All posts by springtide

Self-employed mortgage checklist

The self-employed have always faced significant hurdles when it comes to obtaining a mortgage. With the introduction of new rules for mortgage applications under the MMR, it seems that sentiment among self-employed people looking for mortgages is currently running at its lowest ebb. Stories of 3 hour grillings from bank staff who pick over every aspect of one’s financial life have been making headlines everywhere.

But we don’t think this negative outlook on the part of self-employed homebuyers is quite justified.

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5 top tips for applying for large mortgages

High street lenders shied away from offering large mortgage loans in the wake of the financial crisis. Lending a large sum to a single individual is seen as more risky than spreading the risk over several smaller loans. Recently though, buoyant property prices have coaxed these lenders back into the large loan market and buyers looking to apply for mortgages of £1m plus are finding themselves with more choice than ever.

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Mortgages for barristers – brokers to the rescue

Due to the highly specialised nature of the work they do and the unique circumstances under which chambers operate, barrister mortgages constitute an important subset of the work that mortgage brokers carry out.

Specialist advice on both the selection of mortgage product and how to present earnings as part of a mortgage application are invaluable for professionals who often don’t have the time to fully research the complexities of the market.

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How to get a contractor mortgage

The instincts of most contractors, when faced with the question of how to obtain a mortgage, are overly pessimistic. Mortgages for the self-employed are generally viewed by those in search of them as unrealistic pipe dreams, reserved only for the lucky few.

But are these sentiments of doom a realistic assessment of the current contractor mortgage market? Or is it the case that mortgages for self-employed individuals are actually relatively easy to obtain, provided you go about applying in the right way?

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Clients are ‘shocked’ by changes to mortgage application process since 2007

Increasing numbers of Springtide Capital’s clients have been shocked by the extent of changes to the mortgage application process in the last six years. Many have reported that they are finding the process much more ‘challenging and time consuming’ than in previous years.

Before 2007 mortgage applications would regularly go through in under 10 working days, however clients now find they will have to wait at least 15 working days and often much longer. This has the result of delaying exchange dates and often jeopardises the entire sale.

This trend is largely attributed to regulatory change and the fact that lenders are now being far more diligent. Compared with fast track applications from 2007 which relied on a credit score alone, lenders will now ‘forensically’ examine all income and expenditure before agreeing to make an offer.

Henry Knight, Managing Director of Springtide Capital has told clients that the process can still be managed quickly and efficiently, as long as they are prepared and informed in advance of what is required.

Knight offers his top five tips for those wishing to be as organised as possible:

1. For purposes of identification make sure you have an up to date passport.  If using your driving licence, ensure it is showing your current home address.

2. You will need to have a proof of address. Lenders will only accept a hard copy that has been posted to your address, rather than an online version. It must be addressed within the last three months and show the current address in its correct format.  Many lenders also expect to see the first initial of the clients name showing.

3. If you are employed, you must obtain the last three months payslips and last two years P60s. These are the documents that people often have issues locating, however, you can normally obtain duplicates from your HR department if you cannot locate them.

4. If you receive a bonus, you must also demonstrate the latest pay slips for this. Again, it can be tricky to find so ask for assistance in your accounts or HR department if you cannot find the hard copy.

5. If you are self employed, you will need an SA302 form from the last three years as well as the last three years accounts.  Few people have heard of an SA302 form and they are not sent out automatically.  You will need to phone HMRC to request the documents and they will insist on posting them out.  HMRC also only send these by second class post meaning they can take 10-15 days to come through.

Mortgage finance at £1m and above set to be most competitive since 2007

Today, Springtide Capital has predicted that the pricing and availability of mortgage finance at £1m and above will be at its most competitive since before the financial crisis. The broker has witnessed a particular increase over the last four months in the number of high street lenders re-entering this market.  For the previous five years, this market had been the preserve of the Private Banks, however there is now a significant shift towards the retail banks offering purely transactional deals and becoming increasingly keen for the business.

Experts at Springtide Capital predict the impact of this trend will be heightened competition among the retail and private banks for high net worth clients. This, in turn, is likely to reduce the cost of borrowing on mortgages over £1m over the next twelve months.

Henry Knight, Managing Director of Springtide Capital says:

‘Following the financial crisis we witnessed the percentage of high street lenders withdraw from the large loan market, leaving the opportunities with the private banks.   Now that the likes of Nat West, Santander, Virgin, Halifax and Woolwich have all come back to the market with new propositions, we can expect to see more competition and innovation amongst all banks”.

Knight added:

‘The significant difference is that private banks will invariably be looking for a wider relationship, often insisting on funds under management whereas the high street lenders are able to offer this level of finance without asking for any such commitment from their customers.  We therefore expect as a result of this we will see increased pressure on private banks, resulting in rates falling in the months ahead for both those purchasing and refinancing.’

Mortgage market forecast: best rates in 2014 will last for 6 months only

BEST RATES IN 2014 WILL LAST FOR SIX MONTHS ONLY

Today, Springtide Capital has predicted that the best mortgage rates of 2014 will only be available for six months at most. The broker has also predicted the start of a ‘rate war’ among lenders in the first three months of the year as a result of the Help to Buy scheme. Help to Buy is predicted to intensify competition among lenders at the start of the year as more first time buyers enter the market.

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Help to Buy rates will fall in time for January sales

There are now three words on everyone’s lips when it comes to mortgages; help, to and buy. This year continues to bring exciting revelations from the market, as the second phase of the initiative was recently brought forward by three months. All the major lenders have now announced their involvement in the Help to Buy scheme and outlined their individual terms and criteria. It is my view, however, that we will have to wait until the early part of next year to see real competition among lenders flourishing in the market. Continue reading

Mortgage Solutions

The natural inclination for consumers in a low interest rate environment is to seek value from long term fixed rate products. We are currently seeing lenders competing most aggressively in the five year fixed rate market which has been driving down prices and therefore retaining the greatest consumer appetite. Two of the most popular fixed products at present include Clydesdale Bank’s 5 year fixed rate at 60% LTV on a rate of 2.69% with a £999 fee and Accord’s
5 year fixed rate at 75% with a rate of 2.89% and a £1,845 fee.

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Mortgage market update, Funding for Lending one year on

The UK housing market is looking buoyant again. Lending levels continue to rise and there are a whole range of new and affordable products coming to market. This good news flies in the face of any market commentators who had made gloomy predictions about housing market recovery last year. Stories of negative growth, a generation of renting and even talk of a triple dip recession dominated our national headlines just over a year ago.

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