How to apply for a mortgage – Money Advice Service #mortgage #caclulator


#apply for mortgage

#

How to apply for a mortgage

When you apply for a mortgage, lenders have to make sure that you can afford your monthly repayments. Read on to learn everything you need to know about applying for a mortgage.

How do lenders check I can afford a mortgage?

Lenders will add up all your household income – including your basic salary and any additional income you receive from a second job, freelancing, benefits, commission or bonuses.

Checking affordability is a much more detailed process. Lenders take all your regular household bills and outgoings into account, along with any debts such as loans and credit cards, to make sure you have enough left to cover the monthly mortgage repayments.

They also have to ‘stress test’ whether you could still afford the mortgage if interest rates were to rise, or if you were to retire, go on maternity leave or end a fixed-term contract.

In addition, they’ll run a credit report with a credit reference agency to take a look at your financial history and assess how much of a risk lending to you might be.

Use our Affordability calculator to see how much you can borrow.

How to prepare for your application

Before applying for a mortgage, contact the three main credit reference agencies and order your credit reports. Make sure there is no incorrect information about you. You can do this online and it’s often free of charge for up to 30 days.

Start collecting all the documents you will need for the mortgage application. This includes:

  • Your last three months’ payslips
  • P60 form from your employer
  • Bank statements of your current account for the last three to six months
  • Statements from your savings accounts
  • Proof of benefits received
  • Statement of two to three years’ accounts from an accountant if self-employed
  • Tax return form SA302 if you have earnings from more than one source or are self-employed
  • Self-employed people should look to provide information alongside their tax return, which supports what the SA302 says about their income, such as bank statements
  • Utility bills
  • Passport or driving licence (to prove your identity)

Be accurate. Make sure the information on the application form matches the documents you supply. For example, don’t round up your salary if the amount on the payslips differ from this figure.

Provide details of the address of the property, the estate agent and your solicitor.

These are the basics – some lenders may ask for more paperwork. Bear in mind that lenders may have different criteria around income and outgoings. Ask your lender or independent mortgage adviser what else you may need.

Please note, printouts of online statements of your current account and utility bills may not be acceptable. You will either need hard copies or to have copies certified by your solicitor, your bank or your utility provider.

How you spend your money

You might also need to show your outgoings, including how much you’re borrowing on credit cards and other loans, as well as your household bills, including council tax, utility bills, insurance policies, and general living costs such as travelling to work or school, clothing, childcare and entertainment.

Are you remortgaging?

If you want to increase the size of your mortgage you may also have to go through the affordability checks above, and you’ll be given advice around which mortgage products are suitable.

If you have a mortgage and don’t want to borrow any additional money, there are more flexible arrangements. Read more about it in our guide to Remortgaging .

Do you want an interest-only mortgage?

Not all lenders offer interest-only mortgages. If you do apply for one, you will have to show that you have a credible repayment method in place, as well as meeting the necessary income criteria.

Speak to a mortgage adviser

It’s wise to speak to a range of people so you can choose the right mortgage for you. This could include lenders’ advisers or you can speak to an independent financial adviser (IFA) or mortgage broker.

Calculate the total cost of your mortgage

The lender or the broker will do this for you, but do make sure they fully explain all the charges and fees. including. any conditional charges and fees too, such as early repayment penalties.

Some brokers will not charge fees for advice as they may receive a commission from the lender. In-house bank and building society advisers are also unlikely to charge a fee for their advice.

Currently, you’re provided with an Annual Percentage Rate (APR), which shows the total yearly cost of a mortgage and is expressed as a percentage of the loan amount. From March 2016, new rules require lenders to use one or more Annual Percentage Rate of Charge (APRC) calculations instead.

The APRC, although calculated in a very similar way, includes any fees such as valuation or redemption fees associated with your mortgage deal.

This will give you a more thorough comparison between mortgages deals that take into account these additional associated fees.

From March 2016, these fees and charges will be part of the calculation for the annual interest rate. This rate, which is known as the Annual Percentage Rate of Charge (APRC) should enable you to compare the total cost of one mortgage with another.

Comparison websites are a good starting point for anyone trying to find a mortgage tailored to their needs.

We recommend the following websites for comparing mortgages:

  • Comparison websites won’t all give you the same results, so make sure you use more than one site before making a decision.
  • It is also important to do some research into the type of product and features you need before making a purchase or changing supplier.
  • Find out more in our guide to comparison sites

Try our Affordability calculator to see how much you may be able to borrow.

Your next step

Share this article

  • Share this article on Facebook

Share this article on Facebook

  • Share this article on Twitter
    Share this article on Twitter
  • Share this article by Email

    Share this article by Email


  • Bad credit mortgages – How to get the best mortgage deal – Mortgages – property


    #mortgage bad credit

    #

    How to get the best mortgage deal Bad credit mortgages

    Some lenders specialise in providing mortgages to people with a bad credit rating

    Getting a mortgage when you’ve got a bad credit rating is tough, but not impossible. We explain what options are available and what you can do to improve your prospects.

    How have bad credit mortgages changed?

    Since the credit crunch, it has become more difficult for people with a bad credit score to get a mortgage.

    Before 2007, the sub-prime sector – ie the part of the mortgage market aimed at people with bad credit – was viewed as a great money-maker for lenders, and these kind of loans were widely available.

    However, in recent years lenders have become more risk averse, and the market for bad credit mortgages has become more limited.

    Nevertheless, there are still some lenders in the UK that specialise in offering mortgages to borrowers with a poor credit history.

    • If you’re struggling with mortgages because of a poor credit rating, we’d recommend talking to a whole-of-market, impartial broker such as Which? Mortgage Advisers. The friendly team can assess your situation and explain which mortgages you’re most likely to get accepted for. Call for a free consultation on 0808 252 7987.

    Can I get a mortgage with bad credit?

    If you have a bad credit history, you may still be able to find a mortgage using specialist lenders, but getting accepted will be harder for you than it is for people with better credit records.

    You’ll have to pay higher-than-average interest and will need to have a large deposit. This is because bad credit mortgage lenders often restrict the amount they are willing to lend.

    A mortgage for someone with poor credit will usually be capped at around 80% of the value of the property, though some lenders will only offer mortgages up to 60% of the value of the property.

    Why do I have a bad credit rating?

    A number of things can affect your credit rating. Some of the main reasons include:

    • if you have missed credit card, loan or mortgage payments
    • if you are in some kind of debt repayment arrangement, eg an IVA, or have been declared bankrupt
    • if you have County Court Judgments against you
    • if you have never taken out any credit and so haven’t built up a record of paying things back in time.

    Whether or not you think these factors apply to you, you should always check out your credit report before applying for a mortgage. The three biggest organisations for this are Callcredit, Equifax and Experian. If you’re concerned, it’s worth checking how you fare with all three companies, as they all score slightly differently.

    Once you have your report(s), consider what you can do to improve your credit rating, and check that all the information on record about you is correct. Avoid making lots of different applications for credit, including mortgages, as this will show up on your record and may harm your rating further.

    In some cases, it will be better to wait until your credit history has improved so you can access more affordable mortgage deals. A good mortgage adviser will be able to ascertain what mortgage deals you are likely to be accepted for and advise whether you’re better off waiting.

    Remortgaging with a bad credit mortgage

    Making your monthly mortgage repayments on time will help you build a stronger credit history (assuming all other debt is also paid back on time).

    It may therefore eventually be possible to remortgage to secure a better rate from a traditional lender.

    Which? Mortgage Advisers has a detailed remortgaging guide with all the information you need to help you understand your mortgage options and get the best deal.

    More on this.


    Mortgage Types: are fixed rate mortgages best? Money Saving Expert #mortgage #payments #calculator


    #mortgage rate tracker

    #

    What type of mortgage to choose?

    What the * means above

    If a link has an * by it, that means it is an affiliated link and therefore it helps MoneySavingExpert stay free to use, as it is tracked to us. If you go through it, it can sometimes result in a payment or benefit to the site. It’s worth noting this means the third party used may be named on any credit agreements.

    You shouldnпїЅt notice any difference and the link will never negatively impact the product. Plus the editorial line (the things we write) is NEVER impacted by these links. We aim to look at all available products. If it isn’t possible to get an affiliate link for the top deal, it is still included in exactly the same way, just with a non-paying link. For more details, read How This Site Is Financed .

    FREE MoneySaving email

    Get this free weekly email full of deals, guides it’s spam free

    Forced prepay meter installations could be banned for the most vulnerable customers

    HMRC to axe tax credit checking firm Concentrix

    Plastic пїЅ5 notes available from today пїЅ but can you use them in ticket machines?

    New iPhone 7 interest-free deal is far cheaper than mobile network contracts

    Data ‘booster’ prices double for T-Mobile pay-as-you-go customers

    Is the BBC costing Brits a fortune when they go on holiday?

    How much the Govt expects you to give your children for university

    Santander 123 to slash interest to 1.5% – should you ditch it?

    If Santander 123 drops interest to 2% is it still worth it?

    First-time buyers’ trick: Max LISA and Help to Buy ISA gains by timing it right

    Amazon Restaurants delivery service: пїЅ10 off пїЅ15 spend

    How much more are Express/Local пїЅconvenienceпїЅ stores costing you?

    Amazon Dash ‘house essentials’ service пїЅ is it worth it?

    On-pack promotions to look out for in the supermarket пїЅ incl пїЅFREEпїЅ cinema tickets, Nails Inc polish and пїЅ10 off B amp;Q voucher

    FREE Monopoly Electronic board gameпїЅ just show пїЅ50 Monopoly money

    How this site works

    We think it’s important you understand the strengths and limitations of the site. We’re a journalistic website and aim to provide the best MoneySaving guides, tips, tools and techniques, but can’t guarantee to be perfect, so do note you use the information at your own risk and we can’t accept liability if things go wrong.

    • This info does not constitute financial advice, always do your own research on top to ensure it’s right for your specific circumstances and remember we focus on rates not service.
    • We don’t AS a general policy investigate the solvency of companies mentioned (how likely they are to go bust), but there is a risk any company can struggle and it’s rarely made public until it’s too late (see the section 75 guide for protection tips).
    • We often link to other websites, but we can’t be responsible for their content.
    • Always remember anyone can post on the MSE forums, so it can be very different from our opinion.

    MoneySavingExpert.com is part of the MoneySupermarket Group, but is entirely editorially independent. Its stance of putting consumers first is protected and enshrined in the legally-binding MSE Editorial Code .

    More tools from MoneySavingExpert

    Budget Planner

    Free tool to analyse your finances and scrutinise spending.

    Premium Bonds Calc

    Unique tool uses probability to estimate winnings.

    EBay Local Deals Mapper

    Find cheap pick-up only items near you – they often attract fewer bids.

    MobileValuer.com

    Selling an old mobile phone? It compares who pays the most.

    Credit Card Eligibility Calc

    Shows which top cards you’re most likely to get.

    MegaShopBot.com

    Instantly searches the best shopping comparison sites.

    Cheap Energy Club

    Ensures the cheapest energy deal constantly.

    TravelMoneyMax.com


    100% Home Financing – RANLife No Money Down Programs #calculator #mortgage


    #100 mortgage financing

    #

    100% HOME FINANCING

    RANLife offers many 100% Financing programs to make getting a home loan more affordable. A lot of the time, especially for first time homebuyers, saving up enough money for a down payment, closing costs, and moving costs can be one of the most difficult steps in buying a home. It used to be despite having perfect credit and a stable income, a homebuyers dream could quickly be crushed due to a lack of a down payment. Now, with RANLife’s No Down Payment program options, this dream can be a reality! Explore all of RANLife’s 100% Financing programs below:

    USDA Home Loans

    VA Home Loans

    City & State Grant Loan Programs

    Some Benefits of the 100% Financing Programs Include:

    • Low Interest Rates
    • Low to No Monthly Mortgage Insurance
    • No Prepayment Penalty
    • Minimized Upfront Mortgage Expenses
    • Low Monthly Payment
    • Loan Amounts up to $417,000 – Calculate Your Estimated Payment Now

    Although the most common loan programs require a percentage of the purchase price to be applied as a down payment, there are still Zero Down Home Loan programs available today. To find out more information about RANLife’s 100% Financing Loans and to find out if you qualify please fill out an application online or contact one of our Loan Specialists at (800) 461-4152.

    Zero Down Quick Form

    Get more info on 100% Financing mortgage programs!

    Thank you for your submission. Please check your email for additional information.

    All information is kept confidential and is not
    shared with any 3rd party vendors.


    Government schemes for first-time home buyers and existing homeowners – Money Advice Service #uk #mortgage


    #government mortgage help

    #

    Government schemes for first-time home buyers and existing homeowners

    There are a number of government schemes to help you buy a home such as Help to Buy, Right to Buy, Shared Ownership, and more. Find out more about these affordable housing schemes and how to apply.

    Help to Buy

    Help to Buy is a government scheme for those who have a small deposit, when buying a home. Have you at least a 5% deposit? If so, you could use the Help to Buy scheme through:

    • Equity loans – available to first-time buyers and existing homeowners who want to buy a ‘new build’ house. The purchase price must be no more than £600,000.
      Under this scheme, you can borrow 20% of the purchase price interest-free for the first five years as long as you have a 5% deposit.
      If you live in London, you can borrow up to 40% of the purchase price.
      The scheme is available until 2021.
    • Mortgage guarantees – available for new and old properties across the UK. The government undertakes to cover any of your mortgage lender’s losses as a result of any problems you might have in paying it back. However, you are still responsible for keeping up your mortgage repayments on a Help to Buy scheme in exactly the same way as any other mortgage.
      The scheme is open until 31 December 2016.

    With both schemes there are limits on the cost of the property you buy. These limits differ across the UK.

    Right to Buy/Right to Acquire

    Right to Buy is for tenants in England, Wales and Northern Ireland who rent their home from their local council. It allows tenants, who qualify, to buy their home at a discount. The size of the discount varies depending on where you live and the type of property you want to buy.

    Tenants who were living in council homes before it transferred to another landlord such as a housing association, may be eligible to buy their home under the ‘Preserved’ Right to Buy or Right to Acquire schemes.

    In most cases, tenants will need to have rented from the public sector (i.e. local council or housing association) for three years before they can buy under these schemes.

    The three years can be non-consecutive, so tenants who have rented from the private sector in the middle of a total of three years renting from the public sector, can still qualify.

    In 2016, the Right to Buy scheme is getting extended to include housing association tenants in England.

    This extension is starting out with a small number of housing associations in certain areas. It will then be rolled to the rest of England over the year. For more information, visit the Right to Buy website .

    In Scotland. the Scottish Government plans to end the scheme for all council and housing association tenants in Scotland, but there are other schemes available .

    Right to Acquire is a scheme offered in England and Wales for housing association tenants who don’t qualify for Right to Buy. The discounts are slightly smaller.

    In Northern Ireland this scheme is called the House sales scheme and is for tenants who rent from the Northern Ireland Housing Executive or a housing association. Find out more on the nidirect website .

    Shared ownership

    Shared ownership is where you buy a share of a home from the landlord, who is usually the council or a housing association, and rent the remaining share.

    You need a mortgage to pay for your share, which can be between a quarter and three-quarters of the home’s full value. You then pay a reduced rent on the share you don’t own and you have the option later on to buy a bigger share in the property up to 100% of its value.

    The eligibility restrictions on the shared ownership have lifted. So, from April 2016 anyone who has a household income of less than £80,000 (outside London) or £90,000 (inside London) can buy a home through shared ownership.

    Only military personnel will be given be priority over other groups. The scheme will apply across England.

    Co-Ownership in Northern Ireland

    This scheme is exclusive to Northern Ireland and is available for both newly built and older homes. You buy between 50% and 90% of the property (known as the ‘starter share’) and can increase that share at any time (known as ‘staircasing’). You pay rent on the portion you don’t own.

    First Steps London

    This scheme aims to help low and modest income earners buy or rent at a price that’s affordable. You part buy and part rent the property – mostly for newly-built homes but some resale properties are included. There are eligibility criteria around earnings and you can’t buy a home on the open market.

    If you’re looking in London, find out more on the First Steps website .

    Shared equity schemes

    The Help to Buy equity loan scheme is a government scheme currently set to run until 2020. It’s available to first-time buyers as well as homeowners looking to move – but only for newly built homes.

    Scotland

    Scotland has two shared equity schemes – New Supply Shared Equity and Open Market Shared Equity.

    Wales

    The Homebuy scheme offers help by providing an equity loan (30% increasing to 50% of the purchase price), and is designed for people who would otherwise need social housing. The loan can be repaid at any time before the property is sold, but if you sell the property then it must be repaid at that point.

    Find out more about Welsh home buying schemes at the Wales Government site .

    Northern Ireland

    There’s an Equity sharing scheme in Northern Ireland where you can buy a property, often at a discount, with a housing association or the Northern Ireland Housing Executive (NIHE).

    Starter Home scheme

    The Starter Home scheme is a new government plan where 200,000 new build homes are available to first-time buyers under 40 years old with a minimum of 20% off the market price.

    The discounted price for these homes should be priced no more than £250,000 outside London, and £450,000 in London.

    For more information about the homes available in this scheme, visit the New Homes website .

    Next steps

    Use the Mortgage payments calculator to estimate the monthly interest and repayment amount.

    Share this article

    • Share this article on Facebook

    Share this article on Facebook

  • Share this article on Twitter
    Share this article on Twitter
  • Share this article by Email

    Share this article by Email


  • Mortgage payment protection – Protection insurance explained – Insurance – Which? Money #hamp #mortgage


    #mortgage protection

    #

    Protection insurance explained Mortgage payment protection

    MPPI covers your mortgage payments if you’re unable to work due to accident, sickness or unemployment

    What is mortgage payment protection insurance (MPPI)?

    MPPI is designed to cover your mortage payments if you’re unable to work due to accident, sickness or unemployment. In exchange for a monthly premium, MPPI pays you a set amount each month, usually for a period of 12 or 24 months.

    As it only pays out for a limited period, it may not be the best form of mortgage protection for you. See alternatives to mortgage insurance for information on other options. Most people would be better off considering income protection instead.

    Mortgage insurance policy options

    When you take out an MPPI policy, you choose how much you would want it to pay out each month. Some policies let you also cover other monthly bills as well as your mortgage.

    Most MPPI providers let you have a maximum benefit of between £1,500 and £3,000.You may only be able to get up to, say, 75% of your gross monthly salary though, or up to 150% of your monthly mortgage payment. In addition, some mortgage protection policies don’t let you take the policy with you if you switch mortgage.

    Problems with mortgage payment protection insurance

    The biggest problem with MPPI is the way it is underwritten. Income protection is fully medically underwritten when you take out the policy, meaning you’ll know from the outset what you are and aren’t covered for.

    In contrast, MPPI usually does the full medical checks at the point you put in a claim – this means, for example, that you can’t be certain any pre-existing illness will be covered until the moment you put in a claim.

    MPPI waiting periods

    The waiting period is how long you have to wait once you’ve put in a claim before the policy benefit starts to be paid out.

    Some providers call this the ‘excess period’ or ‘deferral period’. It can range from 30 days to 180 days. For example, if you stopped work on 1 February and the waiting period was 30 days, the policy would start paying out from 3 March. Some policies, known as ‘back-to-day-one’ policies, don’t have a waiting period.

    In general, the longer the waiting period you choose, the cheaper the policy. If your employer pays you sick pay. you may want to take out a policy with a waiting period that ends when these benefits end.

    Need mortgage advice?

    We believe you should seek independent mortgage advice before taking out a mortgage. The Which? Group offers an independent mortgage advice service. Which? Mortgage Advisers, that looks at every mortgage from every available lender.

    More on this.

    • How to buy life insurance – get the best term assurance or whole-of-life policy
    • Call the Which? Money Helpline – if you have a question about protecting your wealth
    • Income protection – read our full guide to protecting your income if you’re ill or injured

    Which? Limited (registered in England and Wales number 00677665) is an Introducer Appointed Representative of Which? Financial Services Limited (registered in England and Wales number 07239342). Which? Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited. Registered office: 2 Marylebone Road, London NW1 4DF.

    Footer Navigation

    Which? works for you Which? 2016


    Your mortgage comparison checklist – Money Advice Service #mortgage #calculato


    #mortgage tables

    #

    Your mortgage comparison checklist

    Once you know how much you can borrow and the deposit required, you need to select a mortgage. Use this checklist to help you compare and decide which mortgage features are the most important to you.

    1. Do you want a repayment or interest-only mortgage?

    This means you choose between paying off the amount you’ve borrowed and the interest as you go along or only paying back the interest.

    Bear in mind that with an interest-only mortgage you’ll need to be able to show the lender that you have a strategy or investment plan that will pay off the mortgage when it is due. It’s much harder to get an interest-only mortgage now and lenders don’t always offer them. Find out more in our guides below.

    2. Do you want fixed monthly payments?

    You may want to have certainty about your future monthly payments. If you need that certainty and you can find a reasonable and affordable deal, consider a fixed-rate mortgage. Understand more about choosing between fixed or variable rate mortgages.

    3. Do you want to start with the lowest possible rate?

    It’s not always about the rate – there are other factors to consider when choosing a mortgage. Make sure you shop around for a deal which works for you and that you can afford.

    Comparison websites are a good starting point for anyone trying to find a mortgage tailored to their needs.

    We recommend the following websites for comparing mortgages:

    • Comparison websites won’t all give you the same results, so make sure you use more than one site before making a decision.
    • It is also important to do some research into the type of product and features you need before making a purchase or changing supplier.
    • Find out more in our guide to comparison sites .

    4. Are you happy to pay a large fee in return for a lower rate?

    If you’re willing to pay a large upfront arrangement fee, you can often get a lower interest rate. If you go for a fee-free mortgage, you’ll probably have to pay a higher rate.

    5. Do you want to add some/all of your mortgage fees into your mortgage?

    If you can’t afford to pay these fees right now, you should find out if you can add them to your mortgage. Bear in mind that you’ll pay interest on that extra debt for many years to come.

    6. Do you want the flexibility to overpay, underpay or take payment breaks?

    Some mortgages allow you to overpay sometimes – in other words, pay more than your normal monthly payment. Some allow you to underpay or even take a short mortgage holiday where you don’t have to repay any money at all. Whether these features are available to you will depend on the mortgage terms and conditions as well as your financial circumstances.

    7. Do you want to be able to move lenders (remortgage) whenever you want?

    Remortgaging to a better product can save you hundreds and sometimes thousands of pounds. Most lenders charge exit fees. If you’re on a fixed-rate deal, early repayment fees can be substantial. Speak to the lender, or use a mortgage broker to help you find a mortgage where there are no exit fees, or where the exit fees are very low.

    8. If interest rates rise, do you want to make sure you won’t pay interest above a certain rate?

    Some mortgages come with a capped rate feature where the rate won’t rise above a certain level.

    9. Do you want to use your savings to help pay off your mortgage sooner?

    You could use your savings to help you reduce your outstanding mortgage and pay less interest. If you want to do this, an offset mortgage will give you the most flexibility.

    Your next step

    Share this article

    • Share this article on Facebook

    Share this article on Facebook

  • Share this article on Twitter
    Share this article on Twitter
  • Share this article by Email

    Share this article by Email


  • How does remortgaging work? Money Advice Service #100 #mortgage #financing


    #remortgage

    #

    How does remortgaging work?

    Remortgaging is where you pay off your existing mortgage and switch to another lender. There are good reasons to consider remortgaging, but you need to consider the costs before you do.

    At a glance

    1. Check the value of your property. It may have increased in value since you last checked. The higher the property value in relation to the mortgage, the more deals may be available to you if you decide to remortgage – and you may be able to get cheaper deals.
    2. Check the market for mortgage deals. This is your starting point for comparing what you’re paying now with what you might be able to get elsewhere.
    3. Make sure the benefits of switching outweigh the costs. Even though there may be lower rates available you need to take into account any fees associated with switching and the remaining length of your loan.
    4. Take what you’ve found to a mortgage broker. They have access to mortgages that aren’t available on comparison sites so may be able to improve on what you’ve found. They’ll also double check the costs and benefits of switching. Ask for an advised service.
    5. Set a reminder to review your mortgage each year. If you remortgage you may get an introductory deal on your interest rate – when this ends you’ll usually be put on a less competitive variable rate.

    Check the market for mortgage deals

    Comparison websites are a good starting point when you’re trying to find a mortgage tailored to your needs.

    We recommend the following websites for comparing mortgages:

    • Comparison websites won’t all give you the same results, so make sure you use more than one site before making a decision.
    • It is also important to do some research into the type of product and features you need before making a purchase or changing supplier.

    Use our Mortgage affordability calculator to find out how much you can afford to borrow.

    Take advice

    Taking advice from a qualified expert offers you extra protection because if the mortgage turns out to be unsuitable, you can complain to the Financial Ombudsman Service (FOS).

    If you choose to go down the ‘execution-only’ route (where you make decisions on your own without advice), there will be fewer circumstances in which you can complain to FOS.

    When it pays to switch and when it doesn’t

    In the two examples below you can see how the size and remaining term of your outstanding mortgage can affect whether or not it’s worth switching.

    In the first example, the cost of switching (£500) is greater than the saving (£239.04), so there’s no point in remortgaging. In the second example, it’s clear that switching mortgage saves money.

    If you change your mortgage before the end of your deal you may have to pay a fee (called an ‘early repayment charge’).

    You can use the links below to check current deals and work out what you might save by switching. But remember to check associated fees and costs.

    Use our Mortgage calculator to see how much you could save by switching.

    Check the costs

    Before you switch be sure to check out the costs. Some lenders might offer fee-free deals to tempt you, but if they don’t you’ll have legal, valuation and administration costs to pay.

    You can use the Annual Percentage Rate of Charge (APRC) to help you compare deals. The APRC is a way of calculating interest rates that incorporates some mortgage related fees in the calculation, giving you a way to compare mortgage deals.

    What might look like a money saving deal could end up losing you money if you don’t do your sums first.

    Reducing your loan-to-value to get a better rate

    Every mortgage deal has a limit to how much you can borrow when compared with the current value of the property.

    This is shown as a percentage and is called the ‘loan-to-value’.

    When you remortgage, the lower the loan-to-value you need, the more deals that may be available to you – and you may be able to get cheaper mortgage deals.

    How to calculate your loan-to-value

    1. Divide your outstanding mortgage amount by your property’s current value.
    2. Multiply the result by 100.
    • Your outstanding mortgage is £150,000
    • Your lender thinks your property is worth £200,000
    • 150,000 divided by 200,000 = 0.75
    • 0.75 x 100 = 75 – so your loan-to-value is 75%

    Use the links below to get an idea of your home’s current value.

    Your lender’s valuation

    Bear in mind that when you apply for a mortgage, the lender’s valuation may just involve checking the outside of the property from the street.

    If you think the valuation is much too low – and that you’re losing out on a better rate as a result – ask the lender to reconsider.

    To support your case, you could provide evidence of the sale price of a few similar properties in your area and, if relevant, list the cost of any expensive home improvements you’ve carried out.

    If as a result of cost savings you can make by remortgaging, you’re wondering whether to pay off your mortgage early, read our guide below.

    Remortgaging to get a better interest rate

    When you take out a new mortgage, you normally get an introductory deal – for example a low fixed or discounted rate or a low tracker rate for the first few years of your mortgage.

    Introductory deals normally last for between two and five years. Once the deal ends you’ll probably be moved onto your lender’s standard variable rate, which will usually be higher than other rates that you might be able to get elsewhere.

    So when your introductory period ends, take a look at the market to see if switching to a new mortgage deal will save you money. It’s also worth reviewing options before interest rates change .

    Bear in mind that if you only have a small outstanding mortgage the amount you stand to save may be too low to make switching worthwhile.

    Remortgaging for more flexibility

    Remortgaging may also enable you to get a more flexible deal – for example if you want to overpay.

    Or maybe you want to switch to an offset or current account mortgage, where you use your savings to reduce the amount of interest you pay permanently or temporarily – and have the option to draw your savings back if you need them.

    Remortgaging to consolidate debt

    If you have a lot of debt, you might be tempted to borrow some extra money and use it to pay off your other debts.

    Even though interest rates on mortgages are normally lower than rates on personal loans – and much lower than credit cards – you may end up paying far more overall if the loan is over a longer term.

    Instead of adding your debt to your mortgage, try to prioritise and clear your loans separately.

    Share this article

    • Share this article on Facebook

    Share this article on Facebook

  • Share this article on Twitter
    Share this article on Twitter
  • Share this article by Email

    Share this article by Email

  • Government help if you can’t pay your mortgage


    Why mortgage applications are declined and what to do next – Money Advice Service #mortgage


    #mortgage applications

    #

    Why mortgage applications are declined and what to do next

    If your mortgage application has been declined, it’s important to look over what you can do to improve your chances for next time. But don’t rush off to another lender as each application could show up on your credit file. Use our checklist below to see why your application might have been turned down and what you can do to increase your chances next time.

    Common reasons for a declined application and what to do

    Poor credit history

    Check your credit file with the credit reference agencies (Experian, Equifax and CallCredit) to see what information they have about you. If any of the information on your credit report is wrong, you can correct it. Find out How to improve your credit rating .

    Not registered to vote

    You need to be on the electoral register at your current address so lenders can confirm who you are and where you live. It’s quick and easy to do online at aboutmyvote.co.uk or through your local council.

    Too many credit applications

    When you apply for credit, the lender will search your credit report to check your suitability. Most searches are recorded, leaving a footprint on your credit history. Repeatedly applying for credit makes it look like you have problems, so try to avoid taking out new credit deals three to six months before you want a mortgage.

    Too much debt

    Look at our Budget planner to try and bring down your existing debt.

    Payday loans

    Any payday loan you’ve had since 2011 will be listed on your file, even if you’ve paid it off on time. It is still counted against you as lenders may think you won’t be able to cope with the financial responsibility of having a mortgage.

    Administration errors

    Lenders aren’t perfect. Many of them put the details from your application into a computer so you may have failed because of a mistake. Ask for an interview to discuss your application.

    Not earning enough

    You can ask for a smaller mortgage, or see if you qualify for shared ownership or one of the home buying schemes for people on lower wages. Use our Mortgage affordability calculator to see what you can afford to borrow.

    Not matching the lender’s profile

    Some lenders prefer to lend to a specific demographic. An independent mortgage adviser has experience of the market and a better idea of the type of borrower that lenders want. Read more on Choosing the right mortgage .

    Small deposit

    See our ideas on saving for a deposit. There are also several schemes available to buyers with only a 5% deposit.

    Other reasons you can have difficulties

    Did you know?

    Three out of four borrowers are accepted for a mortgage (Source: Intermediary Mortgage Lenders Association)

    If you’re self-employed or a contract worker

    You have to prove you have a steady income by showing tax statements and business accounts for at least the last two to three years. You might also have to prove you have work secured for the future – but that is a decision that will vary from lender to lender.

    If you’ve lived in the UK for less than three years

    Most lenders are unwilling to lend to new arrivals, but not all. You’ll need to show your employment contract and a visa, which proves you have permission to live and work in the UK.

    Where to go for help

    A professional mortgage broker or independent financial adviser who specialises in mortgages will have regular dealings with a wide selection of lenders. They will be aware of what different lenders require before offering a mortgage, and will speak to the lender on your behalf. Read our guide on Choosing the right mortgage .

    Your next step

    Share this article

    • Share this article on Facebook

    Share this article on Facebook

  • Share this article on Twitter
    Share this article on Twitter
  • Share this article by Email

    Share this article by Email


  • Money Rates – Markets Data Center #mortgage #help #programs


    #prime interest rate today

    #

    Notes on data:
    U.S. prime rate is effective December 17, 2015. Discount rate is effective December 17, 2015. U.S. prime rate is the base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks; Other prime rates aren’t directly comparable; lending practices vary widely by location; Discount rate is the charge on loans to depository institutions by the New York Federal Reserve Banks; Federal-funds rate is on reserves traded among commercial banks for overnight use in amounts of $1 million or more; Call money rate is the charge on loans to brokers on stock-exchange collateral; Commercial Paper (AA financial) is from the Federal Reserve and is presented with a one-day lag. DTCC GCF Repo Index is Depository Trust & Clearing Corp.’s weighted average for overnight trades in applicable CUSIPs. Value traded is in billions of U.S. dollars. Futures on the DTCC GCF Repo Index are traded on NYSE Liffe US.

    Source: Federal Reserve; Bureau of Labor Statistics; DTCC; SIX Financial Information; General Electric Capital Corp.; Tullett Prebon Information, Ltd.

    Thursday, September 08, 2016

    Source: Freddie Mac

    An Advertising Feature PARTNER CENTER

    Money Rates – Markets Data Center – WSJ.com

    Customer Service

    Policy

    Advertise

    Tools Features

    More