Do:
Your research…
Go to at least one property auction before you intend to purchase, just to see how they work.
Go and view the property you’d like to buy, at least once.
Compare the price and condition of the property to others that are similar that have recently sold or are currently on sale in the street/area. This will help you determine what you think the true market value of the property is and how much you are prepared to bid for it. Websites like Zoopla offer lots of information on previous purchase prices and average prices in the area.
Get a survey/valuation of the property in advance of the sale if this is possible.
Get hold of the Legal Pack and get a solicitor to check it prior to the auction. This pack contains all the information that your solicitor would normally check if you were buying a property in the more conventional way and usually includes key information such as special conditions of sale, title deeds, searches, leases and any legal issues.
Take advice from a mortgage broker or adviser on the suitability of the property for raising a mortgage.
If you can get a mortgage approved on the property prior to the auction or if not get a Mortgage Decision in Principle and an application near ready to submit, before you go into the auction room as you will usually need to complete within 28 days or forfeit your deposit.
Get initial quotes for remedial work if the property needs considerable work. You might be surprised at how much these jobs will cost – better to know up front than after you’ve made your purchase.
Ensure you have sufficient funds available for costs and remedial work if considerable as your mortgage lender will very likely retain part of the mortgage amount until these works are completed.
Have your deposit ready for payment on the day – usually 10% of the hammer price.
Don’t:
Bid on a property at auction that you haven’t seen and looks to be a real bargain in the auction room – there’s probably a reason why no-one else is bidding on it.
Get carried away in the auction room – know your maximum bid before you arrive and don’t get into a bidding war that pushes you beyond this maximum – be prepared to walk away.
Presume you’ll be able to get a mortgage after the event – you may need to shop around or get independent advice. If you can’t pay the balance within 28 days of the auction you will pay hefty interest and possibly forfeit your deposit.
For mortgage advice on short term finance for property auctions visit us here rightmortgageadvice.co.uk
Is it possible to get a mortgage whilst on maternity leave and still include my income?
As many couples think about moving to larger homes when their family starts to grow, they regularly ask if it is possible to get a mortgage when on maternity leave.
The simple answer is yes for almost all circumstances. However, there are lots of considerations and lenders do vary in the way they calculate affordability during this time.
Some lenders will use only the income during maternity leave in their affordability calculation, which usually results in low maximum loans.
However, other lenders will use the ‘usual’ salary or the ‘return to work’ salary in the calculation if a return to work is within the next few months.
If your return to work is much later, there may still be one or two lenders who will consider the application under these terms.
For evidence, lenders may request a letter from the client confirming the ‘usual’ salary and the current income.
They often request a letter from employers to confirm the return to work date, future terms such as changes to hours, and ‘return to work’ salary.
It will be important that mortgage payments are still affordable during the maternity leave, so evidence of savings to substitute the difference in income and mortgage payments will often be required for the remainder of the maternity leave.
When calculating affordability, future childcare costs and changes to other commitments must be considered, to ensure the mortgage will remain affordable.
For further advice and help arranging a mortgage whilst on maternity leave, call 0345 4594490 or fill in our enquiry form.
Woolwich have announced changes to their 4.19% fixed rate until 31/10/2011 mortgage product at 70% Loan to value.
The product was restricted to a maximum loan amount of £200,000 and a minimum loan of £100,000. The amendments now allow maximum borrowing of £1 million and minimum borrowing of £50,000, opening the product up to a much wider audience, to the delight of Mortgage Brokers and borrowers alike.
The product remains the same otherwise with a £499 arrangement fee. The APR is 2.5%, and the reversion rate is 1.99%. Based on a loan of £100,000, other applicable fees are; a valuation fee of £295, a land registry fee of £200, a lender Conveyancing fee of £126 and a £35 completion fee. Early repayment charges are 3% until 31/10/2011.
As usual, consult a mortgage advisor and request a Key Facts Illustration about the mortgage before deciding.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. We do not usually charge a fee for mortgage advice, although you may pay up to 1.5% of the loan amount. Some buy-to-let and commercial loans are not regulated by the Financial Services Authority.
A big question for many first-time buyers is whether it is possible to buy a property without a deposit; in the absence of 100% mortgage products.
One way is the government’s Home Buy Direct shared-equity scheme, which allows customers to buy a house for 70% or more of its value.
The property developer makes a loan for the remainder on an interest-free basis which reverts to a low rate, such as 1.75%, after several years.
Some property developers involved in the scheme offer purchases without a deposit.
The scheme operator is repaid by “staircasing” (the owner buying a bigger share later on); or on the sale of the property, in which case they will take their percentage of the sale value.
Housing associations also run similar schemes known as “shared ownership”, where you purchase between 25-75% of a property and pay a nominal rent on the remainder; however, these may require a small deposit. Broadly both schemes are similar.
To find out more, search for Home Buy Direct on Google or for housing associations in your area.
One way that won’t usually work is the vendor reducing the sale price. Known as a vendor’s deposit, this is very unlikely to be accepted (in the present climate of declining property prices).
So pretty much all lenders will take the lesser figure for the valuation, leaving you back at square one.
With many borrowers now falling fowl of credit scoring, it’s a great time to take simple steps to improve your credit score; here are some tips on how to do it.
Improve your payment history.
Simple budgeting steps can help improve your credit score by ensuring you always make your minimum payments on time. Setting up direct debits and checking there are always sufficient funds for these payments is pivotal to a high credit score.
Work to a budget.
It can be easier to stay on budget if you work out your fixed monthly bills (e.g. mortgage, car insurance, gas) and transfer your spending money to another account by standing order.
It is simpler to manage when you come to the cash machine. Just make sure you always leave a little extra in the account for bills in case they are higher than expected.
Update your information.
Make sure all your important information is up to date. Credit scores can be improved by ensuring your personal information is consistent and accurate across all sources.
Human underwriters still make many decisions, so it is always good to check everything ties together, such as your driving license, bank details and electoral roll, and that all are accurate & up to date.
Limit credit applications.
When you apply for credit, it is recorded on your credit file. If these increase rapidly, a lender may think you are in financial difficulty or have concerns about fraud. So shopping for a new phone and a store card may be best left until after any mortgage application.
Check your credit report.
It is now possible to check your credit report, so ensure that information is correct, particularly regarding public record information about CCJs, repossessions or bankruptcies and the financial connections section.
If there is anything on a credit report you do not understand, or if you are regularly refused credit for no apparent reason, it may be worth speaking to a mortgage broker or advisor.
