It’s been a few months since I last wrote about Brexit and its likely impact on interest rates, the mortgage sector and the residential property market. That was not long after the deadline for the UK to leave the EU was extended to the end of October. So, now that we’re roughly halfway between the last deadline and this one, what’s changed? On the one hand, nothing much has changed at all. There’s no more clarity now on how we’ll leave the bloc (or even, perhaps, if we’ll leave) than there was three months ago. But politically-speaking, on the other hand, everything has changed. We have a new Prime Minister working with an even more slender majority than his predecessor and leading a party that, if anything, is more divided than it has been at any point since the EU referendum. He chairs a cabinet that is loudly pro-Leave and, publicly at least, completely aligned to taking the UK out of Europe on October 31 come what may. Outside the inner sanctum of the cabinet, former senior ministers warn of chaos ahead if Britain is allowed to crash out of Europe without a deal, while the apparatchiks of central and local government ramp up their preparations for No Deal. Labour is said to be planning a vote of no confidence in a bid to force a General Election. The Liberal Democrats have a new leader in Jo Swinson, and her fiercely pro-Remain party is attracting membership applications from former Tory MPs, disillusioned with their brief stint as part of the Change UK party. All in all, things have certainly been better within Great Britain PLC. But what does the uncertainty mean if you’ve got a mortgage or you’re thinking of buying and/or selling your home? Naturally, it depends on what you read, who you listen to and whether you’re on the Winnie the Pooh or Eeyore side of the optimism/pessimism divide. But amid the more outlandish crystal ball-gazing, there have been some interesting and well-informed hypotheses doing the rounds recently. The general consensus seems to be that a No Deal Brexit would substantially increase the chances of an economic downturn. Some commentators have stopped short of predicting a full-on recession, but others haven’t been quite as shy. According to the Guardian’s personal finance and consumer correspondents, this may not be a bad thing for homeowners where interest rates are concerned. Their joint article talks of mortgage interest rates returning to their sub-1% levels of 2016 and even of the Bank of England imposing a zero rate to ease the transition to a new trade arrangement with the rest of the world. Such a move would undoubtedly be welcomed by homeowners who suddenly find their mortgage rates significantly reduced. But the other side of that coin, of course, is the resulting misery for savers and investors. As for house prices and whether now is the time to buy or sell, the same article suggests that trying to predict whether to move before or after October 31 is more likely to be a lottery. Having said that, the fact remains that if you consider your finances to be insulated from the immediate impact of Brexit – whether with or without a deal – then when you move is less of an issue. The only question at that point is whether you can sweeten the process by winning out on the price at which you agree to buy and securing the market value of the house you sell. The Daily Mail’s financial website This Is Money reports that there’s been a growth in the appetite for long-term mortgage deals, including the recently-trending 10 year fixed product some lenders are offering. As I said in our recent article on whether you should fix your mortgage rate, we’d advise caution when it comes to locking on to a long-term deal. They tend to be more expensive and if rates do come down – which is a distinct possibility over a period of a decade – then you’re going to lose out in the long run. There are circumstances where a long-term fixed product might be right for you – but I would strongly advise getting advice from a professional mortgage expert before you commit. And then there are the conflicting calls in the Express and Times for the Bank of England to either raise interest rates and demonstrate its commitment to – and confidence in – Brexit (Express), or cut rates ahead of Brexit to ease the impact on the economy (Times). So, even the papers are divided on the best approach to fiscal policy. The fact is, we won’t have true clarity until October 31 arrives. In the meantime, the world keeps turning and life goes on. My advice is always that you should take any long-term financial decision – such as buying a house – in the context of your long-term financial security, and ultimately that comes down to the answer to the question of whether your potential financial exposure is controllable. Any investment is a risk – but calculated risks, where you’ve looked at the worst-case scenarios and demonstrated you can survive them, are always going to be preferable to walking into a commitment blind. The best thing you can do if you’re thinking about moving in the next three months is get some advice from a professional broker and a financial adviser – and factor that advice into your decision. Need more information about your mortgage options? Take a look at our short guide to remortgaging. 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. Oportfolio Limited is an appointed representative of Primis Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority 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.
It’s often said that buying a house can be one of the biggest sources of stress you can have in life, which probably explains why a recent MoneyWise report suggests a quarter of all borrowers find the mortgage application process stressful. It’s hardly surprising, when you think about it – after all, you’ve made the commitment to move – possibly to the house of your dreams – and you’ve invested time and, probably, some money in the process. By the time you’re applying for a mortgage, you’re likely to be emotionally invested in the outcome. Many, if not most, are approved – on average around 65,000 a month, yet because different lenders adopt different criteria, and because the common lending criteria imposed on all regulated mortgage providers is now stricter than it was before the 2008 crash, it’s hard to be 100% sure your application will be agreed. So, whether you’ve managed the process yourself or you’ve used a broker to put the application together, what can you do if the worst happens and your mortgage application gets declined? Here are some ‘dos and don’ts’ and some tips to try to make sure your next application is accepted. #1 - Don’t panic! We can’t stress this enough. There are many reasons why your application might not have made it through the lender’s assessment. The most common is that you’ve failed to meet the lender’s own criteria. That doesn’t mean you won’t meet the lending criteria for another bank or building society, though, because as we’ve already said, each lender uses a different scoring system to assess risk and liability. Also, some banks and building societies may specialise in lending under circumstances that others won’t. Take a moment to breathe. #2 - Don’t immediately apply to another lender Because you don’t know why your application has been declined, you don’t know whether the problem is something that needs to be addressed for all lenders or whether it’s just been an issue for that bank or building society in particular. Multiple failed applications may show up in your credit history, making it even harder to get your mortgage application through the next stage. So don’t act in haste. #3 - Talk to a mortgage broker about your options If your failed application was handled by a broker, you may feel there’s no point in talking to another one. But all brokers are different, with different experiences and different areas of expertise. It may be that a broker can review your paperwork and see an issue that hadn’t been obvious to your previous broker. If you managed your declined application yourself, it could be that you’ve made a simple error or omitted some key information without realising it. Any reputable mortgage broker should be able to spot this and potentially get you back on track. #4 - Do your homework (or make sure your broker has done theirs) Having an Agreement in Principle – where your mortgage is approved based on basic information and subject to a full application and review – is always going to give you a better chance of your full application being accepted. If you’re declined even though you’ve had the AIP, it could be for one of a number of reasons. It’s possible a more thorough credit review has turned up an undeclared adverse issue, for example. Or it may be that you’ve applied to a lender who, based on a deeper understanding of your circumstances, was never going to lend to you in the first place. Maybe you’ve changed jobs unexpectedly and didn’t know your proposed lender’s policy was to only accept applications where the applicants had been in the same job for 12 months or more. There are lenders out there who will accept applications from borrowers with poor credit, CCJs or who have been in their job for a short time or face a range of other challenging circumstances – and as long as they’re aware of that up front and the application is managed properly, there’s a good chance you can still get your application accepted by applying to the right lender. #5 - Ask the lender to explain why they declined the application For reasons which are understandable, some lenders can prove difficult to pin down on this. If it’s to do with something in your credit history then their access to the detailed data can be limited, even if they were inclined to share the information with you. At this point, they may point you in the direction of your credit score. But it’s important to know whether you were declined because of an adverse credit event or because you didn’t meet their policy in some other way, so it’s always worth you or your broker pushing them on the reason – it may be the clue that helps you to resolve the problem. While you may be anxious about the prospect of your application being declined, you shouldn’t spend time worrying that a ‘no’ is the end of the road. With specialist help and advice from an advisor who knows the mortgage market well, even applications that may look like they’re dead in the water may be able to be rescued. 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.
It’s always lovely when the values you promote as a business are recognised publicly, so there was open delight at Oportfolio when the company’s founder, Oliver Whitehead, was named Best Overall Adviser at the recent Primis awards ceremony. It was Oliver’s third year of success at the awards, which recognise and celebrate the best UK mortgage and protection advisers and are organised by Primis – one of the biggest networks of financial services brokerages in the UK. His award this year saw him retain the Overall Adviser award he won in 2018, a year after being named Top Mortgage Adviser in 2017. The accolade serves as a ringing endorsement for the very simple principle that underpins Oliver’s approach to Oportfolio, a business he started 11 years ago following a decade in financial services, running his own mortgage brokerage and as a Director at Alexander Hall. Oliver said: “Ultimately what we strive to do is look after people in the same way we would want to be looked after ourselves. It’s that ethos of wanting to help people and to go the extra mile in doing it.” In the end, this month’s award is ongoing reward for a seed which was planted back in 1998 when Oportfolio first opened its doors and welcomed its first client – that the values and ethics that the company is built on should run through the veins of everyone who has ever worked there or will ever work there. Building a company in your own image is no easy feat and, as Oliver himself observes, providing high quality service has become something of a dying art for many companies. But by doing things the right way from the start, the process has got easier as the business has grown and its client base has increased. There’s also the fact that Oliver insists that the first contact the company has with a potential client is as good as the last contact. He makes a point of responding personally and immediately, wherever possible, to an initial query. You might think that’s obvious, yet this proactive approach isn’t as common as you might imagine. What that translates into in most cases is a sense in the person on the other end of the phone that they’re being looked after and are in safe hands. “I know that when people get in touch with us, what they’re really looking for is reassurance. They simply want some love and to know that the people they’re talking to not only know how to help them, but actively want to help them. “In the end, that’s what my business has always been about – the desire to help people and to do that in the right way.” Oliver concedes that his own determination and commitment to deliver a consistently superior level of service is partly behind not just the awards success, but also Oportfolio’s continued growth and high client retention rates. “That has to be a part of it, yes,” he admits. “although you can never completely replicate yourself in other people. “But experience and knowledge also plays a big part. The whole team here is completely aware of the process that lies behind applying for a mortgage. We know it can be an anxious or worrying time – but our job is to take that worry away, to reassure them that with our help it wont be as stressful as it may seem to them.” Knowing the market inside out and understanding which banks will be prepared to lend what amount under what circumstances is a big part of being a successful brokerage, of course. But it’s where circumstances aren’t straightforward that is where Oliver expects Oportfolio to earn its stripes. “That’s where the hard work is done,” he says. “In finding solutions to the problems we come across so that the people we’re helping still achieve what they set out to achieve.” All of which means that the awards that currently sit on Oportfolio’s shelves are much appreciated by Oliver and his team – but are really symbols of the hard work done in the past, and a reminder that the same level of commitment to the great service is required today, tomorrow and beyond. 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.
Is it harder to get a mortgage when you’re self-employed? It’s a question we get asked quite a lot and the most simple answer is that it’s not necessarily more difficult, but the way in which affordability is assessed by prospective lenders is inevitably a bit different. In the end, there are a few simple things that you’ll need to remember and to bear in mind if you work for yourself and you want to change your existing mortgage arrangement or increase your borrowing to move home. There’s no such thing as a self-employed mortgage Mortgage products designed specifically for people who run their own businesses, either as a limited company or a sole trader, don’t exist. Whether you’re in a salaried job with an employer or you’re working for yourself, you’ll be applying for a standard mortgage product just like everyone else. That means you’ll be subjected to exactly the same strict affordability tests that every regulated and reputable lender applies to every loan application they receive. So far, so much the same. So, if the products and the affordability tests don’t change, what does? One obvious difference is the way in which your income is measured. The other is in the fact that you’ll have access to lenders who may specifically cater for the self-employed market and may therefore offer more flexibility when it comes to how they apply their lending criteria. Assessing your income If you’re in full-time employment and receiving a salary lenders will typically want to see a certain number of payslips going back over a prescribed time – usually 3 to 6 months, depending on the lender. Some people who are self-employed do pay themselves a salary through their company, but more often than not this isn’t the case. If you don’t receive a regular salary, then in order to assess your income for repayment purposes, lenders will instead want to see net income or dividends detailed in 2 years of company accounts prepared by an accountant (if you operate through a limited company) or 2 years of tax returns (if you’re a sole trader). Some lenders do accept financial information reflecting only 1 year, but they’re in a minority. If you’re a contractor, then a lender is likely to look at the value of your current and previous contracts, your experience and your professional history in order to reach a leanding decision. In most cases, the income you show in this way will be averaged out, although if you show income increasing year-on-year over time some lenders may use the most recent year for the basis of assessing affordability. Might my age count against me? The term of the loan (in other words, how long you want to take to pay it off) may be an issue for some lenders. The most recent data from the Office for National Statistics suggests most self-employed people retire later than their peers who are in full-time employment. Factors that drive this include pension value and the fact the same data suggests entrepreneurs opt for self-employment much later in life – and so require longer to build their businesses. There’s no statutory upper age by which you must have repaid your mortgage loan, but typically most lenders would need to give special consideration to any application for a mortgage that went beyond the age of 75 or 80. Why use a mortgage broker to help you apply for a mortgage if you’re self-employed? The key benefits of using a professional mortgage broker like Oportfolio are that we have existing relationships with lenders and we often have access to products you won’t be able to find for yourself online or on the High Street. What that means in practice is that we can identify the lender and product most suited to your needs now and in the future. Because we’re mortgage experts, we can also take the guesswork out of what information you need to provide, reducing your stress and hopefully making the process a little bit more efficient. The long and the short of it is that all things (and especially affordability!) being equal, people who work for themselves have just as much chance of getting a mortgage as anyone else – but it takes understanding and organisation. 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.