What happens after I have a Decision In Principle (DIP)?

A decision in principle may also be referred to as an agreement in principle. This is simply confirmation from your chosen lender that they could be willing to lend a certain amount, subject to their final checks. This step can give house hunters the confidence to start their search and even put in an offer on a home. After securing a decision in principle, these are the next steps.

1. Documentation

The original documentation will be gathered, reviewed and certified by your lender.

2. Further checks completed

Your lender will check affordability once again. The lending criteria and market position research will also be revisited to ensure nothing has changed since the initial decision in principle.

3. Choose your conveyancing solicitors

We have relationships with excellent conveyancing solicitors. If you choose to work with our solicitors, we will instruct them to begin the conveyancing process.

4. Survey completed

The client valuation will be confirmed. This is an essential step for the lender to confirm that the house is worth what you are willing to pay for it.

5. Payment details collected

You may need to provide credit or debit card details for certain upfront costs. This included lender charges, applications and survey fees.

5. ID checks completed

Your lender needs to meet you in-person, or via a video call. This is to check your identity and to ensure you are who you say you are.

6. Completed application submitted to the lender

The full application will now be submitted to the lender and reviewed by an Underwriter. They may need to carry out additional checks, including credit checks. Your credit score will be checked again to ensure you haven’t made any large credit applications between the decision in principle and the full application. You will also be checked against a Sanctionlist for politically exposed persons. Internet searches may be carried out on your employer to determine the company size and position. If you are self-employed, the Underwriter may check for any information held at Companies House.

7. Application document supplied to Underwriter and points clarified

This will typically happen in the first five days after submitting your mortgage application. A good mortgage broker will anticipate the information and prepare the relevant documentation for when it is requested. If there are additional documents required, we will contact you directly.

8. Supporting documents prepared for the solicitors

If you choose to use our conveyancing solicitors, we will provide them with ID and proof of address on your behalf so that they can begin work.

9. Lender’s survey

In nearly all cases, the lender will instruct a surveyor to view and appraise the property. This helps to protect them in the event they have to repossess the property. They will also address the value of the property and the potential rental income if it is a buy-to-let property.

Some mortgage providers will instruct this survey once the application form has been received while others will wait until further through the process.

The surveyor will contact the person who can provide access to the property. When purchasing a new property, this will often be the agent. If remortgaging, you will be the point of contact.

After a surveyor’s visit, you can expect the written report to be delivered in 24 to 48 hours. This will join the pipeline of documents to be reviewed as part of your application.

If the report is unclear, the lender may ask for further information which can delay the application. If the report uncovers issues such as damp or damage to wood, this may trigger further checks and the lender may request a “timber and damp report”.

10.Final checks

Once all documents have been checked and the Underwriter has all of the information required to make a decision, they will either make a formal offer to lend or reject your application. If your application is more complex or if the value is high, a Senior Underwriter may be called in for a second opinion.

11. The mortgage offer is delivered

Your lender will provide a legal document by email and will send an enhanced version to your solicitor in the mail. This letter will outline the conditions to be satisfied. You may also receive a copy of the valuation, but this isn’t guaranteed.

12. Legal processes

Your mortgage broker’s job is now complete and your solicitor will be your main point of contact. They will give you details on the completion date, when funds will be released and when you will get the keys.

13. Start your insurance policies

Many lenders required insurance as part of the mortgage application process. Your life cover should be placed “on risk” by the exchange. You may also be responsible for building insurance. We can provide advice and support on insurance companies and how to arrange the right level of cover for each stage.

14. Completion

On the completion date, you will have the keys and will be ready to move into your new property. In the case of remortgaging, the lender will change and the funds will be released.

15. Register the title

Your solicitors will register your ownership with the Land Registry

If you need help securing a decision in principle, get in touch with Niche Mortgage Info. We provide bespoke advice for individuals with unique mortgage application needs.

Using gifted deposits to fund your mortgage

More and more people are turning to gifts from relatives to help fund their dreams of homeownership. With wages failing to keep up with inflation, monthly budgets are stretched to the maximum, leaving little room for savings. To help plug this gap and help individuals onto the property ladder, older relatives may choose to give a gift to put towards a deposit. In some cases, this will bolster savings but in many cases, the gift is the entire deposit.

This might seem like a practical solution to a common problem, but it can cause issues for many lenders. Some lenders are sceptical about large sums of money being given as a gift. In this article, we will look at how to declare your mortgage deposit as a gift and how to limit the damage this can do to your application.

Why are mortgage providers sceptical about gifted deposits?

There are three main reasons that lenders are sceptical about using money given as a gift as a deposit. First off, lenders prefer when borrowers use their savings. They might be nervous about an interested third party. And finally, in the case of a buy-to-let property, the gift could be considered an investment. Let’s look at these three concerns in more detail.

Lenders prefer personal savings

There is a very simple reason that lenders prefer you to use your savings. It shows a commitment to your finances and the ability to live within your means. Saving money is not an easy task, and when you are trying to demonstrate that you are fiscally responsible, using your savings is an excellent way to achieve this. By showing that you have consistently had a surplus of money at the end of each month, you give the lender confidence that you will be able to make the repayments.

Lenders worry about third party interests

If you accept a gift as your deposit, there is concern that the person giving the money may make a legal claim over partial ownership. If the borrower were to default on the mortgage, the individual who gave the gift of a deposit may need to be consulted during the repossession. This complicates things for the lender.

Likewise, while the lender has the legal right to check the financial status of the applicants, this doesn’t extend to the person giving the gift. This raises issues for money laundering checks which are required by law. The lender must take a leap of faith when accepting a mortgage application from someone with a gifted deposit.

Buy to let investment

If the property is a buy-to-let purchase, then the gifted deposit will be considered as an investment. A buy to let is an investment, so there is no reason to believe that the gifted deposit does not come with strings attached. If the interested third party expects a return on their investment, this can complicate things for the lender.

The lender may seek written confirmation from the third party that confirms they do not have a financial interest in the property. However, this isn’t always accepted. A parent might wish to help their child onto the property ladder, but helping them expand their housing portfolio is another matter entirely.

Who can give a gift for a deposit?

There are also rules surrounding who you can accept a gifted deposit from. In most cases, the majority will only accept an application if the gift is from a parent. Even less would accept an application if the deposit is a gift from grandparents, siblings, aunts and uncles or extended family. Hardly any lenders would accept an application if the deposit is a gift from a friend.

What if the deposit comes from a relative abroad?

Lenders will be very nervous about accepting an application when the deposit is a gift coming from an overseas bank. The lender has an obligation to carry out Anti-Money Laundering checks, and this would be more difficult when the money is from overseas. While lenders do have the ability to carry out international checks, this complicates the process for them. Building societies would not be able to carry out these checks and would rule them out entirely.

Lenders will likely ask that the money be transferred to a UK bank account, rather than coming directly from overseas. They will also need photo identification from the person giving the monetary gift. Some countries are favoured more than others by lenders, so this will also play into the likelihood of being accepted.

Will the gift giver have any claim to the property?

No, for the gift to be a true gift, they would have to waive all rights to reclaiming that money or claiming a portion of the property. They would not be able to place a charge on the property for repayment of the gift in the event of a future sale. This is why family members need to think carefully about the nature of the gift.

To find out more about gifted deposits and how to increase your chance of being accepted for a mortgage, get in touch with Niche Mortgage Info today. We can provide advice and support on the best route forward when purchasing a property with a gifted deposit.

Mortgage solutions for Right-to-Buy on a flat with deck access

Deck access refers to a walkway that leads to the door of a flat. This balcony walkway is common in ex-council flats, which makes them a common obstacle for Right-to-Buy mortgages. Deck access can make a mortgage application more difficult.

Properties with deck access are considered to be more difficult to sell, so lenders are typically concerned about the risk of repossession. They could be left with a property they cannot sell if the borrower is unable to keep up with repayments. For this reason, many lenders will be wary of this type of property.

In this guide, we will look at some of the best ways to secure a mortgage on a deck access property.

Check with the local authority or building management

If any of the other flats in the immediate area are privately owned, this will give you some confidence that you may be able to go ahead with the purchase. Check out Right to Buy papers for a contact name. The more privately owned properties the better, as this will give lenders confidence.

Speak to your neighbours

If you already know that your neighbours have purchased their property, ask which lender they used. This can help you to narrow down your search. Remember that lenders can change their policies at any time, so this isn’t a guarantee. However, it can be helpful to know where to start.

Take pictures

Taking a few photographs can save a lot of money when compared with paying for a survey. This is a preliminary step, and should not be considered as a way to avoid a survey entirely. However, it can help lenders to understand the type of deck access you are dealing with.

Approach the right lender

As mentioned above, lenders change their policies all the time. By working with a specialist Right-to-Buy broker, you can narrow down your search and increase your chances of being accepted. Get in touch with Niche Mortgage Info to find out how we can help you to purchase your ex-council flat with deck access.

Renting a buy to let property to family

It’s a noble thing to want to help a family member out by letting them live in your buy to let property. Unfortunately, your lender might not see it this way. In this article, we will look at some of the steps you can take to rent to a family member without worrying about your mortgage provider.

What is the issue with renting to a family?

Buy to let properties are essentially a business, and they need to be operated as such. The issue a lender will have with you renting to a family member is that you are likely to offer them a below-market rent. You are also much less likely to chase missing rental payments.

When making a decision on a buy-to-let mortgage, lenders will look at the market value of the property to help them determine if the mortgage is affordable. Remember that many buy-to-let mortgages are secured without looking at the rest of your finances. Lenders make a decision based on the rental income more than covering the mortgage payments. They don’t have any way to accommodate your charitable adjustments to rent.

This isn’t the only reason for lenders to be wary. The Financial Services Conduct Authority also imposes consumer safeguards on any property that is used at least 40% by a family member. This means that the lender and broker have to justify their recommendations.

A new wave of checks that came into play in April 2014 also increased the bureaucracy for lenders. This led to many prominent figures leaving the family lettings market due to added pressure. This included BM Solutions, which is a prominent figure in the buy-to-let market. The new difficulties and checks required for renting to family members make this route unviable for many lenders.

What solution is available?

We aren’t called Niche Mortgage Info by accident. We can facilitate an introduction to brokers with access to lenders still offering a buy to let mortgage that will enable you to rent to family members. This isn’t about finding a loophole; rather, it’s about finding a lender that actively allows lets to close family members.

However, it’s important to note that the solution isn’t as simple as you might like. In essence, you would be securing a second residential mortgage that allows rentals. This means that affordability would be based on your income and not the potential rental yield. Another point to note is that many lenders will require the mortgage to be on a repayment basis and not interest only.

Below we can explore some of the criteria you can expect to face when looking for this type of mortgage. Note that this is a broad picture of the sector and should not be taken as a guarantee of acceptance.

Criteria for buy to let family rental

Minimum income of £25,000, for at least one applicant, not including pension or benefits.
40% deposit
Applicant must be an owner-occupier, but the property can still be mortgaged.
No gifted deposits accepted.
The property must be standard construction.
Must be able to afford both mortgage payments.
Mortgage terms up to 75 years of age.
London and M25 properties must be valued at over £300,000.
Portfolio with no more than 10 properties.
Rent must cover 125% of the mortgage payments

The section most likely to trip up applicants is the no gifted deposits. This is because the person planning to rent the property must not be the one who has given you the deposit. To avoid this entirely, lenders ask for you to provide the deposit.

If you are looking to purchase a property for a family member to live in, get in touch with Niche Mortgage Info today. We can help to guide you through the process and put you in touch with brokers who can help you secure the mortgage you need.

HMRC SA302 & Self Employed Documents For Getting a Mortgage

When applying for a mortgage, lenders want to see evidence of your income. For the self-employed, this will mean digging out your SA302 forms.

The SA302 & Tax Year Overview is required for a number of requested years. Read on to learn how to access this form and how to make sure your SA302 is accepted.

Where do I find my SA302?

Once you have filed your self-assessment tax return, HM Revenue & Customs (HMRC) will provide this information through your online account. You will need to go to the HMRC self-assessment website and enter your login details You can then access an online version of your SA302 and your tax year overview.

Paper originals are still accepted by many lenders if you do not have access to your online account. These can be ordered by you or your accountant by calling HMRC on 0300 200 3310.

You can use a combination of paper and online forms if you are submitting for multiple years.

What to check before you submit

For your SA302 form to be accepted by the lender, you need to make sure the following information is visible:

HMRC logo
Unique Tax Reference (UTR)
Your name
The tax year

How to print your SA302 form (online)

You will need access to your HMRC online account to be able to complete these steps.

Head to the HMRC website
Select ‘self assessment’. If you are only registered for self-assessment, you may be automatically redirected to this screen.
Follow the link to “View Your Tax Returns”
Choose the relevant year and select “Go”
Click on “View Return”
Click on “View Calculation”
Click on “View and print your calculation”
Follow the instructions on the page to print your SA302 form

Tax Year Overview

In addition to your SA302, you will also need to provide your tax year overview. This helps lenders to confirm the amount of money you have earned. The tax year overview is only provided once an individual has submitted their tax return. The tax year overview shows the amount of money paid to HMRC, or any refunds due for a given tax year.

To print your tax year overview (online) follow these steps:

Head to the HMRC website
Select ‘self assessment’. If you are only registered for self-assessment, you may be automatically redirected to this screen.
Click on “self assessment overview”
Click on “view accounts”
Click on “tax years”
Select the relevant tax year and click “go”
Follow the link to “print your tax year overview

Complete these steps for all relevant years. The more years of tax returns you can provide, the more likely you are to be accepted by a lender. If you’re struggling to secure a mortgage with self-employment income, get in touch with Niche Mortgage Info to find out how we can help.

How to secure a mortgage based on 6 times income

Mortgages of up to 6 times an individual's income started to appear around 2011. This was at a time where interest rates were at historically low levels, meaning that mortgages of this size were more affordable than ever before. This type of mortgage could even be more affordable than a mortgage offered at 3 times annual income which was standard in the 80s and 90s.

There is still a strong appetite for this type of mortgage as interest rates remain low and the housing market is booming. The good news is that 6 times income mortgages are available for single and joint applicants. Employed and self-employed applicants are also considered, although the latter will need multiple years of accounts.

Since the Mortgage Market Review (MMR) which followed the 2008 financial crash, lenders now have to place more emphasis on the role of dependents in your life. This includes children and parents who may be living with you. This is to ensure mortgages are affordable, particularly when looking at such high levels of borrowing. Having just one dependent on your application could reduce the maximum borrowing to 5.5 times annual income.

When looking for a high multiple mortgages, it’s vital to seek expert advice. As with any large financial decision, you need to be sure you are getting the best possible deal. Rates will rise again and this could have a significant impact on your ability to afford your mortgage. This is why we recommend working with Niche Mortgage Info to find a broker that will help you to secure the best possible deal.

What factors will help you to secure a 6 times income mortgage?

Lenders are often flexible in their approach. So if your application is presented in the correct light, they will be more inclined to consider your application. When going through the underwriting process, lenders might be inclined to allow one weaker aspect of your application to pass if you are in good standing in other areas.

While an application on £15,000 per year won’t be viewed as favourably as an application on £25,000 per year, there are other factors to consider. For example, a worker at the start of their career can anticipate a bigger increase in their earnings than someone nearing retirement.

What’s important is the positioning and the conversation between your broker and the lender. They will be able to highlight the key aspects of the application which make you a stronger candidate.

What times of income can I include in my application?

When completing your mortgage application, you may include the following income sources:

Your basic salary
The net profits from self-employed or sole trader work
Salary and dividends for director of a limited company
Your pension and annuities
Income from a second job
London weighting or a large town allowance
Bonuses, overtime and commission provided it is regular
Shift allowance or car allowance
Mortgage subsidy or housing allowance
Family business employment
Short term and long term working contracts with a history of renewal
Maintenance
Fostering income
Excess income from rental properties

You could also include child benefit and working tax credits, but having dependents will reduce the chance of securing a 6 times income mortgage.

Can I secure a 6 times income mortgage with bad credit?

No, a lender would want to see a strong credit history with no missed payments, defaults or CCJs.

Can I get a 6 times income mortgage when I have recently changed jobs?

This will depend on your employment status. If you are a contract worker and have a history of contract renewals, this shouldn’t be a problem for the lender. Likewise, if you have recently started working as an employee and you do not have to complete a probationary period. If you have recently started self-employment, this will rule you out from most mortgage applications.

What deposit will I need for a 6 times income mortgage?

Most lenders will want to see a 10% deposit, ideally from your savings or as a gift from a parent. If you want to purchase a £100,000 home, you would need a £10,000 deposit and would be applying for a £90,000 mortgage. This means you would need to be earning £15,000 per year.

Can I get a joint mortgage with 6 times income?

Yes, you can apply with a partner to increase the total borrowing amount. For example, if you earn £30,000 per year and your partner earns £35,000 per year, you could secure a mortgage of up to 6 times £65,000, which is £390,000.

Will a credit card and personal loan prevent me from securing this mortgage?

Any existing payments and financial obligations will be taken into consideration when making a lending decision. The decision to offer 6 times your annual income is not about income alone, it also looks at the affordability of the loan. Many lenders will deduct the amount of outstanding debt from your income to help to make sure the loan is affordable. If you can pay off this debt before applying, you could be in a much better position.

If I own another property, will this impact my application?

If you have a rental property, the income from this rental must exceed your existing mortgage commitments. If you have a significant margin, this income may be factored into the 6 times income calculation. A smaller margin could reduce the amount you can borrow.

Can I remortgage to 6 times my income?

Yes, and this could be an excellent way to bring down your monthly payments. You could also release equity from your home to pay for home improvements.

Can a married individual apply alone?

Unfortunately no, if you are married, you will need to apply with your spouse.

Can I get a 6 times income mortgage with credit issues?

Lenders will want to see a history of good credit before offering such high levels of lending. As a general rule, a CCJ, arrears or defaults will cap your lending capacity at around 4.5 times your annual income. An IVA or bankruptcy will cap your lending capacity at around 3.5 times your annual income.

If you have bad credit and want to secure the best possible deal, we can help to connect you with the right brokers and lenders. We have experience working with borrowers with unique personal circumstances who want to secure a great deal on their mortgage, remortgage or buy-to-let property.

6 things you need to know about a mortgage agreement in principle (AIP)

When applying for a mortgage, many lenders will advise you to secure something known as an agreement in principle. Since the mortgage process requires you to learn lots of new phrases and terms, we want to spend a little bit of time exploring what this means.

At Niche Mortgage Info, we provide advice and support to prospective homebuyers looking to secure a great deal on their mortgage. In many cases, we will help them to secure an agreement in principle first using one of our specialist mortgage brokers.

If you are a first time buyer and have been advised to get an agreement in principle, read on to discover what this means.

How Long Does A Mortgage In Principle Last?

An agreement in principle will typically last around 30 days. Some may be valid for 90 days. Lenders will usually make it quite easy to renew the agreement, but the longer you leave it, the more chance there is that your accounts will change month-to-month.

Every time you run your application for an agreement in principle, this will show up on your credit report. This can affect your status and cause a drop in your credit score. Don’t be pressuring into running one earlier than you need to by estate agents or sellers.

What is an agreement in principle?

The agreement in principle gives you the confidence to move forward with your home search. It offers reassurance that lenders are likely to accept your mortgage application based on your income and finances.

Remember that it isn’t a final decision and the application could still fail during the full application, but it is often a good sign that you have found a lender willing to work with you.

A mortgage in principle is followed up with a full mortgage application once you have found a property you want to purchase. The information provided for the mortgage in principle will be revisited, so you must be accurate and honest in your initial application. A mortgage underwriter may have some doubts if it is found that your initial application for a mortgage in principle was found to be inaccurate.

If you haven’t been offered a mortgage in principle but have instead been offered an agreement in principle, don’t worry. These are the same things and serve the same purpose.

Not every agreement in principle is created equal, and they do not offer a guarantee that you will be able to secure the funding to purchase a home. It may be that the final amount offered is lower than you were expecting, so don’t get too attached to a property until you have secured a full mortgage offer.

These are six things it is helpful to know about mortgage agreements in principle before moving forward with your home search.

Secure your agreement in principle as early as possible

You don’t have to have a property in mind to be able to secure your agreement in principle. Instead, you just need to make some decisions about how much you can afford to repay every month, how much deposit you can offer and perhaps a rough idea of your budget. A flat will cost significantly less than a house, so deciding on this simple matter will help to shape your search. Once you know what is affordable, you can start to think about which lenders will be most likely to accept your application.

Be aware of conflicting advice

When you start looking for a home, you may find that everyone has unhelpful advice to share. While the majority will be harmless, some people have a conflict of interests. The estate agent selling a home may offer unwelcome mortgage advice that you would be best to steer clear from. Their interest is only in selling the home as quickly as possible so they can secure their commission. They don’t care if you get a good deal on your mortgage.

Be prepared before you start your home search

Some sellers will only accept viewings from those with an agreement in principle. This helps to reduce the number of people visiting their home speculatively. And if you decide you want to put in an offer, many estate agents will not take the home off the market unless you have an agreement in principle. This helps to protect them if the mortgage application falls through.

Get your accounts in order

You not only need to have your accounts for the agreement in principle application, but you also need to keep them in order until the final application. Big changes to your finances can derail an application and raise additional questions which can delay the process and risk the seller pulling out.

Keep a close eye on your finances during this time and make sure you are living within your means. Try to end each month with a surplus in your account, stay out of your overdraft and avoid borrowing money from friends or family.

Aim for the maximum amount

While you might not end up using the full amount, it broadens your options and improves your negotiation power if you have an agreement in principle for the maximum amount. A mortgage broker can help you to determine how much to apply for to increase your chances of being accepted.

If you need help understanding the steps in securing a mortgage agreement in principle, Niche Mortgage Info can help. We can connect you with the lenders most likely to accept your application and maximise your chances of getting on the property ladder.

Can I get a mortgage when I start a new job?

We can help if you are looking to secure a mortgage within 3 months of your new job start date or with a job offer or employment contract.

Lenders want to see steady and stable income before lending. So when it comes to securing a mortgage with nothing more than a job offer letter, your choice of lenders will be much smaller. The majority of lenders want to see that you have been employed with a company for at least 3 months before they will consider granting a mortgage. A small number of lenders will consider a job offer letter up to 6 months in advance, provided the borrower meets a number of other requirements.

If you are planning to move to a new company and don’t want this to derail your plans to get on the property ladder, finding the right lender could help. Lenders will want to see a written contract and a verbal agreement will not be sufficient. It also helps if the new role is in a similar sector.

An example of this would be a medical student graduating and having a job offer from a hospital. Secondments would also be satisfactory to a select number of lenders. The lender will calculate affordability based on what is outlined on the job offer. They will want to see that the pay will not revert to a lower amount once you return to your usual place of work.

If you are including bonuses or other allowances in your affordability calculations, these will need to be guaranteed in the job offer. For example, if you are being offered a signing bonus to join another company, this would need to be outlined in the offer and be clear to the underwriter.

Lenders will also look at the employment contract to identify any deductions from your salary for things like pensions, union subscriptions or travel loans. If you have a housing allowance that expires after three months, this would need to be taken into consideration in the affordability calculations.

If you’re hoping to secure a mortgage during a job change, get in touch to find out how we can make this process easier.

Credit Score: Does online gambling affect getting a mortgage?

It’s one of the most common urban legends circulating mortgage applications. Your best mate’s uncle's neighbour has a friend who was turned down for a mortgage because he had used a betting website. So does online gambling affect getting a mortgage?

Well, the explanation is simple enough; banks don’t want to lend to people who might have irresponsible spending habits. But is there any truth to the myth? And could a flutter on your favourite team get in the way of your hopes of homeownership?

The truth is, yes, gambling websites on your bank statements can make lenders nervous.

And when coupled with other factors, this can be enough to see your mortgage application rejected. It isn’t as simple as a single betting transaction making it impossible to secure a mortgage, but it is something to consider if you are hoping to get on the property ladder.

Lets us advise you on how best to deal with this - Contact us here

How do lenders detect gambling?

When you submit a mortgage application, you will be asked to provide 3 months of bank statements. Underwriters will examine these for signs that your earnings and expenses match what you have stated. This is all part of the process for ensuring that your mortgage is affordable.

They are trained to look for the signs of regular gambling, and they may see this in regular transactions to common betting websites.

When does betting not matter?

If you bet small amounts here and there, the lender is unlikely to care about these transactions. When your betting is within your spending money and you aren’t using a credit facility to place the bets, this doesn’t ring any alarm bells to the lender. But if you also have poor credit, a history of late payments, and you’re placing large deposits in online gambling websites that are outside of your budget, this is a different story.

Lenders are only concerned with risk

Just like a gambler, lenders are only concerned with making sure they don’t lose money. To do this, they have to assess the level of risk involved with backing one borrower over another. If one person regularly deposits money into a gambling account, and the other puts their money into savings, then it’s easy to see which borrower will be more attractive to lenders

One of the biggest factors that will deter lenders is borrowing money to place bets. This means you should never be using betting websites when you are in your overdraft or place a bet using a credit card.

You are free to gamble with your earnings, but only if this is money you have in the bank, not money you’re borrowing from the bank. Most people live in their overdraft and don’t see the distinction between their money and the bank’s money, but this isn’t the kind of behaviour that lenders want to see.

Does my credit score show gambling?

Your credit score is not linked to any online gambling, so lenders will not be able to see that you are gambling from your credit score alone. However, if your credit score is poor, you make payments late and your lender can see evidence of gambling on your bank statements, these factors will all add up.

Will gambling debts impact my ability to secure a mortgage?

Any debt will impact your ability to secure a mortgage, and gambling debt is no different. If you now have your gambling under control and are working towards paying off this debt, this shouldn’t be flagged as an issue. It would be difficult for lenders to see the source of the debt, so provided you have stopped making deposits to gambling websites, there is no reason to disclose this.

How can I increase my chances of being approved?

Lenders want to see that you are responsible with your money and make payments on time. In the months running up to your mortgage application, keep your spending in line with your stated expenses. You should also avoid making any credit applications, as these will show as hard searches on your credit report.

Even if you aren’t a regular gambler, a lot of people like to avoid any sense of doubt by stopping gambling for three months before an application. You could use a secondary bank account, like a Monzo account, if you want to participate in gambling but don’t want this to show up on your bank account. (Note that transfers to other bank accounts in your name might raise just as many questions, so it could be better to avoid it entirely.)

Lenders aren’t looking for reasons to rule you out, but they are responsible for more stringent affordability checks. If your mortgage is affordable and you are feeling confident, you should do everything in your power to keep your spending in check to ensure there is no reason to doubt your application. And stopping gambling is one way to give lenders extra confidence.

Right to Buy mortgage guide

If you have received a letter from the council offering the chance to purchase your council house, this guide is for you. Under the Right to Buy scheme, you now have the option to purchase your council property. But having the option available doesn’t always mean that you will be eligible for a mortgage.

In this guide, we will look at the Right to Buy scheme and explore how you can maximise the benefit of this scheme. We’ll also answer some of the most common questions asked by Right to Buy applicants.

Can I use the Right to Buy if I have poor credit?

Absolutely, an increasing number of lenders are allowing those with poor credit to purchase their council house. This means you may be accepted with missed payments, debt defaults or even CCJs. In the case of an IVA or bankruptcy, you are less likely to be accepted as these are considered to be more severe forms of debt.

What if I don’t have a deposit saved?

What is unique about the Right to Buy scheme is that you will be offered a discount on the property. This discount can be used in lieu of a deposit, so the difference between the discounted price and the open market value is essentially your deposit. If the bank needed to repossess and resell your home if you failed to keep up with payments, they would be able to sell it for more than the original mortgage amount.

Imagine the open market value of your home is £200,000 and you agree to buy it for £150,000. You can borrow the entire £150,000 as a mortgage, which is effectively a 100% mortgage. The “deposit” would effectively be 25%.

Can I borrow more than the Right to Buy discounted price?

Some lenders will allow you to do this. The reason for the additional funds will typically have to be for home improvements or to cover fees associated with the purchase. The total mortgage will typically be capped at 75% of the open market value, so you might not be able to access this type of funding without putting down a deposit.

Speak to Niche Mortgage Info about how you can borrow above the discounted amount. You will have to seek permission from the local authority to secure additional funding. This process is known as “unconditional postponement of their charge”.

What is the most I can borrow on a Right to Buy mortgage?

As always, this depends on the property, your circumstances and the lender you approach. Lenders will look at things like your age, income, existing financial commitments and dependents to reach a figure they would be comfortable with. Working with the Niche Mortgage Info team, we can help to sort through your finances and determine how much you are likely to be able to borrow.

If you are in receipt of benefits, this may be counted as a secondary income. You may also be able to use a guarantor such as your children to provide additional support to your application. This is a common step for families with adult children who wish to purchase the family home to help with their parent’s retirement.

How can a child help their parents with a Help to Buy mortgage?

An adult child with their own career and income may want to help their parents purchase their own home. This can be achieved in a few different ways. First, the child could purchase the property with their parents and be listed on the Right to Buy papers. Second, the child could be listed as a guarantor on the application. In this instance, your income would need to cover the entire mortgage (even if you aren’t planning to be the one paying it) plus your own monthly expenses.

An example of this would be Amy. She is a marketing manager earning £50,000 per year. She owns a home in Manchester with a value of £350,000 and £125,000 left on the mortgage. Her parents are offered the option to purchase their home in Leeds for £75,000.

As a guarantor, her total mortgage liability would now be £200,000. She would need to find a lender willing to offer a mortgage of 4 times her annual income (£50,000 x 4 = £200,000) to cover this mortgage. This would be easily achieved, provided her credit history was in good standing.

Can I use the Right to Buy scheme when retired?

It’s not uncommon for retired individuals to use the Right to Buy scheme. As with any application, the lender would need to be comfortable that your retirement income would cover the mortgage.

Many lenders also have a maximum age for mortgages, which is typically 70 to 75. You could need to approach a specialist lender to find a Right to Buy mortgage above this age, and this is what Niche Mortgage Info can help you to achieve.

Remember that the market is always changing, so you need to seek advice from a whole-of-market broker with up-to-date knowledge of the lending products available.

Which documents will I need for my application?

This will all depend on the lender, but in general, you can expect to be asked for the following documents:

Your Right to Buy notice.
All the names listed on the Right to Buy notice must be on the mortgage.
Home improvement plans, if applicable.
Details of employment, including 3 months of payslips and your last P60.
Details of self-employment, including 2 years of accounts or SA302 forms.
For retired individuals, your private, company and state pension statements.
3 months of bank statements clearly showing your income

How can Niche Mortgage Info help?

If you have received your Right to Buy notice and want to know where to start with your application, we can help guide you in the right direction. Click here to get in touch with our team and we will help you to understand your position and how to move forward with your purchase.