by admin | Nov 29, 2020 | Mortgage News
Regardless of whether you’re buying or selling, there’s no time to lose if you want to make the most of the Stamp Duty holiday. If you’re doing both, then there’s definitely no time to lose. Being organised is always a plus in the property market. Right now it’s vital. Here are some tips to help.
Sellers should get their paperwork organised
This is a good move at the best of times. This year, it could literally make the difference between making a sale and seeing a buyer move on to another property. The SDLT holiday is due to close at the end of March 2021. That is not long to see a property transaction through from marketing to completion at any time, let alone during COVID19 and the festive season.
There is always a possibility that the Stamp Duty holiday will be extended. This is, however, very unlikely. Quite bluntly, the government is likely to want to get the tax revenue flowing again as quickly as possible. Astute buyers will be well aware of this and will therefore be looking to work with motivated and organised sellers.
Buyers could start looking while being approved for a mortgage
These days, the standard advice to buyers is to get preapproved for a mortgage before they put in an offer on a house. In principle, this advice still holds. In practice, when a clock is ticking, you need to get moving. This means that, for once, it probably wouldn’t hurt to get busy house-hunting at the sale time as you are sorting out your mortgage pre-approval.
In fact, this could be essential to beating the Stamp-Duty-holiday deadline. Keep in mind that the Chancellor’s move has created a huge demand for property. This means a huge demand for mortgages. Processing mortgage applications is skilled work, so the lenders cannot just ramp up their staff. If anything, the process will be slowed down because of COVID19.
Buyers need to be realistic about their mortgage prospects
It’s generally advisable to be realistic about your mortgage options. If you’re planning on house-hunting before you’ve been officially approved for a mortgage. Apart from anything else, currently, sellers can expect to have competing offers. Given that many sellers are also buyers themselves, they’ll probably be keen to choose a buyer who can complete quickly.
There are three key factors which will determine how much of a mortgage you are likely to be offered. These are your credit score, your deposit and your income. At this stage, there isn’t likely to be much you can do to improve your credit score. You should, however, still check it, partly so you know what it is, and partly to make sure that it is free of errors.
Make sure you understand each lender’s policy on deposits. Specifically, you will need to know the minimum deposit they will accept and if they have any rules on gifting. Also, be clear about the fact that your headline income is only an indication of your ability to service a mortgage. Lenders need to look at the issue of affordability in a much greater level of detail.
It’s advisable to choose a conveyancer before you find a house
Conveyancers are also experiencing a surge in demand due to the Stamp Duty Holiday. As with mortgage-application processing, this is highly-skilled work. It cannot just be passed off to temps. An efficient conveyancer can make a buyer’s life much easier so it’s important to choose one wisely and to be prepared to pay for quality service.
Having your conveyancer lined up in advance means that you can move as soon as you find the right property. This could make the difference between making the Stamp-Duty-holiday deadline and losing out on it.
Your property may be repossessed if you do not keep up repayments on your mortgage.
by admin | Nov 20, 2020 | Mortgage News
If you’ve paid attention to the internet, you might already have suspected it. Now it’s been confirmed by a study of 2000 UK adults carried out for online lettings agent Mashroom by OnePoll. “Gen Z” (18-24-year-olds) really are the most house-proud generation alive today.
Almost half of Gen Z renters have asked to make improvements
Even though 32% of landlords said that they had already made improvements to their properties, almost half of Gen Z renters wanted to improve them even more. They asked their landlord’s permission and presumably paid for the changes themselves.
The survey does not say what kind of improvements were requested. Given that renters are unlikely to spend money on making changes they cannot reverse easily, the likeliest options are painting/wallpapering, drilling holes in walls (to make use of vertical space) and perhaps changing accessories such handles, knobs and possibly even taps.
As many an internet article shows, these are the sorts of changes which can make a real difference to the look and feel of a home. At the same time, they’re easy to undo when you move. What’s more, if you invest in hardware, you can often reuse it or sell it on to someone else.
61% of 18-24s will update their home decor over the next year
Gen Z also led the way in updating home decor. No less than 61% of 18-24s are planning to update their home decor within the next year. That’s more than any other generation, even though Gen Z are often on the tightest budgets. This figure may have been pushed up as a result of lockdown, but so then, presumably, would the figures for other generations.
If you’ve been paying attention to the internet, you may not be surprised to hear that over a third of Gen Zers year for a modern, tidy look. Admittedly, this is not exactly the same as being minimalist. It does have to be said, however, that social media trends indicate that minimalism is still very much a strong force amongst the younger generation.
This may be a case of making a virtue out of necessity. Homes are getting smaller and Gen Zers are likely to live in particularly small homes. What’s more, younger people tend to be more geographically-mobile than older ones. Having minimal baggage helps to reduce the stress of moving. It can also give a sense of freedom in uncertain times.
Younger people want more space indoors and outdoors
What may come as a surprise is that even though Gen Zers are fairly minimalist and tidy in a lot of ways, they still want more space indoors and outdoors. Almost a third of them want a study at home, 38% want a bigger garden and 21% want a vegetable patch. Interestingly, these results are in line with other generations and other surveys.
On the other hand, these results may be far less surprising when taken in the context of the year 2020. Unprecedented numbers of people have been working from home. As has been widely pointed out, a person’s experience of home-working will often depend greatly on the quality of their home-working environment. This has already been leading to a “flight from the city”.
Similarly, other surveys have shown that the lockdown has given us all a greater appreciation of green spaces, both private and public. Having a garden brings green space, literally, to our doors. Having a vegetable patch makes it possible for us to grow our own food. These are considerations for all generations.
It’s also worth noting that Gen Zers tend to have a high level of consideration for the environment and sustainability. Growing your own food is also very much in line with this.
It’s worth bearing this in mind when selling to a first time buyer.
by admin | Nov 13, 2020 | Mortgage News
Way back in March, when the first lockdown was announced, the government worked with the financial-services sector to soften the impact on the public. The measures announced then have technically just finished (on Halloween). Now, however, another lockdown has been announced and with it a new package of measures. Here’s what you need to know.
The rules for the first lockdown
In short, the government made it clear that it expected lenders to accommodate borrowers who were struggling due to COVID19. This edict applied pretty much across the board from overdrafts and credit cards to mortgages, including buy-to-let mortgages.
On the one hand, this accommodation wasn’t necessarily as generous as the headlines might have led you to believe. In simple terms, lenders were often obligated to allow borrowers to skip payments. They did, however, generally have the right to keep charging interest.
On the other hand, it was usually fairly easy to qualify for the support. In some cases, it was enough just to self-certify that your income had been hit by COVID19. What’s more, the government stated that taking a payment holiday for COVID19-related reasons shouldn’t be recorded on a borrower’s credit record.
What was supposed to happen next?
The package of measures introduced for the first lockdown technically ended on Halloween. After this, lenders were supposed to show forbearance to those in financial difficulty and work to find a tailored solution. In other words, it was essentially business as usual, although probably with a higher level of people needing help.
This would have meant that going forward, people would have needed to have gone through the usual assessment process before being offered any help. It would also have meant that any measures would have been reflected on their credit score.
Appropriately enough, however, Halloween was also the day the government announced the new lockdown. Fortunately, the new lockdown came with a new package of measures and it is possible that further measures will be announced.
What will happen next?
The furlough scheme has been extended at its original rate of 80% of wages. Hopefully, this in itself will be enough to help the majority of people cover their housing costs, be that rent or a mortgage. Both the government and the Financial Conduct Authority have made it clear that anyone who can continue to pay should do so.
The government has also announced that mortgage payment holidays are being extended. There is, however, a catch. Mortgage holidays were only due to last up to six months. This means that anyone who applied for one at the start of the pandemic is not guaranteed to be given one now. Their lender might agree to it but they are not obliged to do so.
Similarly, anyone who took out a mortgage payment holiday at a later stage can only extend it up to a maximum of six months. After this, as the rules currently stand, they would be treated essentially the same way as anyone else in financial difficulty.
What might happen next?
This is a huge question, but there are some key points which potentially stand out. Firstly, the new lockdown could be cancelled, or at least reduced. The lockdown has been announced by the government but not, yet, agreed by parliament.
Secondly, if the lockdown does go ahead in any form, especially its current one, it’s possible that further support measures may be offered. These could include an extension of the mortgage payment holiday and/or an extension of the Stamp Duty holiday, to make it easier for people to sell properties they could not afford to people who could.
There is also the possibility that payment holidays will be offered on other products, such as overdrafts, loans and credit cards. This might make it easier to prioritise mortgage repayments.
Your property may be repossessed if you do not keep up repayments on your mortgage.
by admin | Nov 7, 2020 | Mortgage News
When you exchange contracts with a seller, you are committing to making that purchase no matter what. Even in an absolute worst-case scenario, say the house is struck by lightning and burns down, you are still committed to buying it. This means that, as a buyer, you need to be prepared.
Do your homework thoroughly before you exchange
First of all, make sure that you’re really comfortable, if not actively happy, with the local area. Think about the practicalities across all seasons, including the depths of winter. Think about what it might mean for working at your current place of business and from home. Think about what it might mean if you wanted or needed to change jobs.
Secondly, make sure that you’re really comfortable with the property itself. Unless you’re knowingly buying a “fixer-upper”, then you need to be sure that the property is structurally sound. Unless you’re buying a new-build with a reliable builder’s guarantee, it’s usually very advisable to have a property surveyed rather than just valued.
In simple terms, a survey looks at the structural soundness of the property and tries to confirm whether or not any issues can be reasonably foreseen. A valuation essentially just looks at how much the property could be expected to fetch if it had to be sold. It, therefore, acts as a baseline for calculating the loan-to-vehicle ratio of a mortgage.
Make sure you have insurance from the point of exchange
It is impossible to overstate the importance of this point. It may be highly unlikely that anything will happen to the property between exchange and completion. There is, however, a huge difference between unlikely and impossible and that difference can be painfully expensive. If that difference happens to you, then you will be the one taking the financial hit – unless you have insurance in place.
The case for insurance becomes even more compelling when you consider how little it can cost. Firstly, you’re only insuring the building itself. If the seller still has property in it, then that is their problem. Secondly, you’re only insuring for the rebuild value rather than the purchase value. Essentially, you already own the land on which the property rests, so you’re only looking at the cost of rebuilding the property itself.
Think about whether or not you need insurance for your move
If you’re using professional movers then check that they have insurance in place. If you’re planning on moving yourself, even if only in part, then you may want to check if your existing home insurance covers you for the move. If it doesn’t, you may want to see if you can take out insurance to cover you during the move itself.
If you are hiring a van, then check what insurance is covered as part of the hiring process. If it’s insufficient, then again see if you can find extra cover for the process of the move. If you’re borrowing a van or car then it’s vital that you have standard third-party insurance in place as well as insurance for the goods you are moving. Never assume that either the vehicle owner’s insurance or your insurance will cover you for either event.
Update your insurers on your move
Remember to let your insurers know that you have moved. In fact, remember to inform all the companies with which you do business. If you receive any benefits, you will probably have to update the relevant authority. You may also want to think about applying a mail redirect to catch anything you’ve forgotten (or if a business doesn’t update its records properly).
This can be a tedious exercise at a busy time, but it’s also an opportunity to close off old accounts and hence reduce the number of organizations which have your data.
Your property may be repossessed if you do not keep up repayments on your mortgage.
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