Category: News

Understanding Mortgage Rates and Interest Rates in the UK: September 2024 and Beyond

As we enter the final few months of 2024, the UK mortgage market is continuing to experience significant shifts. If you’re looking to buy a home or remortgage, it’s important to understand how mortgage rates and interest rates work, and how they’re likely to change. Let’s have a look at what’s currently going on in the world of mortgages and why now is the time to consult with your mortgage advisor.

What’s Happening in the UK Mortgage Market in September 2024

As you will be aware, the UK mortgage market has been navigating a challenging economic environment over the past couple of years. The Bank of England (BoE) has consistently adjusted the base interest rate in response to ongoing inflation concerns and global economic pressures – leaving many homeowners facing significant rises in their mortgage interest rates. Although things seem to be heading in a more favourable direction, as of September 2024, the BoE’s base rate sits at 5%, a level that remains subrationally higher compared to pre-2022 rates. While inflation has started to cool down slightly, the UK’s economy still faces significant challenges. These high interest rates have directly impacted mortgage products. Lenders have been adjusting their offers, and mortgage rates remain notably higher than what borrowers had become accustomed to in the last decade. Recent research by Right Move suggests the current average mortgage rate for a five-year fixed rate mortgage is 4.68%, and the current average rate for a two-year fixed rate mortgage is 5.04% – both are down from previous rates. While we’re not seeing the extreme highs of 2023, these rates are significantly higher than the ultra-low rates seen pre-pandemic.

What’s Driving Mortgage Rate Changes?

Several key factors are influencing the mortgage market right now:

Inflation Control: The Bank of England’s main goal in keeping the base rate high is to manage inflation. Although inflation has started to fall, the BoE has indicated that it may keep rates elevated for longer than initially expected to ensure inflation is fully under control.
Global Economic Pressures: Global events affecting the energy market and contributing to higher costs and geopolitical tensions continue to impact the cost of borrowing. The uncertain economic outlook means lenders are factoring more risk into their pricing, leading to higher mortgage rates.
Lender Caution: Lenders are being cautious – which makes for a fast moving market. It makes sense that because of the high rates many have adjusted their affordability criteria, with increased scrutiny on borrowers’ income and expenditure. However, alongside this we are seeing new deals coming to market all of the time.

What Can We Expect for the Rest of 2024?

While some financial analysts predict that the BoE will continue to reduce the base rate, others suggest the chances of any significant cuts before the end of 2024 are slim. This might mean mortgage rates are likely to remain at current levels for the remainder of the year. However, with economic uncertainty still looming, there’s a possibility that rates could fluctuate slightly. The truth is, no one really knows what’s going to happen next or what the future holds.

Why Speak to a Mortgage Advisor?

For those with fixed-rate deals expiring soon, the prospect of remortgaging at a higher rate can seem daunting. Yet, the market is not all doom and gloom. There are many competitive deals available and new one’s coming to market all the time. Given the uncertainty and complexity of the current market, now is a crucial time to speak with a professional mortgage advisor such as ourselves, and here’s why:

Tailored Advice: Every borrower’s situation is unique. Whether you’re a first-time buyer, a home mover, or someone looking to remortgage, a mortgage advisor will help you understand which products best suit your needs. Advisors have access to a wide range of mortgage deals, including those that aren’t always visible on the high street or online.
Understanding Affordability: With tighter affordability checks in place, a mortgage advisor can guide you through how much you can realistically borrow and the potential impact of interest rate changes on your repayments.
Expertise in Navigating the Market: Mortgage advisors stay up to date on market trends, lender policies, and upcoming changes in regulation. They can provide invaluable insight into when to lock in a rate, which product to choose, and how to structure your mortgage to protect against further rate increases.
Exclusive Deals: Some lenders offer exclusive mortgage deals that are only accessible through mortgage advisors. By consulting with your advisor, you may gain access to lower rates or better terms that wouldn’t be available to you directly.
Save Time and Money: Shopping for a mortgage on your own can be time-consuming and confusing. A mortgage advisor takes the legwork out of comparing hundreds of products, ensuring you find the most cost-effective and suitable option for your circumstances.

Plan Ahead for Your Mortgage Needs

As we move towards the end of 2024, the UK mortgage market remains complex. As much as the experts attempt to predict what’s going to happen, we are not in control of events which may keep things as they are or increase them. For that reason, it’s essential to understand your borrowing options and to seek expert advice tailored to your unique circumstances and financial situation. At Kingsbridge Mortgage Advice, we’re here to help you navigate the mortgage market and find the right deal for your unique circumstances. Whether you’re looking to buy your first home, move up the property ladder, or remortgage to secure a better rate, speaking with one of our mortgage advisors can make all the difference. Contact us today to discuss how we can help you plan for your financial future with confidence.

Why Should I Remortgage?

There are a variety of reasons people look to arrange a remortgage. Whether you want to cut your costs by moving to a more competitive rate or simply need to raise some extra cash, remortgaging can work for all kinds of purposes. For most people, their mortgage is their biggest financial commitment. If you’re the kind of person who shops around to get the cheapest television or broadband deal, then you’re missing a trick by not using the same skills to save money on your mortgage.

Other reasons you may want to remortgage

It’s not just about saving money. It’s also about getting a mortgage which is right for you and your situation. So here are some more reasons to think about remortgaging:

Your mortgage doesn’t fit anymore

You’ve had a pay rise or maybe you’ve inherited some money. You want to make extra payments to your mortgage, but your current deal won’t let you, or it will only let you make a small overpayment. Or perhaps you need to be able to miss a payment. Changing jobs or going back into education – whatever the reason, there are mortgages which will let you take payment holidays.

You want to borrow more

Perhaps your current lender has said no to lending you extra money (called a ‘further advance’) or the terms it’s offering aren’t very good. Remortgaging to a new lender might allow you to raise money on low rates. With so many different products available, the market can be confusing. Our expert advisors have many years’ experience in the financial services industry and are here to help you navigate the market in a clear and concise way. We can assess your current deal, take your financial circumstances into account and find you the most suitable deal from the whole of the market. We can also alert you to any lock-ins or unfavourable aspects of the deal, so you don’t get caught out further down the line. Making the right choice at the right time can potentially save you thousands of pounds over the mortgage term.

FAQs

What if I am on a fixed rate mortgage? If you’re on a fixed rate mortgage and tied in for a number of years, your lender will probably apply an early repayment charge if you leave the deal early. Our advisors will be able to answer all your questions and help you understand all the costs which will apply, taking all your circumstances into account.

Do I need a deposit? You don’t need a deposit for a remortgage as you can use the equity you have in your home. If you wanted to get a competitive mortgage, using a deposit to add to the equity you already own is an option and this will lead to you needing a smaller mortgage.

Will I need a valuation? Most lenders will instruct their own surveyor or valuer to value your property as part of the remortgage process. The valuation gives the lender a clear understanding of the value of your property. This will be used to calculate your loan to value, which helps the lender decide the deal they are able to offer you.

Ready to remortgage? Our expert team are on hand to help you from start to finish. Arrange an appointment with one of our mortgage advisers today. Whether you are a first-time buyer, moving home or looking to remortgage, our specialists are here to make the process easier, so you can get on with everyday life. With everything under one roof, you can rest assured that we can find a mortgage deal that will suit your needs.

Our Guide to the popular UK Mortgage Rates in 2024

As we move into February, mortgage rates and the effects on home owners continue to gain news coverage. There could be some light at the end of the tunnel though! Following 14 consecutive rises since December 2021, we just saw the Bank of England’s base rate being held for the fourth time in a row, bringing speculation that we might see a decrease in 2024. 2023 was another challenging year in many ways for home owners. 57% of mortgages up for renewal in 2023* were fixed at rates below 2%, meaning many households were looking at a significant increase in their monthly mortgage payments. With the base rate continuing to rise up to August, and some lenders reacting to the rises by bringing down their rates, we had many calls from concerned homeowners enquiring about what they should do? The reality is, the UK mortgage market is in a constant state of flux, which is influenced by many variables, including interest rates and property availability. Similarly, the Bank of England’s base rate can be affected by national or global events and politics. Because of this, no one can accurately predicate what’s going to happen throughout 2024, so we thought we would put together this guide on the key mortgage products available and what they mean for you. Understanding these rates is crucial for anyone considering a property purchase or remortgage.

Fixed-Rate Mortgages

Research** shows that around, 81% of homeowner mortgages are on a fixed rate contract, which is unsurprising when dealing with uncertainty as fixed-rate mortgages provide the borrower with more of a sense of financial security. The interest rate on your mortgage is fixed for a term (number of years), usually anywhere between 2-10 years. The most popular option is a two year or five year fixed rate mortgage. This is because, if you want to make any changes like move home or remortgage, you may have to pay thousands of pounds to exit your current fixed-term mortgage deal. This would offset any savings made by being on a fixed-term deal. The main benefit of this mortgage is, it shields you from fluctuations in the market, making it easier to budget and plan for the future as you know what you are paying each month.

Tracker Mortgages

Tracker mortgages are a good option for those comfortable with market-driven fluctuations. This type of mortgage is tied directly to the Bank of England’s base rate, when the base rate rises or falls, so does the interest rate on a tracker mortgage. This can result in immediate cost savings or potential challenges, making it a choice for borrowers whose circumstances allow for adaptability to shifting interest rates. If you are confident your finances and income allow you to navigate the market changes then a tracker mortgage could be the one for you, as it allows you to benefit from favourable conditions while staying vigilant to potential rate adjustments.

Variable-Rate Mortgages

Each lender can set their own rate of lending. Variable-rate mortgages are set by individual lenders and can change at their discretion. The pros of a variable rate mortgage can include lower initial payments than a fixed-rate loan, and lower payments if the interest rate drops. However, the downsides are that the mortgage payments can increase if the interest rate rises. Although this means a variable-rate mortgage can lead to lower initial payments, they come with some uncertainty. If your lifestyle and circumstances allow you to navigate potential rate increases, you may find this is the mortgage for you.

Discount Mortgages

Discount mortgages offer a reduced interest rate for a specified period. They are often linked to the lender’s standard variable rate (SVR). Although this initial discount can provide temporary relief, you should be aware that rates will likely rise once the discount period ends. For example, if your mortgage offers a 1.5% discount and the SVR is currently 5%, your interest rate will be 3.5%. If your lender’s SVR goes up to 6%, your new interest rate will be 4.5%, and your repayments will increase. This option suits those who are confident in their ability to manage potential future increases and seek a more affordable starting point.

How do you know which mortgage is right for you?

What works for one household may not be right for you, so it’s important to get professional advice when it comes to mortgages. That’s where we come in. We have helps thousands of home owners with their mortgages. We get to know all about you, your circumstances and what it is you want to achieve and will advise you on the most suitable option we think is right for your needs. We take into consideration your income, outgoings, savings, financial goals, risk tolerance, and market outlook. Whether you’re a first-time homebuyer or are looking to remortgage, it’s important to understand the intricacies of these mortgage rates so you can select the one that best suits your needs. Our advisors will guide you through this process, helping you make informed decisions aligned with your unique circumstances. * Office for National Statistics ** www.ukfinance.org.uk

Navigating and planning for 2024

As we move towards the final month of 2023, our thoughts turn to the New Year. We might set goals or have things we want to achieve, perhaps you are thinking of moving home, buying your first property or sorting out your finances and security for the long term? There is no denying that homeowners have had a bumpy ride over the last few years. With increases in mortgage rates, the cost of living and an uncertain future, we see more and more people coming to us for not only mortgage advice, but for insurance and protection advice as well. Whatever your plans are for the coming year, this blog will look into the key considerations we think everyone should consider to ensure you have everything covered!

Economic Outlook

Let’s start with where we are in terms of the economy. Global events and the looming general election are continuing to create an atmosphere of unpredictability for home owners in the UK. Although we cannot speculate on what’s going to happen in 2024, we think being prepared will stand you in good stead.

Mortgage Planning

The Bank of England chose to keep the base interest rate at 5.25% in November, the second time in a row it has held the rate following 14 consecutive rate increases which was a relief to many. Although this doesn’t necessarily indicate what will happen to interest rates in 2024, we have seen rates decreasing a little in the last few weeks and we certainly hope that this trend continues. If you are thinking about buying your first home or are a current homeowner looking to re-mortgage, we would advise you talk through your options with your mortgage advisor. Although they cannot predict what will happen, they keep a close on what’s going on in the market and will be able to give you their best advice based on your circumstances and what you want to achieve.

Insurance Policies

In uncertain times, protecting your income, home and health has never been more important. There are a variety of policies available and an advisor will be able to discuss these with you. If you have policies in place then a review would ensure they align with your current needs and circumstances.

Home Insurance

Most home owners will need Home Insurance, which consists of Buildings Insurance, covering you for any structural damage from accidents or natural disasters; and Contents Insurance which covers all of your belongings. Neither of these policies are mandatory, yet Buildings Insurance may be a condition of your mortgage. Our advisors can help you secure the right policy for your property.

Protection Policies

Life is unpredictable, and having a protection policy in place can provide invaluable peace of mind. This type of insurance ensures that your loved ones are looked after financially in the event of unforeseen circumstances such as disability, critical illness, or death. There are a variety of policies which provide different cover.

Life insurance will pay out on death. It can help your children and family if you are no longer here and can pay off debts such as your mortgage, pay for funeral costs and potentially provide an ongoing income or a lump sum payment for your dependents. A life insurance plan covers you for a fixed period and pays out a lump sum if you die during that time.
An income protection plan is a long-term insurance policy that makes sure you get a regular income until you retire or are able to return to work should something happen which stops you from being able to work.
Critical illness cover does just that, provides you with a lump sum if you are diagnosed with a critical illness such as cancer, a heart attack, stroke, and other conditions that may affect your life such as loss of sight or loss or a limb. You can then use the pay-out to cover your mortgage, allow you the necessary time off work to recover, or pay for adjustments you need to make in your life moving forward.
Family Income Benefit is a type of life insurance policy that pays out a tax free regular income to your loved ones for a specified period of time in the event of your death. This type of policy can really help if you have young children, and particularly if one of you is the main income provider. It’s also considered the most affordable type of life insurance available.

Many of these policies come with additional benefits aimed at supporting your physical and mental health. Because everyone’s circumstances are different, we would recommend you talk to one of our advisors. They can look at your existing protection policies and consider if adjustments or additional coverage are necessary to safeguard your family’s financial well-being. If you currently don’t have policies in place, our advisors can talk you through the different options based on your needs.

As we look forward to the opportunities and challenges that 2024 may bring, being proactive when it comes to your financial matters is key to a secure future. At Kingsbridge, we’re committed to being there for you every step of the way. We really take our time to get to know all about your circumstances so we can advise you on a mortgage or policy that’s right for you and your family. If you have any concerns or questions regarding your mortgage or insurance policies then get in touch with one of our advisors today.

100% Mortgages: How can they help first time buyers?

A 100% mortgage, is also known as a zero-deposit mortgage and is a loan that allows first-time buyers to borrow the full purchase price of a property without having a deposit.

What does this mean?

For first-time buyers, a 100% mortgage can be an appealing option as it allows you to step onto the property ladder sooner, without having to build up a large deposit. It can help individuals or couples who may be struggling to save a sizeable amount for a down payment, while also covering other expenses linked with buying a home, such as legal fees and moving costs.

What about my finance?

With a 100% mortgage, first-time buyers could face higher interest rates compared to mortgages with a deposit. Lenders view these loans as higher risk as there is no initial equity, and as a result, they may charge a higher interest rate to balance this risk. Furthermore, as a first- time buyer, it is important to consider the long-term affordability of a 100% mortgage. Without a deposit, the loan amount will be larger, resulting in higher monthly repayments. It’s essential to carefully assess your personal finances, taking into account ongoing mortgage payments, other living expenses, and potential interest rate changes.

Government-backed schemes

In recent years, some initiatives and government-backed schemes, such as Help to Buy, have been introduced to support first-time buyers. These programs aim to assist buyers by providing equity loans or shared ownership options, reducing the burden of a large deposit or enabling buyers to purchase a portion of the property. Help to Buy closed to new applicants towards the end of 2022, although there could be a chance of it making a return with Wales extending the scheme to 2025. It’s uncertain if the Help to Buy scheme will return, but there are still plenty of options available to first- time buyers. It’s essential for prospective buyers to carefully consider the long-term financial implications, including higher interest rates and monthly repayments, before opting for this type of mortgage. Exploring other government schemes and saving for a deposit may still be a wise approach to secure the best financial outcome when purchasing a home. If you are a first time buyer and want to find out more about 100% mortgages or government schemes and discuss your mortgage options, then get in touch with one of our advisors. We will meet you at a time and place which suits you – and all of our advice is fee free.

How to manage a property chain

We all know that buying and selling a property and moving home can be a stressful process. Even more so when parts of the process are within a property chain. If you have not yet purchased a property, you have probably heard about property chains from others – normally when something goes wrong. Being in a chain can make things a little more stressful, so in this blog we are going to look at the chain and helping prepare yourself to reduce the risks.

What is a property chain?

Briefly, this is where a group of home buyers and sellers are dependent on one another when purchasing a house – for example the owner(s) of the house you want to buy might need to find a house to buy themselves first, and those buying your house may need to sell theirs. There is no hard and fast rule on this, but the length of the property chain can vary anywhere from 3 properties right up to 10+ properties, and the timeframes involved in a chain can vary dramatically. Understandably, the more in the chain, the more challenges can arise.

Understanding the property chain

The property chain can cause a lot of issues so it’s useful to understand these issues in order to navigate the buying and selling process successfully. One of the most significant issues with a property chain is that it can cause delays. If one person encounters a problem, such as a surveyor finding an issue with a property, it can result in a domino effect that delays the entire chain. Another issue with a property chain is that it can be fragile. For example, if one person pulls out of the chain, it can cause the entire chain to collapse. This can be incredibly frustrating for everyone involved, and especially problematic if you are close to completing the purchase of your new home and have already made plans to move in.

What can I do to reduce the impact?

Fortunately, there are several things that you can do to reduce the impact if these issues arise. Firstly, it’s important to work with an experienced mortgage adviser who can help you navigate the buying and selling process. Another thing that you can do is to be as prepared as possible. Having your mortgage in place, and all of your paperwork ready to go can help to speed up the buying process and reduce the risk of delays. Deal with any potential issues that might hold up the chain as early in the process as possible. For example, if you know there is an issue with your house that you know will potentially be picked up by a surveyor, be proactive with your solicitor and talk through the options early on, rather than waiting for this to be discovered at the last minute. Good communication between all parties is also a must and helps to reduce the risk of misunderstanding. Make sure you stay in regular contact with your estate agent to ensure they are communicating with all parties in the chain and providing you with updates accordingly.

We asked our advisors for one piece of advice they would give you so you are best prepared when faced with a property chain:

“Make sure you choose a good solicitor that you can call or visit and communicate directly with. They are key to keeping you and the chain updated throughout the process. Use personal recommendations but be aware that the cheapest isn’t necessarily best!” – Philippa

“Don’t be afraid to be proactive and call selling agents and solicitors if necessary so you know what’s going on. Make sure you know when your mortgage offer expires too if things are going slowly.” – Julie

The property chain is a necessary part of the buying and selling process, but it can be complex and cause a lot of issues. By doing all you can to prepare as much as possible using the tips above can help make the buying and selling process as smooth as possible. If you have concerns, or want to talk through your mortgage options then get in touch with one of our experienced advisors who can support you and discuss the options available to you.

What’s going on with the Interest Rates and what it means for homeowners?

If you have been keeping an eye on the news of late, you may be asking yourself what’s going on with the mortgage rates? We have seen multiple increases in the Bank of England’s Base rate since 2021, with it currently sitting at a 14-year high of 4%. Alongside this, we have naturally seen an increase in mortgage rates. However, as we write this blog, at the beginning of March 2023, we are seeing the base rate continue to increase and the average cost of fixed rate mortgages continuing to come down from its peak.

How it works

The Bank of England sets the base interest rate, which influences the rates charged by banks and other financial institutions for borrowing and lending money. When the Bank of England raises the base rate, it may become more expensive for banks to borrow money, and they may pass on this cost to their customers in the form of higher interest rates. Conversely, when the base rate decreases, banks may lower their interest rates. When it comes to mortgages, fixed rates are predominately determined by future borrowing costs. Simply put, economists predict that once the Bank of England’s base rate has reached its peak the future cost of borrowing will lower. Hence, the predictions that mortgage rates may continue to fall in 2023. Whilst some predict rates may fall, it’s almost certain that we are not going to see a return to the low mortgage rates pre-pandemic any time soon. Understandably this can be confusing for home owners and those wishing to purchase their first property, and you may have many questions. Should you fix now or wait to see if the mortgage rates come down further? What’s going to happen to the markets this year? We would agree that it’s a confusing time.

What this means for home owners

If your current rate is coming to an end it can be tempting to hold on that little bit longer. We would recommend that you get professional advice that is tailored to your specific circumstances. Sometimes, when people chase rates they can end up paying more, so it’s important that you get an experienced view on this. If we look at what’s happened over the last few years, none of us really saw Brexit coming, or the pandemic, and now we have the war in Ukraine. These national and world events affect the markets and we just don’t know what’s around the corner. Research shows that 57% of mortgages coming up for renewal in 2023 were fixed at rates below 2%. As it currently stands, the average costs of a three-year and five-year fixes are at 4.89% and 4.43% respectively. This compares to highs of more than 6.50% in October. If you have been on a fixed rate for the past 3-5 years then it’s pretty certain your mortgage payments are going to increase. And you have two choices, to stay at your lenders variable rate or fix in for another few years, which you can do with your current lender or shop around for a better deal. Holding out to see what’s going to happen is a risky tactic, we just don’t know. Economists can make predictions, but then if another world event happens that can all change in a moment. The Bank of England holds their next monetary policy committee meeting on 23rd March, and we will wait to see what they do with the rates next. If you are concerned about your mortgage rates, or your rate is coming to an end within the next 6 months, get in touch to speak to one of our advisors.

A guide for first time buyers

Buying your first home is one of the biggest purchases you will make and it’s most probably something you have been thinking about for some time. There is a lot of advice for first time buyers and there is no one size fits all when it comes to your first mortgage. Everyone’s situation and circumstances are different so the first thing we would say is to get advice that if right for you! At Kingsbridge Mortgage Advice, we have helped many first-time buyers purchase their first home and have collected the top 10 most common questions asked when they start out on this process.

1. I think I am ready to buy – where do I start?

Start by having a look at properties in areas you might like to live. A good place to begin is with online property searches. You can also have a chat to your local estate agents and ask them to let you know about properties which you might be interested in. Given you may be living in the property for a number of years you need to take into consideration your life in the future, so think about location, transport links, nurseries and schools, outside spaces and the amenities in the local area.

2. Do I need a mortgage advisor?

We would recommend using one as it will help make the process easier for you. Ask around for recommendations and find someone who you like and feel comfortable with. You can talk to a mortgage advisor like ourselves whatever stage you are at, even if purchasing a property is something you have only just considered. We can help you identify how much of a deposit you might need, whether or not you would get a mortgage and explain the process, so you are better prepared. When you are ready to buy, we will help secure your mortgage and be there every step of the way through to completion.

3. How much of a deposit do I need?

The minimum deposit you would need can be as little as 5% of the purchase price but may be more depending on the type of property you are looking to buy. If you can save more and have a bigger deposit, it would mean you may be to apply for mortgage deals with lower interest rates. It’s useful to start by Identifying the area you might like to purchase in and check out the house prices. You will then get an idea of how much you would need to save and what you think you can afford.

4. How much do I need to earn to get a mortgage?

A mortgage advisor will be able to help you work out if you can get a mortgage and how much a lender is willing to lend by looking at how much of a deposit you have, your employment status and income. This could be different if you are a two or one income household. They will also take your credit score into account (see below). This will all influence how much you can borrow. There are some government schemes available for first time byers and they will be able to talk you through those as well.

5. Do I need a good credit score to get a mortgage?

As part of their assessment of your application, lenders will look at your credit report and your credit rating to determine whether to approve your mortgage application. There are lenders that will help clients who have lower credit scores, typically the interest rates charged will be higher than mainstream or high street lenders. It’s good practice to regularly check your credit score, that way if there are any changes you can find out why and take steps to rectify it. If you are concerned about your credit rating or credit history, please get in touch and we will be happy to discuss this with you.

6. What fees are required when buying my first home?

There are other fees which you need to take into consideration and save for when purchasing a property. If you are buying a property up to £425,000 then you won’t currently need to worry about Stamp Duty. These are the rules as of today and things are always changing so when you are thinking about buying, it’s good to check this with your mortgage advisor.

Valuation Fee

After you put in an offer, your mortgage lender will assess the value of the property to establish how much they are prepared to lend you. Not all lenders charge for this, it depends on the type of mortgage product you select.

Private Survey

When you are spending a lot of money on your first property, you may wish to consider arranging your own private survey, which can highlight any issues you need to be aware of. Depending on the results, this may affect the purchase price, how much your lender is prepared to lend you and affect your decision on whether to go ahead with the purchase.

Solicitor fees

You will need a solicitor to carry out all of the legal work. We recommend you shop around for the best quote and ask for recommendations. If you would like a professional recommendation from us for a survey or a solicitor, please get in touch and we would be happy to help.

Mortgage Product Fees

The majority of mortgage products will charge an arrangement fee. However, there are also products which are fee free, and as always, your advisor will discuss this with you and advise on the best product for your specific needs. If there is an arrangement fee charged, you have a choice to either pay this fee upfront or add it to the loan. If you add it to your loan, it will increase your overall lending, the interest payable and the monthly payment.

Mortgage advisor fees

Some mortgage advisors charge for their services, normally paid on application. We don’t charge a fee because we are interested in building a long-term relationship with you. We believe if we do a good job, you will come back to us again and even recommend us to your friends and family.

7. What paperwork will I need?

Commonly you will be asked for the following:

Proof of ID – both name and address
Bank Statements
Proof of income. Lenders will ask for payslips if you are employed or tax returns if you are self-employed.
Proof of deposit. If you are being gifted a deposit, then you may have to fill in a form or request a statement from the person gifting you the lump sum.

8. What’s a Mortgage in principle?

Once you know how much you can afford, your mortgage advisor will have a look at products from different lenders to find one that is best for you. Once you agree to one, they will go to the lender to get a mortgage agreement in principle – this means the lender has agreed to lend you a specified amount, based on details you’ve provided about your income, spending and debts. If you decide to apply for the mortgage, they will ask more detailed questions about your finances to see how much you can borrow. The benefits of this are it gives you a head start when putting in your offer as this part of the process is already done.

9. How long will the process take?

From initial offer to moving in is presently taking around four months. There are a few moving parts which need to happen at the same time.

Once you find a home you like and are sure you want to buy you put in the offer to your estate agent. The buyers may have a number of offers so don’t go too low, and you can always increase your offer.
You then find and instruct your solicitor. They will handle all the legal work, will communicate with the seller’s solicitor, carry out the searches and check land registry and draw up the contracts.
Once your offer is accepted you can ask your advisor to go back to the lender and get your mortgage arranged – your mortgage advisor will help you complete the mortgage application and talk you through the process.
Then comes the survey to highlight any work that’s needed now and in the future.
Once you are happy with those results you can exchange contracts. This is when you and the seller exchange signed agreements which legally bind you to the sale.
You then pay the deposit through your solicitor and agree to a completion date.
The final part of the process is Completion. Which is when you become the legal owner of the property. Your solicitor will transfer the remaining funds to the seller and that’s it! You get to pick up the keys and move in. This is normally a month after exchanging.

10. What Insurance do I need?

Many mortgage contracts will have a condition that you need buildings insurance. We also recommend that you get contents insurance, to protect all of your stuff once it’s in the house. We also strongly recommend that you consider Life Insurance, Critical Illness Cover and income protection policies – this will help protect you, your family and your finances and bring peace of mind if anything unforeseen happens.

Kingsbridge Mortgage Advice have helped many first-time buyers get on the property ladder and we will be with you every step of the way. We like to keep things simple for home buyers. Which is why we take the time to get to know you, give advice tailored for you and your circumstances and are always on hand to answer any questions. Before you start viewing and looking for your first home, we recommend talking to one of our team to find out how much you can borrow and how that fits into your budget requirements so you can view houses with confidence. Get in touch to speak to one of our advisors.

Planning for peace of mind in 2023

2022 brought a few challenges and surprises for us all. With inflation, rises in the cost-of-living, and Bank of England Base rate increases, homeowners were particularly affected. We saw the base rate of lending rise many times in 2022, resulting in several increases of mortgage rates. With an estimated £100 billion of mortgages maturing in the last quarter of 2022, this meant many home owners were affected and made it essential to speak to a mortgage advisor before making any decisions. Now, with a new year ahead of us, I can imagine many of you are curious as to what 2023 will bring. Although experts can give forecasts, in reality, none of us know for certain what’s going to happen to the market. However, nobody likes unwanted surprises. So, our advice to you would always be, to be as prepared and proactive as possible and get all your finances in order now so you can go into this year with peace of mind and on the front foot.

Here is a plan to get your started

Getting on top of your finances now will benefit you all year. You may be planning to move, re-mortgage or invest in property in the future. Or perhaps you are thinking about making some home improvements and want to work out how to fund it? Even if that’s planned for later in the year, it’s a good idea to get everything in order for a smooth process when it arrives.

Mortgages

Check when your mortgage rates are ending. We always recommend talking to an advisor six months before the term finishes. This gives you time to do your research and shop about to find the best follow on deal. If you have been making plans to move or purchase your first property, then it’s essential to get some good advice first. There are many mortgages out there to help first-time buyers, and your advisor will look at your circumstances and advise you on how to plan and proceed.

Planning for every occasion

We think it’s a good idea to review your insurance policies regularly. Life changes and you may have had a policy for several years, which is now not sufficient for your needs. Or you might be considering adding a new policy to your cover? Speak to your provider or an advisor such as ourselves to ensure your policy covers you for everything in your life. Many providers offer additional benefits (we have a blog on this here), so it’s worth checking what you have, or could get so you get the most out of your policy. Like everything in life, things don’t always go according to plan. Giving yourself a head start and being proactive around these matters can really help. Getting things right at the start of the year can bring peace of mind and means you go into the year knowing where you are at, so you are better placed to face any challenges that may arise.

Finding the right advisor

Getting professional, impartial and trusted advice can really help when getting all of this in order. When you are looking for a mortgage or insurance advisor, there are several things to consider. Have a look at our guide to choosing a mortgage advisor here. All advisors at Kingsbridge have years of experience in mortgage, insurance and protection advice. They will take their time to get to know you and your circumstances and can help you plan for your year ahead. The best part is all our advice is fee free, so it won’t cost you a penny to talk to us. Get in touch to talk to one of our advisors today.

What to look for in a Mortgage Broker

You may have recently heard Money Saving Expert, Martin Lewis say ‘a mortgage broker is worth their weight in gold right now’. With the increases in mortgage rates and the cost of living, we would agree. If you are looking for a mortgage, whether as a first-time buyer, a home mover, or are thinking about remortgaging, getting trusted advice from an experienced broker is essential. If you have not used a mortgage broker before, then there are a few things you should consider. Simply put, a mortgage broker, or adviser, is someone who will review the mortgages available to you based on your personal financial situation and circumstances and apply for one on your behalf. If you have not used one before, consider how much time it might take to manage the whole process yourself. There are thousands of products on the market, all with their own criteria. It would take you a lot longer to search through the internet, work out the terms, fill in the forms, arrange meetings and have the necessary conversations. You want your mortgage process to go as smoothly as possible, so a Mortgage broker does all of this for you. They know the market, the process and the jargon and will save you time by telling you which lenders are likely to accept you, will explain the process and deal with some of the paperwork. However, not all mortgage advisors are the same, so here are some things to look out for when doing your research.

Years of experience.

You want to trust that your broker really knows their stuff. So, find out how long they have been advising, and what their background and experience is. If they are newer to the industry, make sure they work as part of a wider, more experienced team so that they can be supported to provide the best advice.

They have access to a vast range of products.

Some mortgage advisers and brokers only have a few lenders to choose from, and if you speak to an adviser based in a bank or building society, they will only tell you about their own product range. You want to ensure your advisor has access to a wide enough choice of lenders to cover all needs. This means they can shop around to find the cheapest or most suitable product for you, saving you money.

They are fee free.

Some advisors charge a fee for their advice. The problem here is that if you are not happy with the outcome, you would have wasted your money, or you may feel obliged to work with them because you have already paid for it. A fee free broker means that the advice service is free, and there is no obligation to use them. Fee free refers to the advice process only, there may be arrangement, valuation and legal fees to pay.

They have positive reviews.

We would say to do your research and look at reviews on Google or Trustpilot. However, there is nothing better than word of mouth. Ask around, who have your friends and family used? If someone you know has received an excellent service, then have a chat with them.

They offer a full advice process.

Make sure the broker covers all areas, from mortgage planning to protection and home insurance. Ask if they have professional contacts such as solicitor’s and surveyors. This will save you time as you won’t have to search for those as well and will help make the process as smooth as possible.

They are flexible.

For some of you, your profession may mean you are only available to meet in the evenings or at weekends, as is the case for teachers. You may prefer face-to-face meetings rather than online, or vice versa. Check if your advisor will meet you in person, at a time and place that suits you? Or will they meet on zoom and take phone calls? Can you message them when you have an important question? Flexibility is important.

They offer end-to-end advice.

Things don’t always go smoothly for home buyers. Will your advisor manage the entire process from start to finish? This means finding you a product, helping you to find a solicitor and surveyor, answering any questions which arise throughout the process, filling in the paperwork and being there through to completion. This is so important, as it will take away a lot of stress for you.

Do they use plain English?

If they bamboozle you with jargon, then you may want to look elsewhere. A good advisor will talk to you in plain English and will take their time to make sure you understand everything.

Do they take the time to get to know you?

You broker should never be in a rush. They will ask questions about your finances, work, lifestyle and future plans. The mortgage product they recommend needs to work for you now and in the future.

At Kingsbridge we have helped thousands of clients with their mortgages. All our advisors are experienced, will take the time to get to know you and will be with you through every step of the process. We are fee free because we put our money where our mouth is, we want to provide the best service possible and build an excellent working relationship with you for the long term. If you would like to speak to one of our advisors, then get in touch today.