Looking to buy a new home or remortgage? Broker Katie Crosby has some tips…
Local mortgage advisor Katie takes the reins to offer up some advice on the current property market
By Katie Crosby
A little about me and how I got into mortgages…
I’m 31 and live in Whitley Bay with my husband, Sam, who’s a furniture designer and maker, our sausage dog and two cats. I may be biased, but I think it’s the best place to live in the world. I moved here a year and a half ago and I’ve never been happier. There’s a real sense of community; all the local businesses know each other and look out for one another, there’s an abundance of cafés, bars, restaurants and take-outs and, most importantly, it’s by the sea! Every morning before I start work, I go out on a big walk and grab a coffee. It really sets me up for a productive day. When people first meet me, they always assume I do something creative and arty for a living. I guess most mortgage and insurance brokers aren’t covered in tattoos and brightly-coloured clothes! They always seem a tad disappointed when I tell them I’m in finance. I’ve no idea why either, I think it’s thrilling! I’m not even joking, I find the world of finance so interesting and entertaining and I love what I do.
Although I studied Business Management at uni, I certainly wasn’t expecting a career in finance. After graduating, like thousands of other students, I was looking for a full-time job with no idea of which direction to go in. When a recruiter got in touch about a job as a mortgage adviser with one of the UK’s largest brokers, I didn’t know anything about the property market! But I had nothing to lose, got the job, flew through my qualifications and immediately fell in love with it all. Better yet, I found I was actually very good at it. Fast-forward nearly 7 years and thousands of clients later and here I am. I’ve taken the leap of faith and have gone self-employed, joining the amazing 313 Financial team, which has its head office in Durham. I’ve never been more passionate and enthusiastic about my job and the difference I can make to people’s lives.
Anyway, enough about me…now for some advice for anyone looking to buy a new home or remortgage soon.
Use a broker
I’m not just saying this is important because it’s my job! Using a broker is so important to ensure a smooth (as possible) transaction. Lenders criteria, affordability and rates change all the time, especially now – with some lenders literally changing weekly. A good broker will be on top of all these changes. They’ll know if you can no longer apply with a certain lender, or for a certain rate. They’ll understand the reasons why cases may now get declined from a lender whereas, pre-COVID, they would have sailed through. A good broker will submit your application at 7.00am to ensure you excellent access to the limited daily deals out there, and they’ll work until 8.00pm to get the application submitted before the rate is withdrawn. A great broker will work for you, not against you, and will do their best to ensure everyone gets the desired result.
Whether you’re a first-time buyer, a next-time buyer, or you’re venturing into landlord territory, it’s always important to speak to your broker in the first instance to ensure you can actually afford, and meet the criteria for, the property you want to buy. I always check clients’ payslips and credit files before they put an offer in; you’d be surprised how many people don’t know their exact incomes or credit commitments. Once your broker has made sure you’re qualified, you can then be confident in the knowledge that you can either afford to put an offer in, or that you need to wait a little longer until you apply for your mortgage.
Have your deposit ready
Maybe it’s savings, inheritance or a gift from your parents, but however you’re planning to get your full deposit together, make sure it’s fully organised before you apply for a mortgage. Pre-COVID, 5%-deposit mortgages were in abundance for residential properties; now the new normal is 15%. There are a few 10% deals, and I’ve place clients with them over the pandemic who’ve now moved into their homes, but there are often heavier criteria restrictions for 10%-deposit mortgages, which rule out many clients.
Get your old property on the market ASAP
Most sellers won’t accept an offer on their house until you’ve had an offer accepted on your own, so if you’re thinking of selling your old property, don’t hang about.
Be aware of when your fixed-rate ends
On furlough? Current mortgage rate ending soon? Don’t worry, there are usually still options to switch to a better deal. If you do nothing at all, when your current fixed rate ends your mortgage will revert to the lender’s standard variable rate, which is usually very high. So 3–4 months before the current rate ends, get in touch with your broker to arrange your next rate and make sure you don’t end up paying too much. There are still lenders willing to offer mortgages to clients who are on furlough. Of course, there’s criteria that needs to be met, but don’t do nothing and see your rate increase.
Looking to use the Help To Buy scheme?
If you’re wanting to buy a new build property, you’re not a first-time buyer but you still want to use the government’s New Build Help To Buy scheme, then time is running out. The current scheme is ending in March 2021 and from April it will only be available to first-time buyers. The new scheme will also have restrictions on maximum property price depending on the area of the country you live in, so act fast.
Whether you have a mortgage or not, everyone needs to ensure they’re protected in the event they, or their family, become unwell. If you rent and you can’t work because you’re sick, the rent doesn’t stop – the same is true of a mortgage. The bills don’t stop, you still need to eat, look after the kids, pay for fuel, the list is endless. Even if you’re lucky enough to get sick pay from your employer, what happens when that sick pay stops, which it will, and you’re still unable to work? The government’s statutory sick pay is just £95.85 per week. Not many people could survive on that for any length of time. Income Protection would pay you a percentage of your annual wage each month if you were unable to work through illness or injury. This protection would last until you could return to work, the policy ended, you retired or you passed away, and you can claim multiple times during the policy length. It’s definitely one of the most important insurance policies available.
Got a mortgage? Then you also need life insurance. I think some people forget that a mortgage is actually debt. If you have a joint mortgage especially, where you rely on the combination of two wages, then if one person dies the remaining partner is left with a huge debt to try and pay themselves. Having life insurance means that you can leave your partner mortgage-free in the unfortunate event of your passing.
Finally, write a Will
I always offer all of my clients a complimentary Will. According to Unbiased in 2017, two out of three adults don’t have one, but I’d say around 90% of my clients haven’t written a Will when they first contact me. You might think you don’t have anything to bequeath, but if you own a property you will have equity in that property; if you have life insurance, that’s often a payout of hundreds of thousands of pounds; if you pay into a pension, then that will have a value; if you own car, so will that. All these things make up your estate and, without a Will, they may not be passed down to the people you would want them to be. Most importantly, if you have children you need to make a Will as soon as possible. A Will is the only way to name who would legally become your children’s guardian if you were no longer here; without a Will, the State decides who brings up your kids.
For more property and financial advice, visit Katie’s professional Instagram account @kc_mortgageandprotection.
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