Getting Prepared For A Mortgage In Liverpool

A Specialist Guide for First Time Buyers Mortgages in Liverpool

Once you have made a start on your home buying journey and have been able to save up a suitable deposit, it’s time for you to take the next step, which is for you to get prepared for your mortgage!

Below we have put together a detailed list of some helpful tips and tricks that could help first time buyers in Liverpool to make sure that they are “mortgage ready”.

Get an Up-to-Date Credit Report & Improve Your Credit Score

Before you get in touch with a mortgage broker in Liverpool, before you do anything else, we would recommend that you look to get yourself an up-to-date credit report.

We would definitely recommend that you pay off any outstanding payments that are in your name, even if you have reasons for not doing so, such as a mobile phone bill dispute. Whilst you might not like to do so, it will put you in a much better position credit wise.

With less going against you financially, the mortgage lender will see you more favourably. We also suggest checking to make sure that you are on the voters roll, or that your information is correct. It may not seem hugely important at first, but it can have a big impact on your credit score!

Another way to improve your credit score is to close down any old or unused credit cards, though conversely, having a couple of cards you still use and pay off fully can work in your favour as well.w

Your mortgage advisor in Liverpool will be able to go through your credit report with you early on in your mortgage journey. You’ll receive expert mortgage advice in Liverpool on any ways that they feel you could work on improving your credit score.

Proof of Identification

In the early days of your home buying process, your mortgage advisor in Liverpool will ask you to provide photo ID. We usually find that this is in the form of either a driving license or passport.

Your driving license is also usable when it comes to your proof of address as well, though if you use this for that purpose, it cannot be used for proof of ID. This means, if you are using this for proof of photo ID, you’ll need something else to show your address.

Any non-UK nationals now residing in the UK will also need to show us a copy of their Visa.

Proof of Address

You will also need to provide your mortgage advisor with documents that can prove to a mortgage lender where you live. We normally find that customers send in utility bills or original bank statements that are dated within the last 3 months.

Alternatively, however, as we mentioned above, if you are using a passport for your photo ID, you are welcome to use a driving license instead as a proof of your address.

Last 3 Months’ Bank Statements

Your bank statements should be able to demonstrate both your income and your outgoings. We would definitely recommend that customers try to stay away from partaking in any gambling on the build up to this, as the mortgage lenders may potentially hold this against you during your mortgage application.

It is also very important to make sure that you don’t go past any overdraft limits and let any direct debits bounce that are in your name. You absolutely need to be prepared ahead of time for this.

You will find that most mortgage lenders will be wanting to see your bank statements, as they like to be certain that you will definitely be able to maintain your monthly mortgage repayments.

Evidence of Deposit

As a first time buyer in Liverpool, you will also be required to prove to the mortgage lender that you also do in fact have the means to afford an initial deposit, keep up all of your payments and be able to evidence that you can do this, for anti-money laundering purposes.

Audit trails can be a little difficult to prove, especially if money has been moved back and forth between different accounts. As such, we would definitely advise keeping this to a minimum, if you are able to, as not to confuse the trail.

In truth, mortgage lenders would likely much rather prefer to see you building up your savings over time. If you have any large amounts going in, make sure you are able to account for those with receipts to evidence where those funds came from.

In recent years, we have found that a large amount of our customers deposits are actually gifted by family members. This is especially a popular choice for first time buyers in Liverpool, as it helps them to take that primary step onto the property ladder.

Gifted deposits will also always need to be evidenced, with the donor, the person who is gifting you the deposit, having a requirement to fill in a form that confirms it is purely a gift, not a loan that they expect you to repay.

Proof of Income

Staying on topic with proof, you will also be required to provide proof of income. If you’re a standard, employed applicant, then this will typically be shown your last 3 months of payslips, with a portion of mortgage lenders out there needing to see your most recent P60.

A mortgage lender may also factor in any regular overtime, shift allowance, bonuses and commission that you have. If you have multiple employers, perhaps you are working a part-time job or are self employed and have contracts, a mortgage lender will sometimes accept your earnings from those as well.

We tend to find that a large amount applicants who are self employed will enquire for expert mortgage advice in Liverpool. If you are self employed in Liverpool and looking to apply for a mortgage, you will need help from your accountant to request your last 2-3 years’ proof of earnings from the revenue.

Our team of dedicated and experienced mortgage advisors in Liverpool have the knowledge to sit and discuss this with you, instructing on how to navigate the online government gateway portal if required to do so.

Budget Planner

It’s always within your best interests to make sure that you are always prepared ahead of time and write down an estimate of what you think your outgoings could look like once you factor in mortgage payments and general running costs.

This will help you work out costs such as council tax and utility bills, as well as anything you regularly spend your money on, such as your food and drinks shopping.

It will also help to give you a generalised estimate of how much disposable income you’ll have available, in order to cover the costs of your monthly mortgage payments.

Getting Prepared For a Mortgage

As you can see from all of the points we have discussed, there can be a lot to think about when preparing for a mortgage, although with the help of a dedicated mortgage advice team in Liverpool, you’ll hopefully be in the best place for taking on the process.

Putting in the effort from the start, staying patient and being careful will hopefully increase the likelihood of you walking out of the mortgage process with your dream property to show for it.

What is a 95% Mortgage?

As the name would suggest, a 95% mortgage is where you are borrowing against 95% of the property price, paying the remaining 5% with your deposit. An example of this would be if you wanted to buy a property that was worth £150,000 with a 95% mortgage, your minimum deposit would be £7,500 and you would borrow the remaining £142,500 from the lender. 

95% Mortgage Advice in Liverpool

Following on from the March 2021 Budget, Prime Minister Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, something that would aim to make 95% mortgages more readily available from the high street banks.   

This is very welcome news for First-Time Buyers and Home Movers, as this scheme will remain active until December 2022. Specific terms and conditions will apply, something your Mortgage Advisor in Liverpool will be able to look at with you, to see if you qualify.    

All our customers who Get in Touch with us for Mortgage Advice in Liverpool, will receive a free, no-obligation mortgage consultation. Here, one of our dedicated mortgage advisors will be able to make a recommendation on the most appropriate route for you to take.

Can I get a 95% mortgage?

You will find that 95% mortgages are usually accessible by both First-Time Buyers in Liverpool & those who are Moving Home in Liverpool. The concept of saving for a 5% deposit sounds like a pretty straightforward plan of action, but you’ll still need to have an acceptable credit score and prove to the lender that you are able to afford your monthly mortgage repayments, before you are considered for a 95% mortgage.

Improving your credit score

You’ll need to demonstrate you have a good credit score before you’ll be accepted for any mortgage, especially a 95% mortgage. Handy tips for improving this will include paying any current credit commitments on time, ensuring your addresses are updated and checking that you’re on the voters roll. For a more detailed look at how and why you can help your credit score, please see our How to Improve Your Credit Score article. 

Affordability 

Affordability is something else you should also consider. Providing the lender with enough details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments will allow them to get a general overview of whether or not you are able to afford a 95% mortgage.

Can my family help me get a 95% mortgage?

It’s a common occurrence these days to see lots of family members helping one another get onto the property ladder, especially with parents looking to further their children’s lives. This normally happens by a family member gifting the person looking to find their home, the deposit required to proceed. Known through the industry as the “Bank of Mum & Dad, Gifted Deposits should only be a gift, and not a loan to be paid back. The lender will need this to be agreed and proven, before it can be used towards your mortgage. 

How do I choose the right 95% mortgage?

You always want to make sure you have the right type of mortgage, especially with something like a 95% mortgage. Each type works in its own way, with that choice allowing you to find one that is most appropriate for your personal and financial circumstances. 

Some homeowners and buyers would rather go with a Fixed Rate or Tracker Mortgage, mortgage types which mean you either keep interest rates at a set amount or have your interest rates following the Bank of England base rates.

Alternatively, you might be more comfortable with the way Interest-Only or a Repayment Mortgages work. Interest-Only allows cheaper payments until you need to pay a lump sum once it reaches its end (mostly now used for Buy-to-Lets), whereas a Repayment mortgage (a normal mortgage if you’d like) means you’ll be paying a combination of both interest and capital per month.

You can read more about each of these mortgage types in our Different Types of Mortgages article, with informative videos for each type.

How can a bigger deposit help with my mortgage? 

A mortgage is a hugely important financial outgoing, and as such you need to be prepared. If you aren’t prepared, you might find yourself more likely to be affected by things like higher interest rates, remortgaging difficulties due to less equity and then negative equity.

This is not something to worry about though, as these problems can be avoided if you’re smart enough with your process initially. The more deposit you put down, the less risk you’ll be to the lender. 

A larger deposit would not only reduce the interest rates by a noticeable amount, but would also give the property more equity and reduce the risk of negative equity, which will be because you are borrowing less against the property. 

So, whilst the risks may seem rather scary at first, planning ahead and saving for a larger deposit to access something like a 90% or even an 85% mortgage will be very beneficial in your mortgage journey and something you’ll be able to reap the rewards from in the future. 

Why use a Mortgage Broker in Liverpool

Today we live in an uncertain economic environment. Yet, in a world full of opportunities, therefore we like to be prepared, and when it comes to our finances, there is one thing we all desire: being well informed. 

Are you looking for mortgage advice in Liverpool? 

As a group of experts, we believe that there are some excellent reasons to use a mortgage broker in Liverpool, so here we will talk about both methods’ positives and negatives so that you can make the best well-informed decision. 

We know that there are many mortgages options out there, for example, you can still go directly to the lender, whether via a branch or online. However, we discovered that most people still use a mortgage broker in Liverpool due to the benefits it brings.

Using a Broker instead of a bank

You may not have much experience, but one thing is for sure: We all like to save some money. So, when we think of mortgage advice, one of the options that first comes to mind is to go directly to a Bank or Building Society, so that you won’t have to pay a broker fee. However, that option became unattractive when credit scores came in a few years ago, and people started looking for other alternatives.

Mortgage Products Offered by Lenders

Another of the mortgage products on the market are those offered by lenders that are only available directly. This strategy gets implemented to attract a fair business distribution from consumers and brokers alike. By being exclusive, they can turn on and off these products when they deem it necessary, this method often confuses the market and consumers.

However, from 2014 onwards, lenders were no longer allowed to sell mortgages without professional advice. Many consumers felt that non-advisors had been trying to push solid advice on them, and they weren’t able to benefit from some of the consumer protection. A benefit that accompanies sales conducted by professionally trained mortgage advisors is why most people still use this service.

Because of this, in late 2014, it was not unusual to have to wait more than a month just for an appointment, and it still happens today. Not the best scenario when you’ve just had your offer accepted on the house. So, many began to make their applications through mortgage agents, who assure you professionalism and a mortgage service the same day, like ourselves.

Affordability

Another important point when applying for a mortgage is affordability, no matter how good the deal is if it is not enough money. That is why we believe that a broker is a perfect option. With our mortgage advice in Liverpool.

We can assure you of the best deal and our service when you need it, in a professional and personalized way. When you call us, we try and put you through with a qualified mortgage advisor either immediately or at the very least, within the same day (unless requested otherwise).

We Can Handle Difficult Cases

Applying for a mortgage can sometimes be difficult. Each case is unique, and many reasons can complicate an application. Some examples are:

• Poor credit history.

• Self-employed income.

• Mixed source of deposit (savings/gift).

• Let to Buy (keep your current home and buy another).

• Contract workers / zero-hour contracts.

• Affordability.

In previous years, lenders could stand out from the competition by merely offering a similar deal but better than another lender. In modern times this is very different, with lending criteria being what separates one lender from another.

However, as we mentioned before, when we talk about our well-being and finances, we like to be well informed and consult with experts on the subject. Your situation is unique, and what you need is not a better loan than someone else’s, but a better one for you and one that suits your situation.

We offer a Free Mortgage Consultation

That’s why we think that seeking professional mortgage advice in Liverpool is the best alternative. When you explain your position to an experienced mortgage broker in Liverpool, there is a chance they have come across something a little similar in the past, allowing them to personalize their service and help you through.

With a little luck, professionalism, and much work, your mortgage advisor will be able to recommend the most suitable mortgage for you at the lowest possible rate.

More than that, though, it’s not just about getting the mortgage. Even if the application itself is straightforward, our clients trust our experience and knowledge for more than that. For example, we will discuss how much they will offer for the property they are buying.

Our team of mortgage brokers in Liverpool can recommend other professional services such as solicitors and explain the different types of surveys and protection available to them. 

Responsive service

Another significant advantage of using a mortgage broker is that they tend to be much more responsive than lenders might be. It’s not been unheard of for our team to work late at night, out of hours, working hard on client cases at full speed to ensure service is prompt, but also efficient. Our team is committed to offering our assistance when you need it and how you need it.

Another point that gets overlooked when looking at why clients may prefer a broker is that everyone is very busy. You may be self-employed in Liverpool, a full-time worker, a working mom and you need a mortgage but do not have time to do it, that is where your advisor can take the burden off for you.

Professional applicants especially see the benefits of these as they have clients of their own to charge for their services and appreciate the benefits of having an expert on board.

Personalized service

Technology is taking over, and the future of the mortgage market is no different. Perhaps in the future, we will see lenders who want to compete with the broker’s business. If this happens, they are unlikely to staff-up their branch networks.

Technology is excellent, and it is a service particular for customers who are happy to do business that way, especially for straightforward cases. However, for most people, there is an element of “reality,” a “human touch,” that you can’t get anywhere other than talking to a mortgage counsellor yourself.

The mortgage broker becomes your ally and can provide you with a satisfying experience, a complete service with all the benefits that the client requires and attention that technology cannot offer.

Having said all this, the reasons for hiring a mortgage broker in Liverpool are vast and if you want to ask any questions related to mortgages. Seek or obtain this service from the hand of a professional team adapted to your needs, get in touch, and we’ll put you through with a mortgage advisor in Liverpool as soon as possible.

Do I Have to use my Estate Agent’s in-house Mortgage Advisor in Liverpool?

Estate Agent Mortgage Advice in Liverpool

Before you start your mortgage process, you should consider all of your options. Usually, customers are eager to get the whole thing over with as fast as possible. The most common mistake that customers make is rushing straight to a large estate agent and taking their in-house advice. We advise against this; in all honestly, you can get just as good and if not better advice elsewhere!

If you are a First Time Buyer in Liverpool, we strongly advise that you do your research and look around for external Mortgage Advisors in Liverpool that are more suited for your circumstances. On the other hand, if you do end up using in-house advisors, we have created a list of some sale tactics that estate agents use that you might find useful…

Sales tactics of estate agents

When you use your estate agent’s in-house Mortgage Advisor in Liverpool and their conveyancer, think about this… where has the money come from? The estate agents could be charging you extra on top of your other fees.

When you use a Mortgage Broker in Liverpool, you will get each and every cost broken down for you so that you can see exactly how your money has been spent. If you are unsure about anything whatsoever, it’s easy to ask and your question will be answered honestly. This is the personal touch of a Mortgage Broker in Liverpool.

On the rare occasion (as it’s illegal), estate agents may hold back your mortgage application just because you have used another financial advisor over theirs. For example, you could submit your application through a broker and then they could receive another application through their in-house system but then they could hold yours back to process their application first. Despite submitting your application first, you could end up being backlogged, even if your purchase is worth more than the other application! Remember to note that this is illegal.

If the estate agent is really trying their luck, they may try and charge you over the top in-house conveyancing fees. Even if your purchase is nice and straightforward, they could try and get an extra £1,500+ out of you for no reason. If this happens during your process, you should ask for a breakdown of where these extra costs are coming from.

There are plenty of other ways you can arrange a mortgage without using the estate agent. In this article we’ll cover the ways in which you can do so, helping you decide on who to use for your mortgage and getting the most out of your money.

How can I arrange a mortgage in Liverpool?

Do it yourself online

If you would rather take matters into your own hands and get behind the wheel, you should know that it’s perfectly okay to do that! Everything that your advisor would arrange for you can be done online. Of course, you would be missing out on getting advice from a specialist, however, you would be avoiding the fee for getting the advice in the first place.

By using price comparison websites, you could end up finding yourself a great deal. You may also end up saving money down the line providing that you end up finding the right deal that suits your situation. Once you have your deal, you could end up getting through the process very quickly.

Here are some things to be aware of when switching your mortgage deal online:

• Check that you match the criteria for the “Best Buy” rates before you apply for them. If you are declined, it could leave a negative print on your credit file.
• Make sure that you have researched what sort of mortgage you are looking for and the differences between them.
• If you pick the wrong mortgage deal it can be costly to get this changed. So be careful of valuation and application fees before selecting a deal with minimum research. You should know that these fees will be non-refundable and it will be hard to switch deals without a big cost even if you find a better one.
• If you choose to go at it on your own, you must know that you are responsible for progressing your application to endpoint and you will have to resolve any issues that you come across on your own.
  

Using your bank’s in-house Mortgage Advisor in Liverpool

Yes, it can be easy to make an appointment with your in-house advisor, however, is it your best option? Here are some things to take note of if you choose your in-house advisor:

• Your in-house advisor will not search around for the best deal, they are restricted to their products and their products only. They are also under no obligation to tell you about cheaper deals elsewhere.
• You can swoop up a mortgage appointment in no time, although, their waiting lists can sometimes go up to 6 months.
• Your bank may not have advisors that specialise in specific mortgage areas. This could be a problem if you are in the middle of a sticky mortgage scenario and need specialist help.
  

Using a Mortgage Broker in Liverpool

Sometimes opting to use a Mortgage Broker in Liverpool, especially if you’ve been declined by your bank or are looking to access competitive mortgage rates. A Mortgage Broker has the potential to help you find a great deal, provide a personal service and get things completed quickly.

A Mortgage Broker in Liverpool will charge you for their services, however, they usually offer a free mortgage consultation up until the point where you send off your application.

At Liverpoolmoneyman Mortgage Brokers, we work solely for you and everything is kept strictly between us. We are also not tied to any estate agents, so we are free to access thousands of mortgage deals, it’s just the case of finding the right one for you!

Whether you are a First Time Buyer, Moving Home or looking to Remortgage in Liverpool, you will find our Mortgage Advice service extremely beneficial. As a trusted Mortgage Broker in Liverpool, we will guide you through the home buying process, giving good, honest and unbiased mortgage advice. Get in touch for a free mortgage consultation and we’ll see how we’re able to help you.

Mortgage Advice in Liverpool

Opportunity For Tenants Buying From Landlords In Liverpool

Open & Honest Mortgage Advice in Liverpool

We regularly receive questions from private tenants buying from landlords, often due to some landlords offering first refusal (the opportunity to buy before it hits the open market) to existing tenants. Even if you don’t have this privilege, it might still be an option and it is always worth asking your landlord if they would be willing to offer this to you in the event of a sale.

The government decided to crack down on tax relief previously available on Buy to Let Mortgages. The changes were brought in over a 4-year period and it is only now this has taken effect that they are starting to see the impact of these changes as they receive their tax bills.

Property has been a solid means of income and a worthy investment for landlords over the years. Some landlords opted to ride out the tax changes because they are in it for the long haul, with a lengthy career as a landlord in mind.

However, some landlords were tempted to sell up and move on. There are lots of advantages on their part to selling you the property you currently reside in, which is why many of them took that route. Here are some of those:

Advantages to tenants buying from landlords in Liverpool

• Avoiding estate agents fees – the national average estate agents fee is 1.8% + vat so just by that factor alone, they’re saving a lot of money.
• Loss of rent – it’s actually quite difficult to sell a house with a tenant already living inside. This is because tenants won’t typically put themselves out to do viewings on behalf of their landlord. Because of this, there is a chance that they will just move out, creating a “rental void” where no income is being received. Selling to the tenant guarantees rent will keep coming in right up until completion.
• No refurb costs – if the tenant moves out then the chances are the house will need at least a lick of paint, if not more significant refurbishment to get it ready to put up on the open market. Selling to a tenant means no extra work needs to go into it, as they know the tenant already likes it that way.

There are also advantages for the sitting tenants buying from Landlords in these kind of circumstances. Some are these are:

• You are already very familiar with the property as it is your home, and you are aware of any possible improvements that need work.
• There is no property chain involved, so the sale is less likely to fall through.
• The landlord may offer you a slight discount from the open market value because of the costs they are avoiding.

Experienced Mortgage Advisor in Liverpool

How To Make An Offer On A Property in Liverpool?

How to make an offer on a property?

When you are at the point of being ready to make an offer on a property, it’s important that you put your circumstances across to the seller or estate agent in such a way that gives you the best chance of having your offer accepted. Whether you are a First Time Buyer or Moving Home in Liverpool, it’s always key that you know how to make an offer on a property.

A cash buyer will always have the advantage, though if you have a mortgage agreement in principle in place you will definitely be in a better position than other potential buyers who have yet to get in touch with a Mortgage Broker in Liverpool and get this sorted.

Buying a property is a negotiation process, and so if the seller rejects your initial offer you will be asked whether you want to increase your offer. So don’t be afraid to offer less in the first instance than you are willing to pay for the property you’re interested in.

If your increased offer is also rejected sometimes it just boils down to whether you are willing to pay the asking price, especially if the property in question has just been placed on the market, or whether you are prepared to walk away and find another property to live in.

As part of our dedicated mortgage advice service, we offer you a free initial mortgage consultation. So, please feel free to give us a call if you want to speak to an expert Mortgage Advisor in Liverpool. They will try their best to attend to all of your mortgage needs.

Mortgage Advice in Liverpool

Mortgages for the Self Employed in Liverpool

Self Employed Guidance

Gone are the days of someone leaving school at 18 and working for one employer all the way through to their eventual retirement. The rise in new engineering and digital occupations has, in particular, allowed for the popularity of self employed roles. But the uncertain nature of this type of work can make banks nervous Self Employed Mortgage Advice here.

If you are Self-Employed, it’s not impossible to get a mortgage, though it certainly is considered a specialist area. So we will take the opportunity to help you get prepared if you’re thinking of buying a house whilst working as Self-Employed.

How many years’ accounts do I need?

Most lenders will only require a minimum of one year’s trading, with some lenders having stricter rules and wanting a minimum of two. The reason for this is that so many businesses fail within their first year and it’s a lot of risk that the banks aren’t willing to take.

How is my income assessed?

Generally speaking, lenders will take the average of your last 2 years’ earning, however, there are some who go off the latest year. This could be very good news for you if your profits are on the increase.

I’m a director of my own Limited company – does this mean I’m employed?

This is a little trickier to answer. Technically yes, you are employed, however, unless you own less than 25% of the shares, the lender will not recognise you as an employee of the business. Most lenders add your salary to your declared dividend to calculate your annual earnings, with the occasional lender using net profit, something which can be good if your business retains some profit.

My net profits don’t reflect the true picture of my business – what can I do?

This is a question we hear regularly, but unfortunately there’s not a lot we can do. Your mortgage application is assessed on the income that has been declared (net profit or salary/dividend) to the revenue. If you want to get a mortgage then you will have to have paid at least some tax.

How much deposit do I need?

No matter whether you’re a self-employed applicant or a standard employed applicant, this remains the same. You will need a minimum of 5% although it may be more than that if you only have one year’s accounts.

Will a bigger deposit help me?

Putting down more deposit will likely open you up to a better deal than you otherwise would’ve had to choose from, and you will have a wider choice of lenders too. That being said, it doesn’t make any difference to the amount of mortgage you would be granted to borrow.

I’m a contractor – am I treated differently?

Admittedly, leenders do seem to like contractors a little more at certain times, especially if you’ve built up a good track record. With that, the lenders can consider taking your “daily rate” and applying a multiplier to this rather than your net profit. There have been lenders in the past who have offered bigger mortgages to contractor applicants using this method, especially for IT contractors.

Can I self-certify my income?

Unfortunately, “self-certs” were widely abused by applicants in the pre-credit crunch days and there is no sign of this type of mortgage ever returning.

Taking out a mortgage for the self employed can certainly be more complicated than it would be for an standard employee, though some lenders may be more flexible than others when it comes to this.

That’s why It’s a good idea to speak with an experienced Mortgage Broker in Liverpool early on in the process. You’ll have realistic aspirations right from the start.

Long gone are the days when your bank manager could “take a view” on your circumstances just because you are a loyal customer. The lenders lean increasingly upon their computerised credit scoring systems and like lots of things, it’s just knowing where to look.

How to get a Mortgage Agreement in Principle in Liverpool

What is a mortgage agreement in principle?

The purpose of a mortgage agreement in principle (AIP) document is to prove that you do have a mortgage in place. To the estate agent, it proves you have good enough credit to proceed, as you have passed the lenders credit scoring system. That being said, getting a mortgage can never be guaranteed, as a full application will still require further background checks.

The value of a mortgage agreement in principle

Now you have your mortgage agreement in principle, what do you do with it? Well, having your mortgage agreed at the outset can help you negotiate on asking price with the owner of the property. It is relatively easy to obtain and is something we can arrange for all of our clients. Almost all lenders offer an Agreement in Principle.

To proceed further with a mortgage application, you will require further background checks to cover things like evidence of income, as well as a satisfactory valuation of the property itself.

Getting one in advance can really put you in a better position for negotiating, can help you avoid disappointment and allows you to figure out your limits.

Negotiating power with a mortgage agreement in principle

When you reach the point of being ready to make a formal offer on a new home, the majority of estate agents will undertake due diligence and ask you to prove that you can in fact afford to complete the purchase. Sufficient evidence of this include bank statements and also an agreement in principle certificate, which our team can provide for you. Once you have provided them with all this documentation, the estate agent will usually cease marketing the property and put a “sold” or “sale agreed” board up to let people know a deal is currently being processed.

If you already have a mortgage agreed before you make an offer, you are instantly more appealing to a seller as this proves you are not making this choice lightly and you’ve thought about how you’re going to afford the purchase. This might persuade a seller to accept an offer you put forward on their property that may be underneath their initial asking price.

Avoid disappointment with a mortgage agreement in principle

When it comes to buying a house some customers go full steam ahead and make an offer on a property without first checking that they have the means to proceed with the purchase. This can understandably leave people feeling very disappointed if this doesn’t quite work out how they’d hoped.

By that point they may have already got their heart set on their new potential family home. By getting in touch with us early on, this disappointment can be avoided. Sometimes there are things that are causing a mortgage to decline that can be overcome over time.

For example, there may be a small issue on your credit report that is proving to be a nuisance, perhaps a disputed mobile phone bill which can be easily fixed. Maybe you thought you were on the voters roll and you’re not, something that over time can be solved. In any case, it’s better than you know ahead of time, rather than mess people about. Our team will be able to tell you what you need to do to improve your credit score for the future.

Knowing your limits with a mortgage agreement in principle

Ok, so you know you’ve got a good credit rating because you’ve never been turned down for credit, you’re registered on the voters roll and you’ve always made your credit card payments on time – so what can go wrong?

Well, you could approach 10 different lenders these days and get 10 different maximum mortgage amounts! They all calculate affordability in their own unique ways. If you’re self-employed it really is a minefield: some lenders take your net profit, others your salary and divided. Some use your latest year, others an average over 3 years.

Knowing your borrowing limits is important as then you know for sure what your price range is. We’ll be able to advise you of the maximum mortgage available to you. Also, more importantly, together we’ll work out how much you can afford to pay back each month.

Mortgage Advice in Liverpool

Different Types Of Mortgages Explained

The Different Types of Mortgage Available in Liverpool

At the start of your mortgage process, you will soon realise that there are many different options available. If you are First Time Buyer in Liverpool, you are probably thinking “How could there be so many different types of mortgage?”

In this article we will provide a list of the most popular types of mortgages available on the market and hopefully answer any questions you have about them.

What is a fixed-rate mortgage?

A fixed-rate mortgage means that your mortgage payments are not going to change for the length of your term. You are able to choose the length of this yourself, with common choices being 2, 3 or 5 years or longer. Regardless of what happens to inflation, interest rates or the economy, you have the security of knowing that your mortgage, likely your biggest outgoing payment each month, will remain the same.

What is a tracker mortgage?

A tracker mortgage means that your interest rate will track the base rate set by the Bank of England. What this means is, the lender that you are with does not actually choose the rate that will be applied, and you will be paying a percentage above the Bank of England base rate. In an example, if the base rate is 1% and you are tracking at 1% above base rate, you will be paying a rate of 2%.

What is a repayment mortgage?

When you take out a repayment mortgage this means that each month you are paying back a combination of both interest and capital. Providing that you keep your payments going for the full length of the mortgage term, you are almost guaranteed to have fully paid off the mortgage by the end of your term, resulting in the property becoming solely yours.

This is probably the most risk-free way to pay your capital back to the lender. Early on into your mortgage term, it is mainly the interest that you are paying and your balance will go down at a rather slow rate, especially if you have taken out a 25, 30 or 35-year term. The benefits of this arise in the last ten years or so of your mortgage, where your payments are covering more capital than interest and the balance will go down at a much quicker pace.

What is an interest-only mortgage?

Whilst many Buy to Let Mortgages are set up on an interest-only basis, it is much harder task to get a residential property on that same basis.

The likelihood for lenders to offer an interest-only product now is a lot less than it was.  That being said, there are certain circumstances where this can be a viable option, including things like downsizing later on in life, or having other investments what you will use to pay the capital back. Lenders have stricter rules when it comes to offering these products now and the loan to values are a lot lower than they used to be.

What is an offset mortgage?

With an offset mortgage, the lender will set you up a savings account to work alongside your mortgage account. How this works is that, for example, if you have a mortgage balance of £100,000 and £20,000 is deposited into your savings account, you would only be paying interest on the difference, which in this case would be £80,000. This can be a much more efficient way of managing your money, especially if you pay a higher rate of tax.

Mortgage Broker in Liverpool

Gifted Deposits FAQ’s | Mortgage Advice in Liverpool

Through our extensive experience as a trusted mortgage broker in Liverpool, our team understand that a big hurdle in getting onto the property ladder for a first time buyer in Liverpool is to build up enough savings for a deposit.

In many cases, parents, grandparents and sometimes friends will want to help you towards achieving your goal of buying your first home. This will be done by providing either a percentage or the full amount of a deposit to put forward on a property. A situation like this is referred to as a gifted deposit. Find out more information on this below.

What is a gifted deposit?

A gifted deposit is a lump sum of money provided by parents, grandparents or friends to a homebuyer and would make up the full or partial amount of the homebuyer’s required deposit. This can be a beneficial option for those struggling to save for a deposit.

Keep in mind that the money isn’t a loan and providing a gifted deposit is giving to the homebuyers with an understanding that the money doesn’t need to be repaid.

How can gifted deposits help?

As mentioned, gifted deposit can be a helpful option for first time buyers in Liverpool especially those who are financially stable to cover mortgage repayments but are not able to save up for the initial deposit.

When providing open and honest mortgage advice in Liverpool, we find this is a regular instance. This could be because the customer has larger outgoings like rental payments, home energy bills and essentials resulting in having no remaining amount to put into savings for a deposit.

Through receiving a gifted deposit, you will have opened yourself up to better rates of interest when you are in the mortgage process, in particular, for those with a gift that is above the minimum 5-10% deposit requirement.

Who can gift The deposit?

Normally, it’s parents (birth and adopted) and carers who are able to gift you the deposit. This case is usually known in the mortgage world as the “bank of mum & dad”. It is possible for other family members to gift you the deposit, however, this is down to the lender and would require care when selecting the most appropriate mortgage lender for this.

In the case where the gifter is over the of 55, they may be able to provide you with the deposit through Equity Release in Liverpool & a Lifetime Mortgage.

Do your parents know you need help?

The general consensus we find around this topic is that many customers aren’t aware that their parents can help with their mortgage or may not feel comfortable asking them for help. Normally, parents are willing and ready to help out their children by helping them on the road to homeownership.

In the majority of situations, taking out a mortgage can be a better option than renting. This is because you may end up paying less per month on your repayments over your rent. The deposit could come from inheritance, with some parents potentially gifting it earlier on in life if they currently have enough in savings or have released a specific amount of equity from their own family home.

Gifted deposit vs loans

Loans are something many lenders won’t accept as a deposit because the lender may be unsure that you’d be able to pay back both the loan and the mortgage at the same time.

Is there a maximum or minimum gifted amount?

There isn’t a set amount on the maximum you can receive as a gift, however, some lenders will want you to put in at least 5% deposit from your own personal funds.

Remember, the more you can afford to put down, maybe by combining savings and gifts, you’ll have access to better deals.

Who can benefit from a gifted deposit?

Generally, it’s first time buyers and home movers in Liverpool who will benefit the most from the gifted deposit.

Our Mortgage Advice Service in Liverpool

As an expert mortgage broker in Liverpool, our team strive in providing top-level customer service with the aim to get them through the mortgage process with the help of expert mortgage advice in Liverpool.

Whatever your mortgage situation may look like, get in touch with our team today. Through our experience in speaking to customers seeking mortgage advice in Liverpool, we have encountered a variety of cases including complex ones.

What proof is required?

The individual who is gifting you the money will need to sign a gifted deposit form stating that it is not a loan and is in fact a gift. Other proof of ID includes address and bank statements.

Offering Gifted Deposit Mortgage Advice in Liverpool

As a mortgage broker in Liverpool, we are available 7 days a week from early until late. Our mortgage advisors in Liverpool are here to answer all your questions and update you on your mortgage process.

Schedule a call with an expert mortgage advisor in Liverpool to see how we can help you towards achieving your mortgage goals!