Mortgage confusion is a big hurdle for buyers. The process of applying for a mortgage and knowing all the facts can seem a big challenge when buying a home. Following on from our last Mortgage Guidance piece from Trinity Financial earlier this year, we again speak with Communications Director Aaron Strutt, for some advice, useful information and news.
Have fixed rates increased in price since the base rate rise?
Many of the banks and building societies increased the price of their rates during the run-up to the base rate hike. They did not go up by a huge amount, but there was a shift in pricing.
If you are looking to purchase a property or remortgage it is still a great time to lock into one of the best buy mortgage deals. The challenger banks have been undercutting the biggest lenders and improving their acceptance criteria as they look to attract more borrowers.
How long are people fixing in for?
Most borrowers are locking into two or five-year fixes, but there are some longer-term deals and variable rates available.
The lowest two-year fixed rates are priced around 1.40% and you will need a 40% deposit to qualify. There is a long list of lenders offing sub-2% five-year fixes.
If you would prefer to lock into a longer-term fixed rate, then there is a selection of lenders offering ten-year fixes. The lowest rates are priced around 2.5% so they are 1% more expensive than the lowest fixes.
If you are looking for low rates without early repayment charges, there are some great two-year discounted variable rates and two-year trackers.
What deposit do I need to access the best rates?
You will need a 35 per cent or 40 per cent deposit for the very cheapest rates, but you can still access some great deals if you have a 20 per cent deposit.
Are you still seeing many buy-to-let applications?
We are still arranging buy-to-let purchase mortgages but not as many as we have been used to. Many landlords are still considering setting up limited companies, and lots of them are remortgaging to avoid expensive standard variable rates.
Is there anything new on the market?
As rates are so cheap, the providers are having to work harder to make it easier for borrowers to qualify. Trinity’s brokers are helping more people with less standard situations to find lenders and applications are being agreed by the lenders credit committees as exceptions.
More of the lenders are offering interest-only, foreign income and retained profits mortgages and applying income stretches. They are also happy with holiday lets or Airbnb mortgages. There has also been a rise in the number of joint borrower sole proprietor rates where parents use their income to help their children onto the property ladder in a tax-efficient way.
Are you still helping a lot of first-time buyers?
At the start of this year, there was a huge surge in first-time buyers because of the stamp duty cut and the availability of low deposit mortgages. We are still helping lots of first-time buyers but not quite as many.
The lenders are still providing impressively cheap low deposit mortgages and you will need to have a 5 per cent or 10 per cent deposit to qualify
If your bank will not lend enough money is it worth shopping around?
Many of the people looking for mortgages are coming to us for a second opinion because they think there can get a better deal elsewhere. Their banks do not always have competitively priced rates, and the income multiples are restricted to 4.5 times salary.
We regularly speak to buyers who have been to another broker and they are not happy with their service or the fees they are charging.
How long should it take to get mortgage offers?
Many of the lenders advertise their turnaround times on their intermediary websites and they usually say it should take around two weeks to produce an offer.
Halifax has a reputation of providing very quick offers and Virgin Money has a ten-day service guarantee where the bank pays £100 compensation if a correctly packaged case is not offered on time.
Trinity Financial, a preferred partner of Winkworth, is one of the UK's leading independent mortgage broker firms. The team have strong relationships with all the providers and will scour the market to find you the very best deal. Trinity deal in all manner of products from first-time buyer to £multi-million portfolios and overseas mortgages. The guys also facilitate exclusive and often complex deals that can't be found on the high street.
If you're looking for a mortgage or require some advice please do not hesitate to get in touch with the team at Trinity.
020 7267 9399