We are often approached by distraught property buyers who have approached their bank or normal mortgage provider only to be told "sorry - you don't meet our lending requirements".
However, a full review of your circumstances and research across the entire market mortgage market can often provide a solution to rescue that dream move.
Although the same set of mortgage regulations apply to all UK lenders, each will interpret the rules in their own way and assess risks differently. Some examples of areas which can have a major effect on borrowing amounts are: –
1. Monthly pension contributions can cause severe restrictions – some lenders do not factor in these outgoings at all, others do include thus reducing borrowing levels. 2.Assessment of overtime, commission and bonuses can give extreme variances.
3. Credit cards – if you use these for day to day expenses, your mortgage availability can be restricted with some lenders even if you repay the card in full each month.
4. Self-employed income and contractors – an old favourite of ours – different lenders have many varied ways of assessing income and its sustainability.
5. Credit file – again a regular theme – a poor score doesn’t necessarily mean that you can’t get a mortgage, whereas an excellent score doesn’t guarantee that all lenders will help!
6. School fees – seen by many as an optional payment, some lenders treat these as a fixed and permanent expense.
Lastly, the nature of the mortgage market is that the affordability calculators used by lenders can result in some large differences from lender to lender in how much they will lend to you. You may have approached your own bank or building society and be quoted a certain figure, but it could be that there are lenders much more suited to your needs who will offer a larger borrowing figure. For some people this can be crucial in allowing them to buy the property that they aspire to.
So whether you are looking to move house, remortgage or review your insurances, why not take local, face to face, independent mortgage and loan advice to smooth the whole process? We would be delighted to help
Paul Hardingham and Tony Ibson are Mortgage and Protection Advisers at Innovate Mortgages and Loans. Both have over 20 years of experience advising individuals and businesses across the North East of England. They can be contacted for bespoke advice at paul@innovateml.co.uk or tony@innovateml.co.uk or call 0191 2843723.
