When it comes to applying for a mortgage, it is important to keep an eye on your credit score. The higher your credit score, the more likely that it is that you will be successful when applying for a mortgage with a lender. There are a variety of different elements that can have some kind of effect on your credit score.
One that is quite simple in theory but does has a larger impact than you might expect, is your address. Generally, the fewer addresses you have on your record, the better it will be. In the past though, we’ve seen people try to get around this in the wrong way.
A lot of the applicants we have dealt with are first-time buyers in Bristol who have moved out of their parents address into rented accommodation, but are keeping their bank statements, credit card and electoral roll information registered at their previous home.
For some bizarre reason, people think that it is beneficial to them and their credit score to keep everything under one roof. Whilst theoretically that would lean into the statement of “the fewer, the better”, this actually causes a lot more harm than good. Almost without fail, if you have moved to a new address; whether you change it or not, there will be a record of you living there somewhere.
Anything from a general eBay or Amazon order, to an ASDA delivery, to something like your car, contents or home insurance are all linked to your credit history and will appear with your address on in some way.
Before you perform a credit search and apply for a mortgage, you have to be absolutely certain that as far as you’re aware, nothing will affect your credit score. You will need to make sure your current residential address is the one present on all accounts, be that electoral register, credit and debit cards, etc.
This only really applies to you if you have already moved out of your parents home, as up until that point you will be still only have your previous address to go off. Once you’re moved in, that’s when you should start moving everything over as soon as possible.
Regardless, when it comes to the point of applying for a mortgage, this all needs to be double and triple checked. We always find that people have a tendency to forget to update their address on their credit file and electoral roll. Please do your best to remember, it really does make a big difference!
Make sure that you definitely get the dates right too, knowing the exact date you moved into your rented property and the day that you moved out. Any mistakes made with these dates can sometimes give the lender the impression that you are occupying two properties at once.
By keeping your credit file super up-to-date, you are giving the lender the proof they need that you really know what you are doing and you are completely serious about what it is you’re looking to do.
It’s a more open and honest way of handling the mortgage application process. Your goal should be to impress the mortgage lender in any way you possibly can and keeping up to date with your address is a good starting point for doing so.
If you are in need of any further help or are just looking for some handy tips from a professional mortgage advisor in Bristol, please do get in touch and take advantage of our free initial mortgage consultation.
We know that being a first time buyer in Bristol with no mortgage experience can difficult and stressful, which is why we’re here to help. Get in touch with a dedicated and trustworthy mortgage broker in Bristol today and we’ll see what we can do for you.
When you start out looking for a mortgage in Bristol you will soon realise that there are lots of different options available. Below you will see a list of the most popular types of mortgages available on the market and hopefully. If you have any questions regarding any of the below mortgage options, then please do not hesitate to contact us.
A fixed-rate mortgage means that your mortgage payments are going to stay the same for a set period of time. You can set the length of which you want to fix your payments for, typically this being 2, 3 or 5 years or longer. No matter what happens to inflation, interest rates or the economy you know that your mortgage payment, usually your biggest outgoing, will not change.
A tracker mortgage means that your interest rate will track the Bank of England’s base rate. So in other words, the lender that you are with does not actually set the rate themselves. You will be paying a percentage above the Bank of England base rate. In an example, if the base rate is 1% and you are tracking at 1% above base rate, that means you will be paying a rate of 2%.
When you take out a repayment mortgage this means that each month you are paying capital and interest combined. So as long as you keep your payments going for the full length of the mortgage term, the mortgage balance is guaranteed to be paid off at the end and the property becomes yours.
This is the most risk-free way to pay your capital back to the lender, in the early years it is mainly the interest that you are paying and your balance will reduce very slowly especially if you have taken out a 25, 30 or 35-year term. This situation switches in the last ten years or so of your mortgage, where your payments are paying off more capital than interest and the balance will come down much faster.
Whilst many Buy to Let Mortgages in Bristol are set up on an interest-only basis, it is much more difficult to get a residential property on an interest-only basis.
It is much less likely for lenders to offer an interest-only product now. However, there are certain circumstances where this can be an option. These include downsizing when you are older or have other investments that you will use to pay the capital back. Lenders are very strict when it comes to offering these products now and the loan to values is a lot lower than back in the day.
With an offset mortgage, the lender will set you up a savings account to go alongside your mortgage account. How this works is that let’s say you have a mortgage balance of £100,000 and £20,000 is deposited into your savings account, you only pay interest on the difference, so in this case, £80,000. This can be a very efficient way of managing your money, especially if you are a higher rate taxpayer.
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.
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;
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 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.
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.
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.
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.
First of all, once you have contact and speak to one of our responsive teams, 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.
Following the chat, we will get you booked in for your free mortgage consultation with your dedicated mortgage advisor in Bristol.
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.
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.
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!
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.
Now that you’ve learnt more about our service, it’s your job to get in touch. We are available 7 days a week. Therefore, you can choose when to contact us.
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 or moving home in Bristol, we recommend getting in touch now.
When lenders ask for your bank statements, you can expect them to look for a variety of things. In any case, their main objective is to assess whether you can balance money responsibly and keep up to date with your monthly mortgage payments. One question we find ourselves being asked by applicants often: “Do gambling transactions look bad on my bank statements”.
Many people can see gambling as a mainstream hobby. However, don’t forget that even gambling advertisers urge customers to play responsibly, and this is something you should absolutely bear in mind when applying for a mortgage.
Whilst it is not up to the lender to tell you how you should live your life, how you should spend your money, or to even decide the ethical rights and wrongs of gambling, they do have a duty to lend responsibly to their customers.
If lenders need to prove to the regulators that they are wisely making their lending decisions, it isn’t entirely unreasonable of them to wish that those who they lend to, to adopt a similar approach when it comes to managing their finances.
Look at it from the lenders perspective; If you were lending your own money, would you lend it to the applicant who gambles or the one who does not?
There’s no law against gambling and no harm in having the odd gambling transaction on your bank statements. These being present doesn’t automatically mean you will find yourself declined for a mortgage.
That being said, the lender will decide on whether these transactions are reasonable and responsible. Additionally, they will mainly look at how often these transactions take place, how large these transactions are, and the impact on the customer’s account balance.
If these transactions are small amounts and don’t happen often, making no significant impact on a regular credit bank balance, then they are not likely to flag up in the eyes of the lender. On the other hand, if you make bets frequently or you get overdrawn continuously, the lender will most likely see that as being irresponsible and decline your application.
From our experience Lenders are looking at your bank statements to gain an understanding of how you manage your finances and to give them either the confidence that you are financially capable of paying back a mortgage, or the evidence that you aren’t.
Having an overdraft facility and occasionally using it, whilst not necessarily a bad thing, can cause trouble if you are regularly exceeding the overdraft limit. Lenders will look for excess overdraft fees or returned direct debits, as this would demonstrate that you are not so good with your finances.
Some other factors to be mindful of include credit transactions from payday loan companies and undisclosed loan repayments. If there appear to be regular loan payments that you failed to mention at the point of application, this could be a problem.
Generally speaking, a bank would ask for up to three months of your most recent bank statements, which will show your monthly income and all your regular bill payments. If you know you’re likely to want to apply for a mortgage in the future at all, try to make sure that you are in the best possible position financially.
Stop gambling for a short while and work on presenting your bank account in the best way you can. Remember, if you do decide to gamble at all leading up to and during your process, please gamble responsibly!
If you are a First-Time Buyer in Bristol, you will benefit greatly from Specialist Mortgage Advice in Bristol. Your dedicated advisor will be able to guide you through the whole mortgage process and help you with your application, hopefully ensuring a favourable outcome down the line. To learn more about the mortgage process or to get the ball rolling on one of your own, please feel free to Get in Touch and take advantage of a free mortgage consultation.
The main reason a mortgage lender will need to see your bank statements is to gain a better understanding of you as a person and what your regular spending habits tend to be like. The way you have been conducting your finances lately and the presentation of this on your bank statements can make a big difference in the amount a lender will let you borrow, if they’ll even lend at all.
This is because of the risk presented to lenders by a poor financial history. A lender needs to have complete confidence that you are responsible with your income and can be trusted to handle finances in the appropriate manner. Let’s be honest, taking out a mortgage is going to be one of, if not the biggest financial commitment you will ever make in your life and is not something you should just rush headfirst into.
You are able to easily obtain bank statements either in the post from your bank, over the counter from your local bank, or as is a common occurrence nowadays, as a printable version from your bank’s online website or application.
Now for the big question. What will the lender actually be looking for? What factors may flag up in their checks?
Well as we touched upon, they need to know you are responsible and reliable with your income. Something they will take a look at is if there are any overdrafts. Using an overdraft occasionally is not necessarily a bad thing, but if you are exceeding your limit quite often, this is going to make the lender question whether or not they can trust you.
Additional factors to look out for are potential returned Direct Debits, which could possibly indicate to a lender you are not consistently reliable, as well as not disclosing loans at application stage, something that will reflect on you rather poorly if the lender finds outgoings on your bank statements that you neglected to tell them about. Going back to before, they have to trust you.
Some other things to be wary of are any missed payments for personal loans or any credit cards you may have. If you are able to demonstrate that you can handle your money well and can consistently meet monthly payment deadlines, you will be more likely to borrow the amount you would like from the lender.
We find ourselves being asked this question quite a lot. Unfortunately we regularly find that customers end up stuck due to a history of gambling behind them. Having some fun once every blue moon is relatively harmless, but if you are constantly throwing large amounts of money at casinos or high street gambling establishments, whether you’re making the money you put into it back or not, a lender will look at your case less than favourably.
To learn more, please take a look at our article on “Do Gambling Transactions Look Bad on My Bank Statements?”
From our experience of helping out a lot of different First-Time Buyers in Bristol & Home Movers in Bristol, we have found that the majority of lenders prefer to have at least three months bank statements from a mortgage applicant.
Bearing this in mind, it’s time to think to the future and leave the past in the past. You have at the very least, three months to improve your handling of finances. The first thing we’d recommend to customers, is if you make frequent trips to the local bookmakers or attend the online gambling scene, you should look at taking a break for a while. This not only benefits you financially, but also can massively help your mental health too.
The next steps we would recommend taking is to do your best to pay off any current debts you have, without the use of an additional credit card. Also, eating in rather than eating out, reducing unnecessary purchases and cancelling any subscriptions you don’t need, are all really useful ways of freeing up additional cash to ensure you can pay all your bills on time.
The basics of all this is that you be sensible and create a plan for yourself with plenty of time ahead of what you’re looking to achieve. The further away you go from debt and financial troubles, the better your chances with a lender will be.
No matter if you’re a First-Time Buyer, Moving Home or Self-Employed, it’s always important to manage your finances well. If you have a bad credit history and aren’t sure of what your options are, you can always take Specialist Mortgage Advice in Bristol by Getting in Touch with us today. We’ll advise you as well as we can, working hard to further you through the mortgage process.
One of the primary factors in why Home movers and First Time Buyers in Bristol use a Mortgage Broker in Bristol, is to help the process of buying a home go as quickly and as smoothly as it can go. For many, the home buying process can be a very stressful experience and for our customers, it’s a comforting relief to know they have got someone on their side to deal with the hard parts, with availability to answer any questions they may have.
Your dedicated Mortgage Advisor will work incredibly hard to try and ensure that you obtain the cheapest or at least most favourable mortgage outcome for your personal needs. This level of dedication and passion for our work applies no matter the mortgage type. Whether you’re making your first purchase, a second purchase or you wish to Remortgage, we put everything we have into our service, to ensure our customers have the best outcome available to them.
If you’re looking at taking out mortgage advice when buying a home, we would personally recommend talking to a Mortgage Advisor in Bristol as early on in the process as you can. Your trusted member of the Moneyman team will be able to help you work out roughly how much you’ll be able to pay per month, as well as how much you may be able to borrow.
Different lenders each have different criteria, so speaking to an expert in the field, with a wealth of knowledge surrounding these criteria, will be of a great benefit to you. If you know what you are able afford well in advance of making an application, it may help you avoid any potential future disappointment.
Communication and responsiveness are also a large part of what we do. We aim to ensure all of our customers are kept informed about the progress of their mortgage application by email, so you are fully aware of what is going on and where the process is headed next. If something ever goes wrong or you have any questions, we are always available at the end of the telephone, ready to help you out in any way we can.
A trusted and loyal Mortgage Broker will work for the customer and not the Lender. This is something that is important to remember throughout your process. Our team are firmly in your corner, sometimes having to argue how strong an application may be, in order to ensure it goes through. Thanks to our initial checks, we find that we know our customers financial situation inside out. Through our company process of requesting and checking your proof of income and bank statements ahead of time, we look to carefully avoid any hurdles that may arise, hopefully before they can become a factor.
We also have the ability to help you choose the right type of survey for your property transaction, as well as instruct a Solicitor on your behalf to carry out the legal aspects of your final transaction. We are experts in the art of completing application forms on behalf of our brilliant customers, again working hard to ensure complete accuracy and giving your application the best chance of completing in the end.
Finally, our motivated and caring Mortgage Advisors love to build up customer relationships, with an aim to assist with future mortgage enquiries, be this as a Buy-to-Let landlord with your own portfolio, or to Remortgage when your term ends. Your journey starts with an affordability assessment and Agreement in Principle, before you even get to the part where you find a house.
Once your purchase is complete, your advisor will still keep in regular contact via email and in the six months running up to the initial mortgage product coming to its end, will get in touch once more to discuss your Remortgage options. At this point we are then able to compare the market on your behalf like we did before, with the goal of helping you obtain the best remortgage deal available for your circumstances.