Kylie's Mortgage Podcast Kylie Meade-Richards

In today's show, I will be talking about three types of mortgage and I want to start off by saying these are not the only three types but they are the three types which you will come up against when you are doing your research or when you are looking into mortgages in general.

For today’s episode I am going to be talking about; Fixed-rate, The standard variable rate and

Tracker mortgage.

I would consider today's episode to be a little bit of a building block episode. By listening to all the episodes in this podcast, you will begin to build up your mortgage knowledge and if this is your first episode then please do feel free to go back to the episodes which you missed so that you can catch up on all the other information which has already been covered off.

Understanding mortgages really is not that complicated, it just takes a little effort on your part to put in the time to find out more about the subject… which is very much the same as most other topics.

When it comes to mortgages one mini topic to get clear in your mind is understanding the different types of mortgages which are out there and how one option may be better for you and your situation than all the other types.

Now if you are in the market for a mortgage and you are choosing to use a mortgage adviser then this episode will very much go hand in hand with the advice process and the adviser's role and your knowledge around this issue will be cemented in when you speak to your adviser.

If on the other hand, you are not going down that route then it may be worth just making sure you fully understand the differences between these options and how these will affect you throughout the life of the mortgage.

Firstly we have the Fixed Rate mortgage

This is likely to be the mortgage type which most people will be familiar with either with a residential or buy to let mortgage. I would say the most common solution for people with fixed incomes and it is a very common option for first-time buyers who want to make sure that they can budget their incoming and outgoings.

Mortgages that are sold with a fixed rate mean that the interest rate is fixed and will not change during the time for which they are fixed. Sounds simple enough… So for example, if you are looking at mortgage deals and rates at the moment and you spot one that is described as being a 2 year fixed rate then for the next two years of this mortgage you will know what your mortgage payments are going to be. Now some lenders do have a fixed date which will be around two years but very close to two years as in this example so you should just keep that in mind.

Fixed-rate mortgage can be 2 year, 3 year, 5 year 7 year 10 year and by now I am sure you are getting where I am coming from. These fix rate products are great if you would like to fix your payments on your mortgage and don’t imagine too much is going to be changing with your current situation. While the fixed nature can be useful it is also worth remembering that these products do also come with a certain degree of flexibility built into them in that some fixed products do allow you to port or take your mortgage with you when you move. You can also make overpayments on your mortgage if the lender and product allows which will often be restricted to an upper cap of 10% of the mortgage balance but it's important to check the details with your lender before making large overpayments on your mortgage. A standard variable rate mortgage is the type of mortgage you would have likely fallen onto because your fixed-rate mortgage has come to an end. Thank you so much for listening I have been Kylie Meade-Richards and I'll see you next time

For today's episode, I am going to be talking about how when it comes to your banking, keeping things simple could be the key to a simple mortgage application.

This is rather a short episode and as this is still a rather new podcast I am still playing around with the length of each one and I would like to know if this shorter version is more suited to you or if you prefer the longer form ones.

The art of keeping things simple is a little mantra that gets used all the time for many different things. Simplicity is sought as a reaction to our over-complicated lives.

When we feel that we can’t control everything in our lives, it can be helpful to our psyche to control certain elements to restore order.

When it comes to mortgage applications it can be useful to apply a simplistic approach especially around your banking and proving income and proof of deposits.

Having a complicated banking arrangement can make a mortgage application slightly more complicated but please don't let that be a barrier if you put yourself into this camp.

Let's look at this all could mean for you more carefully.

If you are employed and you are applying for a residential purchase, for example, you will be expected to produce three months payslips, three months payslips which show your wages being credited into your bank. For the majority of the cases I deal with this is what I tend to see. One account which takes in your wages and the same account is then used to

If you are the person who is supplying the deposit for the purchase then you will also be expected to show the build-up of funds for your deposit which for most people means that you will be expected to produce another set of bank statements as the majority of people keep these funds in the account which is separate from their current account. Aside from all the other documents you will be expected to produce already for the three we have spoken about there - this is already a fair amount of paperwork to produce.

Simply for the purposes of supplying documents, your mortgage application can be made more complicated if you pay some of your money into account a to pay for x,y,z and if you have other income go into account b which pays for this and the other around your home. Now I am a big fan of having dedicated savings accounts for dedicated savings goals and if you and your household like to keep multiple accounts for multiple different reasons then just know that when you come to do your mortgage you may have to provide documents for each account that proves your income and shows your outgoings.

If you move your deposit money around from account to account and in the case of a recent application if you change where you hold your money frequently AND change the currency that it is held in then you may be faced with avoidable barriers to your application.

On today's episode, I am going to be talking about how if you start to think of a mortgage application like a job application you can put yourself in the best position and really help make your application a successful and pleasurable one for all concerned.

I am going to be talking about how you can do this by making small measured choices and how by doing a certain amount of pre-planning your application for your mortgage for your dream home doesn't have to become a nightmare.

Today's episode….

Often, when it comes to a mortgage people will be so concerned with saving money concerned with getting the best rates on a mortgage and concerned with how much mortgage they can get but that they forget the what I consider to be the vital first step on anyone's journey whether that is for homeownership as a Residential application or for anyone considering buying another rental property and that is the credit report.

Your credit report will give you a good idea of what it is that the lender is going to see when any application for funds is sent their way. With the majority of lenders, the credit report will be what they will be looking at when they are assessing your application and if you and your mortgage adviser know what is on your report you stand the best chase of obtaining the mortgage funds you apply for.

I think it's worth putting yourself in the shoes of the lender and asking yourself would I lend thousands of pounds to me if I saw my application laid out on paper. If your answer comes back as a no then try and work out what you might possibly have to improve your chances of obtaining positive results.

Think of your mortgage application like a job application. With a job application, you basically want to put your best foot forward. You take the time spent looking at the CV putting it together in a manner that makes sense. you read it check for grammatical errors check the spelling. You might agonize over making sure that the font is just so (if you are anything like me). Your skills and what you have to offer are all detailed within this document which you hope gives yourself the best option for obtaining a job.

The same level of detail should be taken when it comes to looking at your mortgage application….it is still an application after all and you're asking them to provide you with something which you would like and I think it's fair that this process should require some preparation.

So what sort of things can you do to improve your chances?

Firstly, make sure that when you get your credit report everything is recorded properly, and if you notice any errors on there get them corrected straight away. By doing this at the beginning of your journey means that while you are saving for your deposit and let's face it sometimes saving for the deposit can take a while you're able to put some history between the adverse or the incorrect information of the office and put some distance between you and that issue. If you don't get a copy of your report at the very outset of your application you could be setting yourself up for future disappointment. This disappointment will be further compounded when you then also find that this issue could have been resolved to then give you a different result. So for example if when you get your report and you notice a current unsatisfied default which you can pay in full I would urge you to pay this off IN FULL if you can do so.

Thank you so much for listening. I have been Kylie Meade-Richards and I'll see you next time.

Now I appreciate that I am now armed with a certain degree of knowledge when it comes to mortgages purely because I have been living and breathing this subject every day for the last few years and I'm always conscious when I'm talking to clients of that fact.

I try to remember how I felt when I was buying my first property as I think this really helps clients feel at ease because I can communicate the information to them in a way that is tied to real life.

As I said, I believe that I made the majority of the mistakes most first-time buyers make when I got my first property but Sadly I didn't know any better at the time.

Having been there and come through the other side I'd say I'm grateful now  that I did actually get onto the property ladder and if I had to do it all again, including making the same mistakes then I definitely would and that might sound strange but let me explain

Firstly, I would like to say the only thing I did well was going to a mortgage adviser and from that point onwards it was simply downhill from there, and honestly, I can't even take credit for making that decision.

I was led as many First Time buyers are to the desk of the mortgage adviser after wandering in estate agents closest to where I lived. I was told as many first time buyers are that this was necessary if I wanted to view a property which is the same line every first-time buyer is told when they also decide they want to look at Properties.

I did have a fairly decent amount of deposit saved up which I had worked incredibly hard for. At the time I was working for a company where overtime was readily available and I would take every single opportunity to do so, to my way of thinking,  if I was working I wouldn't necessarily be able to spend any money so it was a double win for me.  At this point, none of my peers owned or even rented property but it was something I wanted to do, especially as I had seen how much it meant to my parents after they, after many years of being in the army finally bought their first home together. Growing up we had spent all our lives moving from army quarter to army quarter and we only bought our first home when we left the army and I think I was headed to university at the time.

So I was certain I wanted to buy my first home and I knew I needed a deposit but that is about all I knew and that is how I found myself plonked down in front of a mortgage adviser sat behind a desk within an estate agents.

I don't remember the gentleman's name but I remember very little about the application process after the first meeting which I now realize must have meant that we had very little to do with one another after that first meeting.

The budget that he had based on my circumstances at the time I'm was very limited. When I would go on to online websites to search for properties I would always have to sort the properties lowest to highest and I very rarely made it off page one.

Having said that at the time I did have a fairly broad range of properties within my budget and I was lucky he because I didn't have a strict list of requirements which I felt I had to religiously stick to so I looked at every single property within my budget I looked at flats above shops I looked at houses I looked at one bedroom two bedroom and even completely by mistake a 5-bedroom mid-terrace but that's a story for another time.

Finally, after what seemed like forever, I found the one. I describe this feeling to all my first-time buyers and assure them it will happen to them. something strange comes over you when you walk into the right property something just feels right and you feel like you are at home.

Right now a niche is a specialized segment of the market for a particular kind of product or service and to be honest that description does fairly accurately describe what I mean when I talk about niche lenders.

And when it comes to niche lenders mortgage consumers tend to feel a

Very occasionally a client will ask that when we apply for a mortgage that we do so from a high street lender.  Sometimes a client will see the name of the lender on the mortgage illustration i have provided them with and they will ask about the lender because it is not a name that they have heard before and they become rather worried when they see this.

Now high street lenders are perfect for the perfect client but if you can not obtain the funds from the high street lenders then these niche lenders are perfect for your needs.

All lenders have their own criteria, this is a set of guidelines which the lenders will base their decision to either lend or not lend on. Ok, sometimes it is possible for a lender to accept a case which is outside of policy but for the most part the criteria is set in stone which is fine. Having a criteria is a useful tool, it allows mortgage advisors of this world to understand the lender's position and understand which types of clients or cases that they lenders will or won't accept - this means that we don't then spend a lot of time and effort placing a case with a lender only for them to kick it out and decline the application.

Sometimes we need to use these types of lenders when there has been a level of adverse credit which is just above that of what the lenders on the high street are comfortable with - sometimes these lenders are used because the client's income is made up in a less than typical fashion and sometimes these lenders are used because of the property itself.

These lenders often have more of a manual approach to the application process which can be useful if something on an application requires some level of explanation. This manual approach to the application can be useful but it can also slow down the process slightly so it is really important to give your mortgage advisor all the details about your case going into the application so that a full picture can be provided to the lender and then they have the option really early on to decide if they are going to proceed with the case rather than find out something later on which makes them decline to offer. When I am putting a case together for a lender I like to provide as detailed an application as I can and bring all the positives of the case to view and the parts of the case which I would like them to make a decision on rather than hope the lender does not spot the ‘issue’. I provide detailed explanations of the bank statements where I think appropriate. In a way, I am saying to a lender ‘ yes this did happen or yes this is the case in this area but hey look at all the reasons you should lend to this person’

As a rule of thumb, if you have made an application to a mainstream lender i.e. to one of the banks you see in the high street and they decline that application - stop and try and find out why they did.

It may be that you may be able to apply to the next bank or building society on the high street and that they will accept your application -  but it is well worth trying to work out why your application was declined before you do so. If you don’t try to evaluate why you were declined by speaking to the lender or getting a copy of your credit report then you risk a lot of wasted time and effort and in the case of a purchase then you may risk the purchase of the property that you have set your heart on.

Thank you so much for listening I have been Kylie Meade-Richards and I'll see you next time

Misunderstandings will always happen. They can happen in all facets of life.  often misunderstandings can mean that you damage or lose relationships. They can mean you have to try and understand something which you thought you already had a grasp of.  Misunderstanding something can also mean you end up missing out on something and this can, unfortunately, apply to mortgages and your options when it comes to mortgages.

I have collected some examples of the more common mortgage myths and then attempted to dispel them so that more people can take advantage of the opportunities which are available to them should they want them.

This is not going to be a full list as unfortunately, I hear new Myths all the time and I will, I am sure be able to do another episode just like this one very soon.

Myth one. You will be able to get a mortgage if your rent would be more than your mortgage

People who rent can get rather frustrated/

I did read that this was up for a  review but at the moment rental payments and the fact that you have kept up a rental agreement is not a factor that lenders can use to determine the amount of mortgage they are willing to lend you. I know a lot of renters find it hard to understand how paying £1200 in rental doesn't mean that your mortgage payments will be able to be as high as £1200 per month but no renting is not a ticket into getting a mortgage.

Myth two

Aren't all lenders the same?

Each Mortgage lender has their own set of criteria and while many of the criteria will be similar from lender to lender there will be differences whether that be subtle or vast and understanding lenders criteria is where a mortgage broker comes into their own.

As a consumer, it would be impractical and difficult for you to learn all the criteria from all the lenders and if you are in a position where you would like to obtain a mortgage I would suggest you seek out the advice and services of an intermediary otherwise known as a mortgage adviser.

Mortgage advisers gather your information and understand your uniqueness and place you with the lender that is best suited to you and your needs and get you the outcome that you would like.

Applying to a lender who ultimately will not lend to you is not the best use of your time and resources so if you are going to apply to a mortgage lender directly then do some due diligence beforehand to make sure they would like your application.

My credit score is very low…. I can’t get a mortgage

At the very moment that you decide that you want to get a mortgage, it's a really good idea to get a copy of your credit report. You can take this credit report with you when you go to a mortgage adviser and if you're unsure about anything and get their advice on the report itself this is a step that you really should not forget and you shouldn't skip some cases we've seen clients with surprise says on that report which they could have rectified before applying for the mortgage. Check this out because in timer lend-able do so and it's a good idea to know what you're going you're heading into before they do.

The right to vote

Being registered to vote will put a positive element on your credit report. This is something that can be done again the moment you decide that you want to apply for a mortgage along with these make sure that your bank statements and driving licences also have your current name and address on them as any discrepancies with these may just put a delay on your application.