If you have reached the end of your patience with your current home, and are thinking of buying a new one, it might be an idea to reacquaint yourself with the process. A lot has changed in the mortgage business and housing market. If you haven’t bought a house before 2014, you will find that things are a little different. Ever since the financial crash of 2008, which was caused in part by poor mortgage lending, the Mortgage Market was due for review. One thing that has not changed is the need to pay Stamp Duty Land tax, unless you are a first time buyer or are a charity. Even then a company like Sentientsdlt can look at getting you a Stamp Duty Refund, if you are eligible.
The first thing that you will have to do is consult with a Mortgage advisor. Following the Mortgage Market Review, that was carried out by the Financial Conduct Authority, it was decided that all new purchases would be subject to a full review. Put simply if you want to buy a house you have to get mortgage advice. Prior to 2014, anyone could conduct a mortgage for you. If you made an application over the phone, it would come to a Mortgage consultant. Basically these were salespeople who were paid a bonus on top of a salary, or they were commission-based. Either way, the Financial Conduct Authority decided that this was wrong as it did not have the best interest of the borrower at heart. It meant that the lending was not responsible. The systems in place for a Mortgage Promise were not robust enough, neither did they delve deep enough into the customers financial income and outgoings. All mortgages for the purpose of a residential purpose have to be on an advised level. All Mortgage Advisers must have the proper professional qualification to give mortgage advice.
When you call up, know it is a good idea to have at least three years payslips or SA302’s if you are self-employed. If you are looking to continue or have a new Interest-only mortgage, you better have a reliable vehicle to repay it. The days of simply saying that you will switch to repayment or you will sell the property at the end of the term are generally not acceptable anymore. It’s also a good idea to have a complete list of all your financial outgoings. Lenders algorithms will account for daily living, but you will need to provide any overdrafts you are in, any Credit cards you have, loans (including student loans), and if you pay maintenance. If there is anything that you pay for that you simply cannot or will not give up, then that needs to be declared too.
You will also need a budget. It is no longer acceptable to say that you want a 10, 15 or 25-year mortgage. In the past, Mortgages were longer than they needed to be, and people paid more interest than they should have done. Now the monthly mortgage budget you state will determine the length.