You know a mortgage will cost the same or less than your rent which you have paid without problems for years - so it's obvious you can afford the mortgage. But that isn't what a mortgage lender looks at when they assess affordability! A few years ago, lenders only looked at the size of your deposit, your credit rating and your income. Now, in 2020, the "affordability calculations" look … [Read more...]
Articles about Mortgages
Mortgages are a "priority debt". If you are having difficulty paying the mortgage you need to take debt advice as soon as possible - the earlier you do this, the more options you are likely to have.
These pages list all Debt Camel articles about mortgages in date order. If you would prefer to see the most popular articles grouped by theme, looking at "problems getting a Mortgage", "problems if you already have a mortgage" and "interest rates", then look at the Mortgages and Debt page.
“Can mortgage lenders see old debts, no longer on my credit record?”
A reader asked: I know a debt drops off my credit file 6 years after it was settled or defaulted. I just want to ask when I apply for a mortgage, can the lender dig up unpaid debts if they are no longer showing on my credit report? This is a common question. The answer is Yes, sometimes because a lender can see other information that may show the debts. Let's look at what the lender can see, … [Read more...]
Are 35 or 40 year mortgages a good idea?
Mortgage terms are getting longer, especially for first-time buyers. Twelve years ago about half of all first-time mortgages were for 25 years or less. And only one in six first time mortgages was for 35 years or more. 2019 figures show how the mortgage world has changed. This year only 22% of first-time mortgages is for 25 years or less. And a dramatic 36% are for more than 35 years. So … [Read more...]
After a fixed rate mortgage ends, fix again? For how long?
If your fixed mortgage has ended, or will soon, you could face a large increase in your mortgage payments. Most mortgage revert to their lender's Standard Variable Rate (SVR) when a fix ends. In summer 2019, the average SVR is 4.9%. You can get much cheaper fixes than that! This affects a lot of people. In October 2019, fixed rate mortgages worth £26billion are coming to an end. More than … [Read more...]
“I really want to get a mortgage but my credit score is very poor”
A reader asked: I really want to stop renting and own my own house. But I'm in my mid thirties and my credit score is very poor. I've been careless and sometimes stupid, there were two defaults in 2018 and several more before that. None of them yet repaid. I've not used my credit card since January but the balance is huge. Can this be done? Is it worth trying to fix this? You have to decide … [Read more...]
Options if you have an interest-only mortgage
160,000 interest-only mortgages will be ending in 2019-20. And many more families will have interest-only mortgages ending after 2020, with a big peak in numbers in 2027-8 and in 2032. When an interest-only mortgage ends, you have to repay all the amount you borrowed. The money to repay it can come from three sources: savings or investments; by getting a new mortgage; or by selling … [Read more...]
Recent payday loans make it hard to get a mortgage in 2019
Having a recent payday loan on your credit history can make it much harder for you to get a mortgage at a good rate - or even at all! If you have used payday loans, the best advice for a mortgage application is: wait until at least 12 months have passed after your last payday loan; always go through a good broker; a payday loan affordability complaint may help clean up your credit … [Read more...]
Support for Mortgage Interest (SMI) is now a loan – should you agree to this?
Support for Mortgage Interest (SMI) helps people with the cost of their mortgage if they aren't working. It has been paid as a benefit since 1948, but in April 2018 this changed and now it is only given as a loan that is secured on your house. Here is the DWP leaflet describing the new loan: DWP SMI Factsheet (6 April). You may see LMI (loans for Morgage Interest) used as the new name for this, … [Read more...]
Mortgage repossession and your credit record
A reader, Mr D, asked: I had a mortgage shortfall from 2006 after my house was repossessed by Natwest. As a mortgage shortfall stays on file for 12 years, I decided to make a Full and Final settlement offer in January this year which they accepted and which has now been paid. Now with both Equifax and Experian, the account has disappeared, it doesn't appear in my open or closed accounts. … [Read more...]
Help to Buy mortgages now reaching the crucial 5 year point
The first Help to Buy mortgages were given in 2013, so in 2019 and 2020 many are getting to the five-year point when the government's 20% share stops being "free". If you have used the Help to Buy scheme, this article looks at what your options are at five years. And if you are thinking of buying your first home with Help to Buy, read this so you know what happens in five years time - don't … [Read more...]