Can I get an adverse credit buy to let (BTL) mortgage?

An adverse credit buy to let (BTL) mortgage is just what it says – a buy to let mortgage for someone who has an adverse credit history. Can you get one? Yes, you can – though you might have to look a bit harder than normal.

Mortgages and your credit history

When you apply for any kind of mortgage – including a BTL mortgage – one of the principal investigations any lender will make is about your credit history. Your credit history indicates how you have managed debt in the past, whether you have made repayments on time, or if you have missed some altogether – all as a way of trying to determine whether you are likely to repay the mortgage loan for which you are now applying.

If you have defaulted on the repayment of past debts or credit, had to make individual voluntary arrangements (IVAs) with creditors, received county court judgments (CCJs) against you, or ever declared bankruptcy, you will be given a low credit score. A low credit score means it is…

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Should I get pre-approved for a mortgage before house hunting?

Timing can be critical when you want to buy your home with the help of a mortgage. Sometimes, you might be wondering whether you are putting the cart before the horse – you can’t buy your house without a mortgage, but you can’t get a mortgage until a mortgage lender knows what house you plan to buy.

Naturally, your mortgage can only be advanced on a particular property you want to buy. But some would argue that if you have already started looking at homes you would like to buy, you have already left it too late to start the process of getting a mortgage.

Getting pre-approved for a mortgage before house hunting

One way of resolving that conundrum is to get pre-approved for a mortgage before house hunting. Pre-approval or a mortgage decision in principle does not bind you or the lender, since it is recognised that several steps still need to be gone through – not least, your finding the house you want to buy.

The agreement in principle – or “m…

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What do you take to see a mortgage adviser?

There’s a lot hanging on it. Finding a mortgage is never the simplest and most straightforward of matters. So, you want to instruct a mortgage adviser to help you. He or she are there to do just that and you want to make your first appointment count.

To set off on the right foot and to do all in your power to make the business of getting a mortgage as smooth and painless as possible, what do you take to see a mortgage adviser?

Helpfully, online listings site Rightmove suggests the answer:

photo ID; proof of address; your last three payslips or pay advice; your latest form P60; and the last three months’ worth of bank statements.

The photo ID, of course, is needed to confirm your identity and may take the form of your passport, driving licence or any other official document bearing your name and photograph. Providing your proof of identity is a required anti money-laundering measure which also prevents criminals from illegally obt…

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Shared ownership mortgages explained

During the summer of 2020, applications for shared ownership contracts with a particular housing association have rocketed, revealed a report by the BBC. Where the association receives typically around 50 applications a week, during July, it was receiving 1,000.

In addition to those applicants on lower incomes, the association was now also receiving requests from key workers such as nurses, police officers and teachers.

The news comes at a time when first-time buyers are finding it increasingly difficult to secure an affordable standard mortgage, according to a report in the Guardian newspaper recently. Against that background, shared ownership certainly offers a solution – and, fortunately, home ownership scheme mortgages continue to be available.

What are shared ownership mortgages?

A shared ownership mortgage is a long-term loan that allows you to buy a percentage in a shared ownership home, where you are buying part o…

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Can I get a mortgage using latest years’ accounts?

By the end of 2019, more than 5 million people in the UK were self-employed, according to the latest figures from the Office for National Statistics (ONS). This represents an increase of 1.8 million self-employed since 2000. And the self-employed currently account for 15.3% of the total workforce – up from just 12% in 2000.

The prospects for self-employed mortgages, therefore, remain a keen interest for a significant proportion of the population.

The good news is that the market has changed sufficiently to encourage some – but not all – mortgage lenders to accept just a year’s worth of accounts from a self-employed applicant for a mortgage advance.

Why can it be challenging to find self-employed mortgages?

History suggests that if you are self-employed, you are going to have a harder time getting a mortgage. The problem comes down to the relative difficulty you face in convincing any prospective lender that you have a sufficient and reliable…

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What are interest-only mortgages?

Interest-only (IO) mortgages are becoming popular, said the Financial Adviser magazine last year. Indeed, interest-only mortgages accounted for 20% of all new mortgages granted during the second quarter of 2019 – a significant increase in the 15% market share enjoyed by this type of mortgage five years’ previously.

So, what are IO mortgages, what are their attractions, and what do you need to consider before arranging one?

What is an interest-only mortgage?

If you can get a mortgage and only ever have to repay the interest on the loan, of course, that is going to be popular. But that is not the case with the interest-only mortgage – which you might think to be something of a misnomer.

Naturally, the capital needs to be repaid at some time. But in this case that repayment is delayed until the end of the mortgage term. In the meantime, your monthly payment will simply cover the interest on the amount you borrowed.

Make no d…

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What are offset mortgages?

Many of us are so accustomed to keeping borrowing and saving entirely separate that we think it always needs to be that way.

It doesn’t have to be that way. Instead, you might think of borrowing and saving as the two sides of broadly the same coin when it comes to your domestic finances. At the very least, for example, the more you are saving, the less you need to borrow.

How do offset mortgages work?

That is very much the principle behind the offset mortgage. Offset mortgages are linked to your savings account so that you pay less on the amount you are borrowing – the more you save, the less you end up paying for your mortgage.

That is the result of linking your savings or current account to the mortgage you have with the same lender. The amount in your savings or current account is deducted from the outstanding balance on your mortgage, and you only pay interest on the net balance rather than the total amount of your mortgage.

Fo…

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What are CIS scheme mortgages?

If you work as a self-employed contractor, you may find it challenging to get a mortgage. That is where so-called CIS scheme mortgages may help. It is important to note that there is no actual CIS mortgage product – rather, it is about the applicant being a member of the Construction Industry Scheme (CIS).

This article will explain:

the structure of the construction industry;why self-employed contractors may have difficulty getting approved for a mortgage;how the CIS works;getting a mortgage.

Let’s dive in …

The construction industry in the UK is structured rather differently to many other sectors. It relies on a complex network of relationships between contractors and subcontractors.

At its simplest, contractors pay subcontractors for construction work they do. Many different firms and organisations may pay other businesses for the construction work they do. Often, those contracting businesses are themselves paid by other business…

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What are guarantor mortgages?

The principal concern of any lender is to ensure that borrowing is repaid, with interest, and on time.

Where the borrower’s history or financial circumstances raise doubts about the certainty of a loan being repaid, the way might be smoothed by someone with proven financial reliability acting as guarantor.

Guarantor mortgages

That is the principle behind guarantor mortgages. An approved individual may be called upon to stand as your guarantor if the lender raises any of the following reasons for doubt in your capacity to repay a loan:

your current income does not readily support a mortgage of the size you need – the backing of a guarantor might help you get it; you are too young to have been able to build up a credit history from which the lender might assess your creditworthiness; you have a poor credit history – and a guarantor steps up to ensure that mortgage repayments will be made even if you default; or you have an insufficient d…
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Why use a mortgage broker?

Getting a mortgage involves a long-term commitment – and one that is not to be taken lightly. Making the wrong decision might leave you not only with an unsuitable mortgage, but one that leaves you seriously out of pocket. Before taking the plunge, therefore, you might want to take the most appropriate mortgage advice you can find.

That advice is likely to come from a mortgage broker. A mortgage broker – or mortgage adviser or mortgage advisor as they are also known – is quite simply someone who specialises in mortgages, explains Equifax.

What are the potential advantages of mortgage brokers versus lenders?

You might be asking yourself whether it is worthwhile consulting a mortgage broker. After all, some of the shops and offices on the UK high streets are the banks and building societies in the business of arranging mortgages for their customers.

Surely, you can cut out the middleman by going straight to the mortgage lender?

Indee…

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