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Our property investment expert is Jeni Browne, Sales Director at
Mortgages for Business
www.mortgagesforbusiness.co.uk/
Tel: 0345 345 6788
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Question
Credit file blip – can I get a mortgage?
I am looking for a lender who will be suitable for me. I am about to move house but have a problem on my credit file.
In the seven years I have had a mortgage I have never defaulted. I have also paid all my credit cards, bills and other payments on time and have absolutely no debt apart from the mortgage.
However, I have had a problem with my mobile phone bill – due to an error at their end I didn’t pay the bill for two months and this has shown up on my credit report.
Although I have paid the money owed and cleared up the situation I am concerned I won’t be accepted for a new mortgage when I move house. Do you know if there are any lenders who might be able to help with this situation?
I earn £38,000 a year and have no children/dependants. It is just me on the mortgage.
Answer
Many lenders will take into consideration the odd misdemeanour, and a missed payment or two on a mobile phone contract would certainly be fine for many.
The key is when you missed the payments; anything over 12 months ago should not cause any issues, but if it was within the last 12 months, then the lenders available to you will be restricted.
I would recommend showing your credit file to a mortgage broker who, using their broad knowledge of the mortgage market, will be able to advise you of your options.
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Question
Mortgage in principle – am I tied to the lender?
My wife and I have been house hunting for our first home and were advised to get a mortgage in principle. We took out a mortgage in principle with our bank a couple of months ago and we have now found a house and have put in an offer.
We are just waiting to hear back from the estate agent about whether our offer has been accepted.
We would like to know if we are now obliged to use the same lender and mortgage for our house purchase.
We have been looking around a bit and think we can find a cheaper interest rate so we would rather try our luck with a different lender. Are we tied to our decision in principle lender or can we change?
Answer
Having a Mortgage in Principle (or Decision in Principle) from a lender does not commit you to taking a mortgage with them.
Technically, until a mortgage completes, you can walk away; however, you may lose any fees (e.g. survey fees) that you have already paid.
Mortgage interest rates are low, so now is a brilliant time to look around for the most suitable mortgage for you!
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Question
Worried we cannot make repayments
How do people afford a mortgage?! My boyfriend and I earn £4,000 a month jointly and we understand we only need to borrow four-and-a-half times our salary. This would mean we can only buy a house worth £216,000.
This sounds fine, but we live in London and have two children so we don’t hold out much hope of finding a property suitable. Is there anything we can do to boost our chances? I think the thing worrying us most is being able to afford the repayments.
At the moment we pay £1,700 in rent and this is a struggle as we also have to pay for childcare – £1.5k a month. We have been saving for a deposit and have about £10,000. We are not sure we will be eligible for shared ownership as neither of us are key workers – I am a PA and my boyfriend works in accounts.
We are desperate to get our own house and would love to stop wasting money by throwing it down the renting drain but we feel trapped. How do others in our situation afford it?
Answer
First of all, I just want to say a huge well done for supporting your family this way, whilst living on what sounds like an incredibly tight budget.
There are lots of government schemes in place to help people buy their own homes and, based on what you have said, I think it would be well worth you taking a look into Shared Ownership Schemes.
I’ve had many clients, in very similar positions to yourselves, secure their first step onto the property ladder using one of these schemes.
In terms of getting a shared ownership mortgage, there are lots of options available from large reputable lenders, so it would be worth speaking to a mortgage broker who will be able to tell you how this works. I wish you the best of luck!
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Question
How many people can go on the mortgage and property deeds?
My husband is a builder and we are looking at buying a home which we will renovate and then sell on.
We have a few friends who are interested in investing in the project. The idea is we will join forces to provide a healthy deposit, flip the house and issue everyone their share of the profits.
My husband and I will obviously be on the mortgage. But how many additional people can we put on the deeds and mortgage?
From our point of view, the more people who can invest the better because this would mean we would pay less of a mortgage. But we also want to make sure we are completely above board with this one.
Answer
You will find that whilst there is no maximum number of people who can go on the title deeds of a property, the maximum number of people who can be on a mortgage is four.
In your situation, it may be worth looking into forming a limited company where each investor becomes a shareholder. This would allow each party to have their investment formally recorded and increase the number of investors you can have in the project.
A mortgage broker will be able to explain how this type of arrangement works for property investments.
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