Spring is the time of year that we dust off the winter blues, enjoy longer days and look forward to the return of sunshine. Traditionally spring also sees a boost to the mortgage market with potential buyers starting house hunts in earnest, or people looking to re-mortgage for home improvements. If you’re considering a house purchase this spring, here are some hints and tips to help you through the process.

Consider your budget:

Buying a home is an expensive business. It’s not just about getting a mortgage, you also need to consider the other costs associated with your move. Legal fees, surveys, stamp duty and removal costs are just a few so make sure you include these in your upfront budgeting. It’s also worth remembering the potential for rates to rise.

Get a mortgage agreement in principle:

Most lenders will offer a ‘mortgage agreement in principle’ – this confirms the amount you’ve specified to the lender which you believe you’ll need to borrow. This isn’t a guarantee to lending, as it’s subject to acceptance and completion of various checks and surveys. However, having an agreement in principle could give you an advantage when you’re putting in an offer on a property. You can research the mortgage market yourself but this can be very complex. Consider contacting a mortgage advisor who can help you find the deals you qualify for and guide you through the process.

And don’t forget… If you choose to take out a mortgage with a fixed rate, that deal will come to an end after the period specified by the mortgage provider.

Consider resale potential:

If the property you’re buying is not going to be your forever home you need to consider how easy it will be to re-sell when you’re ready to move on. If a property has been on the market for a while think about why it hasn’t sold, is it the surrounding area or the layout of the property?

Get the correct survey:

The mortgage company will request a survey of the property but this is only for lending purposes and will not give you a full view of the condition of the property. To protect yourself, you should consider obtaining either a more detailed homebuyer’s report or a full structural survey, which is the most comprehensive of the three. These reports are more expensive but they’re very detailed and any problems they identify may help you negotiate the purchase price of the property.

Arrange your home insurance:

Before you exchange contracts you need to ensure that you have suitable home insurance in place – buildings insurance is mandatory for exchange. Shop around and get as many quotes as possible but remember to balance the cost of the policy against the benefits. Some of the cheapest policies may not offer the cover you need or have high excesses in the event of a claim.

Police Mutual offer insurance to help you protect your home and belongings – to find out more and to get a quote click here.

Should you move or improve?:

If there is room for improvement, you might want to think about making changes to your current home rather than moving. Adding space can generally add value to your home. Do your research on what you might be able to add by speaking to local estate agents or looking at similar homes in the area. You may be able to fund smaller home improvements with savings but for larger projects you could consider talking to your existing mortgage provider about extending the loan or speaking to an independent mortgage adviser about a remortgage.

You can find more information on the Police Mutual Fee-Free Mortgage Advice Service here.

With so many mortgage deals available, how can you ensure you find the right one for you?

You could decide to go direct, searching the market yourself and approaching a lender directly for a specific mortgage deal. Lenders may provide advice, but only on the products they offer. Going direct could save you money as you’re not charged fees that some brokers charge for mortgage advice, but only if you know what mortgage is best for you.  You could arrange a new mortgage with your existing bank or building society, but you could be limited solely to their own mortgage products, significantly restricting the deals available to you.

What is a mortgage broker?

A mortgage broker is a person or company that arranges a mortgage between you (the borrower) and a mortgage lender.

They will:

• Help you assess your financial situation
• Search the market to find deals that match your criteria
• Recommend the most suitable mortgage for your needs

What are the benefits of using a broker?

• Convenience – if you’re not sure what you’re looking for and aren’t clear on the mortgage markets, or just don’t have the time to search for deals and speak to lenders, then a broker can be very useful. They could save you a considerable amount of time.
• Access – mortgage brokers will usually have access to a wide range of lenders, with deals that aren’t always available if you go direct. This means they have a wider choice of options to recommend from.
• Expertise – if you’re not familiar with the different types of mortgages available, knowing where to start can be overwhelming. For such an important financial decision, having an expert who can provide impartial advice and explain things, will make the whole process clearer.

What are the disadvantages?

• Cost – mortgage brokers receive commission from the lender, some charge a fee for their services. This can be charged an hourly or ‘flat fee’ basis and can either be charged up front or on completion of your mortgage.
• Limitations – not all brokers have independent access to the mortgage market, some only use certain lenders. Not all mortgage deals offered by banks and building societies are available through brokers.
• Quality – getting a mortgage is one of the biggest financial decisions you’ll make, so it’s important to make sure you choose a broker carefully and get recommendations where possible.

What types of mortgage brokers are there?

• Brokers who only offer mortgage from a single lender
• Brokers who offer mortgages from a limited number of lenders
• Brokers who offer a comprehensive range of mortgages from across the market.

You can find more information on the Police Mutual Fee-Free Mortgage Advice Service here.

Mortgage rates play a crucial role in the property market, influencing homebuying decisions and the overall economic landscape. In this article, we will explore the mechanics behind mortgage rates and the factors influencing them.

How do mortgage rates work?

Mortgage rates represent the interest that lenders charge borrowers for home loans. These rates fluctuate based on several factors, including:

1. Economic Indicators:

Key economic indicators such as the Bank of England Base Rate, inflation, employment rates, bonds yields and Gross Domestic Product (GDP) growth, impact mortgage rates. Lenders assess these indicators to determine the level of risk associated with lending money.

What is inflation?

You may have heard this mentioned in the news. Inflation is the rate of change in the consumer price of goods and services. It’s most commonly measured using the Consumer Prices Index (CPI) and the Retail Prices Index (RPI). It compares the price of consumer goods in the current year with the previous year.

So how does inflation impact mortgage rates? The Bank of England takes into consideration inflation when deciding interest rates. Previously when inflation has gone up then interest rates have also tended to increase.

2. Credit Scores:

Borrowers’ credit scores play a significant role. Individuals with higher credit scores often qualify for lower mortgage interest rates as they are considered less risky to lenders.

In addition to your credit score personal factors such as your deposit, income and assets can also affect what mortgage rates are available to you.

3. Loan Terms:

The length of the loan term also affects mortgage rates. Generally, shorter-term loans have lower interest rates compared to longer-term ones.

Are mortgage rates likely to come down?

Predicting future mortgage rates is challenging due to the multitude of economic factors and market conditions. Although some mortgage lenders have started cutting mortgage rates, predicting future rates remains uncertain. Staying informed about economic trends and regularly monitoring market conditions can help individuals make informed decisions about their home financing options.

You can find more information on the Police Mutual Fee-Free Mortgage Advice Service here.

This article was published on Fri 09 Feb 2024. At the time of publishing, this article was true and accurate, however, over time this may have changed. Some links may no longer work. If you have any concerns about this please contact us

Are you thinking of applying for a mortgage soon? Navigating the mortgage application process can be difficult, with lenders having different criteria for assessing mortgage applications. Getting your mortgage loan approved depends on a range of factors including:

• The size of loan you want to take out
• How much you’ve saved as a deposit
• Your employment status and income
• Your credit rating
• Your outgoings
• Your existing debt

We take a look at what steps you can take to boost your chances of getting your mortgage application approved.

When should you start looking for a mortgage deal?

New house purchase – If you’re looking to buy a house then the earlier the better! Start the process and speak to an advisor before viewing properties. That way you’ll not only know how much you can afford to borrow, but it could identify any hiccups early on to prevent any delays in getting a mortgage. You could also be at an advantage compared to other buyers if you have a mortgage already agreed in principle.

Remortgaging – You should generally start looking for a remortgage deal no later than three months before your current deal ends. Moving to a new lender could take up to two months so you need to give yourself time to consider your options.

What are the main reasons for a mortgage application being declined?

• Poor credit history
• Too many credit applications
• Not on the electoral role
• Too much debt
• Insufficient income

How can you improve your odds?

It’s not easy securing a home loan as lenders apply affordability rules to ensure they offer mortgages that people can afford. The following tips could help you boost your mortgage chances.

Get your finances in order– you need to be as financially attractive to lenders as possible. So getting your finances in order and reviewing your spending habits up to 12 months before you apply for a mortgage will help.

Cut back on your spending as Lenders will ask for detail about your outgoings and are likely to ask to see your bank statements to verify what you’ve told them. This is to make sure you’d still be able to afford your mortgage if your circumstances changed. Your application could be rejected if you fail to show you’re managing your money responsibly.

Manage your credit and pay bills off on time – Pay your credit cards and bills on time. Any missed payments can remain on your credit file for six years, so keeping up payments is a must. Setting up direct debit payments for credit cards can avoid the risk of you missing a payment.

Check your credit report – Lenders will check your credit report(s) to see if you’ve got a good repayment history. Your report lists your credit cards, overdrafts, loans, mortgages, mobile phones and some utility payments for all accounts opened within the last 6 years. You can check your credit file at all of the three main credit agencies – Equifax, Trans Union & Experian.

If you’ve applied for joint credit, such as a mortgage or bank account, then you will be financially linked to someone else. If you’ve since separated or have nothing to do with them then they could be affecting your credit score, so you’ll need to update your file. If you spot anything wrong with your credit file then you need to request an amendment.

Are you registered to vote? – If you’re not on the electoral register then your chances of getting a mortgage could be reduced. Lenders will often use the register to confirm your current residency. Your credit report will tell you if you’re on the electoral role. If you’re not you can register here.

Don’t apply for credit 6 months before applying for a mortgage – If you apply for a loan, credit card, utility contract or even a mobile phone then a search may be registered on your credit report, even if you don’t take out the contract. If your credit file shows multiple searches then this can reduce your ability to obtain credit. If you’ve had a payday loan in the last 12 months then you could be declined for a mortgage.

Put down extra on top of your deposit – All mortgages have a maximum loan-to-value (the amount you borrow compared to what the property’s worth). Keeping the loan-to-value as low as possible – for example putting down a little bit more than the minimum deposit required – can make you more attractive to the lender.

Get your paperwork organised – Lenders will need to see proof of your income before they can offer a mortgage so getting it ready in advance could speed the process up. Your lender may want to see any or all of:

• Your last three months’ payslips
• Your last three months’ bank statements
• Proof of bonuses/commission
• Your latest P60 tax form (showing income and tax paid from each tax year)
• Proof of deposits (eg, savings account statements)
• ID documents (usually a passport)
• Proof of address (eg, utility bills or credit card bills)
• A gift letter, this is where you receive part of your mortgage deposit as a gift. If you’re getting deposit help, the lender needs to know it is a gift (not a loan), and that the giver won’t part own the home.

This article was published on Thu 26 Oct 2023. At the time of publishing, this article was true and accurate, however, over time this may have changed. Some links may no longer work. If you have any concerns about this please contact us

With so many mortgages on the market, you may have a lot of questions when you first start doing your research. It’s hard enough to find the time when you’re working 9 to 5 and it can be even tougher if you’re working all hours in your role with the Police.

Can I get a ‘guarantor mortgage’?

There’s actually no such thing as a ‘guarantor mortgage’ as such. However, it’s not uncommon for people, especially first-time buyers to turn to their parents for financial support. Sometimes this could mean your parents contributing towards the deposit you need to put down. But it could also involve them acting as ‘guarantor’ on any mortgage you take out. This means that they would be responsible for making payments on your mortgage, if you were unable to. If you think you’ll need financial help from your parents when taking out your mortgage, it’s worth having a chat with a mortgage advisor.

What size of mortgage can I get?

The amount of money you can borrow depends on a number of factors, including your income, credit rating, how much of a deposit you can put down and the value of the property you wish to buy. Traditionally lenders would lend no more than four times your salary, however many have individual affordability calculators which will help you establish roughly how much you could borrow.  

Do I have to have worked in the Police for a certain length of time before applying for a mortgage?

Broadly speaking, the longer you’ve been in your job the better, as far as mortgage lenders are concerned. Lenders require proof of your income before approving a mortgage application. They may ask to see up to 3 months worth of payslips. If you have been in your role for less time than that, you might need to provide other evidence to support your application. That said, there are some lenders who will consider mortgage applications from people who have only just started their career in the Police.

Can I get a joint mortgage?

If you and your partner are looking to buy a home together, it makes sense to get a joint mortgage. The biggest advantage in doing so is that it could increase your buying power. This is because the amount of money you can borrow is based on your income (amongst other things). So, when considering your application, your mortgage provider will look at you and your partner’s combined salary.

How much of a deposit do I need?

The amount of deposit you will need to buy a home depends firstly on how much the property you wish to purchase is valued at. This can be around 15% of the property value.