It is often difficult to know where to start when it comes to picking a mortgage, then once you do start it can be hard to know exactly what you should be covering during the conversation.
We speak to Steve Jackson, Financial Services Manager of Portico Finance and find out the frequently asked questions when on the hunt for the best mortgage to suit each individual.
If you'd like to get in touch with the team, drop them an email firstname.lastname@example.org
1. How much can I borrow?
This all depends on your income, monthly commitments, deposit level and credit score. If you have debts on things like credit cards or car finance the lenders will take this into consideration when working out how much they think you can afford. Naturally, the larger your deposit, the easier it will be to get exactly what you're after from the lenders than if you have a smaller deposit. If your income is made up of variable pay (commission/bonus) then they can still factor these in but they all have different ideas on how much they will include and it depends also how long you have been receiving your additional pay for.
Portico Finance have strong relationships with all of their lenders, so will be able to place you with a lender who best fits your criteria in order to lend you the mortgage you need to buy or refinance your home.
2, How much deposit do I need?
Ideally a minimum of 10-15% but lenders can accept as little as 5%. With the more deposit you can put down this decreases what is called your loan to value. The lower your loan to value (LTV) then the more a lender will likely lend to you and on better terms in regards to the interest rate they charge you. When it comes to the different rates available to you, this is impacted by every additional 5% you can put down ie, your mortgage rate could be different if you put down a 10%, 15%, 20% deposit etc. If a family member is able to help you with your deposit this is good news for you and most lenders can accept this provided they know the funds are coming from a parent or close family member and that the funds are non-repayable and a true gift to you for the property purchase.
3. Can I get a mortgage with bad credit?
It all depends on what exactly has occurred. Lenders all view blips on your credit file different. Some will view a minor late payment on your credit card as a major event and will not be able to assist. Equally, there are many lenders we work with at Portico Finance who can take a more common-sense approach and try to understand exactly what’s happened, why, and take an individual approach. We have direct access to the underwriters and relationship managers at the lenders if there have been any past credit concerns we can speak with the lenders directly to make sure they’re happy and understand what’s happened before we proceed with an application.
4. What Survey should I get?
This is ultimately up to you but you should consider having a more in-depth survey on the property you wish to buy. Lenders will perform their own valuation but this is purely to ensure the property is mortgageable and fits their lending criteria. It won’t often disclose any further details than that and when you become the owner of the property all future works that need to be performed you will often pay for yourself you should consider doing more research on the property you’re buying before committing to it.
5. Is the lowest mortgage rate always the best?
Often no. Mortgage rates can be like the discounts you see in the high street shop windows; it looks like a good deal until you walk in and find out that the item you want doesn’t have the shiny discount you thought it would have. Often we will recommend proceeding on Mortgage terms on their actual “True Costs” over the deal period you’re considering. The true costs of a mortgage deal factor in the fee’s, valuation costs, exit fees and all other related costs to actually make sure the terms we recommend really are the best possible terms for you.
At Portico Finance we have access to over 70 lenders and are able to source from thousands of lender products to make sure we get you the best terms.
6. How can a Broker help me vs doing it myself?
Think about building the house yourself or asking a builder to do it for you? It’s very similar when it comes to arranging your Mortgage. A broker like Portico Finance firstly has all the connections and knowledge of which is the best mortgage for you, plus, exactly how a builder would know where to source the best materials, we can source the best lenders. With direct access to the Relationship managers at the lenders, a deep understanding of the Mortgage Market and how each individual lender works and ensures you not only proceed with a lender that you fit their criteria on, but also they’re able to lend to you the funds you need, in a timeframe that works for you and ensures you get the best possible terms allowing for all the associated fee’s and considerations.
As a broker we have access to many mortgage deals you simply can’t access on the high street and these are very often exclusive cheaper priced terms. Your Mortgage Broker is your very own Project Manager to ensure you get the best terms, with a lender that can lend you the funds you need and provides you with regulated Mortgage Advice which is personal to just you so you know you’re in safe hands from the very beginning.
At Portico Finance we take pride in ensuring we build a relationship with all our clients and we don’t just arrange the mortgage, we help complete a full protection review to ensure you stay in your home come what, so you and your family are protected. We also can help guide you through the house buying process so at any time you have a question we’re only a phone call away and continue to look to build on those relationships over the years as you enjoy your new home.
7. I’m a current landlord, what options could there be available to me?
Numerous. We can help firstly review your existing mortgage/portfolio to understand if and when we can get you onto better terms. We can also look at ways you can leverage the portfolio further and this can be done in a way where the property/portfolio becomes more tax efficient. We've helped our clients move their properties over from their personal names to Ltd companies to make their properties more tax-efficient now and for the future. Whilst we don’t provide tax advice, we strongly recommend you seek independent tax advice before proceeding with anything, we can certainly highlight options that can be available to you to potentially make things more tax efficient.
8. I’m a FTB what can I do now to help increase the chances of getting a mortgage?
It’s never too early to start getting your finances in order ready for a mortgage application. Ensuring firstly that you’re on the electoral roll at your current address and all your ID’s and documents are updated to reflect where you actually live is a great start. Then it best to review your credit report to understand where that stands and if you can do anything now to improve further. Avoiding taking on any further debts also helps as lenders will all take these into consideration when you come to apply. The best thing to do though is speak to one of our Mortgage Brokers at Portico Finance and we can do a quick review and set you up ready for when you wish to buy a property so you’ve made the most of anytime before then to improve your chances of getting a mortgage approved.
9. What are the top 3 things to obtain a mortgage?
Income- How much you earn is naturally a big part of how much you can borrow for a mortgage and any monthly commitments like credit card or car finance debt payments are all factored in and could, therefore, reduce how much you can borrow.
Deposit- The bigger the deposit the better and every extra 5% you can put down the better the mortgage terms are likely to be and potentially the lender will agree to lend you more if you need it.
Credit score- Showing that you can pay your bills on time and are responsible with any debts to date is a big tick for the lenders as they like to know you will actually make those monthly payments on time each month.
10. What’s the difference between my Income multiples and my affordability
Income multiples are when the lenders say the maximum you can borrow is 4/4.5 or maybe up to 5 x your salary. – if any of your pay is variable, then each lender “views” this differently, so it's well worth speaking to the team at Portico Finance and we can tell you what your options might be.
Affordability is more based on your monthly disposable income, monthly commitments like debt payments on existing loans/credit cards or also your typically living costs like food, travel costs and maybe your service charges due each month and the mortgage payment you’re considering but on a “stress test” scenario- so if rates where 2-3% higher than they are today as an example is the figure the lenders will use to work out if they think you can afford the mortgage.
If you would like to speak to one of our mortgage brokers, you can give Steve a call on 07824 353803 or Pardeep's number is 07824353800 or drop them an email !!email@example.com.