With UK interest rates on the rise, following the mini-Budget announcement (now since almost entirely reversed), and several lenders pulling mortgage products, homeowners whose contracts are coming to an end and first-time buyers are looking to seek advice.
Average house prices also increased to 12.5% in June, which had been driven by high levels of demand, and fell to 9.95% in September. As well as with the subsequent rise in monthly mortgage payments, many individuals are feeling cautious about borrowing.
While there are lots of predictions around the future of the economy and the property market, when comparing today’s rates over a 50-year period they are still below the average of 7.77%.
Many are expecting a recession and the market to crash. This, combined with the surging price of housing beginning to slow down ,is leading to questions around whether now is a good time to buy and what to consider.
Lenders are still lending
Appetite from buyers remains strong and the demand to buy properties is still there. In August and through to September, we saw an increase in new properties coming to market across the network compared to the previous year.
The good news is that the recent stamp duty announcement has put first-time buyers in a favourable position. Over 90% of properties in the UK are now exempt for first-time buyers, and lenders are still offering good deals for those purchasing a house for the first time.
What is evident is that buyers and sellers need to ensure they are fully prepared for the buying and selling process.
Figure out what you can afford
If you’re looking to purchase a property, it's important to understand how much you're entitled to borrow. You can then get a better idea of how much you’ll need for your deposit and the properties that are within your reach.
The government-backed 95% mortgage scheme for first-time buyers has also returned to the market. If you haven’t already, open a Help to Buy Equity Loan before it closes to new applicants on 31 October. First-time buyers also have until 31 March 2023 before the scheme ends, so now is the time to start considering your Agreement in Principle, arranging viewings to avoid delays, preparing all your documents and looking for solicitors to instruct.
When looking for a new mortgage deal, it’s best to start by working out what you can afford. Using a comparison site can help you find out how much you can borrow and what the repayments will cost you.
You can choose between a two-year fixed rate or a five-year. While the repayments on the two-year deals are usually more expensive, the five-year deals have higher interest rates but can offer longer term stability.
Finding a good rate
While most people choose to borrow from their existing banks, or renew deals with their current mortgage provider, the best deals can be found by browsing the market and comparing different lenders.
Since the beginning of the year interest rates have soared to record lows, with rates previously being as low as under 1%. Now, the most affordable fixed rates in the market are more than 3% and could reach as high as 6% in 2023. This increase has been due to a rise in swap rates, which are rates at which the banks lend to and borrow from one another.
Finding good mortgage rates is something you can do independently, but for those who need extra guidance you can get advice from advisors that have access to exclusive mortgage rates - that are not available to the public – to help find you the best deal possible.
When should I start looking?
First-time buyers should start planning a few months before they need to apply for a mortgage, as well as those looking to remortgage.
My advice would be to try and reduce your outgoings, where possible, before you apply for a mortgage. Credit checks are carried out and lenders will use your bank records to see how you manage payments, if you’re in any debt and most importantly if you can afford the property you’re looking to purchase.
If your mortgage deal is due to expire within six months, it’s worth exploring your options now as deals are available for six months so you can apply to a secure rate now and switch over once your current deal comes to an end. This means you will also avoid an early repayment charge.
Seek professional advice
If you are unsure on where to begin when remortgaging a property or beginning your journey of getting onto the property ladder, you can seek advice from a professional.
Mortgage advisers will advise and guide you through the process, by providing you with the structure to help you achieve your property goals.
*Mark Lawrinson is operations director of residential sales at Essex-based property group Beresfords.
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Can Paystubs be verified?
Generally,banks do not verify paystubs for landlords. The best way to verify
If a paystub is legitimate is to contact your potential tenant,s employer directly.
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thanks for the great information
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