Agreement in Principle and Soft Credit Searches

Agreement in Principle Mortgage Advice in Bristol

An agreement in principle, known as an AIP, DIP, mortgage in principle and decision in principle (depending on where you look), is a document that shows a seller that you are ready to proceed with a purchase and mortgage. It also allows you to make an offer on the property in question, proving to be useful when negotiating on the asking price.

Once you have passed the lenders initial credit checks, you will be able to obtain your own agreement in principle. Many first time buyers in Bristol aren’t too sure of how they work, however, so below we’re going to explain how they work, how they affect your credit score and the length of time they last for.

How does your agreement in principle affect your credit score?

The effect an agreement in principle has on your credit score entirely depends on the type of credit search the lender decides to use. Generally you’ll find they will either perform a soft credit search or a hard credit search.

Understandably, especially for a first time buyer, you may not know the difference between the two. Allow us to explain;

Soft credit searches

For the most part, lenders these days will now carry out a soft credit search over a hard credit search. The reason for choosing this one is because they typically require less information and there is a lot less chance of your credit score being affected by a soft credit search.

Whilst whoever is undertaking the soft search will be gaining less information about you from it, than they otherwise would’ve gotten from a hard search, an agreement in principle from one of these lenders is usually still a very strong indication to the seller of the property you’re interested in, that your application is likely to be accepted.

Hard credit searches

Hard credit searches tend to be a lot more in-depth than soft searches are. The main difference between the two credit search types is that hard credit searches can have an effect on your credit score, by leaving what is known as a credit footprint. This means that previous credit searches will be visible to anyone else looking at your file in the future.

If you have a good credit score, this won’t really be a problem. Where it can be an issue, is if your score is lower and you have had multiple hard searches on your file. This is because, to a lender, it can look like you are trying to apply for lots of credit at the same time. It’s likely that this will put them off.

Does an AIP guarantee a mortgage in Bristol?

As much as we would like it to be so, nobody can ever be guaranteed a mortgage, but having an agreement in principle arranged in advance will definitely work in your favour.

Once you have given the lender with all your documents, an underwriter will review your case and proceed to make a final decision. Agreements in principle will often include small print that applicants can easily miss. It’s reasons like this why getting in touch with a mortgage broker in Bristol can be helpful to you.

We often find that in some cases when people get in touch, enquiring about an agreement in principle, they’ve been turned away at full mortgage application stage.

The documents that you’ll need to give the lender include, but are not limited to, forms of ID, payslips and bank statements. As a dedicated and experienced mortgage broker in Bristol, we take a lot of pride in helping you be prepared for your mortgage process. Once you start your mortgage process, it may be worth looking at how to get prepared for a mortgage in Bristol.

Making sure you have your agreement in principle in place when you’re ready to make an offer is a necessary step. Any estate agent with an ounce of credibility will ask for evidence that you are able to proceed with the purchase of a property.

How long will my agreement in principle last for?

Your agreement in principle will typically expire around 30-90 days. When this happens, your mortgage advisor can renew it for you. We are usually able to obtain one an agreement in principle within 24 hours of your initial mortgage appointment.

As an experienced mortgage broker in Bristol, we would suggest that you obtain one of these as early as you can. We say this so that you can try to avoid being told you aren’t eligible for a mortgage on your dream home.

The good thing about having your agreement in principle and it lasting a good length of time, is that you don’t just need to apply for the first home you see. You have time to look around and find one that suits you best.

If you are a first time buyer in Bristol or are looking at moving home in Bristol, please get in touch and take advantage of our mortgage advice service. We offer a free initial mortgage consultation, where you will get to speak with one of our expert mortgage advisors.

Help to Buy Mortgage Schemes in Bristol

Help to Buy Mortgage Advice in Bristol

Following on from the 2008 credit crunch, our government decided that they needed a backup plan, in a bid to try and kickstart the heart of the mortgage market. Their primary focus were on first time buyers, bringing in “Help to Buy Schemes” to help them get onto the property ladder.

There are lots of different ways to take out a Help to Buy in Bristol, with a variety of schemes available. Some may be more appropriate for you, others you won’t meet the criteria for. Below we have listed the Help to Buy Schemes that are available to homebuyers.

Help to Buy Shared Ownership Scheme

The Help to Buy Shared Ownership Scheme was also brought in as a way of helping applicants to purchase their home as only a percentage, rather than the full house, with the remaining percentage being paid as a rental amount to a local authority.

Typically speaking you will own between 25-75% of the property you are looking to purchase, with the percentage that is remaining being owned by a local council or housing association (known as a local authority).

This mortgage schemes works in a way where you will be paying back your monthly mortgage payments, but also a rental fee per month to the local authority, which means that you are paying 100% of the ground rent and service charge on your new home (even if you own the smallest amount.)

The good news is that this rental charge will not have interest, generally making it cheaper than paying the full mortgage amount. If you come into more money as your term progresses or if your property increases in value, you can increase your shares.

Help to Buy Armed Forces Scheme

The Armed Forces Help to Buy scheme was brought forward back in 2014 after the vast success of the Help to Buy Equity Loan Scheme after the credit crunch.

This government ran scheme was created with the aim to build upon the foundations of the original Help to Buy Scheme, with a view to help members of the Armed Forces get onto the property ladder.

If you match the criteria for the Armed Forces Help to Buy Scheme, this is something that could prove to be incredibly advantageous when you are looking to get onto the property ladder as a first time buyer in Bristol.

The government has thankfully rolled this into an enduring policy and we here at Bristolmoneyman genuinely hope it stays around, as the scheme is massively beneficial to Armed Forces members who want to buy their first home.

Bonus: Lifetime ISA

The Lifetime ISA, whilst technically not a Help to Buy Scheme, is a very helpful scheme that often slips people’s minds. It’s not high on everyone’s priority as a go-to scheme, though it could prove to be the scheme that helps you buy your home as a first time buyer in Bristol.

A Lifetime ISA is pretty much a savings account where your money is able to grow, completely tax free. You are also provided with a government top-up of an additional 25%!

This means that if you can put the maximum £4,000 in savings each year, you would receive a much welcomed and rather handy £1,000 bonus amount in your savings, to use later down the line.

In order to access this type of mortgage scheme, you have to meet rather specific mortgage lending criteria, which our dedicated mortgage advisors in Bristol can discuss with you. All of the information on this scheme is available on the government Lifetime ISA website.

Reasons Your Mortgage Application in Bristol Has Been Declined

Failing a credit score

The benchmarks for passing a credit score differs depending on the lender. Sometimes it can be easy; other times it can be strict and challenging to pass. If a lender likely has failed you, you might not have been told why you failed. In some cases, this is because it was a combination of little things, and in truth, they aren’t sure why you had been declined.

It’s at this moment where you will feel the advantages of a mortgage broker in Bristol. We are here to help you and guide you everywhere in the early stages, right through to the end of your mortgage journey. Beforehand, it is strongly recommended that you obtain a copy of your credit file to show your Mortgage Advisor in Bristol.

They will be able to go through it with you and try to match you with the most suitable lender for your situation. The more deposit you have available for you to put down, the easier your chances will be to pass a credit score for a mortgage.

There are things you are able to do to improve your credit score, such as using a credit card regularly (if you have one) and ideally paying off the balance in full each month. You will also need to be on the voters roll for the area of which you live. That one can often be overlooked but is incredibly helpful. You can also close down old bank accounts and credit and store cards that you have since stopped using.

If you fail one lender’s credit score, do not give up! There may still be another lender willing to accept you, though please be wary about having too many hard credit footprints registered against you, as too many hard searches can affect your credit score.

Declined For a Mortgage On Affordability

The different lenders have their own individual ways of calculating how much you can borrow. It’s entirely plausible that you could approach 10 different Lenders and each one give different answers. Some lenders are more generous than others depending on the circumstance, with some, for example, known to be fairer to those who are self-employed.

Some mortgage lenders can consider assessing 100% of an employee’s overtime and bonuses, though this is not the case with every lender. Depending on the lender, some will also accept “unearned” income such as tax credits, child benefit and maintenance.

A mortgage broker in Bristol who deals with First-Time Buyer Mortgage Advice in Bristol can approach several different lenders without the need for a credit check, in order to perform an affordability assessment. If you are looking to buy a home, we would highly recommend that you have an affordability assessment carried out before you start viewing properties to avoid potential disappointment in the future.

If you are Moving Home in Bristol, proving that you have maintained mortgage or rent payments in the past is not an immediate guarantee that you will pass a lender’s own affordability test.

Outside of Lending Policy 

All lenders have their own specific, strict mortgage lending criteria, with some being better than others in certain situations. Lenders look to carve out niches for themselves to fit into, as a means of attracting good quality mortgage borrowers who might not tick all of the right boxes for their competitors.

Some examples as to why your application has been declined for being outside of policy are: 

An experienced Mortgage Broker in Bristol will use their experience of lenders and criteria tools to recommend the most suitable mortgage for you, based on your own personal circumstances. If your situation is a little more complex, then you should look for mortgage advice as being declined elsewhere may affect your chances of being accepted for a mortgage going forward.

Leasehold Houses in Bristol

What Is a Leasehold House?

fter the introduction of the Help-to-Buy Scheme in Bristol, a large number of home builders decided it best practice to start selling their newly built houses on a leasehold basis, as opposed to a freehold one. What does this mean exactly?

Well, the basic overview is that you own the property, but the land on which your property is on, is owned by the freeholder. Generally these leases are for hundreds of years, usually beyond the lifetime of the original leaseholder.

What’s The Catch With Leasehold Houses?

The catch with Leaseholds, is that you only own the property, not the land. This means you may have to pay ground rent, various service fees and at the end of your term, if the lease has not been extended, the freeholder takes back control of the property.

Regarding the end of the lease and the service charges, you should always have the right to extend if you wish and challenge any fee changes, though for more clarity it’s always worth speaking to a Conveyancing Solicitor, as it’s their job to cover the legalities of property.

Some of the fees can fluctuate as and when the leasehold management company wants to change it, so it’s always worth making sure a Conveyancing Solicitor reads over your agreement carefully, to ensure it is fair.

Do I Really Own The Property? Can I Still Obtain a Mortgage On It?

For the length of your term, yes, you own the property. As explained, the freeholder may be able to take their property back at the end of a term, but if your term is taken out over the course of a few hundred years, that property is effectively yours for the rest of your life.

One area that may require some thought, is if you were planning to make any home extensions or improvements. Whilst this may not always be the case with every freeholder, the majority will require you to seek permission for any changes that take place on their land.

Obtaining a mortgage on a leasehold is an interesting one. Not all lenders will accept this kind of deal, however those who do usually will only accept it if your term is at least a minimum of 60 years. The reason for this is down to resalability in the event of repossession.

If your term is shorter than 60 years, you most likely will have to discuss the possibilities of renewing the lease with the freeholder via a legal representative.

Land-Banking Freeholders

One of the big issues around the property market right now, and has been for a few years, is something known in the industry as “land-banking”. This refers to some freeholders who are sitting on their land, whether property is finished or unfinished and despite the need for more homes in the UK, purely because there have been changes to the market and they’re waiting for a chance to make lots of profit.

As you would expect, this kind of practice is frowned upon by most, seeing it as unfair and leading for many to request that the government abolish leasehold altogether, as a means of avoiding this going forward.

Coupled with the service fees, the need for renovation permissions and ground rent, it’s no surprise that leasehold housing can often seem like a bad deal, however if handled correctly, it could still be a viable option for you.

Get in Touch For Leasehold Mortgage Advice in Bristol

If you are looking at leasehold houses and debating whether to buy one, you should first & foremost speak to your Conveyancing Solicitor in regards to the lease and other legalities.

It’s very easy to get carried away with the excitement of buying a home but you need to also realise that this is a major investment decision that you need to think about it very carefully. If you would like to get the ball rolling on a leasehold house mortgage, please Get in Touch.

The Pros & Cons Of Using A Mortgage Broker in Bristol

Making an initial step onto the property ladder for the first time, or taking the next step once your fixed term ends, can make you feel a little nervous from time to time.

There are lots of different routes that homeowners and home buyers can take, but if you can help it, it would be ideal to get it right the first time, especially when you’re dealing with a large amount of money.

Of course, we are strongly in the belief that our service as an open and honest mortgage broker in Bristol, will be beneficial to anyone who is going through their mortgage process, especially if you are a first-time buyer in Bristol.

Whilst we have confidence in our ability to help out our customers, we are also fully aware that it is not necessarily for everyone. Some may even be unsure of how exactly we can help.

With this in mind, we have compiled a balanced overview of why in some cases you might be better off getting in touch with a mortgage broker in Bristol, and how in some other cases, going direct might be your best choice.

What are the pros & cons of using a mortgage broker in Bristol?

Cost-Effectiveness

It is the opinion of many, that you are a lot more likely to save some money by going directly to the bank and finding a mortgage deal yourself. There is indeed merit to this, as a mortgage broker in Bristol may charge you a fee, though this is circumstantial and depends on who you speak to.

If you are already experienced in finding your own mortgage, have a pretty simple case and have a knowledge of lender criteria, going it alone will probably be easier and more cost-effective.

Where a mortgage broker stands out, is the ability to help people with complex cases or those who don’t understand lender criteria.

Without the correct, up-to-date knowledge, you could possibly end up with a bad deal, or even being unable to successfully apply for a mortgage deal. In any case, this could cost you a lot of money or damage your credit score. The latter would in turn hinder your chances of applying for a mortgage at any point in the future.

A dedicated mortgage advisor in Bristol will always make sure that they get their recommendation right the first time, at the cheapest deal that is available to you. Again, this may entail you having to pay a service fee, though it will likely save you a lot more money in the long term.

Local Bank Branch Relationships

Another point of view that customers who are older may think is a benefit of going to the bank directly, is the way you used to be able to get a mortgage. Prior to technology and online banking becoming a big deal, generally you would be a loyal customer of a local branch, typically speaking with the same members of staff.

When you wanted to apply for a mortgage, you would converse with the bank manager themselves. They would “know your finances like the back of their hand”, and would be the ones to personally approve a mortgage for you. Times have changed though, and credit scoring is now done via digital means.

The bank manager will no longer personally go through your case. Instead, your information will be put against a complex online system, to find out if you qualify for that mortgage. Nowadays, everyone gets the same chance as each other, no matter who your bank is.

Exclusive Mortgage Products

Relating to the previous point, many are in the belief that there are better, exclusive deals only by going to the lender direct. Once again, there is an element of truth to this, but it is only part of the story. See, a lender can indeed offer great deals, but only deals that are from their own company.

One of the main problems here is that not all mortgage lenders are actually banks, meaning there are lots of options outside of what you are familiar with. The best deal you could get with your bank, might not be the best deal overall that you could’ve had access to.

That’s another benefit of enquiring for mortgage advice in Bristol. A trusted and experienced mortgage advisor will be able to take a look at your case, and have you matched up with a suitable deal from one of our panel of lenders, rather than one place.

It’s also worth mentioning that there may also be deals that can only be found with a mortgage broker in Bristol. Regardless of if you’re a first-time buyer, are considering your options for a remortgage in Bristol or have a complex case, a mortgage broker will have more options for you.

Changes to Regulation & Consumer Protection

Following on from the 2007-08 credit crunch, the mortgage market was in dire need of a change. As was outlined in the 2014 Mortgage Market Review, lenders no longer had the ability to sell mortgages to customers on a non-advised basis.

This meant that you couldn’t just approach the bank, tell them you want a mortgage and be approved without any prior checks. You also couldn’t obtain a mortgage from any member of staff, as this used to happen regularly, whether they were qualified or not.

Further to this, these changes also introduced consumer protection, that you otherwise wouldn’t have gotten from the bank.

You now had the right to make a complaint to the Financial Ombudsman if you felt mis-advised for one reason or another. You also have the ability to make a claim via the Financial Services Compensation Scheme.

This is positive thing for both mortgage brokers and mortgage lender alike, as this means no matter who you choose to speak to or what your circumstances are, you’ll be safe, secure and advised professionally.

Booking an Appointment with a Mortgage Advisor in Bristol

An area where a mortgage lender has the disadvantage, is that oftentimes it can quite literally take months to speak book an appointment. Once you can eventually speak to someone and kickstart your journey, you’re not always guaranteed to be kept up-to-date about your case progression.

A unique selling point here at Bristolmoneyman, is that we are able to speak with customers at a time that is convenient to them. Our mortgage advisors in Bristol work from early until late, 7 days a week, including weekends. We may also work on some bank holidays too!

If you’re quick enough and lucky enough, you might find that you can book an appointment on the same day, though you don’t always have to do that. If you would like to speak with someone in a few days time, you have the freedom to book a slot in advance!

We are here at time slots that best suit your lifestyle. If you work 9-5 and want to speak with someone in the evening, we can do that too! Using our online booking feature, it has truly never been easier to get in touch with a qualified mortgage advisor!

In addition to this, we are proud of our ability to be responsive with our customers. No matter what stage of your mortgage journey you’re in, we will always make sure you’re up-to-date. If your case changes at any point, your advisor will inform you as soon as they can.

It’s because of expert mortgage brokers in Bristol like us, who are able to offer a high level of customer service, that the public opinion of mortgage brokers has differed over the years. This has led to more and more people getting in touch with a local mortgage expert, instead of going to a big high street bank.

Handling of Complex Scenarios

Sometimes a mortgage case may be a little more complex than the average case. Common examples of this that we have come across over the years, include (but are not limited to);

In the past, mortgage lenders were able to easily compete, by offering better deals than the others. Times have changed though, and now the main difference in choosing a deal, is whether or not you match their strict criteria.

A deal could be cheaper, but you may not qualify for it. The mortgage lender will perform either a hard credit search (leaves a footprint on your credit file) or soft credit search ( this leaves less of a footprint on your credit file), to see if you pass eligibility checks for that mortgage.

If you apply for a mortgage with a lender and are declined an agreement in principle, this will likely cause harm to your credit file. Worst of all, you probably will not be given a reason for why you were declined, which can be understandably disappointing and frustrating.

On the other hand, a trusted mortgage broker in Bristol will be able to take a look at your case beforehand, making sure everything is correct and prepared, informing you of any other steps you should take to better your chances of being accepted for the mortgage.

Using the lenders that we have on panel, you’ll be matched up with deals that you could be eligible for and we’ll look to get you agreed in principle. Obtaining your agreement in principle through Bristolmoneyman typically takes no more than 24 hours of your free mortgage appointment with one of our advisors.

Of course, this still doesn’t mean you are certain to receive an AIP, nor does it guarantee that you will get a mortgage, but it is a lot better for your credit file to have an expert analyse it beforehand. As expert mortgage advisors in Bristol, we always look to make the right recommendation first time.

In Conclusion; Should I use a mortgage broker in Bristol?

At the end of the day , it’s your choice. As you can tell from the information above, there are both pros and cons to choosing a mortgage broker in Bristol. Conversely, there are also a lot of pros and cons to going direct with a lender. It all comes down to how quick of a service you would like, and how secure you want to be on your journey.

As a trusted mortgage broker in Bristol, led by 20+ year industry expert Malcolm Davidson, we have helped thousands of customers to achieve their mortgage goals. From first time buyers in Bristol taking a step onto the property ladder, to people reaching the end of their initial fixed period, looking to remortgage in Bristol, it’s safe to say we’ve seen it all.

To get in touch with a responsive, open & honest, FCA regulated mortgage team of experts, feel free to book yourself in for a free mortgage appointment or remortgage review, with a member of our amazing mortgage advice team. We’re here to help with all your concerns and queries during your process, with time slots that are convenient to you, subject to availability.

If you would like to learn more about our service, take a look at our genuine customer reviews. They are an amazing reflection of the service levels we provide our customers regularly. If you would like to learn more about the mortgage world, take a look at our YouTube Channel, MoneymanTV.

Getting Prepared for a Mortgage in Bristol

First Time Buyers Getting Prepared in Bristol

Once you’ve saved up for your money for a mortgage, the next step is preparation. You need to prepare for your mortgage application and get in a position where you are ready to start your process. If you are a first time buyer in Bristol, this guide will definitely help you progress with your mortgage application. Also, if you are Remortgaging or moving home in Bristol, you will still benefit from this article as it features some useful tips and tricks to help fast track your mortgage application.

Get Mortgage Ready in Bristol!

Up to date credit report

One of the first things that you should obtain during the preparation process is an up-to-date credit report. Having an up-to-date credit report is essential for your mortgage application; ideally, you should try and get yours arranged prior to approaching a Mortgage Broker in Bristol. Your report will be reviewed by your Mortgage Advisor in Bristol before passing it onto the correct lender.

Agreement in principle

Another thing that you should get ready is an agreement in principle. You need one to make an offer on a property!

If you want a fully credit-checked agreement in principle within 24 hours of your application, you should get in touch with us. As an experienced Mortgage Broker in Bristol, we can often turn around an agreement in principle on the same day of your application.

Proof of ID

In terms of proving who you are you’ll need to produce a photo ID. Most customers use a Driving license or passport for this element. You can’t use a Driving Licence for ID though if you are also using it for proof of address. If you are a non-UK national working over here on a Visa, you’ll need to produce that too.

When looking at proof of ID, the required documents will have to be photo identification such as a Driving Licence or Passport – though if you’re using one for proof of ID then it can’t be used as a proof of address. If you are a non-UK national working in England on a Visa then this will also need to be presented.

Proof of address

In addition to proof of identification, you will also be required to prove where you live. This is usually in the form of a utility bill or bank statement within the last 3 months.

Last 3 months’ bank statements

Your bank statements should reflect your income and regular expenditures. It will be displeasure to Lenders if they see gambling transactions on your account and they will also not be happy if you are seen to have surpassed an agreed overdraft limit or your direct debits have bounced regularly. The key factor is to get ahead of the game and get prepared as best as you can.

Not all lenders will ask to see your Bank Statements but it is an option that is available to them if they choose to utilize it – regardless of whether they do ask for your bank statements, they want to be confident that you take your finances seriously. The bank statements which you produce should consist if your salary going in and your bills going out.  

Evidence of deposit

A vital step in the mortgage application is evidencing your deposit for Anti-Money Laundering purposes. To help the process it is best not to move finances around your accounts too much as this will make it a lot more difficult and may delay the process.

Lenders like to see that you are saving your money responsibly, but that doesn’t exempt you from having to account for any large recent deposits into your accounts. If you have been gifted a deposit, then there will need to be written confirmation stating it’s a non-refundable gift.

Proof of income

The most pivotal point of the application is proving your income. If you’re in employment then sufficient evidence would be your last 3 months’ payslips, though some lenders will also ask for your most recent P60. Lenders will take into account regular overtime, commission, shift allowance and bonuses. Additionally, extra earnings may also be considered with some lenders such as part-time jobs or self-employment.

Many applicants are Self Employed in Bristol nowadays – if you are a self-employed applicant then you may mean you will need to acquire your Accounts’ help to request your last two or three years’ proof of earnings from the Revenue. If you submit your own accounts then feel free to get in touch and we will be happy to advise you on how to go about downloading from the Government Gateway.

Budget planner

By working out an estimate of your expected outgoings after you move house means you can gain an idea of how much disposable income will be available to you to pay your mortgage after such things as regular expenditures, council tax, and utility bills have been paid out from your account. To help you with this, we are happy to send you our version of a Budget Planner to get you started.

As seen, there are many steps you must take in order to prepare fully for your mortgage application deeming it not an easy feat but it doesn’t mean you should worry. If you approach the mortgage application with due timing and an organized matter along with a Mortgage Broker in Bristol, you will be in safe hands.

What is a Gifted Deposit?

A gifted deposit is what it says on the tin, a deposit that has been gifted to you. It can either be the full amount or a portion of the deposit, and there has to be an agreement in place that you won’t be repaying the person gifting to you. 

How can gifted deposits help?

Gifted deposits are useful to have at hand when you have enough money to cover the costs of your monthly repayments but are unable to make up the amount required for the initial deposit.

The more deposit that you can have gifted to you, the bigger the potential for better rates from a mortgage lender. If you happen to be on a lower salary and are struggling to find a means of putting money into savings, this again can be very useful.

Who can gift the deposit?

Generally speaking, gifted deposits are normally given out by your parents (adopted parents & carers may also fall into this category, depending on lender). On the internet this is regularly referred to as the “Bank of Mum & Dad”.

It may not just be parents though, as there are other potential family members who a mortgage lender may consider accepting for a gifted deposit. This once again depends on the different lenders that you approach, which would require care when looking for the right one. It’s because of this that you might benefit from a mortgage broker in Bristol.

Do your parents know you need help?

We often hear from our customers that they were never aware of their parents ability to provide a boost to their mortgage. Many of them also don’t feel like they can ask their parents to help. The truth of the matter is that most parents are more than happy to help their kids get onto the property ladder.

For the most part, it is widely believed that taking out a mortgage is a better option for first time buyers in Bristol than renting, due to the possibility of being able to pay less money per month.

Setting out where your finances will be distributed as inheritance can often be contributed towards a deposit, though some parents do gift this to their kids earlier on in life if they have already saved enough to cover it or have released a certain amount of equity from their home.

Gifted Deposit v Loans

The vast majority of lenders won’t accept you using a loan to fund your mortgage deposit. The reason for this boils down to the uncertainty that you’d have enough disposable income left over to cover the costs of both the loan and the mortgage at the same time.

Is there a maximum or minimum gifted amount?

There will be no maximum amount to how much deposit someone can gift you, though there are some lenders out there who would prefer their applicants to have at least 5% deposit saved themselves, with any gifts being used to increase this.

Who can benefit from a gifted deposit?

No matter whether you are a first time buyer in Bristol or you are moving home in Bristol, you will be able to reap the benefits of utilising a gifted deposit. It also comes in really handy when used alongside a Help to Buy in Bristol, as the required 5% deposit, depending on the lender that is used, can be boosted with a gifted deposit.

What proof is required?

Usually you’ll find that all lenders will require a gifted deposit form to be filled in. Depending on the lender that you go with, you may also be asked to provide additional proof and ID (these can include such items as a donor ID or bank statements).

Can I Have Two Mortgages in Bristol?

Yes, there is most likely an option where you can have two mortgages as there are many situations that require a person to have more than one mortgage. Our Mortgage Advisors in Bristol can typically help with this.

Some of the reasons for wanting a Second Mortgage could be:

Second mortgage to raise money

If you have equity in your home and are looking for a second mortgage to release some of this to fund a purchase, then we may be able to help.

This situation is known as a further advance. A further advance is when you borrow more from your current lender to fund something like home improvements or a second mortgage.

The amount that you can borrow from them will depend on the amount of equity in your property. Your lender will need strong evidence to prove that you can afford both mortgages. Our mortgage advisors in Bristol can access competitive second mortgage deals and options through our large panel of lenders. 

Second mortgage to rent out existing home to purchase a new one

If you are looking to move house but keep hold of your existing property with the view to let it out, we may be able to help. Your second mortgage will be a new residential one.

Second mortgage to purchase a home for your children

If you are exploring the options available to you of helping your children or grandchildren with getting on the property ladder, there are now many products that we can run through to achieve this.

Second Mortgage for a Buy to Let

If you are looking to purchase a Buy to Let our Mortgage Advisors in Bristol will advise you on the best way to go about this. You will get asked to produce a higher deposit for this than a residential mortgage.

Named on your existing mortgage and want to buy a new home?

Are you currently named on another mortgage and would like to purchase a new property? In any case, this is a situation that our Mortgage Advisors in Bristol come across regularly, mainly due to divorce or separation and we are often able to help.

Whatever your situation is to get a second mortgage. As an Experienced Mortgage Broker in Bristol, we can search 1000’s of mortgage deals on your behalf. Additionally, recommend the most suitable product for you based on your situation.

Why Use Our Mortgage Advice Service in Bristol?

We Specialists in Different Types of Mortgages

As a dedicated mortgage broker in Bristol, our job is to support you through your mortgage process from beginning to end, making it a stress-free and easy-going experience. We aim to find you the most suitable mortgage product tailored to your specific financial and personal circumstances.

We feel the customer should know exactly how our service works and what different order parts of the process come in. So, to give you an insight into our process and how it works, we have put together a handy guide that we think you will find helpful.

How does our process work?

Step 1 – Get in touch

First of all, once you have contact and speak to one of our responsive teams or book yourself in for a free mortgage appointment, they will take some details from you. This is to help build a profile to get a picture of who you are and what you’re looking to do. All this information will help us, partner, you up with a suitable mortgage advisor in Bristol.

Step 2 – Free mortgage consultation

During your free consultation with your dedicated advisor, they will ask you a few more questions. This will give them a closer look into your mortgage needs. From here on out, this advisor will help you find the ideal mortgage deal for you!

If they manage to find you a great deal that benefits both your personal and financial situation and you’re happy to take it up, we are ready to continue to step 3.

Step 3 – Agreement in principle

This step continues right after your consultation. Your advisor will arrange a mortgage agreement in principle (AIP) for you within 24-hours of your consultation.

Having an agreement in principle in place early on in the process is crucial. It shows a seller that a lender is willing to let you borrow from them. Of course, this can provide evidential documents to back up your income and credit score.

During this part of the process, if you haven’t already found a home to make an offer on. You can start hunting for houses with your agreement in principle to back up any offers.

After your agreement in principle is in place, we’ll begin collecting evidential documents from you to back up your mortgage application. This will include things like payslips, bank statements, photographic ID. These documents and the amount that you need to supply do vary if you are a self-employed applicant.

Step 4 – Submission

As soon as everything looks good on our end, we can move to the mortgage application submission stage!

We will only submit your mortgage application if we know that you’ll pass your lender’s credit scoring criteria; we don’t want it to be declined. Once your application is with your potential lender, it’s just a waiting game now. During this time, we’ll be regularly informing you on the progress of your mortgage application.

As soon as we get the green light, we will be in touch straight away to give you the confirmation that you’ve had your mortgage application accepted. Congratulations, you’re now on the road to moving into your new home!

Specialist situations

At Bristolmoneyman, we want you to have the most straightforward mortgage process possible and come out with a great mortgage deal. However, we also deal with complex cases, so if you are struggling to get a mortgage through the traditional mortgage route, our service is in place to offer help when needed. 

Our mortgage advisors in Bristol have been helping customers overcome complex cases for over 20 years now. We have had customers in the past who been turned away from their bank, and we’ve still been able to get them a mortgage offer. We love a good challenge, and our team would love to help anyone struggling with a complicated mortgage situation.

Speak to a Mortgage Advisor in Bristol Today

Now that you’ve learnt more about our service, it’s your job to get in touch. We are available 7 days a week. Book your free mortgage appointment today to speak to an experienced Mortgage Advisor in Bristol today.

Customer service means everything to us, and we want to ensure that you’re delighted with every part of our service. But, of course, it would help if you took advantage of our free consultation. So whether you’re a first time buyer in Bristol or moving home in Bristol, we recommend getting in touch now.

How Much Deposit Do I Need To Buy A House in Bristol?

The amount of deposit you need to buy a property entirely depends on your personal circumstances and what it is exactly what you are looking to achieve. Here we explore how much you may be required to save for, depending on those factors.

Why do I need a deposit anyway?

In previous years, 100% mortgages were readily available and some lenders were offering 125% loan to value mortgages. What this means is that if you were buying a property valued at £100,000 they would lend you up to £125,000. It’s no surprise with that method, that things went very wrong.

Lenders require you to put down a deposit simply to lower their lending risk. If they lend you 100% of the purchase price and you somehow fall into arrears, leaving them to take possession of the property, then it only takes a minor reduction in house prices for them to suffer a loss. Of course, this is something they would like to avoid.

There is also the thought some have that says if you haven’t invested some of yours or your family’s money into your home, then you might find it a bit too easy to “walk away” should the going get tough and you were finding it difficult to keep up your monthly repayments.

Also, if you are not yet able to save up say, 5% of the property purchase price yourself then it could be debated that you’re not yet prepared to get onto the property ladder.

Won’t the government pay the deposit for me?

No, but if you can find 5% of your own resources then you might find yourself qualifying for the government’s Help to Buy equity loan scheme. This only applies to new build properties. You put in 5% and the Government loans you up to 20% to make up the rest as a 25% deposit.

After 5 years you will need to see about paying the equity loan back possibly by way of a remortgage or from savings you have been able to save up during your mortgage term.

Is a 5% deposit enough?

Currently, yes 5% is enough in the majority of situations. Not all Lenders will accept only a 5% deposit though, so your options may be a little more limited. Normally you will need a reasonable credit score to qualify for a mortgage.

You may still find lenders out there that would consider you for a 95% mortgage with an average credit score but the rate of interest would be higher.

My credit history is poor – how much do I need to put down?

Most specialist lenders would prefer to put down at least 15% deposit if you have a considerably poor credit history. As mentioned in an aforementioned point, this is purely to reduce their risk in case a repossession occurs. It is much more difficult to obtain this type of mortgage than it was in the mid-2000s but it is still possible.

What about Buy to Let?

It’s always been necessary to put down a larger deposit for Buy to Lets and most lenders at the moment are looking for 25%.

Can I take out a loan for the deposit?

This may be possible in very few cases, but the vast majority of lenders won’t let you do this, as this would practically still be 100% lending and this isn’t something seen anymore.

Can someone gift me a deposit?

This is something that happens all the time! Usually, it’s “bank of Mum and Dad” (birth parents, adopted parents and legal guardians) gifting or other family members.

In some cases though, family friends can gift you money, so long as they can evidence the funds, prove who they are and confirm they are not expecting it to be paid back as a loan.

Are there any circumstances where I don’t need a deposit?

If you are purchasing as a sitting tenant at a discount from the open market value, from a family member or if you qualify for a discount under the Right to Buy scheme then you usually wouldn’t need to put any of your own money in as the equity is already “built-in” to the deal.

Please remember that the above information is for reference purposes only and is not to be seen as personal financial or mortgage advice.

Bristolmoneyman.com & Bristolmoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.

UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.

Authorised and Regulated by the Financial Conduct Authority.

We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk

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