By Dominic Taddei, Group Managing Director, Clear Mortgage Solutions
The mortgage industry has witnessed two significant changes impacting housebuyers in Scotland within a 12 month period.
April 2014 saw the introduction of the Mortgage Market Review (MMR) a regulatory framework aimed at protecting buyers through stringent affordability checks, subsequently providing greater protection for both lenders and borrowers. It’s further strengthened by tighter regulations including the requirement for all mortgage advisers to hold a professional mortgage qualification.
Most recently, April 2015 brought the Land and Buildings Transaction Tax replacing UK Stamp Duty in Scotland. This is a progressive tax designed to be more proportionate to the actual price of the property, with the percentage rate for each band applied only to the part of the price over the relevant threshold, and up to the next threshold.
With property prices continuing to rise across Scotland, it’s a lucrative time for both buyers and sellers. We’re witnessing banks launching dozens of new deals offering record low rates, cut-price fees and greater fixed-terms, so it’s no surprise the mortgage market is very a competitive place.
So how can you take advantage of this? Whether you’re a first time buyer, climbing the property ladder, or aiming to establish or grow your property portfolio, bearing these top five mortgage tips in mind will help ease your application.
Top 5 Mortgage Tips
1. Reduce your personal debt as it will enable you to borrow more.
2. Don’t miss any financial commitments as overlooking a credit card or loan payment will count negatively against credit scoring.
3. Ensure you don’t apply for credit while a mortgage application is being processed as it will create delays.
4. Ensure you’re on the electoral roll as it’s used to verify a borrower's identity quickly so if you’re not registered to vote you may face additional ID checks. To register visit www.gov.uk/electoral-register.
5. Seek independent advice as it will save you time and money as the adviser will search the whole of the market on your behalf finding the best mortgage available for you and your circumstances.
Dont forget, you shouldn’t just consider your mortgage options when moving home. Did you know remaining on the same deal for the full term of a loan could mean losing out on a range of benefits? Homeowners can choose to switch lender and take advantage of new mortgage products to better suit their circumstances. You could make savings by switching your mortgage to take advantage of a lower interest rate or by reducing your repayment term. However, be mindful that you may have to pay an early repayment charge to your existing lender if you remortgage.