The Mortgage Market Q3, 2018

These blogs and the information contained in them may no longer be current and therefore much of the information/figures quoted could be out of date and shouldn’t therefore be used as an indication of the current situation. If you require any further clarification please contact Derngate Wealth.

Your home may be repossessed if you do not keep up repayments on your mortgage.

According to figures from UK Finance, buy to let lending remains subdued as a result of recent tax, regulatory and legislative changes. In addition, demand for house purchases for both first-time buyers and home movers has also lessened as affordability constraints continue to present a barrier to property ownership and refinancing.

Lenders signed off 58,800 mortgages in September, a fall of 6.5% compared to the same time last year, according to figures from UK Finance. This is the lowest number of mortgages lent in the month of September since 2014.

In particular, there has been a fall in the number of new mortgage issued over the last 12 months due to the new tax rules on buy-to-let properties, and the wider property market shows signs of slowing down.

Although there was an overall drop in the number of mortgages signed off, this was due to the large fall in buy-to-let purchase mortgages approved due to rule changes in the past few years, which increases the amount of tax purchasers must pay. In fact, buy to let mortgages fell faster than other types of borrowing with the number dropping by 18.8% since September 2017 to 12,300. The total value of lending for these types of loans also fell by just over 22%. There could also be further declines in the purchase of buy-to-let properties after changes announced last month’s budget which will affect landlords

Similarly, mortgages issued to those moving home dropped by 8.4% which is the lowest level since 2010. First time buyer numbers fell too but the total value of lending remained the same year on year. The average first time buyer taking out a mortgage in September this year was aged 30.

In the latest Budget, Chancellor Philip Hammond unveiled plans to reduce the time period in which homeowners can claim relief on capital gains tax by half, meaning they will have a larger bill when they decide to sell.

Talk to us at Derngate to find out more about the mortgage market, and to find the best mortgage deal for your individual circumstances.

Read more: https://www.independent.co.uk/news/business/news/uk-house-prices-mortgage-interest-rates-brexit-halifax-index-a8434251.html

How Old is Too Old For a Mortgage?

These blogs and the information contained in them may no longer be current and therefore much of the information/figures quoted could be out of date and shouldn’t therefore be used as an indication of the current situation. If you require any further clarification please contact Derngate Wealth.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Have you ever wondered what the maximum age for a mortgage is?

Not too long ago, the aim of the average Brit was to be mortgage free by the age of 55. That was during a time when people were able to buy a property when just starting out in the world, but with lending criteria becoming much stricter, people are getting onto the property later in life. The average age of someone in the UK buying their first home is 30 years old, compared to 23 in the 1960s.

The world’s population is ageing at such a rate that 10% are now over the age of 60 and this is likely to rise to over 20% by 2050. But what does this mean for older home buyers trying to secure a mortgage?

Most banks and building societies are adapting to these changing times and as a result, it’s now possible to get a mortgage later in life.

In the past, banks required customers to prove they could, in theory, afford a more expensive repayment mortgage where you pay back some of the capital as well as interest each month. This was possible for many borrowers because banks only allowed them a mortgage term up to their 65th or 70th birthday. Given that the repayments due were spread over a short period, those borrowing would have faced monthly bills of thousands of pounds making it unaffordable. However, under the new Financial Conduct Authority rules, customers could only need to show only that they can meet interest-only repayments.

Retirement

If you should retire before you have finished paying off the mortgage, you won’t have the same regular salary and your income is likely to go down. This will result in lenders being unsure that you’ll no longer be able to meet your repayments. Therefore, the older you are the more of a risk you are. Lenders are required  to follow Mortgage Market Review (MMR) rules, which mean they have to make sure you can keep up with repayments over the full term of the mortgage.

The maximum age

There isn’t a maximum age for a mortgage application. However, many lenders have their own age limits. When you take out the mortgage there is usually a maximum age of 65 to 80. When the mortgage term ends there is usually a maximum age of 70 to 85.

This means that even if you are below the maximum age for a mortgage, its term could be limited by how old you are e.g. If you are 60 and want a mortgage that must be paid off before you reach 70, its term could be no more than 10 years. You have a better chance of being accepted if you have a strong credit history if your income is high enough to easily cover the mortgage repayments.

Talk to us at Derngate to find out more about the mortgage market, and to find the best mortgage deal for your individual circumstances.

Read more: https://www.zoopla.co.uk/discover/buying/maximum-age-for-mortgage-lending/

Now it’s Even Harder to Get Onto the Property Ladder

These blogs and the information contained in them may no longer be current and therefore much of the information/figures quoted could be out of date and shouldn’t therefore be used as an indication of the current situation. If you require any further clarification please contact Derngate Wealth.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Young people are finding it even harder to get onto the property ladder with the news that the average salary requirement has risen by 18% over the last three years in some cities. In fact, first-time buyers need an average £53,000 salary to buy a home in the UK’s 20 largest cities.

Research company Hometrack has carried out research into the affordability of property for first time buyers, and one of the findings was that only three out of 20 major cities has become more affordable since 2015.

The cities with the biggest drop in affordability in the past three years were Bristol and Manchester. This is a result of where rapid growth in house prices had pushed up the average wage needed by a first-time buyer by almost a quarter.

A first-time buyer in Bristol now needs to earn £58,826 per year in order to afford the average property, while three years ago they would need £47,283. In Manchester the salary requirement of those wanting to get onto the property ladder has jumped by more than £6,500 to £34,770. London is still too expensive for many young first-time buyers, with the study showing that £84,250 was the average income required to buy an average property.

In addition, it has become harder for first-time buyers to buy a property in Leicester, Birmingham and Nottingham, with home values rising by more than the rate of growth in earnings over the past three years.

It is believed that over 30% of young people may never own their home and could be forced to live and raise families in insecure private rental accommodation throughout their lives. The Institute for Fiscal Studies also said the chances of a young adult on a middle income owning a home in the UK had halved in the past 20 years.

Although wages have risen just above the rate of inflation, property values have risen at a much faster rate.  There has been a slowdown and drop in London, but most of the country has seen values rise by more than 3% each year, and in Scotland this is even higher as demand continues to outstrip supply.

Property in the north-west has seen annual increases of about 5.6% and properties in the south-west and West Midlands rising by about 4.4%. In contrast, the annual increase in average weekly pay was 2.9% in the UK.

In London, Cambridge, Oxford and Aberdeen, affordability has improved slightly where the average income needed to buy a home has risen by 1% in the past three years.

Higher interest rates could make it harder for more people to buy a home, while there were also affordability caps imposed on mortgages to stop banks lending to people who may find it difficult to repay their loans.

If you would like advice on buying a property for the first time, contact Derngate Wealth today.

Read more: https://inews.co.uk/inews-lifestyle/money/can-your-social-media-account-affect-your-mortgage/

October 29, 2018adminBlog

Could your Social Media Account Affect your Mortgage Application?

These blogs and the information contained in them may no longer be current and therefore much of the information/figures quoted could be out of date and shouldn’t therefore be used as an indication of the current situation. If you require any further clarification please contact Derngate Wealth.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Did you know that some banks will look at your social media account before offering you a mortgage, or an insurer will grant you cover? In fact, there are even some companies that will check what banks may see – for a fee.

How does it work?

Some credit score apps are working with lenders to see if you will be able to meet your repayments and financial obligations and they are doing this by checking whether there are signs of irresponsible purchasing behavior and interests.

Companies like Experian have always analsysed consumers to give banks a picture of how much of a risk you are, although Experian has stated that they do not use Social Media for this purpose.

However, whenever you apply for a loan or a job, your social media may be vetted by other companies and they even charge you a fee to see the information and assumptions about you, that they are providing to these organisations.

These companies may put together a report of the impact your social media has on your borrowing ability.  It will give you an indication of the predictions companies are likely to make about you based on the data that is available online.

You can then use this report to change aspects of information publicly available in order to paint a more reliable picture to potential lenders.

What do they check?

These information gathering companies will look at your Facebook, Twitter, LinkedIn and Gmail profiles, as well as online shopping receipts to see whether you are a competent spender. It can also look at newsletter sign ups and log-ins, so be wary as you may be unwittingly sharing information about your preferences.

What can you do?

In fact, by signing up to things through Facebook and Google it may save you time, but it is giving the app a picture of your interests and spending habits, so it’s worth taking the time to register fully for access to these online services otherwise you are giving access to your contacts, images, your location and your browsing history.

Most of the time, this data is analysed by machines and you’ll be given a score. Therefore it’s essential that you set your your account to private so that only you have access to your account and information posted. Everything you share or post online publicly tells people something about you, your habits and your behavior. It can also help criminals steal your identity.

Our advice is to go into Facebook and use the option to view your profile from the public’s point of view and adjust your privacy settings You could also download your entire Facebook history in the privacy section so you can see exactly what’s been stored about you and make changes to protect yourself in the future.

If you would like advice on buying a property, contact Derngate Wealth today.

Read more: https://inews.co.uk/inews-lifestyle/money/can-your-social-media-account-affect-your-mortgage/

Self Employed? You CAN Get a Mortgage.

These blogs and the information contained in them may no longer be current and therefore much of the information/figures quoted could be out of date and shouldn’t therefore be used as an indication of the current situation. If you require any further clarification please contact Derngate Wealth.

Your home may be repossessed if you do not keep up repayments on your mortgage.

There has been a steady rise in the number of self-employed workers in the UK. According to the Office for National Statistics (ONS), over 4.8 million people are self employed. This is a rise of 1.5 million people since 2001.

There are a number of benefits to being self employed, such as being your own boss, having control of your work life balance, having time off, flexible working hours and locations…but there are also so drawbacks to working for yourself. The main risk of course is that you are no longer in receipt of a guaranteed income (although some would argue that there is also no risk of being made redundant!). However, guaranteed income is one of the main criteria for obtaining a mortgage offer, so many assume that being self-employed means they won’t be able to buy a property.

Many people who are self-employed are amazed to discover that they do have options, even if they have a small deposit.

There are some new lenders that have entered the market in recent years and this has increased competition and resulted in an era of more relaxed lending criteria.

The market has moved on so much in the last six years that there are even lenders that would consider someone that had a default or CCJ over three years ago and with just a 5% deposit. However, it’s worth remembering that interest rates are typically higher for applicants, averaging 5.18% APR for a two year fixed deal compared to 2.9 per cent for an applicant with a bigger deposit and a clean credit history.

If you have the desirable 40% cash deposit and two or three years of accounts for your business, there are even more options available to you.

The average mortgage loans are four to five times income, although some lenders will consider six times, and lenders will even consider applicants with just one year’s trading history, though accounts should be detailed

If you have been self-employed for over a year and have a clean credit record, you may qualify for a 95% loan to value (LTV) mortgage with a 5% deposit, but you will need to have a clean credit record for the past three year.

If you would like advice on buying a property if you are self employed, contact Derngate Wealth today.

Read more: https://inews.co.uk/inews-lifestyle/money/how-self-employed-people-can-get-a-mortgage/