Blog Archives

3.09% five-year fixed rate as mortgage sales hot up

27.11.2012

Another day, another mortgage sale. From today, one mortgage lender is launching a 10-day sale with six products on offer.

Highlights include a five-year fix pegged at 3.09 per cent for those with a 30 per cent deposit. There is a £995 product fee. The maximum loan size is a very attractive £1.5m.

However, these deals won’t be around for long – applications must be received by 8pm on 6 December so borrowers have just 10 days.

Speak to us on 020 7495 6633 or enquiries@andersonharris.co.uk for more details and to find out whether this is right for you.

Adrian Anderson
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Adrian Anderson

1.99% two-year fixed rate… for seven days only

23.11.2012

Anderson Harris has access to a rock-bottom two-year fix pegged at 1.99 per cent for those requiring up to 60 per cent loan-to-value. The maximum loan size is £500,000 and there is a £1,495 fee.

However, this won’t be around for long – applications must be received by midnight on 29 November so borrowers have just seven days. This offer is only available through brokers.

Speak to us on 020 7495 6633 or enquiries@andersonharris.co.uk for more details and to find out whether this is right for you.

 

Jonathan Harris
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Jonathan Harris

How to get a mortgage

It has never been harder to get a mortgage – or at least that’s the impression you might have if you regularly read the newspapers. But while lenders have tightened their criteria and there are fewer products available than at the height of the housing boom, interest rates are also at historic lows – and likely to remain that way for some time.

This means that while you might need to put down a bigger deposit than in the past, if you can do so you might also qualify for a much better mortgage rate.

Those buying in the £700,000 to £1m bracket also have the advantage of being able to fish in both pools – with mortgages available from both the high-street lenders and the private banks. This means you have much more choice of deal than those restricted only to the high street, with more flexible lending options available, including interest only.

Below are a few points you might wish to consider when choosing a mortgage:

 

Seek advice. While there are fewer mortgage deals available, sifting through them and selecting the right deal is not necessarily easier than in the past. This is particularly the case if you have complicated income streams, perhaps including bonuses, dividends, investment income, share options or retained profits in a business. Many high-street lenders are not keen to take these into account when calculating how much you can borrow and yet these can be a crucial aspect of your income.

Speak to an independent mortgage broker who can guide you through the maze, advise as to the right deal for your circumstances and deal with the lender on your behalf.

 

Establish your budget – before you start looking at properties. It makes sense to work out how much of a deposit you have and how much you can borrow at the start of the process. This has two advantages: firstly, you won’t waste your time – or anyone else’s – looking at properties you can’t afford. Secondly, it enables you to demonstrate to vendors how serious you are about buying, which means they are more likely to favour you over a rival buyer. This is important if you are trying to buy a particularly desirable property with lots of buyers competing against you.

 

Generate as big a deposit as possible. The more you put down, the lower the mortgage rate you will be able to achieve.

Many first-time buyers in London are having to turn to their parents or grandparents for help with their deposit; this is great if you can call upon such funds but bear in mind that if it is not a gift and needs to be repaid, the lender will take the servicing costs into account when calculating how much you can afford to repay on the mortgage. This could mean a smaller mortgage.

 

Consider maximum loan size. Many lenders have a maximum loan size of £500,000 so if you need to borrow more than this, getting a mortgage on the high street may be tricky. However, a broker will be able to point you in the direction of lenders who will consider larger loans, including the private banks – if you meet their criteria.

 

Check out the private banks. While high-street lenders have reined back the volumes of lending they are prepared to do since the credit crunch, the private banks have continued to lend. Although some require assets under management when you take out a loan (such as the transfer of savings or investments to the bank), others have no such requirements. You do need to be wealthy (some banks have a minimum wealth requirement) or at least on track to becoming so.

Unless you have an existing relationship with a private bank (and even if you do, that bank may not be the best option for your funding requirements), a broker with good contacts with the private banks is the best way to go. They will present your case and know which bank is most suitable to your particular circumstances.

Adrian Anderson
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Adrian Anderson

Ten top tips to improve your chances of getting a mortgage

06.11.2012

It is well-documented that since the downturn it has been harder to get a mortgage with lenders tightening their criteria and reducing maximum loan-to-values. The recently published Mortgage Market Review (MMR) introduces a raft of rules that will make getting a mortgage even trickier.

However, it’s not necessarily impossible. Below are Anderson Harris’ top tips for getting a mortgage:

1)   Check your credit rating: Since the credit crunch, lenders have preferred borrowers with clean credit histories over those who have missed payments in the past. Check what your credit file says about you before applying for a mortgage as mistakes can be corrected. Contact Equifax (www.equifax.co.uk) and Experian (www.experian.co.uk).

2)   Get on the electoral roll: While this might not sound particularly relevant when it comes to buying your first home or the next one, lenders will confirm your identity by checking the electoral roll. Fraud has been a big issue in the world of mortgages – so a lender will want to check that you are who you say you are.

3)   Keep payslips and P60s: One of the key components of the MMR is that lenders must see proof of income, whether you are employed or self-employed. Those who are employed should have payslips and P60s; if you are self-employed, you will need three years of accounts, although one or two lenders will lend on the basis of one year’s audited accounts. A private bank is likely to be more understanding of complicated income streams: contact us to find out if you qualify.

4) Hold onto bank statements: As well as seeing proof of income, your lender will want to see evidence of your spending. It will want to see that you are not over-spending and running up huge debts, and that you can keep your account in order.

5)   Reduce debts: Instead of simply lending three or four times income, lenders are increasingly looking at affordability. This means taking your outgoings into account as well as your income when deciding how much you can borrow. If you have a lot of debt, this will count against you so pay off credit and store cards.

6)   Speak to Anderson Harris: We are independent mortgage brokers so can help find the right deal for your circumstances. This is particularly important if you are self-employed, have complicated income streams (such as bonuses and retained profits in a business), are buying an unusual property, don’t have any experience of buying property or need access to a private bank. If you are in a contract race and need to move quickly, or require bridging funding, we can help speed things along.

7)   Pull together the biggest possible deposit: The cheapest mortgage rates are available to those with the biggest deposits, with market-leading deals targeted at those with at least a 40 per cent down payment. While your savings may not stretch to these levels, the more you can put down, the better the rate will be. Those with only a 5 per cent deposit will pay around 3 percentage points more for a five-year fix, for example, than someone with a 40 per cent down payment. That makes a big difference to your monthly costs. The other downside of having a small deposit is that the lender’s credit scoring will be tougher.

8)   Consult the Bank of Mum and Dad. It may be your kids or grandkids who are trying to get on the housing ladder and there are options available if you wish to help them do this. Ideally, you would be gifting cash that you won’t need back again (otherwise, this would be viewed as a loan so would affect their affordability when getting a mortgage). Another option might be to act as a guarantor but if you do this, you should seek legal advice to ensure you know exactly what you are getting into and what your commitments are.

9)   Get a mortgage agreed in principle. It’s worth finding out how much you can borrow before you start house hunting. This ensures you don’t waste your time, or anyone else’s, looking at properties you can’t afford. It will also ensure that vendors regard you as being serious because you’ve made the effort to get your finances in order before you start looking for a property. This may mean your offer is more likely to be accepted, even if it’s not necessarily the highest one on the table.

10)   Think ahead: If you are planning on changing jobs in the near future, or setting up your own business, it makes sense to take out a mortgage or remortgage beforehand. Otherwise, you won’t be in a position to do so for some time afterwards. Likewise, if you or your partner are going on maternity leave or planning a career break to have a baby, think ahead. Any drop in income is likely to mean a smaller mortgage in the future.

 

Jonathan Harris
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Jonathan Harris