Member Article

“Now is a great time to get mortgage”, says local housebuilder

Local homebuilder Barratt Homes North East is reminding potential homebuyers in Newcastle that following the Bank of England’s interest rate cut, now is the time to get a mortgage and to jump on the housing ladder. With mortgage rates at record lows and with lots more mortgages available, now is one of the best times for many years for people looking to secure a mortgage at a great rate.

Head of Mortgage Lending at Barratt Developments, Adrian MacDiarmid, said: “The banks and lenders are offering some really attractive deals at the moment. Many of our customers were not initially sure if they could get a mortgage or not, but we were able to help them so that they could buy their new home. We recommend you come in and speak to us and we will refer you to a specialist mortgage adviser who can show you just how affordable a new home can be.

“There are some simple things that all potential homebuyers should think about when looking to get a mortgage. We encourage everyone to look at these tips to help them secure a great deal on a mortgage.”

MORTGAGE TIPS:

Speak to a mortgage adviser

They will be able to practically demonstrate how you might be able to afford a mortgage because of the record low interest rates. As Sarah Davidson on www.thisismoney.co.uk said: “The EU referendum will keep interest rates lower for longer so lenders may go to war on mortgage rates”. Barratt Homes has a network of mortgage advisers who are specialists in new homes and will help you get the best deal that is right for you.

Look at all the options

Many more lenders have entered the mortgage market since the last recession, from challenger banks (such as TSB or Virgin Money) to specialist lenders (such as Aldermore or Precise Mortgages). The high street banks are still extremely popular too, so you have lots of options to choose from.

Pick a great deal – there are fantastic mortgages available

There are some great deals to be had, both fixed-rate and variable[1]. One of the very lowest is HSBC’s 0.99% deal, however, this does require a relatively large deposit of 35%. Buyers with a 25% deposit can still benefit from the very low rates – for example the Post Office is offering a 2 year fixed rate mortgage at just 1.33%.

It is even possible to get a ten year fixed rate mortgage, giving you security and peace of mind for a decade whilst rates are low. First time buyers can also get some fantastic deals, with Santander offering a 2 year fixed rate mortgage at 1.74% with a 15% deposit.

For those with just a 5% deposit there is the government’s extremely popular Help to Buy scheme, which enables both first time buyers and existing owners to buy a new home up to £600,000. The government lends the buyer 20% of the value of the property in the form of an equity loan which is interest free for the first five years, meaning they can benefit from the great mortgage rates available with a 75% mortgage.

Be aware though that each product will have varying fees and criteria, so it is always best to take expert advice to give you the best mortgage deal.

Don’t give up if you have a poor credit history

Many people think that because they have a poor credit history they won’t be able to get a mortgage. However, the lending environment has changed a lot over the last few years. Many people who have missed the odd payment to a credit card or loan may still be able to qualify for a mortgage.

Being self-employed is also not the barrier it once was to getting a mortgage. If you are self-employed you may only need to show one year’s set of accounts to potentially qualify for a mortgage.

Check your credit score

Last year Barratt Homes found out that 70% of people do not know their own credit score. Yet it is so simple to do now through a variety of websites which check your history. For instance, click on www.noddle.co.uk and you can find out your credit score in a matter of minutes.

Also, look at making changes to improve your score. For instance, try not to get too close to your credit limit or use overdrafts, as lenders may view this as ‘excessive’ debt. Look to build up a credit history too, by paying off your credit card in full each month.

Keep saving

If you can show that you save regular amounts and you are actively trying to build up a deposit for a home, lenders will take notice of this. While it can seem hard at the start, over time it will get easier. Also consider government saving schemes such as the Help to Buy ISA which can boost your savings by up to £3,000.

Fenton Hewitt, Sales Director for Barratt Homes North East, said, “Following the Bank of England’s interest rate cut earlier this month it looks as though rates will remain low for a while. This means for some people it is a great time to look at getting a mortgage. There are some fantastic new developments being built here in the North East and more people than ever can look at potentially buying their own new home.”

[1] Note: all mortgage rates quoted were valid as of 1 July 2016

This was posted in Bdaily's Members' News section by Richard Savage .