoided.
Trying to choose the right Mortgage Advisor can be hard; but is there a way to make it easier?
Sometimes you will have a specific case that might require specialist care and attention. An estate agents in-house advisors will only care about making money off you. When you Get in Touch with a mortgage broker in Essex, you can be matched up with an experienced advisor relative to that field.
An example of this, is that in our company we have specialist buy-to-let mortgage experts who are able to help out buy-to-let enquiry is presented to them. Once you’ve had a free mortgage consultation and an agreement in principle (often turned around in 24 hours or less), you could be linked with your perfect advisor and get started on the mortgage process.
We have been providing mortgage advice for years now and have been helping struggling customer take that leap into the mortgage market for over 15 years. You can find out more about our expert mortgage advice service by looking at our incredible customer reviews.
If you would rather take matters into your own hands, you should know that it’s perfectly okay to do so. Most of the process can now be done online! Along with the use of price comparison websites, you may be able to find yourself the best deal for what you need.
The benefit of doing things online is that you have the chance to save money on additional fees. As long as you are confident in what you are doing and know what you are looking for, you could complete the process quicker than initially anticipated.
One thing to bear in mind is shopping around and comparing online may be a little trickier than you think. You will need to make sure that you’ve found the best deal before agreeing to something. Here are some things you should be careful of when choosing to find a deal by yourself:
Making an appointment with your bank’s Mortgage Advisor isn’t exactly a hard task, however, it may not be the right choice for you to make. If you do opt to do this, here are a few things you should keep an eye out for:
Getting in touch with a mortgage broker that is not associated with the estate agent ensures you have someone working purely on your behalf as an inexperienced First Time Buyer in Essex. This also reduces any conflict of interest risks.
The process will be kept between you and your designated Mortgage Advisor in Essex. We have no external ties to any building societies, banks or estate agents, working solely for you. Whilst we have lenders on panel, they’re purely there for the deals they offer, allowing us to find the best deal for your personal circumstances.
Our team of advisors and administrators only have your best interests at heart. Managing Director Malcolm Davidson is here to explain the pros & cons of using a trusted mortgage broker:
First and foremost, what is an Agreement in Principle? You may see this online shortened to AIP or under the name Decision in Principle (worry not, it’s exactly the same thing), an Agreement in Principle is a certification of passing a lenders credit score, allowing you to qualify for a potential mortgage.
Once you have obtained yourself an Agreement in Principle, you are ready to support any offers you make as a First-Time Buyer in Essex. Having one of these on hand may put you in a better place to negotiate a lower price, as it is a demonstration to the seller that you are making a serious enquiry and have the financial means to proceed.
More commonly these days we see lenders using soft searches as their primary method of credit scoring, however hard searches still do occur and it’s not impossible for either to affect your credit score. Generally it’s a hard search rather than a soft search that will do this, though it’s not unheard of completely. Remember with soft searches, whilst they don’t go as in-depth, they’re still valid forms of credit scoring.
If you infrequently have a hard search performed on you, then for the most part you should remain unaffected. Where this becomes an issue, is if you continuously have these done in a short space of time, as hard searches leave a credit footprint.
On the other side of the coin, if have a good credit rating and you know this, you should not be put off by a hard search, especially if it’s your best chance of obtaining a mortgage.
Whilst in theory this would be really nice, there are unfortunately no guarantees in the world of properties and mortgages, even if having an Agreement in Principle does make you look really good. At the end of the day, the mortgage lender will still need to see all your documents and only then will a decision be made by an underwriter.
We regularly encounter customers who have gotten to the point of a mortgage application and been declined, even with their AIP. This is usually down to some missed or misexplained small print in the Agreement in Principle itself.
You will be required to provide ID to prove that you are genuine, payslips to prove the amount you claim to earn is in fact true and bank statements to prove you conduct your finances. Once all this has been submitted, then a lender will offer your case.
Though you are able to make an offer without an Agreement in Principle, it is not something we would recommend. An Estate Agent with credibility will want you to prove you can proceed as expected.
It is possible to obtain an Agreement in Principle within 24 hours of speaking with a trusted Mortgage Advisor in Essex.
Typically speaking, an Agreement in Principle will expire after 30-90 days. The good news for you, is this does not mean you should just apply for the first house you see. If your Agreement in Principle expires, you can quite easily have it refreshed for when you are ready to make an offer on a property.
Getting declined on a mortgage can understandably be disappointing. As such, we recommend getting an Agreement in Principle as early on into the process as you can.
Whether you are a First-Time Buyer in Essex, Home Mover in Essex or someone looking to Remortgage in Essex, the lender is going to want to see your bank statements. The lender will analyse them, looking at all aspects of this, though at the end of the day, their aim is to determine whether you can manage your money responsibly and maintain regular monthly mortgage payments.
You need to be aware that your bank statements will say a lot about you. Something that often crops up and causes a fair amount of trouble, is gambling.
Whether you’re a regular user of gambling sites or spend money on the Grand National once a year, there is nothing illegal about gambling. With many bookmakers advertising on the mainstream media, to many people gambling is simply a fun hobby.
However, even the bookmakers and gambling advertisers themselves urge customers to ‘please gamble responsibly’, a message that also applies when it comes to the world of mortgages. Whilst the lender can’t tell you how to live your life, how you spend your money or indeed to moralise on ethical rights and wrongs of gambling, it is their job (underscored by mortgage regulation) to lend responsibly to their customers.
Lenders need to prove to their regulators that they are in-fact lending responsibly and being careful. As such, it isn’t entirely unreasonable of them to expect the people to whom they lend to adopt a similar approach when it comes to their own finances. If you think about it; Would you really lend your own money to someone who you know gambles?
As previously touched on, gambling is not an illegal form of entertainment. With that in mind, just because you have a few gambling transactions on your bank statements doesn’t mean you will be automatically declined for a mortgage. That being said, it is up to the lender whether or not some of these are deemed reasonable or responsible, checking how frequent they occur and the impact they have on your income.
If the transactions are small and infrequent, with no major impact to your overall regular credit bank balance, then the lender is likely to ignore these and proceed as normal. On the flip side, if you gamble frequently and are always overdrawn, the lender will likely see you as irresponsible and decline your application.
As you’ve read, lenders are basically looking at your bank statements to give themselves confidence in whether or not you are smart with your money.
Remember that these mortgage lenders are financial institutions that, either directly or as part of a wider group, often sell current accounts, overdraft facilities credit cards and personal loans. As such, they are well aware that these things can also be an issue.
When applying for a mortgage, the key is how the things are managed. For example, having an overdraft facility and occasionally using it isn’t necessarily a bad thing. If you regularly go over your overdraft limit, this will be a problem. Lenders keep their eye out for excess overdraft fees or returned direct debits because these would normally show that whoever owns the account is not great at managing their money.
Other things to bear in mind include;
Be smart and plan ahead. Generally speaking, a bank would ask for up to three months of your most recent bank statements, which will show your salary credits and all your regular bill payments. If you know you would like to apply for a mortgage in the future, try to make sure that you avoid any of the aforementioned issues.
Take a break from gambling for a short while and work on making sure your account is in the best shape for a future mortgage transaction. Your Mortgage Broker in Essex may be able to help, as there are some lenders who may ask for fewer bank statements than other lenders might want.
It is worth remembering that even these lenders would reserve the right to request bank statements in certain circumstances, so your best bet is to be careful and always gamble responsibly.