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The Independent
12 hours ago
- Business
- The Independent
How much money can I borrow and what if I have bad credit? Expert answers the most-Googled mortgage questions
Taking out a mortgage is one of the most important (and expensive) life milestones, making it imperative for housebuyers to have all the right information before committing. For many, the starting point is to look online for information they need to know, with more than half a million Google searches carried out a month in the UK with the word ' mortgages ' in them. Here, The Independent takes a lot at the most-searched questions — and asks an expert to answer them. How do I get a mortgage? Finding out the basics is a good place to start. It can be time-consuming and you'll need to speak to several people, including a mortgage broker who can help you find deals which suit your needs – plus you'll have to get your own paperwork in order. 'Getting a mortgage starts with preparation. Firstly, you'll need to visit a broker to find out exactly who to go with for the best rates for your circumstance, especially if your mortgage is more complex: you're self-employed, have multiple income streams or you need a more flexible approach,' Luke Williams, specialist advisor at Pure Property Finance, explained. 'Once you've had a mortgage-in-principle, you'll then need to prove your income, show a great credit history and show proof of funds for your deposit. 'The more you're able to pay upfront, the less interest payments you'll end up paying over the years.' Of course there are mortgage solutions for those who have lower deposits and even no deposits, but the trade-off is higher interest rate levels and more initial requirements to highlight your status. How can I get a mortgage with bad credit? In an ideal world, we'd save up a deposit, pick our property, make a bid and move in with a mortgage sorted out – all nice and smoothly. It doesn't seem to happen that way often, though. Saving up a deposit is a challenge for some people and starting out with bad credit can be another issue for others. 'You can get a mortgage with bad credit, but it's definitely harder than if your credit score is good,' Mr Williams said. 'Specialist lenders offer mortgages to those with poor credit or who've missed payments. 'A major downside is that the rates can be higher than a normal mortgage and the deposit needs to be larger than 10 per cent. A good broker can help you find the right specialist lender if you are in this circumstance, and might advise on whether it would be worth building your credit score up beforehand.' Having all the information you need to make such a decision is key. The interest rates you pay on a mortgage deal are based off the Bank of England base rate. Right now, that's 4.25 per cent, but it was at or above 5 per cent as recently as October last year. Rates are decreasing, therefore, but this month the BoE are expected to hold, before two further cuts later in the year. In any case, mortgage products don't tend to exactly track the base rate, they are decided based on swap rates - future expectations of where the base rate will be. As such, some will build in drops in interest rates even before they happen, meaning unless you're on a type of variable tracker rate, you wouldn't necessarily see a decrease on mortgage repayments anyway. 'Mortgages may follow [interest rates down] in the coming months; but won't reach pre-pandemic levels for a long time,' adds Mr Williams. How much mortgage can I get? This is the most frequently searched question, more than 17,000 times a month – but you'll of course need more than a scan online. Your specific circumstances will dictate how much you can borrow, but online calculators can be a good starting point. 'Most lenders will let you borrow around 4 to 4.5 times your annual income, however this can vary due to some underlying factors. If you have existing debts or your credit score isn't as good as it should be for a mortgage, you may have to borrow a little less,' explained Mr Williams. 'Other financial commitments, such as other mortgages, car loans and child maintenance costs might also have an impact, and affordability checks are much stricter today, with lenders assessing every single monthly outgoing and financial dependent, to ensure that they don't encounter repayment problems further down the line.' It's always worth checking and re-checking if your circumstances change before you take out a mortgage, to see if you can get a better deal, rate or terms. And most of all, ensure you seek expert help so you know you're looking in all the right areas to get the information you really need.
Daily Mail
6 days ago
- Business
- Daily Mail
Nine red flags you must spot BEFORE buying a home
Avoiding red flags when buying a home is crucial to ensure you do not make a costly mistake you regret. During a quick viewing, it is easy to get caught up talking about how a property has been decorated or its layout. However, before buying a home there are a number of issues you need to take note of, including local mobile signal levels and noise in the surrounding area. Jamie Williams, a property expert at Pure Property Finance, and Fred Jones, chief executive of Upstix, address nine red flags to watch out for before buying a home. 1. Check the mobile signal is adequate There is little point spending hundreds of thousands or even millions on a property and later discover it has little to no mobile phone signal. Williams said: 'Most phone websites now have a software where you can enter your postcode and it'll tell you how good the coverage will be before you commit to any sort of contract.' He added: 'This is something you need to check before buying a home, particularly if you are loyal to one network or you're stuck in a phone contract for a year or two.' 2. Check noise levels at different times You might visit a property for a viewing once the morning commute is over or before the evening rush hour starts. However, it is sensible to visit the property at different times of the day and evening to give you the best sense of noise levels at various times. Unwanted noise can come in many different forms, including neighbour noise, noisy kids in an upstairs flat, road noise or even nearby industry noise coming from commercial sites. Williams told This is Money: 'If you're interested in a property and you're close to signing the dotted line, take a drive by at different times of the day first. 'If you don't like loud noises at night, take a late night drive to see if there are any neighbourhood parties that go on which might irritate you. 'You don't want to move in and a few weeks down the line find yourself not being able to relax or sleep because of loud events taking place outside your window.' 3. Check for damp and mould Check the property from top to bottom for signs of damp or mould when viewing it. Ask the estate agent if damp or mould is a problem and get a survey carried out to check for any unwanted gremlins lurking in the property. Williams told This is Money: 'Damp can be hard to get rid of and even when you get rid of it, there may still be an underlying problem that could be costly to fix. 'When viewing a property, check behind furniture, near the windows and in the corners of the ceilings.' 4. Ensure there's enough natural light While viewing a property, think carefully about how you would use the space. A key element of a home is ensuring it has enough natural light throughout. This might not be possible for every room or property, but later down the line a property without much natural light could prove harder to sell. Williams said: 'Light affects people's mood and how large and spacious a property feels. 'Take a look at which ways the windows face and how much daylight is in each room, as well as any light blockers such as large trees outside.' 5. Check there is adequate storage A property may be kitted out with a top-spec kitchen and a home-cinema, but if there is not enough storage throughout, you have a problem on your hands. Williams said: 'Do note during viewings that if there are things like shoe racks out of cupboards or coats on the backs of doors, it could be a sign of not having enough storage space.' If the seller has stacks of stuff stored under beds, that is also often a sign that there is not enough storage in the property for all their belongings. As a prospective buyer, you will need to think carefully about whether all your belongings will fit into a property once you move in. Alternatively, if you buy a home and find you do not have enough storage, you could sell some of your belongings or put some into storage, though the latter can be very expensive. 6. Check it's not a dodgy neighbourhood Moving to an area you do not know can be fraught with pitfalls. Before buying a home in a new location, try and do as much homework as you can to find out about the area, including crime rates, rubbish and fly-tipping levels and antisocial behaviour. Williams said: 'If you're new to an area, try and join local community groups on Facebook to get an idea of what a place is like and what's happening in the vicinity. 'Are people talking about cars being stolen? Are people talking about gangs in the area late at night? 'Most neighbours also wouldn't mind if you knocked on their doors to ask a couple of questions about the area, though some may be a little bias about it'. Also be careful if the neighbour's property is in a state of disrepair. Jones of Upstix, said: 'A poorly maintained adjacent property can raise concerns about the area's desirability, hinting at possible antisocial behaviour or general neglect.' 7. Check for a general state of disrepair As a prospective buyer, get a sense of how well a property is cared for. Any areas of concern could be costly to resolve. If the seller will not resolve the issues, you could try getting more money off the property's asking price. Watch out: Be on the lookout for antisocial behaviour in the area you are moving to Jones, of Upstix, said: 'A neglected home signals red flags to potential buyers. From peeling paint, an unused swimming pool, or an unkempt garden, visible signs of disrepair can imply deeper, hidden problems.' Jones advises sellers: 'Fix what you can, price wisely, and prepare to be honest and strategic about what you cannot change.' 8. Watch out for infrastructure issues Everyone is different and some people won't be bothered by a giant mobile phone tower or pylons near their home. But for some buyers, they could be a major sticking points, particularly if more constructions are on the cards. Jones said: 'Pylons, mobile phone towers, powerlines, and even wind turbines can be a sticking point. 'Whether it's due to aesthetic concerns, noise or even perceived health risks, these structures can emotionally and visually impact a buyer's willingness to proceed—and the price they're willing to pay.' 9. Find out out flood risks Flooding can ruin your home. In extreme circumstances it can force you out of it for months on end while it is being dried out and repaired. Always check the flood risk in the area you are thinking of buying a property in. You can do this by searching for the postcode on the Environment Agency's flood maps. Depending on which applies, make sure you check both the risk from rivers and sea and also the risk from surface water flooding. Jones said: 'Flood zones are becoming an increasing concern, particularly in light of changing weather patterns. beyond potential property damage, high insurance premiums, difficulty securing a mortgage, and the risk of future disruptions make certain homes harder to sell. 'Many buyers will simply walk away rather than take on the risk.' How to find a new mortgage Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible. Buy-to-let landlords should also act as soon as they can. Quick mortgage finder links with This is Money's partner L&C > Mortgage rates calculator > Find the right mortgage for you What if I need to remortgage? Borrowers should compare rates, speak to a mortgage broker and be prepared to act. Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it. Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees. Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone. What if I am buying a home? Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be. Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people's borrowing ability and buying power. What about buy-to-let landlords Buy-to-let landlords with interest-only mortgages will see a greater jump in monthly costs than homeowners on residential mortgages. This makes remortgaging in plenty of time essential and our partner L&C can help with buy-to-let mortgages too. How to compare mortgage costs The best way to compare mortgage costs and find the right deal for you is to speak to a broker. This is Money has a long-standing partnership with fee-free broker L&C, to provide you with fee-free expert mortgage advice. Interested in seeing today's best mortgage rates? Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs. If you're ready to find your next mortgage, why not use L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you. > Find your best mortgage deal with This is Money and L&C Be aware that rates can change quickly, however, and so if you need a mortgage or want to compare rates, speak to L&C as soon as possible, so they can help you find the right mortgage for you.
