If you are looking for a mortgage broker in Cambridge, this suggests that you feel in need of some advice.
In what follows, we’ll examine some of the key questions put to brokers around the country rather than just Cambridge. Mortgages are important financial commitments and reading on might help you to understand some of the issues associated with them.
Why have I been refused a mortgage?
There might be many reasons, including possibly:
- your income is insufficient to cover the repayments of the amount you’re seeking to borrow. As a variation on that theme, perhaps the lender thought that your income stream was not sufficiently reliable;
- there is an issue with the property (e.g. perhaps there are serious structural concerns noted in the survey);
- the lender saw things on your credit history records that they considered to be an indicator of high-risk in terms of lending to you.
Whatever the cause, and there may be many more, looking backwards isn’t going to help. More positively, it may be worth seeking an overall review of your position from a qualified mortgage broker.
They may be able to help you to find a mortgage from a provider who is less concerned about whatever it is that obstructed you previously.
What is the equity in property?
Broadly speaking, the equity represents the difference between the current realistic market valuation of your property and whatever outstanding finance or mortgages you may have on it currently.
Subtract the outstanding finance from the evaluation and you will have a balance.
If that is positive, it indicates that you effectively have a form of profit in your property, something more correctly referred to as positive equity. Of course, if your property is worth less than the outstanding balance of your existing mortgage, then you have negative equity.
Positive equity is usually something accessed if you are seeking some form of liquid capital injection for whatever reason. Mortgage brokers are often approached to help facilitate what are called equity release schemes.
What is the relationship between property insurance and my mortgage?
In order to protect their interests, most mortgage lenders will seek evidence that the property is covered by full insurance. That should cover potentially the cost of full demolition, re-design and rebuilding should a property be destroyed in some form of catastrophe.
Typically, mortgage lenders will decline to offer a full mortgage unless evidence of such insurance is produced. You are though, under no obligation whatsoever to purchase such insurance from the company providing your mortgage.
Why do I need a deposit?
There are a number of reasons why a potential mortgage lender may ask you to contribute towards the cost of the property from your own financial resources:
- to ensure that they are lending a sum that is lower than the value of the property. This reduces their risk exposure;
- in part, it is an indication of both the financial responsibility of a borrower and their overall financial status.
The amount of deposit you will be asked to contribute, usually expressed as a percentage of the property’s valuation, may vary from one situation to another.
Can I secure a mortgage if I have a poor credit history?
Yes, though you will need to be realistic in your expectations:
- depending upon the exact nature of the problems referred to, some lenders may not be willing to engage with your application at all;
- you may need assistance in finding mortgage lenders who are willing to be more sympathetic to bad credit history situations;
- the amount of the required deposit might increase;
- the cost of borrowing may be higher than for people with relatively clear credit histories.
However, be aware that certain types of glitches on your credit history files are not considered serious by many mortgage providers. They will be unlikely to be a problem.