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mollyharrisuniverse-blog · 2 years

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Are your buy-to-let properties worth selling?

One of the significant reasons for investing in buy-to-let mortgages is they are assumed to be tax efficient, but unfortunately, you cannot benefit from it the way you used to until Brexit. It is assumed that these properties are tax-efficient, but the fact is that they are much less tax efficient than assumed.

To most the people, buy-to-let mortgages seem to be a money-making opportunity. Investing in property could allow you to make some money in the form of rent, but when you calculate the overall cost, including the letting agent commission and tax you paid, you find that you are left with very little income.

It is likely that you may decide to sell your buy-to-let property and use the money to buy another house for your residential purpose. However, it is not as easy as it seems. There are many things you should consider before deciding if it is worth selling buy-to-let properties.

Should you sell the buy-to-let property as tenanted or vacant?

Once you have decided to sell your property, you should inform your tenant because you never know if they might be interested in buying your property. If so, you really do not need to ask the agent to look for a buyer for you, and you can easily save your money on those formalities.

If it is not on your cards, you need to decide if you should sell it as tenanted property or a vacant home. Both have their advantages and drawbacks. Carefully peruse it, so you do not regret it later. If you tend to sell the tenanted buy-to-let property, you will have limited market options to sell.

Most of the buyers and investors are generally interested in buying vacant property. Further, if anybody gets ready to buy your property, you will not be able to sell it at market price. It will likely be a loss deal. If you have decided to sell your house to a sitting tenant, make sure that you have explained to your tenant what the sale could mean to them.

Frequent sale agent visits will be there, so they should always be ready to get through such hassles until it is sold. Try to explain to them its benefits so they could be helpful when property agents come to take photographs or view the house. Their cooperation is required to make it much easier.

You need to check your tenancy agreements, however. The agreement may give them certain rights, for instance, quite an enjoyment, which means you cannot force them to allow people in to take the view of the house or take photographs. If there is any kind of such clauses, you will have to wait until the termination of the letting contract. If you have a good relationship with your tenant, they may be lenient and avoid being stuck to the clause given in the agreement.

Here are the advantages of selling the property with a tenant:

You will keep earning a rental income until the sale is complete. You will be able to earn money as rent until the sale is made, so cash is coming in throughout the period.

The buyer will have the advantage of getting rent from day one.

If the sale falls through, you still have a chance to prevent the loss of rental income.

If you sell a vacant property, you will likely be put on the open market because now, people other than investment buyers may also be interested in buying buy-to-let properties. Further, you may be able to sell at a higher price.

However, the drawback is that you will have to wait until the tenancy period expires. Further, you will have to do it up so you can sell it up at good prices.

5 Factors to think about initially

You must have decided whether you want to sell your buy-to-let property with a sitting tenant or vacate, but before you get into action, you will have to look at the following factors:

Mortgage implications

You do not have to worry about anything if you have already settled a mortgage, but if it is yet to be settled, you will have to consider its implications on your sale process. The ideal time for selling your buy-to-let property is when your fixed-rate interest period is going to expire.

This is the period when you are charged fixed interest rates for two, three or five years and afterwards you are put on a standard variable interest rate. You will end up with hefty interest if a longer fixed rate interest period is left.

However, not all lenders charge very high early repayment fees. Make sure you should consider the best buy-to-let mortgage. This will likely help get money at affordable interest rates.

When to sell

The next thing you need to look at before selling your buy-to-let properties is the right time to sell them. Although the housing market performs well throughout the year in the UK, it is always recommended that you should do some research to know the condition of the local market.

Sometimes the market moves sluggishly due to economic factors. With the help of research, you will be able to know the market selling price. You will get an idea if it is actually worth selling it.

Should you refurbish?

This is another thing you need to consider before deciding on selling buy-to-let property. Doing up your house can help improve the chances of getting good prices but ensure you get a return on the cost you are investing. Refurbishment does not always help get higher prices.

Vacant possession

You cannot just throw them out if you already have a tenant. You will have to wait until the tenancy period expires. You will have to follow the strict legal process. However, if the agreement has the clause that you can ask them to leave any moment before the tenancy period expires by giving a notice period in advance, you can go ahead then.

Take the help of an advisor

Even though you know the entire procedure and you have decided to sell buy-to-let mortgages, you should consider an independent mortgage advisor in Edinburgh. They can help better guide you on what you can do about it.

The final word Well, if your purpose is just to make your property tax efficient, it is recommended that you sell it, as this property is not as tax efficient as it seems, especially for those who are high taxpayers. However, it does not mean that you just have to take into account this factor only. There are a lot of other things you need to look at, for instance, whether you should sell the vacated property or with a sitting tenant.

Both have their own advantages and disadvantages. You will have to look at them carefully, so you choose a better option. Apart from it, other factors include mortgage implications, when to sell, whether you need to do it up, vacant possession, and taking the help of an advisor.

Original Source : https://mortgagebrokerinformation.weebly.com/blog/are-your-buy-to-let-properties-worth-selling

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shinemortgages0 · 1 year

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https://shinemortgages0.blogspot.com/2023/05/ways-to-find-best-online-mortgage.htmlhttps://shinemortgages0.blogspot.com/2023/05/ways-to-find-best-online-mortgage.html

#poor credit mortgage calculator #mortgage with bad credit and no deposit #online mortgage broker uk #free online mortgage broker #best mortgage broker online #mortgage advisor edinburgh #independent mortgage advisor glasgow

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theindependentmortgageadvisor · 1 year

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via Twitter https://twitter.com/uktheadvisors

#mortgage advice #independent mortgage advisor #mortgage services #mortgage advice uk #mortgage advis

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topremortgagedeals · 5 years

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Independent Mortgage Advisor in City of Edinburgh #City #of...

Independent Mortgage Advisor in City of Edinburgh #City #of #Edinburgh https://t.co/88UybiwnXM

— Mortgage Deals (@ukmortgagedeal) March 16, 2019

from Amazing Mortgage Deals http://amazingmortgagedeals.tumblr.com/post/183495579952 via IFTTT

#best remortgaging deals #remortgage services #remortgaging near me #remortgage specialists #Amazing

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amazingmortgagedeals · 5 years

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Independent Mortgage Advisor in City of Edinburgh #City #of #Edinburgh https://t.co/88UybiwnXM

— Mortgage Deals (@ukmortgagedeal) March 16, 2019

#likeforlike #followforfollow #like4like #l4l #mortgage #amazing mortgage deals #mortgage services

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jamieclawhorn · 6 years

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Why a stocks and shares ISA beats buy-to-let every time

I always felt that buy-to-let was over-hyped. Although many investors have done well, generating attractive rental yields and capital growth from rising house prices, it is such an effort.

Buy-to-let bother

And today it demands more effort than ever, while the rewards have declined dramatically. Investors have to secure the right property, slap down thousands in stamp duty and spend money doing it up. They then have to find tenants, sign contracts, collect deposits and rent, check tenants aren’t trashing the place, replace them when they leave, and sort out any problems with the property. There there’s maintenance and wear and tear.

Oh, I forgot. If you take out a buy-to-let mortgage you also have to allow for a valuation, survey, legals, arrangement fees, mortgage interest charges and future remortgage costs.

At the same time, the tax burden has got heavier, including a 3% stamp duty surcharge, reduced wear and tear allowances, and the loss of higher rate tax relief on mortgage interest. Landlords also have to jump through many more regulatory hoops.

So much easier

If you invest in a stocks and shares ISA instead, you simply set up an online trading account, transfer in money from a debit card, choose your funds and click the ‘buy’ button. Stocks are liquid, you can sell at any time. You can invest small amounts such as £1,000 or less.

Rot, subsidence, bad neighbours, burst pipes, winter storms and the thousand natural shocks that property is heir to don’t apply to stocks and shares. OK, you might inadvertently invest in the next Carillion, for example, which is the kind of nightmare that keeps investors awake at night. But property prices can fall too.

Double your money

Property and stocks offer both income and growth. The FTSE 100, for example, currently yields a healthy 4.01%. If you had invested £20,000 in the FTSE All Share 10 years ago you would have more than doubled your money to £41,100, according to Fidelity International.

Property has also done well too, just not well enough to make it worth the extra effort. The national average rental yield is just 4.4%, which falls to 3.16% in London, Your Move calculates. Rental growth has stalled, up just 0.97% in the last year, according to Landbay.

House price slump

Prices in Cambridge and London are more than 65% higher than 10 years ago, Hometrack says, but elsewhere, growth has been patchy, with Belfast, Liverpool and Aberdeen still below 2008 levels, while Newcastle and Edinburgh have experienced weak singledigit growth.

Rental income and house price growth are both taxed, whereas all your income and capital growth is tax-free inside an ISA. The Lifetime Isa even gives younger investors a 25% government bonus. The Government may be cracking down on landlords, but it is lavishing savers with largesse.

Only one winner

Stock markets also give you global diversification, while most buy-to-let investors are doubling down on the UK residential property market. The big advantage of buy-to-let is that you can borrow money to invest via a mortgage but otherwise shares are the clear winner. For me, there’s no contest.

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More reading

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Here’s why the Tullow Oil share price could be set to beat the FTSE 100

Is the Sirius Minerals share price dip your last great buying opportunity?

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financialadvisoredinburgh-blog · 7 years

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Here’s How You Should Search For The Most Reliable Financial Advisors Edinburgh Based

There is no denying that being financially stable is important. However, many people are unsure of how to effectively manage their finances. If you're one of these people who need assistance in securing your finances, then you need to get the services of financial advisors Edinburgh based. They can help you in many ways, whether you're starting an investment or you need a life insurance.

These days, you can easily locate such advisors simply by searching the Internet. Nonetheless, you should only get the services of a reliable financial advice Edinburgh based provider so you can obtain expert guidance. Here are some of the qualities that you must look for in one:

1. They should offer advice on different financial plans

A dependable financial adviser Edinburgh based should provide advice on numerous types of services ranging from mortgages to savings. They should also be familiar with the options these services may have. For example, they should be able to give advice on various mortgage schemes like Right to Buy and Help to Buy. With their vast knowledge in various financial matters, they can help you with any financial concerns that you might have.

2. They should have relevant experience and credentials

Lots of specialists on independent financial advice Edinburgh based have relevant qualifications such as Diploma in Financial Planning (DipPFS) and Certificate in Mortgage Advice and Practice (CeMAP). These certifications ensure that they have received adequate training and education to provide quality advice. Additionally, they must have worked in different sectors of the finance industry such as insurance and banking. This is ideal since they can provide you with in-depth advice regarding financial matters because of the knowledge they have gathered over the years.

3. They should conduct yearly reviews

It's recommended that you work with financial advisers who can conduct an annual review of your finances. This is very important given that financial plans can be affected by changes in your life such as having a new career or getting married. Ideally, the financial adviser Edinburgh based should consider your situation so they can suggest proper adjustments to your plans. With annual reviews, these advisors can ensure that you are always on the right track towards reaching your financial goals.

4. They must be accredited by professional bodies

Lastly, the financial advisor Edinburgh based you must work with should have certifications from different professional bodies like the Chartered Insurance Institute (CII). These organisations guarantee that their members have high standards of business capabilities and technical competence. Advisors are typically required to complete a rigorous examination before they could get accreditation. When you visit the websites of financial advisors, check for proof of their certification like the logos and ribbons of professional bodies.

These are some of the characteristics that reputable financial advisors Edinburgh based must have. Keep in mind to look for these in the advisors that you find on the Internet. By doing this, you are guaranteed to find the ideal ones who will help you and your family become financially stable.

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graeme-from-it · 7 years

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Michelle Thomson, MP for Edinburgh West (initially SNP, then Independent after having to lose the whip due to a police investigation into mortgage dealings) issued a statement after she was not re-selected by the SNP to stand in the seat for the June 2017 General Election. I noticed that she mentioned the “Ashley Madison” hack, and that she had been falsely implicated in it - tat led to this series of tweets... My original tweet is here Her replies are here and here Other tweets by brianspanner1 mentioned her dropping her IT advisor “in it” and that she should explain or “delete fast as fuck” - that can be found here (sorry but can only attach 10 images to a single tumblr blog posting.... So - What now :-)

#snp #michelle thompson #graeme_from_IT #brianspanner1 #thebestbond #hacking #ashley madison

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mortgagesimplicity-blog · 7 years

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MORTGAGE ADVISOR LONDON

As one of the UK's leading Mortgage Advisors, Mortgage Simplicity have access to over 10,000 mortgage products, including broker-only deals. We will search the whole of markets to find you a mortgage best suited to your circumstances. That's why, at Mortgage Simplicity, we pride ourselves in our “best in market” promise. Our mortgage advisory service, is here to help and you through the challenges fanced by first time buyers. We'll support you throughout the entire mortgage process, completing the paperwork as well as working together with the surveyors and solicitors. We take the complexity our of buying your first home, making it as stress free as possible. The range of services we currently offer are extinsive, advising on mortgages and remortgages, buy to let, help to buy and shared equity schemes. We also offer advice on life and protection products, as well as buildings and contents insurance. Mortgage Simplicity are an Independent Whole of Market Mortgage Broker. We are based in Scotland but we cover the whole of the UK. It doesn't matter where you live be in Edinburgh, Belfast, Cardiff or London we can help you. We offer Fee Free Mortgage Advice and We don't Charge Broker Fees. We give recommendations based on all types of Mortgages including First Time Buyer Mortgages, Remortgages, Buy to Let Mortgage, Commercial Mortgages, Secured Loans, Help to Buy Mortgage, Shared Ownership Mortgages. We have access to every lender every deal including all of the major Banks and Building Society covering the whole market. Our website has a Free Mortgage Calculator and you can access Rightmove House Price Data, giving you upto the minute Valuations and House Sale Prices in your area and across the UK.

At Mortgage Simplicity Ltd we aim to take the fear out of applying for a Mortgage. Our experienced and qualified Mortgage Advisors will guide you through the Mortgage Options Available and find a solution that best fits your needs. Mortgage Simplicity Ltd offers Free Mortgage Advice, we do not charge our clients for the advice and services we provide. We work at every mortgage deal that is available to Mortgage Brokers and Tailor a Solution that's right for you. This means you can take advantage of our expertise, without paying us a penny! Mortgage Simplicity is just that, we make it simple to do business with ourselves, online, over the phone or in our bespoke offices, 7 days a week at a time that;s convenient to you, we put our customers first and work for you not the banks.

Contact us for further

#first time buyer mortgages #calculate mortgage uk #Bridging Finance

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mollyharrisuniverse-blog · 2 years

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#joint mortgage calculator #joint mortgage calculator uk #joint mortgage how much can i borrow #Joint mortgage with parents #first time buyer joint mortgage #best places to live in edinburgh #independent mortgage advisor edinburgh #Mortgage Broker in Edinburgh #free mortgage advice edinburgh #Free mortgage advisor Edinburgh #mortgage broker edinburgh #mortgage advisor edinburgh #best mortgage advisor edinburgh #your mortgage broker edinburgh #Best places to live in Edinburgh for families

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mollyharrisuniverse-blog · 2 years

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How much can you borrow from joint mortgages?

How Much Can You Borrow from Joint Mortgages?

Mortgages are often the most significant decision for any person. The individuals might fear taking such a decision alone. It is natural to have fearful thoughts, whether your first property or second Mortgage application.

On the reverse side, the credit report delays securing the mortgage.

Lenders to subside the fear and risks provide joint mortgages. In this, a lender allows a person to buy a property on a mortgage with a spouse or friends.

What are Joint Mortgages?

As the name suggests, a joint mortgage allows two or more people to enter a mutual mortgage agreement. In this, every person is equally responsible for paying the mortgage repayments. The lenders allow the person involved to combine the money to buy the mortgage.

You can borrow more with a joint mortgage than with a single one. Two or more personalities increase the reliability of the loan and thus gain quick approval from the lender. It eliminates any possibility of defaulting on the loan as the person involved ensures their share of the payment is met promptly.

Who can get a Joint Mortgage?

Joint couples or married couples generally cover most of the joint mortgage applications. Here are others who may apply combinedly:

You may apply with a friend

You may apply with a civil partner

You may apply with your girlfriend/ boyfriend

Apply with your colleague

Apply with one of your relatives

A mortgage broker in Edinburgh provides the best joint mortgage quotes from verified lenders at flexible eligibility criteria. The lender, however, ensures that you can make payments towards the loan without fail.

What are the requirements to get a Joint Mortgage?

To get a joint mortgage, you must meet the general loan or mortgage criteria:

The persons involved in the mortgage must hold a good credit score

Low Debt-to-income ration

Meet the lender’s income affordability criteria (Differs from lender to lender)

Must be eligible to make a 15% down payment to get the loan

How does a Joint Mortgage Work?

Getting a joint mortgage works similar to other mortgages. The one you apply for the mortgage with must adhere to the terms and conditions posed by the lender.

It is of two types:

1. Joint Tenants

Joint tenants mean each person involved in the agreement shares an equal percentage share in the property.

It is common among couples to seek a property split owing to personal or legal matters.

If both decide to sell the property after paying the repayments, each person will get an equal profit share.

2.Tenants in Common

It is different from the joint tenants. In this, every person involved holds a different percentage share of the home. It is a common borrowing among friends and families. A solicitor help draw a deed of trust revealing the property percentage each person holds legally.

If you are confused about “how much can I borrow”-

Discuss with the expert how much you can both borrow as per the current financials.

Every person shares different financial status. And thus, the borrowing differs. Once you identify the money you can afford to pay the lender jointly, arrange a mortgage by filing an Agreement in Principle. The document helps one know the affordability to spend on a home and borrow.

The person you agree with must ensure financial solid backing and credit score. If any of you seem unnoticeable to the borrower, the lender may deny the mortgage approval. The credit checks include hard and soft checks; the hard checks may affect the credit score for some time.

If any people stop paying towards the loan, the other must ensure the payments towards the loan.

How Much Money Can You Borrow from The Joint Mortgage?

Lenders calculate how much each person can borrow based on their credit score and recent financial behavior. In the case of joint mortgages, the lender adds two income sources to evaluate the cumulative. The lenders also consider other liabilities in your credit report like student loans, credit card pending payments, etc.

In some situations, like – if your partner is working and you are currently on benefits, lenders may provide a joint mortgage. To qualify for a joint mortgage in this situation, the income must be good enough along with the credit score.

In general, individuals can borrow up to four times the total income affordability in joint mortgages. For example, if you and your spouse combinedly enter into a mortgage agreement with a good salary and credit score, you may borrow 4 times or 5 times of the total income. However, it depends on the lender and the borrowers’ affordability. In some cases, the lender may lower the income multiple for joint appliers compared to a single mortgage applicant.

A mortgage broker helps connect you with the best lenders, ensuring good mortgage money at minimal risks and interest rates.

What to consider before applying for joint mortgages?

Here are some things that you must consider before seeking answers to in a “joint mortgage, how much can I borrow?”

1.Evaluate finances mutually

To qualify for a joint mortgage, one must have a good financial backup. Even if you are employed, identify how much you could dedicate to the monthly mortgage. Could you both manage the down payment sum to increase mortgage approval? Wait until you ensure strong financials.

2. Search for the best home to fetch a mortgage

If you are sure about your financials, the next thing is to finalize the property you wish to mortgage. A mortgage is a secured loan. Generally, the borrower mortgages the new property he wishes to buy later. Identify the positive aspects and the future value.

It is ideal to evaluate the investment from the returns of investment perspective.

Does the property ensure the best location?

Do needed facilities support it?

Does the area share immense growth opportunities and expansion?

Is it free from a mortgage?

Always enquire whether the property is free from legal allegations or not. Is it open to buy??

3.Contact a broker for the best fetch

If you find the property genuine and like dearly, explore the mortgage rates. Choosing from multiple lenders may be confusing. Switch to the best mortgage broker. We help find you the best mortgage by comparing different lenders. You do not need to worry as we work with your situation and provide the best-personalized quotes. Contacting a broker may help you get!

Bottom line

So, it depends entirely on the affordability and the deposit requirement you can meet to get the mortgage.

Description: The amount you may borrow differ drastically from lender-to-lenders. However, the below things may help secure one quickly.

Original Source : https://articlestrend.com/how-much-can-you-borrow-from-joint-mortgages/

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mollyharrisuniverse-blog · 2 years

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How to increase the chances of having a mortgage application approved?

How Can One Increase the Chances of Having a Mortgage Application Approved?

The interest rates increased from 0.1% in 2020 to a staggering 1.25% at the beginning of June- the Bank of England introduced the move to tackle the inflation rate. The economic outlook shows no improvement as experts forecast inflation rates to reach double digits on the line to further energy price hikes.

However, citizens can improve their chances of securing a mortgage even in an unstable financial climate. If you have faced mortgage application rejection recently and wondering how you to avoid facing rejection again, the blog will help.

Why was my mortgage application rejected?

There are a few reasons behind mortgage application rejections:

a) Defaults or missed repayments

b) Not on the electoral roll

c) Failure to align with lender’s eligibility criteria

d) Too many high-interest loans in the profile

e) Multiple mortgage applications

f) Lived in the UK for less than 3 years

g) You are a self-employed or contract worker

Are there any mortgages for self-employed without accounts?

When a self-employed just starts a business, he does not have many accounts in the revenue book. Having a sufficient income bracket is a critical aspect of securing a mortgage. Many lenders provide a mortgage for self-employed without accounts.

However, these can be costly. While many lenders accept SA302 self-assessment submission for a mortgage application and file an agreement in Principle (AIP), it does not guarantee mortgage approval. This agreement last for 3 months. If the lenders, in any case, consider AIP, it would be based on anticipated earnings and net profitable/ salary and dividend; it is still accurate.

Mortgages are difficult to secure for self-employed individuals. The reason is- lenders find it challenging to find enough income proof and reliability to pay off repayments on the mortgage.

In this case, you may need an accountant who may help project the earnings for the future and help lenders decide right. The more you can provide on the income side, the easier it will be to qualify for the mortgage. With new startups and freelancers budding in the UK, there is an increased demand for self-employed mortgages.

How Much Could You Borrow with One Year of The Self-Employment Journey?

The amount you can borrow as a self-employed is similar to that of an employed person. You may borrow around 4-5x of your income.

If you reveal the invoices and the projected revenue you are still to recover from your clients, you may gain the lender’s trust and qualify for a higher mortgage amount. However, you must ensure a healthy credit score as well.

It will help you eliminate any chances of mortgage loan application rejection. Some lenders may draw upon your future projections and lend a sum accordingly. Thus, it is always better to consult an independent mortgage advisor in Edinburgh. It will help you gauge the potential risks associated and fetch the personalized mortgage from the best lender in the UK.

5 Ways to Improve Chances of Mortgage Approval

Getting a mortgage is a wholesome experience of exploring the best quotes, identifying the lender's requirement, and the affordability gave the income status.

Here is how you can improve your chances of boosting your mortgage loan application rate:

1. Save for a larger deposit

The higher the deposit on the mortgage application, the higher the chances of getting the loan approved. Credit score and income are essential parameters to secure a mortgage. If you struggle to maintain a good credit score and are self-employed, ensure a good upfront deposit.

It lowers the LTV (Loan-to-value) ratio. If you default on the mortgage payments, the lender may claim the mortgaged property. A lower LTV implies that they could recover the total debt by selling off the property.

2. Analyze the lender’s requirement

Before applying for a mortgage, it is essential to know the lender's lending point of view. Here are 3 criteria upon which the lender rests his approval.

a) Affordability - It is the measure of loan affordability to repay the debt. It looks at your income, outgoings, and repayment stability. If you are self-employed, ensure every invoice is in place.

b) Deposit - The higher the deposit, the lowers the risk on the mortgage. However, be conscious that the lender may ask for the source of deposit. If you borrowed it from someone in your family or friend, be upfront about it.

c) Credit History - Lenders check the credit profiles to ensure you do not have any high-interest debt lurking in your credit report. You may get the mortgage loan approval if you have a default-free credit history, no CCJ, or missed repayments.

Getting a tab over these fundamentals may help improve the mortgage approval chances. Keep the below documents handy as proof and loan process completion:

Your ID proof and Address proof: Passport, ID card, utility bills

Your income source proof: payslips, invoices, P60, self-employed tax returns

Total expenses: information about credit cards, bank statements, and loans in the credit report

Check the lender's criteria to get a mortgage for the self-employed without accounts.

3. Register for the electoral roll

It could be challenging to qualify for a mortgage without your name on the electoral roll. It helps you pass through the initial borrower profile assessment. Having your name on the electoral roll dispenses reliability. If lenders know who they are lending to, the borrower can expect a quick mortgage loan application approval.

Lenders verify a borrower's identity by scanning the electoral roll for the location and address. Check your credit profile to see whether you have registered for the electoral roll.

Foreign Nationals cannot vote as UK citizens. Some lenders provide mortgage approval to non-residents. However, it could be a long process, thus not guaranteeing loan approval. If confused, check in with an independent mortgage advisor in Edinburgh to make the right move.

4. Avoid getting a new loan

Mortgages require patience and financial commitments. Avoid getting any new loan before applying for a mortgage. A lot of unsaved debt can hamper your application approval. If you have a bad credit profile, wait until the credit score improves. Avoid using your credit cards during this time.

5. Fix the mistakes on your credit report

It is good to check your credit report every once a month. Take a closure look to identify the mistakes that could affect your loan application negatively:

Identify the unpaid debts

Check the paid debts that still exist on the credit profile

Are there any debts that you never took in your name?

Information regarding the spouse that should not be there anymore

Out-Dated information

Are there any paid high-interest debts on your credit profile? Get it cleared.

Incorrect notations for closed accounts

Checking debts on your credit profile frequently is a good idea if you are eying a mortgage. If you have a lot of errors on your credit profile, call the lender or credit agencies.

Conclusion

These are some ways that can help you secure a mortgage quickly. Research, and improvise your credit health and affordability. Analyze if you could delay the mortgage until credit improves. It is the most significant life decision; make the right move.

Description: You should be mindful of certain things to improve mortgage application approval chances. Self-employed can benefit from the guide.

Original Source : https://mortgageloansuk.wixsite.com/shinemortgages/post/how-to-increase-the-chances-of-having-a-mortgage-application-approved

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mollyharrisuniverse-blog · 2 years

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What conditions must be met to qualify for a mortgage in the UK?

You will smile corner to corner when your mortgage application is signed off on, but you are supposed to meet certain conditions. The mortgage is the most expensive debt, and therefore no lender can process the application as quickly as they do for small emergency loans like payday loans.

The deposit size you arrange must be at least 10% of the value of your house. However, you can increase the limit up to 20% or more if you manage to stow away this much despite arranging a bigger down payment, a lender's decision depends on your repaying capacity.

If you fail to prove that you are able to pay down your mortgage, they will straightaway turn down your application. Further, you are supposed to submit all necessary documents. Any discrepancies in your documents can also keep you from fulfilling your house fulfilled. This blog discusses the conditions that you need to qualify for a mortgage.

The appropriate size of down payment

A deposit size is a foremost condition to get qualified for a mortgage. The lending industry has set the trend of submitting at least 10% of the market value of the house as a down payment. A couple of lenders are out there that are a bit lenient and accept applications with a 5% deposit size but only when you are a first-time borrower, and you have a good credit score.

The size of the down payment varies by mortgage borrower. For instance, if you have a bad credit history, a lender would expect you to arrange a bigger deposit size. In most of the cases, it is not less than 20%. It is always suggested to do some research before applying for a mortgage. Contact a mortgage lender to know what minimum down payment they expect from a borrower.

Here comes Mortgage in Principle (MIP), also known as Decision in Principle (DIP). In fact, most of the agents will take you seriously when you have an AIP. You could get it from a lender within a couple of minutes to know how much they would be able to lend you money if you were to buy a property. A lender would look over your income and credit history.

Some lenders run a soft credit check, while others run a hard credit check with your permission. Note that you may lose some credit points if hard inquiries are made. Knowing how much you will likely borrow will give you a clearer idea of the down payment size.

To avoid any complications, you must know how much money you are to pay down as a deposit size. If you apply for it through a broker, you can get all information without putting in much effort. The broker will do everything on your behalf in exchange for online mortgage advisor fees.

A consistent and stable income source

Another condition you need to meet to get the nod is a consistent and stable income source. If you cannot prove your repaying capacity, a lender will not approve your application regardless of the deposit size.

If you are a full-time employee, you will have to submit your pay slip for at least three months. However, this cannot be sufficient to convince a lender to prove your repaying capacity. Make sure that you have been the employee of the same company for over a year.

If you are running a business, your monthly income may fluctuate, but you still should be able to maintain a level. Make sure that your monthly profits are always above and beyond that minimum level.

What documents do you need to apply for a mortgage loan in the UK?

Having an appropriate size down payment and stable income source is not enough to be eligible for a mortgage application. When you apply for a mortgage application, a lender will peruse your credit file to get an idea of your past financial behaviour and afterwards they would ask you to turn in income documents. Here are the documents you should submit:

Utility bills

Proof of benefits, if any

P60 form for your employer

Your last 3 months’ payslips

Passport or driving licence

Bank statement of 3 to 6 months

Statement of 2 to 3 years’ accounts of income if you are self-employed

SA302 form if you have earnings from more than one income source

Additional information along with tax returns gives detail about your income if you are self-employed.

Other things to remember to ensure the accuracy of your documents

Make sure you have arranged all documents before filling in the application form. You can ask about the documents required at the time of getting an AIP. Provide all necessary information, complete your application, and submit documents to the bank details you give. Follow the following tips on your mind when you provide documents:

Do not round up your payment to the next nearest figure in the application. Just mention what your payslips say.

Provide complete details of the house that you are going to purchase. A lender will ask an inspector to evaluate the market value of your house to decide if it is worth lending what you are asking.

Be ready to be asked to provide additional papers as sometimes lenders may not be convinced with your repaying capacity.

Each lender has different criteria for judging your repaying capacity, so some may ask you to provide some information about outgoings. Provide genuine information because otherwise, it will ruin your finances down the line.

Ask your lender if they need any additional documents or information. Things become easier if you are applying with a mortgage broker.

You will need hard copies of your bank statements, not print-outs certified by your solicitor or your bank.

The final word

Qualifying for a mortgage is not that easy. You will have to prove your repaying capacity, and if you have a bad credit score, it can be more challenging and tougher. For instance, a lender could be stricter about the down payment size.

Further, you need to provide additional documents to prove your income. A lender can ask you to submit various documents to process the application. You should contact your mortgage lender to know about them, or you can get this information during DIP.

If you are applying to a mortgage broker in Edinburgh, you can get this information from them. They will ensure the accuracy of all of your documents, so your application is not cast aside because of the lack of documents needed.

Original Source: https://www.apsense.com/article/what-conditions-must-be-met-to-qualify-for-a-mortgage-in-the-uk.html

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