Posts tagged: home finance
Remember when you were young and adults asked you what you wanted to be? Perhaps your answer was a fireman, or maybe an astronaut. I don’t actually remember anybody asking me when I thought I would own my dream home, or even knowing what my dream home was! Had I been asked, I probably would have wanted some kind of Barbie’s caravan and Millennium Falcon fusion home!
It seems that many children across the UK have a very optimistic view of when they will become homeowners. The research carried out by Clydesdale and Yorkshire, found that 19% of children questions believed they would own their dream home by the age of 25.
The research also revealed that 68% of children of primary school age expected to own their dream home by the age of 35 even though 33% thought their dream home would cost them between £500,000 and £1m. Hey, it’s good to have ambition!
It seems that children in Yorkshire have the brightest outlook with 38% aspiring to own their dream home by the time they turn 25 and 83% by the age of 35.
Steve Reid, retail director for Clydesdale Bank, said: “As any parent knows, children can be very ambitious and it is always refreshing to hear about their hopes and dreams, however optimistic they may be.
“With 59% of kids hoping for a swimming pool and 25% wanting their own private theme park within the grounds, it is unsurprising that over a third of children think that their dream home will set them back in excess of £500,000.”
The study also revealed how 71% of children believe they will earn anything up to £100 a week in their first paid job and 22% thinking they will only earn £10 a week which would mean it would take them over 100 years to save up a deposit for that dream home costing £500,000!
Plan for a mortgage as you would a holiday, with enthusiasm and precision.
Mortgage lending criteria over the last couple of years has tightened up and this may continue through 2011. We recommend to give yourself the very best chance of securing a mortgage in 2011. Start your preparations now.
1. Credit report/ score
When a mortgage application is placed the lender usually credit searches the applicant.
We recommend that you order a credit report prior to starting the mortgage process, why?
- to ensure that you have not been a victim of identity fraud.
- Find out what your credit score is: 0 low and 1000 high
If the score is low, it might be improved by,
I. Setting up Direct Debits for payments of credit cards/storecards or loans. One late payment can count against you. Show the mortgage lender you can manage your accounts.
II. Register on the Electoral Role at each address resided. Still living at home? make sure that from the age of 18 you are registered.
III. If you are in rented accommodation even just for six months, we recommend you ensure you register on the Electoral Role.
2. Documents – be prepared
Some mortgage lenders have a time limit to get documentation to them to support an application. Having the following documentation to hand, aims to ensure a quick mortgage application process.
I. A current driving licence or passport for personal identity
II. A utility bill or bank statement not older than three months showing your current address and name.
III. Last three payslips/3 years accounts
IV. Latest P60
V. 3 months bank statements
3. Independent mortgage advice
If a mortgage lender credit searches / scores an application, a ‘footprint’ is left on your credit report and your score could potentially be lowered. If you are unsuccessful in obtaining a mortgage and you have to go through the process again, the new lender will see the previous activity. Talk to Your First Mortgage Company who can undertake a Feasibility Study on your behalf. This will let you know potentially, how much you could borrow, what type of interest rates are available and most importantly will help you gain an understanding of your purchasing and monthly payment budget.
There are no guarantees that you can obtain a mortgage but by good preparation, the feasibility of you being accepted is likely to be much greater. Good luck!
The Financial Services Authority does not regulate some forms of mortgages. There may be a fee for mortgage advice. The precise amount will depend upon your circumstances, but we estimate that it will be £275. The overall cost for comparison is 4.6% APR.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP YOUR REPAYMENTS ON YOUR MORTGAGE
Please note that there may be variations for those living in Scotland and Northern Ireland.
Carol D Brown Cert CII(MP & ER)
Click here to Contact Carol
Loans to first time buyers increased drastically last month as the window for taking advantage of the concession on tax duty for properties in the £125,000 to £175,000 bracket came to an end.
There were 24,900 loans to first-time buyers in Dec 2009 – the highest level since November 2008 and 26% up on the preceding month.
Source: Council of Mortgage Lenders
Gross mortgage lending reached an estimated £13.7 billion in December, a 14% rise from £12.1 billion in November and up 3% on December 2008, according to the Council of Mortgage Lenders. This is the first time the annual monthly comparison has been in positive territory since October 2007. However, other than in 2008, this is still the lowest figure for December since 2001 (£13.4 billion).
Lending totalled £39.1 billion in the fourth quarter, up slightly from £39 billion in the previous quarter but down by 14% on the last three months of 2008. There is typically a 6% fall between the third and fourth quarter.
Source: Council of Mortgage Lenders
The Price comparison website Moneyfacts says that the availablility of high Loan-to-Value mortgages is increasing although still much lower than two years ago.
According to Moneyfacts there were only 56 mortgages available to people with a 10% deposit in October and this has risen to 114 in November. The withdrawal of high LTV products has been cited by many first time buyers as one of the key barriers to getting on the housing ladder. As the market relies on first time buyers entering the market to free chains that allow others to trade up, the increase in availablity of such mortgages is likely to support further movement in the housing market.
Source: Finance Markets