FJK Mortgages

16/05/2023

Caught in the Rental Trap?

We often hear of Clients who are renting but yearn for the chance of buying their own home and getting on the property ladder.
A huge barrier often cited is how do you save for the required Deposit when you are paying a significant part of your salary in Rent?

However, last week you may have noticed the Skipton Building Society grabbing the Mortgage headlines with its mission to help those “stuck” by the launch of their new 100% Mortgage offering. Not quite the heady days of the Northern Rock 125% Mortgage, but a product that hopes to offer an alternative to those in this situation.

I summarize below some key points of the Product:

Who can apply for this Mortgage?

Each Applicant is a First Time Buyer
Each Applicant is over the age of 21
You have less than a 5% Deposit available
Each applicant has no missed payments on debts / credit commitments (e.g. mobile phone bill) over the last 6 months
You want to borrow up to £600k
You're not looking to buy a new build flat
You have proof of having paid at least 12 months' rent in a row, during the last 18 months
You must also have experience of paying all household bills (e.g utility bills, council tax etc) for at least 12 months in a row, during the last 18 months.

You will not be eligible if…

Your rent, averaged over the last 6 months, is lower than the new monthly mortgage payment indicated by the Track Record Calculator, even by a minimal amount
Looking to buy a new build flat. This is any flat being sold for occupation for the first time which has been newly built or converted within the last 3 calendar years
You are not a first-time buyer if you have ever owned a property in the UK or abroad. This includes Buy to Let properties and any property you have inherited, even if you have never lived there

There is a bit more to it, but if this sound like your circumstances, perhaps now is the time to talk.

Please feel free to reach out to me via www.fjkmortages.co.uk, email [email protected], or call on 07912 774334.

Your home may be repossessed if you do not keep up repayments on your mortgage.

26/03/2023

Back to the future!

As you will no doubt be aware the Bank of England raised rates by 0.25% to 4.25% this week.

I often speak to Clients who are holding back from either:

(a) getting on the property ladder,
(b) fixing their mortgage.

The reasoning often being that they are waiting for rates to get back to “normal”.

What is “normal” for interest rates?

I’ll tell you my view of normal is in a sec, but this is pretty much dependent on how young you are….

If you’re less than forty then Interest Rates should be sub 2%, right?

Talk to the less young, then you will hear the horror stories of rates being in excess of 15%, yes 15%!
This may also be supplemented with how tough things were etc, but don’t forget to remind them of the tax benefit they received on their mortgage (MIRAS).

So, there is every chance that we will see rates continue to rise this year, I’m going for one or two more 0.25% increments bringing us to 4.50% to 4.75%.

The spectre of inflation still weighs heavy. The Bank of England is hell bent on bringing inflation to the target rate of 2%.

What goes up must come down? Yes. But I’m in the camp where the old “normal” is replaced with the “back to the future normal” of around 3.50% in 2 years’ time.

I think it's time to move on from “abnormal” rates!
0.10%, no.
1or 2%, no.

Remember, the Bank of England Base Rate is not the cost of your mortgage…. The Standard Variable Rate for most Lenders is somewhere around 7% presently.

For those who haven’t yet Fixed their mortgage, simply, why?

Please feel free to discuss you mortgage needs by reaching out via www.fjkmortgages.co.uk, or email [email protected], or by phoning 07912 774334.

24/03/2023

First Time Buyers Mortgage Journey

Below provides a quick guide to starting your Mortgage journey and getting on to the property ladder. These are of course exciting times but entering into a Mortgage should not be taken lightly.

Often a large part of your income will be put aside to meet monthly mortgage payments. Buying your home is probably the biggest financial decision you will make in your life!

Let’s get started….

Deposit

Lenders will require you to have saved a chunk of money to put towards your purchase.

Typically, this will be 5% to 20% of the property price. The rest of the money comes from a Mortgage Lender. These can be from standard everyday Banks to more bespoke Lenders.

Point to note, the bigger your deposit, usually the lower the interest rate you will be charged. Or put another way, the more “skin in the game” you have the lower the risk you present.

This is also a good reality check. If you can’t save – how will you make your monthly Mortgage Payment?!

Stamp Duty

One thing is certain in life, death and taxes.

Stamp Duty is a tax you pay on when purchasing your house. If you’re a first time buyer the Government “graciously” offers a reduction on the Tax and in fact you do not pay tax for the first £425,000 of the properties value. Above this, you will pay 5% up to £625,000. If you’re buying a house alone and you’ve never owned property or land, you’ll be classed as a first time buyer.

If you’re buying with a partner, both of you need to be first time buyers to qualify.

Engage a Mortgage Advisor...

I’m often asked what’s the difference between a Mortgage Advisor and a Mortgage Broker. Nothing, it’s one and the same.
If you go directly to a Lender, they will offer their products. If you engage an “independent”, “whole of market” Mortgage Advisor they will search all Mortgage products and hopefully find you the cheapest and most suitable Mortgage for your circumstances.

If you use my services, I will ask you, or each of you to produce a Credit Report on yourself (selves). This is an invaluable tool in guiding us to how you are viewed by possible Lenders and things we may need to clarify or provide an explanation for. You can find providers online, such as Experian or Check-my-file.

Getting a mortgage Agreement in Principle

A Mortgage Agreement in Principle or Decision in Principle (they’re the same thing.) is the first stage of getting a mortgage. This is where your lender tells you how much they might lend you and for how long.

Although not an official requirement, this shows perspective sellers and estate agents that you’re a serious buyer. Your Mortgage Advisor will undertake a search based on your circumstances and provide this for you. You’re now able to make an offer to the seller. An Agreement in Principle usually does not affect your credit score.

What documentation will I need?

• A form of ID (such as passport or driving licence)
• Past three to six months of bank statements
• P60 tax form
• Utility bills
• Proof of benefits (if you receive them)

If you're self employed, you’ll need a few more things.

• Two to three years of tax forms
• SA302 tax return form
• Bank statements to support these tax return documents

How long does it take to get a Mortgage Offer?

I advise my clients to allow three and six weeks.

Please reach out via our website www.fjkmortgages.co.uk, email [email protected] or give us a call on 07912 774334

20/02/2023

First Time Buyers Mortgage Journey

Below provides a quick guide to starting your Mortgage journey and getting on to the property ladder.

These are of course exciting times but entering into a Mortgage should not be taken lightly. Often a large part of your income will be put aside to meet monthly mortgage payments. Buying your home is probably the biggest financial decision you will make in your life!

Let’s get started….

Deposit

Lenders will require you to have saved a chunk of money to put towards your purchase.

Typically, this will be 5% to 20% of the property price.

The rest of the money comes from a Mortgage Lender. These can be from standard everyday Banks to more bespoke Lenders.

Point to note, the bigger your deposit, usually the lower the interest rate you will be charged. Or put another way, the more “skin in the game” you have the lower the risk you present.

This is also a good reality check. If you can’t save – how will you make your monthly Mortgage Payment?!

Stamp Duty

One thing is certain in life, death and taxes.

Stamp Duty is a tax you pay on when purchasing your house. If you’re a first time buyer the Government “graciously” offers a reduction on the Tax and in fact you do not pay tax for the first £425,000 of the properties value.

Above this, you will pay 5% up to £625,000. If you’re buying a house alone and you’ve never owned property or land, you’ll be classed as a first time buyer.

If you’re buying with a partner, both of you need to be first time buyers to qualify.

Engage a Mortgage Advisor

I’m often asked what’s the difference between a Mortgage Advisor and a Mortgage Broker - Nothing, it’s one and the same.

If you go directly to a Lender, they will offer their products. If you engage an “independent”, “whole of market” Mortgage Advisor they will search all Mortgage products and hopefully find you the cheapest and most suitable Mortgage for your circumstances.

If you use my services, I will ask you, or each of you to produce a Credit Report on yourself (selves). This is an invaluable tool in guiding us to how you are viewed by possible Lenders and things we may need to clarify or provide an explanation for. You can find providers online, such as Experian or Check-my-file.

Getting a mortgage Agreement in Principle

A Mortgage Agreement in Principle or Decision in Principle (they’re the same thing.) is the first stage of getting a mortgage. This is where your lender tells you how much they might lend you and for how long.

Although not an official requirement, this shows perspective sellers and estate agents that you’re a serious buyer. Your Mortgage Advisor will undertake a search based on your circumstances and provide this for you. You’re now able to make an offer to the seller. An Agreement in Principle usually does not affect your credit score.

What documentation will I need?

• A form of ID (such as passport or driving licence)
• Past three to six months of bank statements
• P60 tax form
• Utility bills
• Proof of benefits (if you receive them)

If you're self employed, you’ll need a few more things.

• Two to three years of tax forms
• SA302 tax return form
• Bank statements to support these tax return documents

How long does it take to get a Mortgage Offer?

I advise my clients to allow three and six weeks.

12/02/2023

The elephant in the room - death!

I prefer talking about Mortgages, but as part of helping to provide the dream home there is always the nagging question what happens when I pass on…

As part of my remit, Life Insurance / Assurance forms part of the package and the following post provides some statistics / thoughts around the Market.

Advisers need to help unmarried couples take a fresh look at their finances this year with research suggesting almost half (43%) of partners have made no plans to ensure their better half receives a pay-out if they die.

A survey published by Scottish Widows recently, also found only half (52%) of unmarried adults who are in relationships know whether their partner even has a life insurance policy.

With UK marriage rates declining by 50% since 1972 according to the Office for National Statistics, it’s more crucial than ever for couples to discuss how their relationship will affect their future finances.

According to Scottish Widows, research has shown that unmarried couples find it difficult to talk about planning for the worst and proactively avoid it as they don’t feel it is important. I disagree and would argue that although we know it’s important, it’s not the most pleasant of subjects. However, despite being difficult to discuss, there is an urgent need to have the discussion to ensure long-term security.

As marriage rates continue the decline, advisers such as myself have a crucial role to play by supporting couples, sensitively, through this process and ensuring they understand the different protection offered to them. Before embarking on my new career path I thought I had a pretty good understating of the different types of policy – I didn't! I constantly have to refresh my understanding and keep abreast of continually changing policies.

Out of the half of unmarried adults who are in relationships that know whether or not their partner has a life insurance policy, more than a quarter (27%) are unaware of the policy’s value.

Levels of awareness around partners’ finances are lower among couples who are not married. Some 60% of married same-s*x couples know exactly how much their partner earns, and 53% of people married to someone of the opposite s*x know the same. This knowledge drops to 47% for same-s*x couples, and to 45% for opposite-s*x couples among couples who are not married.

These figures, which are based on a survey of 2,000 UK adults carried out in September, also show that same-s*x couples are more likely to talk about their finances than opposite-s*x couples.

Nearly a quarter of married same-s*x couples (24%) discuss long-term financial matters monthly, whereas married opposite-s*x couples only do this every two or three months.

To this end - I’m at the end of a call to discuss the elephant in the room! 07912 774334.

07/02/2023

Nationwide Building Society – “First out of the blocks….”

As anticipated, on the back of the Bank of England Base Rate rise last week, Nationwide have lowered their 10-year Fixed Rate Mortgage offering by 0.75%!

Nationwide’s 10-year fixed rate offering is now 4.34%, reduced from 5.09%.

The obvious question is if the Base Rate has gone up, why has this rate fallen?

Put simply, this is on the expectation that a rise in rates in the short term will help to combat inflation and allow for future rates to be lower….

Other rates have also fallen, with Nationwide's 5-year Fixed rate now at 4.18% from 4.34%

All rates quoted assume a Re-Mortgage, LTV of 60% and a booking fee of £999-

04/02/2023

Call out to Landlords – Energy Performance Certificate (“EPC”)

Some Landlords are still unaware. What’s changing?

The government wants to make homes in the private rented sector more energy efficient. It plans to tighten minimum Energy Performance Certificate (EPC) standards in England and Wales for landlords to do this.

These are proposals, not final rules, so the timelines and finer details could change. But you should be aware of the potential changes and have a plan to manage them.

Here's what we know:

In England and Wales, landlords can only let property with a minimum Energy Performance Certificate rating of E (unless you've registered an exemption).
The government has proposed to tighten this to a minimum C-rating on new tenancies from 2025 and all tenancies from 2028.

In line with current rules, a majority of BTL Mortgage Lenders will only lend on private rented properties with a minimum EPC E-rating, or registered exemption.

What if my property doesn't meet the future energy efficiency standard?

If your property doesn't meet the future energy efficiency standard (or you haven't registered an exemption) you could:
• Be prevented from letting out a property and lose your rental income.
• Be fined up to £5,000. Under the new proposals this fine could increase to £30,000.
• Struggle to re-mortgage your BTL property. Mortgage lenders will be asking for evidence of the EPC rating of your rental property.

There are exemptions for certain properties, plus there's a 'cost cap' of £3,500.
This cost cap means you're only required to spend up to £3,500 to boost your property's energy efficiency. Interestingly, if it still doesn't meet the current E-rating requirement you can register an exemption.
However, under the new proposals, the government wants to increase the cap to £10,000 per property to meet the proposed C-rating.

Please feel free to reach out for further details by contacting FJK Mortgages on 07912 774334, by email [email protected], or visit our Website www.fjkmortgages.co.uk

02/02/2023

Bank of England Base Rate Increase – NOW 4%

As you may be aware that Bank of England has increased the Base Rate by 0.50%, from 3.50% to 4.00%.

My thoughts, on reading the Bank of England detail, are below: -

• Reading through the notes, the 9 men & women who make up the “Interest Rate Jury” voted 7 to 2 to increase the rate.

The "2" wanted rates left unchanged at 3.5%.

What this effectively means is that Rate Increases are not “done” yet. We are highly likely to see a further increase in March (next meeting) – I’m guessing 0.25% bringing us up to 4.25%.

• My Economist friends in the City are of the general consensus that we could see a further rate increase from there, but capping out at around 4.50%, with gradual reductions towards the end of the year / early next.

• In terms of those of us with a Mortgage, those with a Standard Variable Rate (why have we not spoken yet?) or a Tracker Rate, this 0.50% increase will be passed on to you in your monthly mortgage bill. For every £100,000 of Mortgage this equates to an extra £500 to find a year.

• Against today’s increase in Base Rates, I’m expecting for those looking to Fix their Mortgage for a period of 5 years, rates to decrease as early as next week. This is based on expectations of future interest rates “traded” in the Financial Markets. The mechanics of how and why are best explained in a call with me.

• If you’re currently on a Fixed Rate, but coming to an end within 6 months of today, we need to talk.

28/01/2023

How much more??

The Bank of England announce any change to the Base Rate this week on Thursday (2nd February).

The current rate is 3.50%.

Market expectations are for a rate increase by as much as 0.50%, bringing the Base Rate to 4%.

Time to review your Mortgage?

Let’s save you some money!

Reach out by email at [email protected], Visit our website, www.fjkmortgages.co.uk, or give me a call on 07912 774334.

03/01/2023

Do you want to earn a £100 Amazon gift voucher for referring Family, Friends, or Colleagues for Mortgage Advice?

For every referral you make and on a Formal Offer of a mortgage being made you will earn a £100 Amazon gift voucher.

Simply ask your contact to mention you when contacting FJK Mortgages.

This applies to all Mortgages - 1st Time Buyers, Re-mortgages or Buy-to-Let.

www.fjkmortgages.co.uk
email: [email protected]
Tel: 07912 774334

FJK Mortgages aims to take the stress (as much as possible) of applying for a mortgage.