by admin | Jan 22, 2021 | Mortgage News
Despite the general lack of seasonal festivities, the Christmas period can still be financially challenging. That being so, you may be thinking about applying for a mortgage holiday in the new year. If so, here’s a quick guide to what you need to know.
Relief is still available for people impacted by COVID19
At present, people impacted by COVID19 have until 31st March 2021 to apply for a self-certified mortgage holiday. What this basically means is that you will automatically be granted a payment holiday for up to three months without the need to go through a formal approval process.
You can then extend this up to a total of 6 months. All COVID19-related payment holidays must, however, be finished by 31st July 2021. This means that if you think you might need or want to take the full 6 months, you’ll need to have everything signed off by the end of January.
The negatives of mortgage holidays
There are two potential negatives about taking a mortgage holiday. Firstly, the holiday gives you a break from the payments. It does not, however, give you a break from the interest. How much of a negative that will be will depend partly on your mortgage deal and partly on the size of your balance.
If you have a large balance on your mortgage, then you might want to consider organizing a partial payment holiday. This would give you some relief from the payments while limiting the amount of interest which accrued during the holiday. Alternatively, you could ask your lender if you could make payments voluntarily if your circumstances allow.
The second negative is that a payment holiday can impact your credit record. Technically, a COVID19-related holiday is not reported on your payment record. The problem is that in the real world, it’s pretty easy for lenders to figure out that you’ve had a payment holiday. If you’re making regular payments, your balance is going down accordingly. If you’re on a payment holiday, it isn’t.
Again, the real-world impact of this is likely to depend on your circumstances. If you’re happy to stay with the same lender for the immediate future, then you may be prepared to take the hit. If, however, you’re looking to change lenders, then you may be better overall to make the payments, even if it’s a struggle.
After the mortgage holiday ends
After the mortgage holiday ends you either resume payments as normal or go onto tailored support measures. These will be set up in partnership with your lender. Be aware that, like payment holidays, these support measures may come at a price. For example, if your lender extends your mortgage term, you may pay less each month but end up paying more overall.
Unlike COVID19 payment holidays, tailored support measures will be reported on your credit record. Again, the impact they have will depend on your circumstances. For example, if you extend your mortgage term, you will be able to maintain a track record of regular payments. If, however, you arrange another deferral, you will be sending a very clear message to a lender.
If you switch to an interest-only mortgage, then you’ll need to think very seriously about how you’ll repay the capital. Unless you have some other repayment vehicle in place, then you will need to give up ownership of your home. This may not mean that you have to leave it. You might, for example, be able to use equity release to pay off the balance.
Selling your home
If it’s a continual struggle to pay your mortgage, then your best option may be to sell your home. This can be a hard decision to take. In fact, you may want to get professional advice before you take it. Keep in mind, however, that there are many reasons why selling your home on your own terms is better than having it repossessed.
Your property may be repossessed if you do not keep up repayments on your mortgage.
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 | Mar 7, 2020 | Mortgage News
If you’re planning on selling your home in 2020, you’ll presumably be hoping for the best price in the shortest time. Here are some tips on how to make this happen.
Start by pulling your paperwork together
This may seem like a dull tip, but it really does matter, so it’s as well to get it over and done with before you go into full “house-selling mode”. Basically, gather together any and all paperwork which could be relevant to the sale of your home.
First of all, you will need to pull together any legal paperwork, which may have been mothballed since you moved in (especially if you have lived in a property a long time). You might want to have a lawyer double-check it to see if there are any issues which could be red-flagged by the current generation of buyers and see if there are any steps you can take to remedy them before you put the property on the market.
After this, you will need to compile any administrative documents regarding your home and its contents. This could include your EPC, warranties for any building work you had done, receipts and warranty information for any white goods you are selling with the house and so on.
For bonus points, you could take this a step further and create a folder containing all the factual information a buyer could reasonably be expected to want to know about your home and the local area.
Focus on presenting what you have rather than upgrading your home
Unless you are selling a property as in need of refurbishment, you will want your property to be in its best “move-in” condition. What that means in practice is that you want to take care of any maintenance issues (if they’re not spotted on the viewing they may well be picked up later and delay the sale) and you want to take all reasonable steps to keep your home clean, tidy and odour-free during the sales period.
It is unlikely to be in your best interests to do any major home improvements. First of all, they may not increase the value of your home by as much as the vendor might have suggested. Secondly, if they do, they could end up putting your home out of the budget of some potential buyers and/or increasing the Stamp Duty payable on it. Thirdly, if they go wrong, they could be a serious hindrance to the sales process.
What you could do is look at potential improvements a buyer might want to make to your home, see if they would need planning permission and if so see if you can either obtain permission for the change or give a compelling reason why permission would be likely to be granted.
Let the estate agent do the selling
There are two good reasons for having your estate agent take charge of the actual sales process. The first is that it is literally how they earn their living, so they will get a lot of practice at it and will probably do a far better job than the average homeowner. Even if you work in sales, home sales is a specialist niche and benefits from specialist knowledge
Secondly, potential buyers may be more inclined to talk freely in front of an estate agent, who will not have an emotional connection to a property, than to a homeowner, who probably will. If buyers have concerns about a property you want them to feel able to voice them so that they can be addressed, rather than have them walk away and look at another property instead.
Your property may be repossessed if you do not keep up repayments on your mortgage.
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