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What is a Cashback Mortgage?

Cashback Mortgage Advice in Sheffield

There are many different types of mortgages available, and most of them are entirely different. In this article, we will talk about the cashback mortgage and how it works.

Does it benefit you in the long term or short term? How does it compare to my other mortgage options in Sheffield? Let’s take a look and answer the most frequently asked questions regarding cashback mortgages.

Firstly, if you prefer to watch our moneymanTV video on cashback mortgages, feel free to watch it below. As a Mortgage Broker in Sheffield, we receive many questions about cashback mortgages, so mortgage advisor and our managing director Malcolm ‘the Moneyman’ decided to make a video to make cashback mortgages easier to understand:

What is a Cashback Mortgage?

Cashback mortgages are pretty self-explanatory. To put it simply, after paying off your mortgage or after finishing your mortgage term, you will get some money back.

The sum you get back gets based on a percentage of what you have borrowed. It usually’s something small like 1 or 2%. Some lenders like to have a fixed price in the contract. Even if you have a long mortgage term, this is a fixed amount, and it will not increase over time.

Will a Cashback Mortgage benefit me?

Cashback mortgages come with both advantages and disadvantages. For example, some Cashback Mortgages might come with a free property valuation or some fringe benefits.

Cashback Mortgages can be very attractive to customers that are borrowing lower mortgages. You will get some money back plus some benefits on the side. If you are offered a reasonable percentage on your Cashback Mortgage, you should consider taking it up as it may be worth it in the long term.

The only real disadvantage to a cashback mortgage is that they usually come with high-interest rates.

Different Types of Mortgages in Sheffield

Compared to other mortgage options available, Cashback Mortgages are not the most popular. However, they are still worth considering. We still see customers at Sheffieldmoneyman looking for Cashback Mortgages, and they are a great backup option if you don’t qualify for your first choices.

If you want a more in-depth viewpoint, be sure to book your free mortgage appointment online or give us a call To speak with a Specialist Mortgage Advisor in Sheffield. Our team will be more than happy to explain the benefits of taking out a Cashback Mortgage and why they could be a suitable option for you.

What are The Different Types of Mortgages Available in Sheffield?

Mortgage Advice in Sheffield

At the start of your mortgage journey, you will come to realise there is a range of different types of mortgages. 

Whether you are a First Time Buyer looking to get onto the property ladder, thinking of Moving Homes in Sheffield, or your term has ended, and you want to know your Remortgage options. Understanding the different types can help find you the most suitable choice that fits within your circumstances when living in Sheffield. 

This article will feature a comprehensive list of the most popular mortgage types available to most customers when looking into their options along their mortgage journey.

For more information regarding these types, please book your free mortgage appointment online today to speak to one of our expert Mortgage Advisors in Sheffield. Our advisors are on hand seven days a week, ready and waiting to try their very best to help you with your mortgage scenario.

What type of mortgage to choose?

Something to contemplate when buying a property is the type of mortgage you take out. The most suitable mortgage for you will depend on your circumstances, plans, and whether you choose to live in or rent out the property. Feel free to use one of the jump links below to go to a specific spot in the article;

Fixed-Rate Mortgage

A fixed-rate mortgage is when your interest rates are on a fixed agreement between you and the lender. This fixed payment can span over a few years. Most buyers and owners usually opted-in between 2 to 5 years or longer.

Choosing this option will lead to your mortgage payment will stay the same throughout this period, even though any economic changes such as interest and inflation, so you can rest assured that you will have no differences with your payment.

Tracker Mortgage

Unlike a fixed-rate mortgage, a tracker mortgage doesn’t have a set rate between you and your lender. But instead, the interest rate will alter depending on the Bank of England’s base rate so that interest rates can fluctuate at any time.

For example, if you are repaying your mortgage, and the Bank of England base rate is 2%, while you are tracking a 2% above base rate, this means the overall rate you will pay back is 4%.

Repayment Mortgage

A repayment mortgage involves paying a combination of interest and capital each month. Over time, the property will eventually become yours if you keep up to date on the mortgage payments.

This method can be described as the most risk-free way to pay back your capital to the mortgage lender. At the start of your mortgage journey, interest becomes your principal payment. If you have taken out a much larger term like 25, 30 or 35 years, your balance will reduce slower.

Later on in your mortgage term, your payment methods will change to paying off more capital than interest, and your balance will lower at a quicker rate.

Interest-Only Mortgage

An interest-only mortgage is a payment method that involves you only paying the interest per month. Whilst that sounds ideal, this means that the borrowed amount has to be paid back in its entirety by the end of the term.

Many Buy to Let Mortgages are seen to be on an interest-only basis. However, getting a residential property on an interest-only basis is nearly unheard of these days due to the complicated criteria that need to be met.

There are circumstances where this may still apply, with reasons including; downsizing your property when you’re older or paying back capital through other investments.

Lenders can be strict when offering these products, and the loan to values is a lot lower than in previous years.

Offset Mortgage

An offset mortgage is a blend of a conventional mortgage account with a savings account that runs alongside it. This mortgage type can allow you to be flexible by regularly paying in your offset account or withdrawing funds if needed. 

This is seen as the more appealing type of mortgage as it allows you to have a savings account opened alongside your main account. An example of this is if someone took out a £100,000 mortgage, but in your savings, you have £20,000. You can put this into your new savings account and pay the interest on the remaining amount, which would be £80,000. 

The potential option is to pay off your mortgage earlier if you keep your payments as expected. 

Capped Rate Mortgage

A capped rate mortgage involves the customer making repayments each month with a maximum interest rate like fixed-rate mortgages. However, this type has a restricted percentage so that you won’t be paying any higher than the agreed percentage. For example, if you’re capped at 5%, your rate will never go above 5%. 

This type can be beneficial if interest rates reduce, as your mortgage rate will follow this reduction. This should reflect in lower monthly mortgage payments.   

Flexible Mortgage

This type of mortgage allows you to be flexible with your payments and either underpay or overpay any amount. You can only underpay if you have overpaid the first time and have agreed to do this with your lender.

Overpaying your mortgage can be helpful if you want to pay your mortgage off early and pay less interest.

How to Approach Making an Offer in Sheffield

Mortgage Advice in Sheffield

First and foremost as a First-Time Buyer in Sheffield who is looking to make offers on a potential new home, you have to bear in mind that there will be lots of other possible buyers all looking to buy the same home.

Because of this, it is very important for you to make sure that you are as prepared as you possibly can be ahead of time. This helps to speed the process up and get you a higher chance of getting the offer accepted.

Something else that you should also remember is that you could be doing everything by the book, have a great credit score and everything saved, but if a cash buyer gets involved you’ll probably not be the one to get the property.

The reason that this is likely to be the case is that cash buyers are easier and quicker to take along through the process, as they won’t be needing a mortgage. Luckily for first time home buyers out there, you don’t tend to find a lot of cash buyers anymore.

Tips For Making an Offer on a Property

Get a Mortgage Agreement in Principle

Getting yourself an Agreement in Principle is major factor in the home buying process. Your AIP (as it is often shortened to) is a written statement of approval that is given by the mortgage lender to confirm that in principle, that subject to further checks later down the process, they are willing to lend you the amount you need for your property purchase.

It’s because of this that you are always better off having one of these to your name, as a home seller or estate agent will definitely want to know conclusively that you have the funds to go forward with the process, avoiding the possibility of both of your times being wasted.

Back during the COVID-19 lockdown periods in 2020, you were even required to have an Agreement in Principle in order for you to view a property, not just buy it. This was to restrict the amount of people viewing or making offers who weren’t in a position to proceed straight away.

As a reputable, open & honest mortgage broker in Sheffield and surrounding areas, we would always highly suggest getting prepared for your mortgage ahead of time and putting yourself ahead of other home buyers, by obtaining an Agreement in Principle as soon into your journey as you can.

We touched upon cash buyers at the beginning. Whilst they are few and far between these days, if and when you encounter one, you will be hard pressed to outdo them as they are probably more favourable to the seller of the home.

Even with that in mind, you may still find that having an AIP to hand will put you in a much stronger position against a cash buyer or any other possible buyers. In many cases, having an Agreement in Principle can be a difference maker.

By obtaining an Agreement in Principle, you are able to prove to the seller of the property in question that you are in-fact a serious buyer and have the necessary funds to proceed with the purchase.

You may also find yourself in a much higher position than other potential home buyers who maybe do have the ability to afford the property purchase, but have yet to obtain their own Agreement in Principle.

This is one of the many perks of speaking to a trusted mortgage broker in Sheffield like ourselves. Our dedicated and loyal team of hard working mortgage advisors in Sheffield will be able to obtain one of these within 24 hours of your free mortgage appointment (of which you can book in a time slot of your choosing, using our online appointment booking system).

Be Prepared to Negotiate with The Seller

Purchasing a property is all about negotiation. If your initial offer is rejected by the seller of the property that you are looking to buy, you will be asked about whether or not you would like to increase your price offer.

If you are firmly in the belief that the property is definitely worth the increase in price and you want to call it home, you may have to be prepared to spend more money than you had initially planned for.

Don’t be worried though if the seller declines your first offer, as this is something that has happened to lots of First Time Buyers in Sheffield over the years and they are still able to find a property for themselves in the future.

If your second offer also happens to be declined, you will most likely have to pay the asking price, something that you’ll have to be prepared for ahead of time. It’s here where it will benefit to do plenty of research beforehand.

Prior to making any offers on a property, you should always take a look around at the other properties in the local area and scout what their sales prices are on reputable property sale websites like Zoopla or Rightmove. This can help give a general idea of what to offer the property seller.

You should also check out the length of time that the property has been actively on the open market. If it is a newer listing, the seller may not be so willing to budge, whereas if it has been listed for quite a while, the seller may be more inclined to accept a lower offer.

If you come across houses that may have gone for lower amounts than the property is worth there is probably a good reason for it. There’s a chance it has possibly been repossessed, perhaps sold to at a discounted price to a tenant living in, or maybe an inter-family sale.

Speak to a Mortgage Advisor in Sheffield today

To gain any mortgage advice relating to this specialist subject, please feel free to get in touch and speak to one of our brilliant mortgage advisors in Sheffield today.

If you require any form of assistance when it comes to making an offer as a First Time Buyer in Sheffield or maybe would just like a mortgage advisor in Sheffield to guide you towards a fantastic deal, we’ll always be there to offer you guidance and support all throughout your process.

Our fast & friendly team of mortgage advisors in Sheffield are here to provide mortgage advice every day of the week, so book your free mortgage appointment online and make a start on your very own mortgage journey.

10 Factors to Help you Decide Where to Live in Sheffield

Moving Home Mortgage Advice in Sheffield

One of the critical factors when moving home in or around the Sheffield area is to consider where you are looking to locate.

If you are looking for that ‘dream home’, you also need an ideal location. It would help if you thought about what the area is like, what is there and what’s a priority.  

To help you get a better sense of the sort of place you would like to locate, we have compiled a list of the different factors that some First Time Buyers in Sheffield look for when trying to find their ideal home.

Are you looking to move to the countryside or the city?

It is essential to develop an idea of the type of area you would like to move in, as this is somewhere you will be living in for a good while, maybe even turning it into a family home further down the line.

If you are someone who enjoys being in the heart of it all, then city life is more suited for you. Otherwise, if you prefer a quiet life, living in the countryside might be more fitting.

In all areas, you will find pros and cons to either choice, so make sure to give it much thought and research the location before you get your heart set on a potential new home.

Public Transport in Sheffield

The transport links to and from your potential new location are essential factors to consider. For example, if you heavily socialise with friends or family, don’t work from home, go out shopping, you may need easy access to the necessary transport links. 

Not to mention each mode of transportation can vary in price depending on location and regular use. If you own a car, how long will it take for you to reach each destination? How much will fuel be? Where is the closest fuel stations?

Schools & Education

For those who have children, you should look at what nearby schools are available. After all, every parent wants to find the right school for their child. It’s essential to learn about the various schools nearby to determine which school is most suitable. 

If you don’t have any children now but are planning to for the future or have no plans at all, it may be beneficial to look it up, just to future proof yourself.

Nearby Facilities – What You Need Vs What You Want

There may be certain facilities you would like to have close to you when you plan on a place to live. We would recommend writing down a list and separating those that you need from those that you want.

An example of this would be looking to have a gym nearby, but doing so could mean that you have to live in an area without the essential shops you need regularly.

You probably need the shops more for your general living, so that might be something to prioritise, whilst finding an area somewhere close to a gym is an added bonus.

Friends and Family

The distance between where you might be living and where your family and friends currently live can influence where you locate. Some prefer keeping them close by, so they have that support network if they need it.

On the other hand, some prefer to keep to themselves with their loved ones at a distance, prioritising peace over going out and socialising with people regularly.

Is the property good value for money?

When making purchases, we all would like to know that we’re getting good value for money. Determining this for your home will depend on the area that you’re looking to move to.

Sometimes a better option is for you to look for a cheaper property to start with, though this might mean compromising various features or nearby facilities that you would’ve preferred to have had.

What is the community like?

The local community can impact your home living experience quite a bit.

As established, some prefer a quiet life. This might require having a few residents nearby who keep to themselves. Others like to have a thriving, busy community, generally where everyone is known and communicates regularly.

Speak to your estate agent and find out what the area is like. Community Facebook pages or locally run websites tend to be quite common these days, so they are worth looking up to get a rough feel for the area.

Career Changes

Some home buyers may be moving because of a new job or career plan. This is something we’ve heard from customers a lot and is a huge factor. You should review the distance between your new home and workplace.

If you will be working in a home office and only visiting the office sporadically, would you be okay with living a bit further out? What is the space like within the property? Is there even room for a home office?

Those who will be job hunting once they have already moved, do some research on the companies in the local area and compile a list of the leading employers to apply with.

Property Type

You will find a lot of different property types available to you across the open property market, with these varying depending on where you’re looking.

Some prefer end-terrace properties with a garden to enjoy, whilst others prefer a modern flat or studio apartment.

Make sure you have a good look at all the available options, undertake some property viewings and get a good idea of the type of property you would prefer to live in.

Local Developments

Any proposed local investment would probably be helpful to find information on, especially if you’re looking to build a life within that home and stay there for quite a while.

Online research will be the best port of call when looking to find any future investments. It’s important to consider whether these will be a benefit or a detriment to your lifestyle.

Again, those who prefer quiet country life might find their dream scenario turned into a nightmare if a significant new housing development is planned within proximity.

Mortgage Broker in Sheffield

Hopefully, you are now better equipped to find a place to call your home by reading our list.

When the time comes to make offers on property and get yourself a mortgage, get yourself booked for a free mortgage appointment. We would be happy to help!

We have a dedicated team of Mortgage Advisors in Sheffield available from early until late throughout the working week and weekend, subject to availability.

Whether you are a First Time Buyer in Sheffield or are Moving Home in Sheffield, we can’t wait to hear from you.

What is a Tracker Mortgage?

Tracker mortgage advice in Sheffield

Tracker mortgages are just one of the many different types of mortgages out there. Some mortgages will be more beneficial to you than others, it entirely depends on your personal and financial situation. Just because a Tracker Mortgage is perfect for someone else, doesn’t necessarily mean that it will be good for you.

As a mortgage broker in Sheffield, we always recommend that you do your research first prior to taking out a product. You need to make sure that it benefits your individual circumstances. If you get locked into a deal that isn’t right for you, you may have to wait until the end of your fixed term to switch products/remortgage in Sheffield. There may be an opportunity to switch deals if you are happy with paying a large fee.

In this article, we are going to focus on the Tracker Mortgage, looking at how it works and why it may be a good option for you. Feel free to watch our Tacker Mortgage YouTube video below:

What is a Tracker Mortgage?

When you take out a Tracker Mortgage, you’ll be tracking the Bank of England’s base interest rate percentage. This percentage will be used to work out your mortgage payments.

Usually, on top of the tracked percentage, your lender will add another percentage to slightly further increase your interest rate. The extra percentage of interest that they add is normally around 1%-2%. So, your interest rate should always be another percentage over the Bank of England’s.

How can a Tracker Mortgage help me?

Since a Tracker Mortgage tracks your interest rate percentage from the Bank of England, if their base rate is low, then your mortgage payments should be lower. Typically, their base rate lies around the 0%-1% mark, however, this will change month to month.

During the credit crunch crisis in 2008, the Bank of England’s interest rate shot right up. It even reached 5% at one point, which meant that customers were potentially paying their mortgage with a 6% interest rate. We all thought that a similar situation would happen again during the coronavirus pandemic in March 2020, although, this time the rates went down. If you had a Tracker Mortgage in this period, you’d be tracking the Bank of England’s base rate at 0.1%! At the time, you couldn’t take out a Tracker Mortgage as the rates were too good to be true. Lenders would be losing money if they kept handing them out.

A Tracker Mortgage can be a gamble sometimes. You’re depending on the economy performing well so that your base rate maintains its percentage. The base rate may fluctuate now and again, however, in most cases, it should stay at a similar rate.

Your mortgage options in Sheffield

There are lots of different types of mortgages, and some will be much more beneficial to you than others. It all comes down to your personal and financial situation.

If you want to find out more about Tracker Mortgages and how they work, feel free to get in touch with our brilliant team. If you want to discuss your other mortgage options, that’s completely fine too!

Our mortgage advisors in Sheffield have been helping first time buyers in Sheffield, home movers and people looking to remortgage for over 20 years now – we know what we’re doing.

Book your own free mortgage appointment online today and we can discuss all of your mortgage options in Sheffield.

How much deposit do I need to put down?

First Time Buyer Mortgage Advice in Sheffield

First time buyers, home movers, landlords and the self employed will always ask the same question when it comes to applying for a mortgage – “how much can I borrow?”.

The answer varies depending on your individual situation. For example, how much you can borrow could change depending on your credit score, income, bank statements and your personal situation.

Let’s take a look into ‘how much you can borrow for a mortgage’ and how things have changed following the credit crunch.

Historic rules when borrowing for a mortgage

Long before the credit crunch, credit scoring was non-existent and mortgages were manually assessed by your local building society manager. Then, during the 1990s, lenders started performing income assessments to provide a consistent approach across applicants.

Maximum lending caps were also introduced. This meant that customers couldn’t borrow more than three to four times their annual income. Scary to think that before people could!

Despite these lending caps in place, in the early 2000s, lender’s income multipliers grew more generous. This meant that more and more people were borrowing more than they can afford to pay back. Furthermore, some lenders were even allowing some of their customers to ‘self-certify’ their income with minimal/no background checks such as payslips.

Of course, all of this went very wrong. Lenders were lending to applicants that couldn’t afford to pay them back, therefore the market crashed and all of sudden, it became extremely hard to get a mortgage from 2008-2010. Lenders tightened their margins and created a cautious (over-corrected) lending environment.

Nowadays approach to how much I can borrow

In 2014, the Mortgage Market Review (MMR) was introduced. This initiative helped the market get back up on its feet; it brought a new set of guidelines for lenders to adhere to. The old income multiplier method was scrapped and replaced with new, more sophisticated affordability calculators.

These new affordability calculators provided a closer look into an applicant’s spending habits and net disposable income. This meant that the lender could have an in-depth look at your bank statements to ensure unaffordable mortgages were not granted as they were before the Mortgage Market Review.

There is still a “lending cap” in place at about 4.75 times your annual income but your expenditures are also analysed. For example, lenders seem to penalise low-earners and even things like gambling showing up on your bank statements can sometimes affect your chances of being accepted. Some take pension contributions as a fixed outgoing so would often lend, say a public sector worker with a big pension deduction less than a private sector and so on.

Mortgage Broker in Sheffield

If you are currently trying to work out how much that you borrow, we would recommend trying our online free affordability calculator or speaking to us for a more accurate measure. A Mortgage Advisor in Sheffield will research the market on your behalf and try to find a lender that will lend you the amount you need.

Before you take out a mortgage you should sit down with a First Time Buyer Mortgage Advisor in Sheffield and work out your finances together to ensure that the repayments feel comfortable to you.

What is a Property Chain & How Can You Avoid Them?

Moving home mortgage advice in Sheffield

When you’re moving home in Sheffield, you may come across all sorts of different hurdles and obstacles along the way. Whether it’s something to do with your offer not being accepted straight away or your application being stuck in the pipeline, there’s always something.

A common problem that homebuyers come across are property chains. Getting stuck in a property chain can often slow down, if not put to a halt, your home moving journey.

What is a property chain?

A property chain is a string of house purchases that rely on one another to complete the chain. If you’re a first time buyer in Sheffield, you will always be at the start of the chain, whereas, if you are selling a property, you’ll be at the end.

Picture it as an actual chain linking houses together. For a buyer to move into the property that they’re buying, they need to wait for the seller to move out first. However, the seller is in the same situation as you! They too are waiting for their seller to move out so that they can move in.

Depending on the property chain that you’re linked with, the link could go on and on. If you’re lucky, you may only have a couple of purchases linked with your property chain or even just one!

How long will the process take in a property chain?

The answer to this question is completely situational. You don’t know what situation that your seller’s seller is in (complicated… we know).

You may not even know that you’re in a property chain, the whole process could run smoothly, and you wouldn’t know any different. Everyone hopes for this situation, who doesn’t want a quick and simple moving home process.

If things don’t go your way, you may be stuck in a waiting scenario. As a mortgage broker in Sheffield, we recommend that you begin your process at least six months of preparation. This means that you have plenty of time to search for that dream home and allowed time just in case you get stuck in a property chain.

What happens if my property chain breaks?

Unfortunately, if you’re linked with a property chain and one purchase doesn’t go through, the whole chain behind it could suffer. When a property chain breaks, you will have to wait or look for another property.

If the property chain breaks at your purchase, if you act quickly, you may be able to stop it from breaking the entire chain. If you’re selling, you could contact the people planning to buy your property by contacting your estate agent; this way, you can inform them of the situation sooner rather than later.

Whether it’s something wrong on the seller’s level or on your level, there are still ways to prepare for a break in the property chain. For example, you could try and buy a property that isn’t in a chain or in a small chain, sell your property and rent temporarily or buy a new-build property, etc.

For more moving home mortgage advice in Sheffield, contact our expert mortgage advisors in Sheffield today.

How can a property chain break?

A property chain can break for many different reasons. It could happen at your’s, your seller’s or even your buyer’s level:

  • The buyer’s mortgage application was declined
  • A seller decides that they don’t want to sell their property
  • A buyer/seller loses their job or becomes ill
  • The property survey that was carried out on the property highlighted some major damages and structural issues

These are just a few examples, there are many more reasons. Depending on the length of the property chain that you’re in will depend on how drastically these situations impact your ability to move home.

How can I avoid a property chain?

It can be hard to avoid a property chain; especially if you’re buying a busy time of year or when the market is hot, for example, January.

Moreover, you could do your research and talk to your estate agent so that you know exactly what your position is during the application stage. Arranging your finances as early in the process as possible would be smart. The more that you are prepared for things that could wrong, the better.

If you manage to avoid a property chain (also known as ‘chain-free’) you should be able to continue straight through the moving home process. This is assuming that you provide evidence that you can afford a mortgage and provide a deposit for the property.

Thinking of moving home in Sheffield?

If you are buying and selling your home, let our moving home mortgage advisors in Sheffield help you through your process.

You can book your own mortgage appointment for free online. Get started today and we can help you get through the moving home process stress-free. We can’t wait to hear from you.

Planning to get a Mortgage in Sheffield

How to Plan & What to Expect

If you are considering buying a house, don’t be spontaneous. Taking out a mortgage requires careful planning and preparation over a long period. 

That said, you will be surprised at the number of people we deal with regularly, who are more accustomed to their buying behaviour and have therefore neglected to prepare for a mortgage in advance.

Many reasons why a first time buyer in Sheffield like yourself jump into such a significant financial commitment on a whim. Some of the most common including; 

  • I am buying from a family member who is now moving home.
  • My landlord decided to sell their property but offering me the first refusal.
  • I saw a for sale sign outside a house and am currently interested in buying.

The Drawbacks with not Planning for a Mortgage

Disadvantages include leaving buyers open to various potential issues with their mortgage. Some common mortgage hurdles we have faced with customers include:

  • Not having any savings or not having enough for the deposit (an easy solution could be a Gifted Deposit!)
  • Having a low credit score that went unchecked (I had no reason to check it at the time.)
  • Inconsistent bank accounting and overdrawn/late payments.
  • Being self employed in Sheffield and having poor recent accounts.

Saving for a Deposits

Savings can be pretty tricky. Especially if you are renting at the moment, balancing a constant income and significant outgoings and essential purchases each month limit what you can save in-between. 

The good news is that family members can help via the use of a Gifted Deposit. Some first time buyers in Sheffield ask family members to try and help whenever they can. If a family member is looking to help. We recommend it’s best to give them as much notice as possible to get their finances in order!

Credit Rating

Getting an up to date credit report is not an incredibly difficult task. You may have seen TV adverts for various credit reference agencies, but we recommend Check My File, as they can collate the data from these sources into one for you to compare.

Once you have downloaded your credit report, you can send it across to a mortgage advisor in Sheffield, who will look at this for you. We see these reports daily, and we know what sort of things the lenders like to see and what they do not want to see.

Bank Accounts

When a lender looks at your bank statements, lenders would rather not see lots of unnecessary bank charges or gambling transactions on your bank statements. You will need to provide the lender with a reasonable explanation as to what has been happening on your account and how you plan to resolve this going forward if any issues arise.

Self Employed

For customers who are self employed in Sheffield, we understand that Accountants try to minimise the tax liability for their customers. That said, if your year-end has come around, then there is nothing to stop you from submitting another set of accounts earlier than you might typically do. 

Especially if you think your business has grown in the last 12 months. Some lenders consider ignoring previous years’ figures if the latest ones are favourable.

No matter your circumstances! If you are still facing one of the problems above, it’s possible that we may be able to help you get in touch. Our team of expert mortgage advisors in Sheffield are here to try and help.

Gifted Deposit Mortgage Advice in Sheffield

How to get a mortgage with a gifted deposit?

First time buyers in Sheffield are relying on gifted deposits to get a mortgage. Find out what a gifted deposit is and how it can help your get onto the property ladder.

What is a Gifted Deposit? | MoneymanTV

While the market has gotten tighter with rules, making it more challenging than it used to be to obtain a mortgage. It can still be possible to buy a property in certain situations.

For example, after spending over three years in the same rental property from the local authority, be that a housing association or council. You may be eligible to buy a property under the Right-to-Buy Scheme in Sheffield. We have seen that they may allow you to use the equity from that property in place of a deposit in some cases.

In most cases, people get around the long and stressful process of saving up their deposit by being given a Gifted Deposit. A gifted deposit is when a homebuyer receives money to use as a down payment on a property. Depending on the amount given, it could be used for the whole deposit or just a portion of it.

Gifted Deposits FAQs

Who can gift the deposit?

Most lenders will have specifications on who can and cannot gift a deposit. If you consider buying a house with your parent’s money ‘bank of mum and dad’, this is the source of funds people often ask. Other family members such as grandparents and siblings are usually allowed.

That said, More distant family members such as aunties and uncles are much less likely to be permitted. A mortgage deposit gift from friends, meanwhile, is improbable to be accepted.

If you’re a parent looking to get your children on the property ladder, a gifted deposit is a good way of doing so!

If the person gifting to you is aged over 55, they may look to take out Equity Release in Sheffield as a means of gifting you a deposit.

Can it be a loan rather than a gift?

In most situations, it will need to be a gift, with the lender requiring that the donor sign a letter (which we can help prepare) to confirm the funds are non-refundable, and they will not put a “charge” on the property you are buying. There are exceptions out there, with at least one notable lender who will accept this.

That said, you must be careful, as taking out a personal loan just before applying for a mortgage will most likely negatively affect your credit score, which could lead to a mortgage application being rejected. 

Also, the mortgage lender will have to take the monthly payments for the loan when they are calculating how much they will lend you.

How much can be gifted for a deposit?

There is no maximum limit on the amount of gift you can receive. But most lenders will insist you put in at least a 5% deposit from your funds.

Are you looking for a Mortgage Advisor in Sheffield?

As an open and honest mortgage broker in Sheffield, we can utilise our extensive panel of lenders to search through 1000’s of Right-to-Buy Mortgage deals for you.

We aim to offer help and guidance during the process, answering any questions you may have along the way. We even aid with other services when necessary, such as conveyancing.

Getting Prepared for a Mortgage in Sheffield

Moving Home Mortgage Advice in Sheffield

So, you are now ready to take a further step up the property ladder and further your mortgage goals. Whether you are a first time buyer in Sheffield, new to the experience or a home mover in Sheffield looking to sell your current home and live somewhere else, you will still need to start getting prepared for your mortgage.

Here are some expert tips from an open and honest mortgage broker in Sheffield:

Know Where You Stand Ahead of Your Mortgage

As an experienced and well trusted mortgage broker in Sheffield, we always recommend taking advantage of mortgage advice as early on in the mortgage process as you can. This will allow you to get an idea of how much you could possibly borrow and what your estimated monthly costs may be.

You need to prioritise getting an up-to-date credit report, as you will need to know what your current credit score is and what you could potentially do to improve it, if necessary. The better your credit score is, the higher chance you have of your mortgage application being accepted.

There are a lot of different ways that you could potentially improve your credit score in Sheffield and to the surprise of many, it isn’t always too difficult to do so. In some cases, it is even possible to obtain a mortgage deal despite having a low credit score, though this ultimately depends on your lender and the way they look at your circumstances.

By ensuring you have both a mortgage advisor in Sheffield by your side and an up-to-date credit report to hand, you could increase your chances of being accepted for a mortgage in the future. A trusted mortgage advisor in Sheffield will be able to work through everything on your behalf, guiding you throughout the process.

Getting Organised for a Mortgage

Here at Sheffieldmoneyman, we have the ability to obtain a fully credit-checked agreement in principle for you, something we can turn around within 24 hours of your initial appointment.

A dedicated mortgage advisor in Sheffield will help you to get prepared for everything prior to submitting your mortgage application.

In doing this, your mortgage lender will want to see some proof of identification, so that you can prove you are who you say you are, along with where you are living and the amount that you earn from your job.

In knowing this, you can now prepare for all the necessary documents you’ll need. These are as follows;

Proof of ID

In terms of proving who you are you’ll need to produce some photo ID. Acceptable types of ID include a driving license or valid passport.

Proof of address

In addition to the above, you’ll need to prove where you live. You’ll need to produce a utility bill or original bank statement dated within the last 3 months.

Last 3 months’ bank statements

Lenders will always have a keen interest in what your spending habits are, compared to anything else.

They need to be absolutely sure that you will have the ability to regularly maintain your monthly mortgage payments on top of everything else you have going out. They will analyse your bank statements very carefully and take everything into consideration.

Lenders aren’t too fond of seeing gambling on your bank statements. It’s something we often see catching people out, as they haven’t realised that it can harm your chances of obtaining a mortgage down the line. They also don’t like seeing customers go over their overdraft limit, as this basically means your spending money that isn’t there.

It’s reasons like this why we always advise that you be careful and make sure that your statements are going to appeal to a mortgage lender, rather than put them off from lending to you.

Proof of deposit

You will have to prove you have the funds in place for the deposit and also be able to evidence this for anti-money laundering purposes. Try not to move money around your various accounts too much as it will make evidencing the audit trail a more complex process than it needs to be.

Lenders take a preference to applicants who are able to evidence that they have been saving for their deposit. It shows that you have a good understanding of how to put money aside every month and not spend money you don’t have. You’ll also need to factor in any large credits into your accounts.

Quite often we find that the money for a deposit has been gifted by family members. These funds will also need to be evidenced, with the “donor” being required to sign a letter for the lender. This will be to confirm that the funds are strictly a gift and not something they will be needing back from the mortgage applicant.

Proof of income

In terms of affordability, the most important thing is to be able to prove your income. If you are employed this tends to be done by providing the lender with your last 3 months’ payslips and most recent P60. Lenders often take into account regular overtime, commission, shift allowance and bonus.

A list of your expected outgoings

Make sure that you do plenty of research ahead of time. Preparing for your mortgage and making a note of your anticipated outgoings after you move house puts you in a great position prior to starting the application process.

You can work out an estimate of how much the council tax and utility bills will be. In addition to that, you can also work out your regular expenditures, such as any food and drink you will be buying. This will demonstrate how much disposable income you have available to pay your mortgage from.

You need to accommodate lots of time to prepare for your mortgage application. It can sometimes be a lot quicker and much easier to approach a mortgage broker in Sheffield who can take the bulk of the process and do it on your behalf.

A mortgage advisor in Sheffield will be able to work out how much everything is potentially going to cost you and guide you through the entire mortgage process, doing their best to work hard and try to secure you a competitive mortgage deal.

Getting ahead and planning early will always impress your mortgage lender. Let an expert mortgage broker in Sheffield help you out. Get in touch to book your free mortgage appointment with a trusted mortgage advisor in Sheffield.

Sheffieldmoneyman.com & Sheffieldmoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited registered in England, registered number 6789312 and registered office 10 Consort Court, Hull, HU9 1PU.

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Sheffieldmoneyman, Courtwood House, Silver Street Head, Sheffield, S1 2DD.

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