Is it better to get a mortgage from the bank or broker?

A mortgage is a long-term commitment, and getting it wrong could leave you with many years’ stuck with an unsuitable deal and unnecessary expense.

So, it is likely to make a great deal of sense to seek advice from appropriately trained professionals before making any decisions about the mortgage you need to buy your home. But is it better to get a mortgage from the bank or a broker?

Where to seek advice

When thinking about looking for advice on your mortgage application, you are likely to have considered the following options:

Direct-only deals

before deciding to seek advice, you might have considered finding a mortgage lender yourself and making an application direct – it costs you nothing to do so, of course; you might be attracted by the fact that some mortgage deals are only available through exclusive direct-only deals that you would not be offered either by a broker; going through the whole mortgage search process yourself…
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How does an offset mortgage work?

Like many people, you might be borrowing money and paying interest on your mortgage, but at the same time, saving money and earning interest on your savings.

It might seem entirely logical and practical, therefore, to combine the interest paid with interest earned into a single account – not only as a matter of convenience but also to ensure that your money is working its hardest for you.

This is precisely the principle of an offset mortgage. So, how does an offset mortgage work?

How an offset mortgage works

An offset mortgage may be set up if you are borrowing and saving with the same mortgage provider.

In place of a standard savings account, your lender sets up a special account, linked to your mortgage, into which you also deposit your savings. In that offset account, the amount of your savings is offset against your outstanding mortgage balance. That means that you are only paying mortgage interest on the balance remaining once…

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Can I get a BTL mortgage with a tenant in situ?

If a property you want to buy to let already has tenants in situ, at first sight, it might seem to answer several significant issues:

you might have picked up a bargain property since those with sitting tenants are likely to have had thousands of pounds knocked off the asking price, according to an article in Property Investments UK on the 14th of March 2020; you won’t need to spend any time advertising and selecting tenants, because they are already in place; the property comes with sitting tenants, so you get to receive rent from day one; if you have bought the property with tenants in situ, the seller has probably also left it furnished, so that is one less problem you need to worry about; and there is unlikely to be any need for the urgent or immediate refurbishment of the property because the tenants in situ decided to stay put despite the change of ownership and landlords. The problem

The one problem you are likely to encounter, however, is…

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Can I get a buy to let mortgage as a first-time buyer?

Investing in buy to let property makes a great deal of sense, said the British Landlord Association (BLA) in an article on the 18th of May 2020 – while at the same time also warning that it is by no means a route to getting rich quick.

Being a landlord is no walk in the park, insists the BLA, and it is likely to come with its moments of stress, hard work and, above all, good judgment in your investment decisions. A lot of the qualities it is going to take might require a mature head and at least a little experience of the property market in general.

The question arises, therefore, whether you are likely to be cut out for the role of a landlord if you are a first-time buyer – and, more critically perhaps, whether you are even likely to get a mortgage as such an investor.

Although a buy to let (BTL) mortgage for a first-time buyer is perfectly feasible, it is likely to be a more challenging process than for those who have proven experience in the…

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Do buy to let mortgages with no proof of income exist?

Buy to let mortgages are advanced on the strength of the business case made by the prospective landlord – will there be sufficient rental income generated to at least cover the need to maintain the mortgage repayments and meet the operating expenses of the buy to let business?

That reliance on the buy to let business model leads to two further fundamental differences between a buy to let (BTL) mortgage and an owner-occupier’s mortgage for the home they live in:

because they are essentially business transactions, buy to let mortgages are not regulated by the Financial Conduct Authority (FCA), explains the Council of Mortgage Lenders (CML); and affordability – your ability to maintain the mortgage repayments is mainly measured with reference to the lettings business (with any other income you receive used to support your mortgage application).

Both factors may help to make lenders attitudes towards establishing proof of income more flexible when you …

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Are there buy to let mortgages based on rent only?

If you are wondering whether rental income can be used to qualify for a buy to let (BTL) mortgage in the UK, then the answer is “yes” – though finding a lender willing to do so may sometimes prove a challenge.

Buy to let mortgages are granted based on the business case made by the applicant – and that business case rests on the rental yield that is projected to be realised once the mortgaged property is let.

If you are in search of buy to let mortgages based on rent only, success is likely to depend on the level of rental yield projected and the certainty with which that projection might be met.

Rental yields

Most buy to let mortgage lenders look for evidence that your let property will yield a rental income that is at least 125% of your monthly mortgage repayments – in some cases, they may be looking for a rental income of at least 145%, explains the website Money Facts.

In making that calculation, most lenders use a representativ…

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What benefits can I use to get a mortgage?

If you rely solely on benefits for your income, it will be difficult getting a mortgage, warns Scope, the charity that promotes equality for disabled people.

It is not your disability – or even the fact you are in receipt of benefits – that disqualifies you from eligibility for a mortgage. Indeed, the Equality Act 2010 makes it unlawful to discriminate against someone on the grounds of their disability – so, any mortgage lender who did so would be breaking the law.

If you are on any kind of welfare benefit, your difficulties boil down to the affordability test that any lender is obliged to conduct before granting you a mortgage. Since your income from benefits alone is likely to be quite severely limited, you may not pass that affordability test. And if you cannot pass the test, the lender is obliged by the industry regulator, the Financial Conduct Authority (FCA), to decline your application for a mortgage.

If your regular and sustainable inco…

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Are taxi driver mortgages easy to get?

The self-employed need mortgages, too – yet they may find it difficult to secure the loan needed to buy their own home.

Along with other self-employed workers, taxi drivers are likely to encounter problems in getting a mortgage because of the difficulties in providing proof of income – something required by any mortgage lender as a test of the affordability of the loan.

How much does a taxi driver earn?

There are all manner of taxi driving jobs available. Because of the sheer range of work, in many different parts of the UK, it is relatively difficult to establish an average annual salary.

The website Indeed, for instance, cites an average of £32,562 a year – an encouraging 12% above the national average wage. From a smaller sample of drivers, the website Glassdoor, on the other hand, found the national average income for a taxi driver to be £25,084 – although some drivers claimed to be earning up to £49,000.

Taxi driver mortgages …
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Can I get a mortgage with payday loans?

If you are looking for a mortgage and you have a payday loan, you may find it difficult – but not impossible – to get approved for a mortgage. Let’s look at what payday loans are and why some mortgage lenders may decline your application if you have one of these loans.

The attraction of payday loans

Payday loans are popular in some quarters because they offer the chance to borrow sums of between £50 and £2,000. The repayment period is short – typically the next month, or next payday, hence the name. Loans can be arranged at very short notice, invariably online.

Even if you have a poor credit rating, you may still be approved for a payday loan – and you rarely have to wait any time at all before receiving the cash.

No questions are asked about why you need to borrow the money and there is no restriction on how you choose to spend it.

The drawbacks

According to a report by the Financial Ombudsman Service on the 12th of June 2020, …

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How an adverse credit broker can help you get a mortgage

If you have ever missed a payment or defaulted on the repayment of debts or credit. If you have ever had to manage your debts by reaching an Individual Voluntary Arrangement (IVA) with your creditors. And especially, if you have ever declared bankruptcy - you are likely to struggle to get a mortgage.

In the circumstances described, you are said to have adverse credit – and that is what makes getting a mortgage more difficult. Any lender will look to your record of managing debt and other lines of credit as a measure of your responsibility and reliability towards any new lending in the shape of a mortgage. This is a measure of your creditworthiness.

Indeed, the industry’s regulator, the Financial Conduct Authority (FCA) advises its registered members on the need to conduct creditworthiness checks.

The biggest impact if you are in search of a mortgage is that you are going to encounter more difficulties, fewer lenders prepared to entertain your a…

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