The mortgage market has never been entirely straightforward, even before the financial crisis of 2008 ushered in a new era of lender caution and tighter controls on affordability. But for many people, the prospect of applying for a mortgage is now even more daunting than it used to be.
In fact, a survey last autumn suggested that millennials – who now make up around a quarter of the UK population – are so put off by the prospect of going through a mortgage application that they would rather break a bone or undergo dentistry to avoid it! And we’re not talking metaphorically here, either.
A theme we often see is that of assumed lendability. What we mean by that is that when we first sit down with clients, many of them have come with a preconceived idea of the amount a lender will – or won’t – be prepared to lend them.
When you think about it, that’s hardly surprising. Here on the Oportfolio website we have a free mortgage calculator which we encourage you to use to determine the kind of budget you might be able to work within.
But it’s important to remember that our calculator tool and others that you might find dotted around the web are only ever intended to be a guide that helps you to focus on a realistically achievable property target: if the calculator estimates you may be able to borrow up to £600,000, then the likelihood is there’s little point in looking at £1,000,000 properties (unless, of course, you have £400,000 to put down as a deposit.
But equally, it could be that you can borrow a little more than you thought – perhaps, for example, putting a £650,000 or even a £700,000 property within your reach.
(For balance, of course, we should also say that your personal circumstances may mean that the most you can borrow is actually substantially less than the figure generated by the calculator.)
The point is, the number the calculator spits out is designed to help you to make key decisions. Can I borrow enough to buy the property I really want? Can I afford the repayments? Is it actually worth moving forward, or would I better off waiting a while?
Once you’ve decided your potential borrowing power is in the right ballpark and you want to step up your search for your dream home, you need to come and talk to someone like us so that we can talk through the real-life options that might be available to you.
That’s exactly what Gus and Selena did.
Gus and Selena are a lovely couple who’d fallen in love with a property called The Gothic House but who’d given up on any real hope of buying it because all the signs they’d come across seemed to suggest they wouldn’t be able to get a big enough mortgage to be able to make a realistic offer.
When the subject came up in a conversation with Gus’ friend, James, he suggested they come and talk to us. We’d already worked with James who had referred a number of his customers and clients to us and he told them that if anyone could find the right mortgage, it was us.
And so it proved. Gus and Selena got in touch and after we spoke it quickly became clear that it buying the property wasn’t just possible, but the finance could be structured in such a way that we could make Gus and Selena the most attractive buyers in a competitive sale.
Having initially thought they would have to sell their existing home, we knew that instead they could let that property, which covered the mortgage payments on it.
Then, because their business was doing well, they were able to borrow more than they had thought was possible.
In a short time, they had gone from believing their dream home was out of reach, to being effectively chain-free, cash buyers with a mortgage in place.
Gus now believes it was that combination that won them the property, even though better offers from other would-be buyers may have been on the table.
“The Gothic House was out of our range – or we thought it was out of our range … but then we spoke to Oliver and he put everything into perspective, and it turned out it was in our range after all,” he said.
The moral of the story is that because we’re mortgage experts, we have specialist insight into and knowledge of the mortgage market – and so, what you think you can borrow and what you can actually borrow are often two different things.
That’s because we know about mortgage products that you won’t find on the high street or online, we know what lenders might be prepared to lend in a range of different circumstances and we can suggest different solutions to improve the chances of your mortgage application being approved.
If you’ve found your dream home or even just the next property on your journey to your dream home, come and talk to us to get an accurate picture of what might be possible.
Want to see The Gothic House and hear from Gus and Selena first hand about their Oportfolio experience? Watch the video here
To find out more about our friendly and professional mortgage service, fees and what we can do to help make sure you’re not paying over the odds for your mortgage, why not visit www.oportfolio.co.uk or give us a call on 020 7371 5063.
Your property may be repossessed if you do not keep up repayments on your mortgage.
Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.