• Mortgage Ten Commandments!


    1. Check your own credit first - plenty of ways to do this free now but the equifax or experian free trial still gives the most accurate reflection of your creditworthiness. Much better than getting an agreement in principle every time you look at a property gradually dragging your credit score down.

    2. Plan Ahead - If your employed think about all your outgoings as the lender will assess them, clear any debts and end any commitments you can three months before you need a mortgage if you can. Same if your self employed but do likewise with your accounts, accept you may have to pay more tax to get the mortgage you want.

    3. It's not all about the rate - look at total costs and long term prospects with that lender, the best 'deal' might be with a lender who won't lend you what you want.

    4.The right order - find out what you can borrow, how much it costs and what the process is before committing to an offer and a tight deadline with the estate agent.

    5. Prepare for a curveball - no matter how well you or your broker are prepared, lenders have some unusual interpretations of the rules and some incredibly inefficient and baffling procedures. Your not home and dry until you get the mortgage offer and this can take some weeks.

    6. Short term loss, Long term gain - paying for a more detailed survey or employing a good local solicitor instead of a cheaper online one gets these crucial jobs done properly. Cutting corners could be costly down the line when you move in.

    7. Honesty, Honesty, Honesty! - Assuming you are using a broker (see 10) tell them your exact situation, don't try to pretend you are an employee when you're a director on a 'tax efficient' income in your dads company and don't try to hide bad credit behind hidden addresses or ignore it altogether, it could cost you your chance of getting a mortgage for a long time if the wrong lender is approached. If the broker knows upfront they may know a lender who could help, second chance could be no chance.

    8. You get what you pay for - if a property is significantly cheaper than those similar around it there is likely a good reason, structural problems, unusual construction, bad area, short lease, flood risk, dodgy neighbour or something else. Don't rely on the agent to tell you, they work for the vendor, not you, and are being paid to sell it, that's all.

    9. Know how 'Risky' you are and behave accordingly - If you have missed credit payments, have a lot of outgoings, are borrowing the maximum you can, are short term self employed/contracted, have little or no deposit equity, are new to the UK or even your job or are using an elaborate tax plan recommended by your account to declare minimum income (there are other scenario's too), lenders will see you as high risk and some/all may not lend to you or may not lend you what you want. No amount of bravado about the strength of your business or the mistake made by the creditor that caused your bad credit will hold any water. Mortgage lenders deal in facts, not fiction.

    10. Employ an professional and trust them to get the job done - by a professional we mean a qualified whole market mortgage broker or Independent Financial Adviser who works for you. Not a bank adviser who can only sell their own products. Also remember estate agents are rarely qualified and do not have the same set of regulations protecting you as the above will have...and the broker/IFA is working for you, nobody else. Trust them with the market, they have nothing to gain by recommending you the wrong product and are professionally bound to recommend the most suitable one for your needs, if you look online and find a 'cheaper' deal it is almost certainly one not suitable for you in terms of borrowing what you want. Remember if you buy online through a search engine, you are making an 'informed choice' and have no comeback if it goes wrong, using a broker gives you the peace of mind that they are taking responsibility and you are protected by their regulations.

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



  • Self Employed and looking for a mortgage?

    What you need to know BEFORE you start looking for your new home or refinancing your current one.

    There's no doubt it's harder to get a mortgage for everyone, especially the self employed than it was a decade ago. The days of 'self certifying' your income are long gone and you must prove your income for any form of borrowing and this must directly relate to the amount of income you pay tax on. Below are to bullet points to help you through to getting the best mortgage you can.

    * Plan Ahead - if your thinking of moving, most lenders will take an average of the last two (maybe three) years figures, so talk to your accountant and liaise with your broker well in advance to ensure you maximise your taxable income.

    * What is the definition of self employed? - Sole traders. partnerships, limited company /LLP directors. In mortgage terms, If it’s your company and your are a director and major shareholder of it (over 20%), then it is your business and you are self employed. If someone else owns the company and you are simply an employee, then your employed and that is different.

    * Pay your dues - you can only borrow against the income you pay tax on, mortgage lenders don't buy elaborate tax avoidance schemes. In a nutshell if you are a sole trader/partnership they will use your NET PROFIT, if you are a director holding at least 20% of shares in a limited company they will combine your DIVIDENDS plus DIRECTORS SALARY AS SHOWN ON YOUR TAX RETURN or NET PROFIT, never both.

    * Know your SA302's & tax year overviews - this is the form HMRC can issue which confirms the amount of income declared and tax paid during a given tax year (last two years minimum). It is not routinely issued so you or your accountant must ask HMRC for them. They can take weeks to arrive so again make sure you have these before you apply for a mortgage. Most lenders ask for these AND the accounts that match them, draft accounts are OK to give your broker an idea of earnings but lenders won't lend based on draft account figures.

    * Different Priorities - your accountant/tax adviser is legitimately offsetting your tax liability as part of their remit. Your mortgage broker needs you to declare enough income to obtain the mortgage you want, both are helping you but remember they have almost an opposite priority.

    * Get the right provider for you - some lenders are more helpful than others to the self-employed. for example some lenders only need one year of accounts or will just work off your latest figures, with certain professions some lenders will not need your accounts or SA302 at all if you have a professional contract and a track record in that profession. Ask us how



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call 01992 301210 or 07737016689 mail :dean@masonsfinancialplanning.co.uk

looking for tips on moving or refinancing?

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Masons Financial Planning Limited. Registered in England and Wales, under no. 09647271. Registered office address - 6 Bell Lane, Broxbourne, United Kingdom, EN10 7HH
Masons Financial Planning Limited is an appointed representative of Intrinsic Mortgage Planning Limited which are authorised and regulated by the Financial Conduct Authority.The Financial Conduct Authority does not regulate on Buy to Let and Commercial mortgages.
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