House Price growth
Possibly surprising for some, in this period of economic uncertainty, the average UK house price has actually risen 11% annually.
(Source: Nationwide, House Price Index, August 2021)
It’s largely been driven by government tax incentives, and buyer demand for a different type of home, against a limited number of available properties.
Whilst house price growth could ease as we move towards the end of 2021, rises can be beneficial for current homeowners. For example, it may give access to better rate deals, if borrowing against a property that’s risen in value over recent years.
Mortgage Rate War
For those considering to either expand the footprint of their current home, or looking to move, then there’s an additional benefit in play; a price war amongst lenders.
This has generated a number of deals at less than 1%. These are primarily (but not exclusively) for those that need to borrow 60% or less Loan-to-Value (LTV) of the home’s value. However, even those needing 90% or 95% LTV could still be looking at best deal rates of around 2% and 3%, respectively.
(Source: Moneyfacts, 1 September 2021)
These deals may be particularly enticing, but it’s not just the headline rate that needs to be considered, it’s the associated fees, and lender requirements. That’s why it makes sense to take professional advice to identify the most suitable route for both your needs and financial circumstances.
When it’s gone, it’s gone(ish)
As ever, each mortgage deal has a limited tranche of money set against it. These days, it seems, the deals aren’t on offer for too long. In fact, the average amount of time a product offering is out there is currently just 28 days!
(Source: Moneyfacts, 1 September 2021)
This doesn’t mean that other comparable deals won’t be there from the same lender,
or others. But you could waste time chasing deals, and that may affect your credit rating if going after too many, across different lenders.
For our part, we know where to look, as we are doing this every day for our clients. Additionally, to help that process, and for you to be able to move swiftly, it makes sense to have all of your financial details to hand, such as bank statements and payslips.
Lenders continue to apply stringent controls on the ‘evidencing of income’ and ‘affordability’. Plus, they may now want to know if you were furloughed, or recently took a mortgage payment holiday.
Find out your Credit Score
This is also really useful information to have, as it would provide us with further background knowledge. A popular site you could use is checkmyfile.com, as that brings together findings from all the rating agencies.
If your score is not great, there may be ways to improve it. This can involve amending incorrect details, or making sure you pay your bills on time. And sometimes, it’s just simply about ensuring you are on the electoral register.
You may have to pay an early repayment charge to your existing lender if you remortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.
