Mortgages are complex, to say the least – combine that with a highly active post-lockdown property market fuelled by the Stamp Duty Holiday and record low interest rates. Then add to the mix over 4000 mortgage products and 70+ lenders with varying criteria – if you want to buy your next home (or your first, or an investment property for that matter) where do you begin?
Well, unless you’ve got enough money sitting in the bank to pay for it upfront, you should generally begin by speaking to a mortgage advisor to get an idea of where you stand and what you can afford (actually, even if you have enough money sitting in the bank, it’s still a good idea to speak to a mortgage advisor!).
On that note, here are three questions that will help you pick your mortgage advisor’s brain to make sure you fully benefit from their knowledge and expertise:
Question 1: How can I make the most of the Stamp Duty Holiday?
If you’re seriously thinking of buying your next home, surely, you’d know about the Stamp Duty holiday, which has been great and has generated a lot of activity in the property market over the past few months.
Just to briefly go over it again: All properties under £500,000 are now exempt from Stamp Duty until March 2021, which means buyers can save up to £15,000 (i.e. the amount of Stamp Duty you would previously have paid on a half a million-pound property). This means nearly 90% of purchases will be exempt from Stamp Duty with the average saving across the country being around £4,500 (source Zoopla)
So, from a numbers point of view, it’s simple – but, it’s not just about numbers, what’s more important is understanding what it means for you and how you can make the most of it. This will vary depending on your circumstances, let’s have a look at some scenarios below:
- Firstly, the obvious, you can save anything up to £15,000 (depending on the price of the property you are purchasing) – use that for your next holiday or to build that conservatory in your new home!
- Secondly, you can put your Stamp Duty saving
towards your deposit which can be beneficial in two ways (and this is where a
good mortgage advisor can make a massive difference):
- Subject to your income and affordability and by matching you with the right lender, more money towards your deposit could mean a bigger budget for your next home – which could get you a home that was previously out of your reach. So, that house you’ve been ‘wishfully’ checking out on Rightmove, might just be yours now!
- Even if you don’t want to stretch your budget for a more expensive home, still, more money towards your deposit could get you a better mortgage rate, saving you on the monthly payments.
- Thirdly, if previously (i.e. before the Stamp Duty Holiday) you wanted to move to a bigger home but were put off by Stamp Duty costs and were thinking of spending your money on getting an extension instead, it’s time to think again and act quickly!
A combination of the above could be relevant for you and it’s crucial to get yourself a good mortgage advisor to work out exactly how you can make the most of this fantastic opportunity.
Question 2: What can you offer that a high street lender can’t?
The obvious advantages of using a broker over going direct to a lender is that the lender will only have a few of their own products to offer while a broker will have a myriad of products from multiple lenders. This will naturally increase your probability of finding the perfect mortgage for your given situation. A broker may also have access to special deals that wouldn’t be offered directly by the lender.
If you are in the early stages of the process, your advisor will also help you get your ducks in a row and make you more attractive to prospective lenders, this could involve a number of things such as registering to vote, clearing off credit card debts and changing certain spending habits.
Lastly, mortgage applications are tedious, you need to provide lots of documents and fill out detailed forms, your broker will do this with you and make sure you get everything right, making the process as comfortable as possible for you.
Question 3: What else can you do for me?
Let’s put things in perspective: You will only go through the mortgage process a few times in your life. According to a Savills research (published by the BBC) the average British homeowner moves home somewhere between 2 and 4 times during their lifetime, after their first purchase. However, your mortgage advisor probably sorts out more mortgage applications than that in a week! So, they know exactly what the process looks like and therefore and it’s worth getting all the advice you can; and if there is anything that you find confusing, ask them to decode it for you.
Your advisor can also connect you to reliable estate agents (if you’re selling your property to buy your next one) and to reliable conveyancers; and guide you through what to expect with regards to processing times etc. Having good estate agents and mortgage advisors on board are critical for the process.
Moving home is also a good time to review all your other essential financial affairs such as insurances (life, health, income protections etc.), pensions, wills and investments. Most mortgage advisors have an excellent financial network and will be able to help you with all these things either directly or through trusted associates.
We’d welcome you to pick our brains with the questions above and more! So, if you’re thinking of buying a property, get in touch with us today!