If you are ready to move up or down the property ladder Bluebell Mortgages can assist you, we will inform you of all of the likely fees associated with a house move we will then identify your current position and calculate your likely required loan amount.
Ready to move up the ladder?
Have you outgrown your current house, had children, need to be in a certain school catchment or just fancy a change, there are many reasons why people will want to move home.
Bluebell Mortgages can help you in making this process as painless as possible.
Where do I start?
You then need to find out how much your current property is worth, we will be able to work out approximate initial figures by using an online valuation of your property which we can do for you. However, to be certain you need to speak to an estate agent who has knowledge of the local market and the likely demand for your property. Particularly If your property is a little bit quirky, remote, or you have done lots of home improvements/extension works then the advice of a knowledgeable local estate agent is invaluable.
Once you know what your property is worth we can then work out how much you can/should purchase for.
To do this, we will need to know.
- The amount of equity in your property (this is the difference between the value of your house minus any mortgage you have secured on it.
- Your borrowing capacity
- Monthly repayments
- Your costs to sell and buy.
Finding out what you can borrow.
You need to understand your borrowing capacity as well as what your repayments are likely to be.
Were all different and so are our finances some of us may be super scrimpers and save every penny others may enjoy the luxuries in life. Lenders need to understand your lifestyle so that they can work out the size of loan to give you.
Lenders will ask questions to work this out, they will want to know.
What you have coming through the front door this can be whether you are.
- Self-employed (most but not all lenders will look at a 2-year average)
- Director or shareholder of a Ltd company.
- Full or part-time
- Paid bonus overtime or commission
Do you pay your debts back on time?
This is your credit rating and credit score, it’s a bit like a mythical beast with many wild rumours doing the rounds.
- Too many checks hurt my score?
- My score is 999 but I have been declined
- I have no credit therefore I am penalised.
Your credit score and credit rating are two different things but the terms are used interchangeably, your credit score is individual to the lender you are looking to borrow your money from. Lenders award points to you for certain traits.
Lender A may have had bad debts from a certain profile of customer in the past for example someone who has only been self-employed for 18 months. If this is the case they will apply a negative weighting to your score, if this is coupled with something else they deem negative such as having a small deposit and not paying a loan back on time you may not hit the desired threshold of points for them to grant you a loan.
A credit report is a very valuable tool when applying for a mortgage, you can download yours for Free at www.noddle.co.uk , or register with one of the paid services such as credit expert or Equifax.
Lenders never divulge their credit scoring system mainly as it is computer generated so you never know if you will be accepted or rejected until you try. However, our expert mortgage brokers at Bluebell Mortgages Ipswich have a detailed knowledge of lenders criteria which proves invaluable when knowing who to approach and who to avoid.
Most lenders will lend to age 70 some to 75 and a few beyond, your age matters because it tells the lender how long you will potentially be earning for and therefore able to service your mortgage. Options do exist for older borrowers who are on a pension income this is covered off in our lifetime mortgages area.
These could be.
- Loans (car, sofa, or holidays etc.)
- Credit cards
- Nursery costs
- Travel costs
- Maintenance (for an ex-partner or children)
- Number of children (the number of mouths you have to feed can impact your borrowing potential, lenders will make an allowance for each child within your affordability) Some lenders do also take child related payments such as child benefit and tax credits to help with this.
Amount of deposit
When moving, it is normal for most of the deposit for your new house to come from the equity of your existing one. The amount of money you can put into your property purchase in addition to your mortgage has a bearing on how much a lender will lend you. Generally, the larger your deposit/equity from your current home the less risk for the lender and they more they will lend.
As part of our mortgage assessment we will work out the costs to buy and sell so that you have an accurate idea of how much deposit you will have available.
Once we have worked out your income, commitments, likely credit score, deposit and how long we are able to borrow the money for we can work out the maximum loan size you should be able to obtain.
However just because a lender says you can borrow a certain amount doesn’t mean that you should always go to that level. The driving factor behind how much you borrow is how much it will cost you to repay per month.
Factors affecting the monthly payment are.
- The Term – how many years you borrow the money over (Your age may determine this)
- The interest rate that you pay %
The term of the loan, how long you want to borrow the money for will impact the monthly payment. The longer the term the lower the payment. Lower payments can seem attractive but using the term to lower them means that you are stretching the loan out, the drawback of this is that you end up paying more interest overall.
We will always try and find a happy medium for you with a term long enough to make payments affordable, but also as short as we can go to minimise interest.!
As part of our review process (see our remortgage area) we will keep one eye on the future and so if you did take a longer term initially to reduce your payments we may suggest shortening your term at this point once you are used to the monthly payment and had a couple of years of pay rises etc. Working this way can reduce or even remove any of the adverse effect of borrowing over an extended term initially.
We have worked with many clients who have taken 10-15 years off their mortgage term and indeed settled their loans way ahead of what they thought possible by using this method.
Ok now we have your borrowing capacity, costs to buy, deposit and a ball park monthly cost, we now need to get some back up from lenders. This is where an agreement in principle comes in.
The way it works is as follows.
An agreement in principle is a security blanket for you, based on our assessments we will identify a lender or number of lenders that will likely fit the bill. We will then assess your criteria and match it with the lender most likely to offer you the best loan for your circumstances. For example, this could be borrowing the maximum amount possible so that you can buy a better home, a lender that is flexible if you have missed one or two credit card payments or will accept you if you have only been self-employed for 12 months. Every client is different and we have the knowledge to match you with the lender most likely to say yes!
We will need to collect supporting documents to back up your earnings (wage slips, accounts etc.) and bank statements to back up your affordability, commitments and outgoings. We will also verify your identity by taking copies of documents such as passports, driving licences etc.)
Once the likely lender has been identified we will provide them with a snapshot of your situation they will also carry out a credit check (do you pay) and credit score (are you likely to pay them). If all goes well they will accept you and you then have an agreement in principle. This is great if you are looking at property, as you will now know that a lender or lenders are willing to provide you with money.
Estate agents will also like to know this information as it shows you are motivated and have got your finances in order.
Now we have your borrowing capacity, costs, deposit and monthly payments sorted and we also have an agreement in principle backing all this up.
Once we have all of this in place and likely sales price we can help you focus your search, put you in control so that you know which property to look at, and reduce the general “Noise” around house hunting.
When considering your next move, you need to think about several things.
What do I need?
- No. of bedrooms
- School catchment
It’s a good idea to try and put yourself into the position of not needing to move again unless you want to. Not moving to often will save you lots of money in selling/buying fees and so sometimes it can be worth stretching that little bit to get the house you can settle in.
Sometimes we find that clients are tied to their current mortgage provider and face a financial penalty if they leave them before their early repayment charge expiry date, this does not normally present a problem when moving as most mortgages nowadays are portable, this means that we can move your current mortgage to a new property without charge, doing this does require careful consideration though as most of the time if you are moving you will look to increase the amount of borrowing you have. It is important to select the correct product for this additional borrowing while you are tied into a deal. We can work out the best available option for you when it comes to porting.
Once you have your likely sales price, borrowing capacity and requirements for your new house sorted it is time to place your property on the market.
It’s a good idea to catch up on those nagging bits of painting you have been meaning to do over the last 5 years, repair the garden gate, get the carpets clean etc. Presenting your house in a clean, tidy and fresh manner can really help you achieve a fast sale close to your desired asking price.
You are then ready to put your house on the market!
It’s a really good idea to try and secure a buyer before you seriously look or offer on the property you want to buy. This is not always easy but if you can refrain from offering ahead of selling you will put yourself in a much stronger bargaining position.
It works like this, someone who has not sold their property can view another and put an offer in, but they cannot really get on with things until their own house has been sold. (it’s a little bit like shopping with no money). If you can wait and secure a buyer you can offer on the house you want with a complete chain behind you, this really puts you in the driving seat as you are ready to go and can quite possibly negotiate a discount on the property price.
This is not always easy and in reality, some people tend to find their dream home, offer the full asking price and then rush to find a buyer for their own, sometimes discounting the sale price as they don’t want to lose the dream property. So, if you can, wait until your house is sold before offering on your new one!
If everything is working like it should you are now sold and can move to the exciting bit, hitting Rightmove, Zoopla, Prime location and your local estate agents to find your dream property.
A few tips here would be.
- Set up Rightmove alerts so that you get emails/texts as soon as a suitable property is listed.
- Contact your local agents directly, you may be wary about being hounded by estate agents if you do this and this can happen. But if you are looking for a very specific type of property or something in a very sought after area dealing directly with the estate agent can put you one step ahead of other buyers. This is because property listed on Rightmove can take up to 24 hours to appear, if an agent knows you are interested they would be able to pick up the phone and get you through the door before anyone else.
So, you have a property in mind and have arranged a viewing with the agent…
So, dream house found, offer accepted (a few butterflies!) What next?
We now need to research the exact mortgage product we are going to take and get your mortgage application sent to the lender. We will present you with some options and work together to finalise the product, amount of mortgage and term you wish to take.
Assuming we have completed the agreement in principle process we will then re-fresh any of your documents wage slips, bank statements etc. and send your application to the lender. Checking that we have the detail down so that the application process goes as smoothly as possible.
Once the application has been received the lender will do several things,
- They will instruct a surveyor to check that the property is in a suitable condition for them to lend on.
- They will take your application through the underwriting process, this is where they scrutinise all your information. After this sometimes they will come back to us with additional questions or requests for further documentation.
Our job is to anticipate these questions before they are even asked, our aim is to have answered everything within the application to make this additional requirements list as short as possible.
Once the lender is happy with you and have received a satisfactory survey report, they will grant your mortgage offer. This will be checked for accuracy by us, and you and your solicitor will also receive a copy.
Our aim is for our service to be 1st class and our goal is for you to be able to hand the job over to us and forget about it until it’s time to move in, our service consists of the following:
- We will handle your initial assessment and agreement in principle (to make sure the lender will lend you the desired funds).
- Apply for the mortgage on your behalf and liaise with the lender dealing with any questions or documentation requests through to mortgage offer stage.
- Advise and arrange any related insurance products for you, such as life assurance, critical illness cover, home insurance etc.
- Liaise with your solicitor to achieve a successful exchange and completion for you. You will then be placed into our review system so that you can forget about your mortgage and let us keep things running efficiently for you.
To find out where you could be moving to next contact us!
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