Guides

Ways to get the best rate on your mortgage

When looking to purchase a property you will more than likely need to take out a mortgage, and failing that a bridging loan if you cannot afford to wait for a mortgage to clear. When looking for a mortgage deal, obviously you will ideally want to find the best deal for you and there are ways in which you can ensure this. Recently, mortgage rates broke their respite, bouncing back after a recent slide. The 30-year fixed-rate mortgage averaged at 4.53% as of the 12^th of July 2018. This is an increase from the previous weeks at 4.52%.

We have put together a list of things which you can do to help you get the best deal on your mortgage possible.

Your credit score and credit history

Getting the best rate on a mortgage starts with your credit score and your credit history. Both are a crucial part of obtaining any type of finance, including a loan, a credit card or, of course, a mortgage. Basically, the lender’s underwriting team will use your credit history and current credit score to measure how much risk you pose as a borrower, as well as the rate they are willing to offer you.

If you are unaware, your credit score essentially summarises what is in your credit report, represented by a number. The highest indicating number is 999 and the lowest is 0. You can use your credit score to understand how your credit history or report might look to a lender. With this knowledge, you can attempt to boost your credit score by doing a number of recommended things including always paying off any debts on time and in full, and not applying to too many lenders at one time.

Pay the largest deposit you can reasonably afford

This may seem strange to some, but the larger your initial deposit is, the less you will ultimately need to borrow. Furthermore, your mortgage provider will see you as less of a credit risk if you put down a larger amount at the deposit stage. In exchange for a bigger deposit, you will usually be offered a lower interest rate.

Lenders tend to offer the best deals to those who put down 40% or more. If this is unrealistic for you, you can usually find good deals with a deposit of 20%. However, if you go any lower than this, expect the interest rates to shoot up.

Shop Around

Like when looking at any type of loan, your best bet is to shop around to compare what deals are available to you. Your bank is often a starting point when thinking about taking out a mortgage. If you are already a member of the bank you approach, you may find that they offer you discounts or rewards – however – this might not always be the best deal.

It is no secret that a mortgage is one of the biggest financial commitments you may ever take out. Therefore, it is very important to do your research and not just jump on the first deal you find which looks alright.

Beware of fees

The interest rate that you receive will have a large impact of your monthly repayments as well as the overall cost of your mortgage. However, this shouldn’t be the only thing that you consider. Be aware that with a mortgage comes many fees, some which are not so explicit. In some cases, the overall cost of the fees may actually outweigh the benefits of agreeing to a mortgage with a lower interest rate.

The three most common fees are:

• The arrangement fee
• The overpayment fee
• Early repayment fees

The arrangement fee is what you will pay your lender in order to cover the administrative cost of setting the mortgage up. This fee can be upwards of £2,000.

The overpayment fees involve overpaying your mortgage. This can save you money in interest and help you to repay your mortgage sooner. It is typical that lenders will let you overpay by up to 10% of the outstanding amount each year. However, some lenders want to dissuade overpayment and put a fee in place to ensure that it is not worth it.

The early repayment fees are similar to overpayment fees in that they are in place to dissuade you from paying off your mortgage early. The reason for this is because the lender will lose out. Not all lenders have the fee in place, so check this out before filling in any applications.

by Sophie Knight

Things to consider when looking to buy a house

Buying a house is an exciting step in your life, but it is also one of the biggest financial commitments to will ever make most probably. Therefore, you have to make sure you do it right – taking into consideration everything possible before making the jump. A big financial commitment where small mistakes can cost you even more than expected.

Nonetheless, with the introduction of the government scheme Help to Buy, owning your own house is becoming more of a reality for more people. In consequence, there are more people in need of advice as to what they should be looking out for when going about buying their first property.

You wouldn’t just spend 20 minutes making a decision about a property which you are going to live in for the foreseeable future, or even for the rest of your life! Some would, which is why we have put together this guide which highlights some of the key things you need to look at when visiting a potential property.

Should you be buying at this moment in time?

Look at the current climate of the housing market. It is true that we have had some devastating years where house prices were so high people simply couldn’t afford to move and years where people were receiving only a fraction of what their house was actually worth.

As a buyer, you should concentrate on whether buying is affordable and will ultimately be the best decision for you in the long term. This is better than buying in the mentality that you should be a homeowner by a certain stage in your life.

Mortgages

With buying a property comes a need for a mortgage, for most of us anyway. Buyers need to factor into the budget how much they can realistically spend each month paying back their mortgage.

As mentioned previously, the Help to Buy scheme has been in place for some years now. As a feature of this, the government have helped to increase the choice of mortgages for people with 5% to put down. However, borrowers will pay a premium at this level. Mortgage deals become a little for competitive if you have 10% or 15% to put down and the really decent rates come in once you can put down 25%.

If you are in need of money to buy a house now but do not have time to wait for a mortgage to clear, an option for you might be a bridging loan. A bridging loan is a type of short-term finance which essentially ‘bridges the gap’ between you and the mortgage, allowing you obtain the property without a mortgage being cleared. Rather than losing a potential property, you can apply for a bridging loan and receive the money in one lump within a few working days. Once the property has been purchased and has access to more finance, you will be required to repay the loan.

Check out the overall neighbourhood

When looking to buy a house, the location should be just as important to you as the property itself. There is no point living in a lovely house in an area which is worn-down and crime-ridden. At the end of the day, you can do a house up in a nice area, but you cannot move a house out of a bad one.

We advise that you should take some time after finding a property that you like to explore the neighbourhood. See what it has to offer – are there shops, restaurants, pubs, parks and so on? What are the local schools like? Is the town clean and presentable, or is it covered in litter and graffiti?

Is the building itself structurally sound?

When viewing a property, you should look out for things like big cracks in the walls as well as smaller problems like damp which may affect the structure and the living environment. Hairline cracks should be nothing to worry about and most places will have these, it is the bigger and more serve ones you should look out for.

You should also look at things like where the extension joins, bay windows and end-of-terrace walls – all of these can start to bow away from the rest of the house if not done well.

The roof is also an area of concern for buyers. Replacing a roof can be extremely expensive and you may not have the budget to do this on top of buying the property. A roof should last about 15 to 20 years, so you should check with the seller how old the roof actually is before making an offer because an old roof may give you grounds to knock the price down.

Evaluate how much storage there is

Often, buyers get so swept up in the excitement of the buying process that they miss out whether the properties they look at have sufficient storage for their amount of personal possessions.

Storage is a massively valuable asset on a house, it increases the monetary value and makes it a nicer environment to dwell in.

When looking around the property, you should think things like “where will I keep my vacuum cleaner, towels, beddings and miscellaneous boxes and products?” It is not impolite to ask the homeowner where they store things like this, after all, it is a selling point to have good storage so they will probably be more than happy to show you.

In addition to this, you should evaluate whether the rooms are big enough for your needs? The way that it has been styled by the sellers may make the rooms appear bigger than they are, but you should consider what the rooms would look like with your furniture in them.

Is the plumbing good?

Run the taps to check out what the water pressure is like. Ask the homeowner if the pipes are insulated and make sure that they are not made of lead as you will have to replace these as soon as possible. Check the radiators and the boiler work and aren’t too old, again these might need replacing adding more cost on to your move.

by Sophie Knight

Things to look out for when buying a property aboard

It is usually the case, understandably, that buying a property overseas is going to be more complicated than simply buying locally. If you are looking to acquire a property abroad, you may be wanting a holiday home situated in the sun or may be looking to actually completely relocate outside of your domestic country.

Second properties abroad are great for saving money on holidays in the long-term, as you never have to worry about finding and forking out for accommodation when you can simply just jet off to your own private home which is self-catered – no need to seek out an all-inclusive deal!

Plenty of people choose to find a home in a different country as part of their retirement plan and live out the rest of their lives in luxury, soaking up the sun after years of hard work.

There are a number of things which you need to consider when aiming to purchase property abroad. These include certain risks as well as working out how you are going to get a mortgage overseas.

In this guide, we will explore the difficulties you may face when buying abroad and provide advice as to how to overcome these potential barriers in your way, including:

• Getting to know the risks of buying abroad
• Getting a mortgage for your property based overseas
• Making sure you've researched the area
• Consider a time-share or joint ownership

Get to know the risks of buying abroad

Tax

Make sure that you are aware of how much tax you will be required to pay. You need to account for this when deciding if you can afford to move abroad or take up a second home overseas. If you have two properties, you will be paying tax on the one in the UK and the one in the country which you have opted to purchase a property in.

Check the paperwork

Be sure to acquire all the necessary paperwork beforehand. This includes permissions, licenses and planning consents – these should be in place before you sign any kind of contract or agreement which binds you to the property.

You also need to know your Visa rights. In most countries, you are not allowed to live in your property for the whole year if you are on a standard Visa. You will have to see what the rules are in the country which you are choosing to buy in before you look to buy at all. It may be that you can only stay for a few weeks or months at a time.

Exchange rates

You need to be aware of the risk of the exchange rates of any given country. Even just a small shift in the exchange rate can have a profound effect on the value of your property. The exchange rates changing could even mean that your property and/or your mortgage repayments practically unaffordable overnight.

Getting a mortgage for your property based overseas

If it is the case that you have a mortgage where you are going to be making the repayments in a foreign currency, it is compulsory for the lender to make you are of the exchange rate if it fluctuates by more than 20%. Any fluctuations can seriously affect your ability to meet any future mortgage commitments which you have signed up for.

Therefore, in order to protect borrowers from falling victim to this, lenders must offer the borrower the option to repay the mortgage in a different currency to the one it is currently being paid in.

If you do not have time to get a mortgage sorted before completing on a property, consider a bridging loan. If you are wondering what a bridging loan is, essentially, A bridging loan is a type of short-term finance which basically acts to ‘bridge the gap’ between you and the mortgage, allowing you to obtain the property without a mortgage being cleared. Rather than losing a potential property, you can apply for a bridging loan and receive the money in one lump within a few working days. Once the property has been purchased and has access to more finance, you will be required to repay the loan.

Make sure you have researched the area

You may be set on a particular country, but are you clued up about the area you are looking in? It may be time for an excuse for a quick holiday to explore the area! You will want to look at the local facilities; is it close to a food store? Are there nice places to eat and drink around, if that is important to you? What things are there to do in the area? And what are the transport links like?

If you are not set on a particular country but just know you want to buy abroad, look at the cultures, safety and economic and political stability of a territory before you make the jump into signing anything. It is not wise to look at getting a holiday property in somewhere which is known for acts of terrorism, war and political unrest. Not only will you probably feel less safe visiting your property and therefore it might not make the purchase worth it in the long-term, the value of the house will be low due to these factors. So yes, you may be able to buy it for a cheap price, but when it comes to selling it you are likely to make a loss.

Consider a time-share or joint ownership

If you are not going to be in your overseas property all of the time, why not consider saving some money and partaking in a timeshare or joint ownership. Buying with friends, family or finding people through an organised group is sure to open the door to plenty more opportunities as to the type of property you can realistically afford to buy, as well as a more premium location.

The way this works is that you have joint-ownership of the property, all parties having full use of the home. You can arrange to book it off for yourself or you can all enjoy it together.  This way, you can have a private holiday home for a fraction of the price and it is still being used, cleaned and maintained when you are not there if someone else is from your agreement.

by Sophie Knight

What is Asbestos and how do you get rid of it?

Asbestos is a naturally occurring mineral made up of extremely small fibres. It was used in building construction commonly between 1945 and 1985 but was banned from use when the risks it can potentially bring were identified.

On average 20 tradesmen die every week as a result of asbestos exposure. Building contractors, plumbers, electricians and decorators are particularly at risk because they might interact with asbestos without realising that they are.

The management and responsibility of asbestos are laid out in Regulation 4 of the Control of Asbestos Regulations 2012.

You are most likely to uncover asbestos in a number of places:

1. Sprayed asbestos and asbestos loose packing, which is being used as fire protection
2. Moulded or pre-formed lagging used as thermal insulation to pipes and boilers
3. Asbestos Insulating Board used for fire protection and thermal insulation or as partitions and ducting
4. Asbestos cement products which have most lily been moulded into corrugated roofing sheets, cladding, guttering, downpipes, flues and water tanks

If asbestos material is disturbed or if they are in poor condition, they release a huge number of needle-shaped fibres which can be inhaled into the lungs. These fibres can then lodge in the lungs and can lead to several diseases a number of which are fatal, namely lung cancer, asbestosis or mesothelioma. Click here, to learn more from the government.

Frighteningly your home has a 50% chance of containing asbestos but experts say that if the asbestos is not disturbed you are at little risk of harmful exposure, but the sites or pockets where asbestos may be harbouring must be regularly checked as a preventative measure

Who is responsible for maintenance or repair?

If you are responsible for maintenance or repair of premises or equipment, you are the duty holder and will need to follow the next steps, but this only applies to the following:

• All non-domestic premises
• The common parts of domestic premises

Testing for Asbestos

If you are not planning on undertaking any works and you have had your premises checked previously for asbestos you do not need to worry. But if on the other hand, there are a number of surveys you can have performed to determine asbestos’s presence:

• Asbestos management survey
• Refurbishment/Demolition survey
• Brownfield Sites asbestos survey
• Old Equipment pre-2000 guidance service

N.B. Before undertaking any asbestos work you are legally obliged to inform those at risk of any works you have planned.

Removing Asbestos

We highly recommend bringing in a professional to remove asbestos but if you believe you are qualified to remove it yourself then there are a number of steps you can take to do so.

The link below will take you to a website which will allow you to get in touch with someone to help you remove the asbestos from your home.

Before beginning asbestos removal work, however, it is essential that either yourself or contractors complete the ASB5 form and return it to the Health and Safety Team before starting.

Competence for removing asbestos is something that is formulated over time not just by taking a simple course, however, the recommended information is often learnt through the book in the link attached.

If you are in the process of moving house, consider taking out a bridging loan to save yourself the stress of waiting for a mortgage to clear and potentially losing your property altogether.

by Sophie Knight

What happens if you have squatters?

Squatting is when a person enters a property on purpose without permission and lives there or has plans to live there. Squatting is occasionally referred to as “adverse possession”, but this is not a term you are likely to hear colloquially.

It is important to remember that squatting in a residential building is illegal. It can likely lead to 6 months in prison or alternatively a large fine, or in a worst-case scenario both.

A person who enters a property with the permission of the landlord or owner is not considered a squatter.

N.B. If you are renting a flat or house and you are late with your rent but you continue to live at the property you are not squatting if you continue to reside there.

What is legal and what is not because slightly more confusing when looking at the protocol surrounding squatting in a non-residential building or land. Whilst it isn’t technically a crime, it is a crime to damage the property.

It is also typically a crime not to live a property when you are asked or instructed to do so by a following number of persons:

• The owner
• The police
• The council
• A repossession order

Why do people squat?

Before dealing with the squatter it might be relevant to consider the motivations behind people choosing to squat.

The United Kingdom has a long history of issues with squatting however things became critical in the 1960s and 1970s as the youth became more interested in alternative lifestyles and became more politicised. However, these lifestyle squatters are in the minimum and it is mostly rough sleepers or other vulnerable groups who will be squatters. According to the homeless charity Crisis, 39% of homeless people have squatted for some period of time.

Removing Squatters

You can remove squatters uses two main processes. The first is called an Interim Possession Order or making a claim for possession.

N.B. Do not try to remove the squatters yourself by threatening them verbally or using physical force, because if you do this you are technically committing a crime

Interim Possession Orders

You are only eligible to apply for an IPO if it has been 28 days or fewer that you discovered your property is being squatted on.

The IPO has to be filled in and then sent to a county court. The court will then send a confirmation of receipt within a few days and they will also send you a number of extremely important documents that you must present to the squatters within a 48-hour time frame.

Once the squatters have themselves received the IPO they are at risk of going to prison if they don’t leave your property within 24 hours or they don’t stay away from your property for 12 months.

If you want to the final possession of the property in question you have to file a claim for possession. You can do this either as a part of your IPO application or separately online, it depends on your preference but both are valid.

N.B. You cannot use an IPO if you are also claiming for the damages caused by the squatters if this is the case you should make a normal claim for possession; or furthermore, the IPO does not apply if you are trying to evict former tenants, sub-tenants or licensees

N.B. It is important to remember that to have an interim possession order can often be as costly as a couple of thousand pounds.

Squatters' Rights

A squatter who has been residing or a property or piece of land can potentially become the registered owner even if they’ve occupied without the owner’s permission.

As a squatter who are eligible to apply for this if you fulfil the following conditions:

• Either one or a succession of squatters have occupied the property for an uninterrupted period of 10 years or more
• You or those who came before you have acted as if you were indeed legal owners of the poetry
• You or any of the predecessors didn’t have the owners permission

How to keep squatters off your property?

As if fairly obvious having efficient security is one of the most crucial factors to preventing squatters from coming to settle on your property. If they force their way onto your property they have caused physical damage and this is an offence. If you are leaving your property for an extended period of time it might be worthwhile informing neighbours and other relevant individuals so they can keep an eye out on your property. There is a third option, which is to sign your property over to one of the numbers of UK property guardian schemes which look after properties of personal and commercial use on behalf of the owners.

What do you do if you suspect there are squatters in your neighbour's property?

If you are of the suspicion that someone might be squatting in your neighbour's house and you are aware that they have not asked for anyone to come stay there whilst they are away, it is the best course of action to call the police.

Where will a squatter live after they have been removed from the property?

If you were previously a squatter and then are removed from the property and have nowhere to reside there is the chance that the council may be able to rehouse you or help organise alternative residential plans for you.

For those who are in the process of buying a property but need to complete before they are likely to get a mortgage approved, see our information on bridging loans.

by Sophie Knight