There has been so much written in the national press about the dire state of the mortgage market since the credit crunch took real effect in 2009. It is difficult to open a paper these days without a sensationalist piece leaping out at you and hitting you between the eyes.
So I thought, for a change, let’s hear from someone at the coalface, someone who actually knows what is going on.
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Fortunately for me, I know just the person – my wife Rachel! She owns and runs her own independent mortgage and insurance broking business, based in Southend Essex.
So I sat down with Rachel to get the inside scoop on the current state of the mortgage market, and asked her these four questions:
1. Is the Mortgage Market Really As Bad As The Media Suggests?
No of course not – the media delight in spreading bad news stories as that is what sells newspapers!
The real situation is that the market is not as healthy as it was in 2007, but it is a lot better than it was in 2009!
I have had my busiest year for some time, and the people I have been able to help have been from a variety of jobs and industries, so it isn’t just people on big salaries that are able to get finance.
2. Are There Mortgages Out There For First Time Buyers?
Yes there are – this year has seen the return of the 90% mortgage at reasonable rates, and there are even some 95% mortgages out there, although the rates are high at the moment.
However it is important to focus on affordability rather than just rate – lenders increasingly focus on this now, and so should borrowers too.
The important thing is not the rate, but whether you can afford it each month, not just now but next month, next year.
3. What Is The Property Market Like Generally?
It really depends where you are – there are certainly pockets where it is active and rising, although generally the market is flat, going neither up nor down.
That said, there are definitely some bargains to be had, especially if you are prepared to negotiate and do some work to improve the property. I’ve seen people recently get into some great properties, simply because the seller was keen to move on and there are not a huge number of buyers with finance out there.
4. What Tips Can You Give For People Looking To Get A Mortgage?
Check out what you can get and what you can afford mortgage wise before you start looking at properties – it is the worst feeling to fall in love with your dream property, only to find you can’t afford it.
It doesn’t cost anything (or at least it shouldn’t!) to talk to your broker and check out your options first.
Also make sure your credit record is spotless – put everything on direct debit, try and keep debt to a minimum, and if you pay off debt, make sure you close the account down – some lenders are now using your potential ability to get indebted after you’ve taken out a mortgage as justification for reducing what you can borrow.
It is an easy thing to forget, so you can easily check out what accounts you have open by getting your credit file from www.experian.co.uk and www.equifax.co.uk. Then you can check exactly what you’ve got open and contact any lenders such as credit card companies and close old accounts off.
So there you have it – the real facts from someone at the centre of the industry.
If you’re not sure, ask!
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