Sunday 2nd May 2021
Hello and hope you are having a fabulous Bank Holiday weekend.
It has been a relatively quiet one for me in the Land Of K-S’s; I did a few viewings yesterday, and today spent a bit of time at house I am about to market – dressing and preparing it for photographs. The sellers are abroad, and the house has been rented out for a few years, so we felt a few titivations ahead of marketing would be helpful. It is amazing what a difference some cushions, flowers, and rearranging of things can make! It should come to market in a week or so – and boasts one of the best views I have seen in a house in Winchester for quite some years!
Meanwhile, I was wondering about what to write in this month’s blog, and thought the best thing I could do is to offer advice if you are considering buying a house (or moving from your existing home, and buying another).
The most important thing is ….
Don’t let your mortgage choice or broker be like getting a hair cut ….
Seriously. There is synergy here … How long have you had your current hairstyle? If you went to a different hairdresser, would you get new ideas and perspectives? How many times have you gone to your hairdresser, and asked for a cut, and they, and you, slip into autopilot and do it the same way ….?
So, when people ask me what they should do first when looking to buy or sell a house, my answer is always the same – start with the mortgage. If you have a property now, you should check on your current mortgage, whether there are unexpected redemptions, or whether it is portable (ie able to be carried to another home). It could be that there might be redemptions, but new rates might be so good that it is worth considering absorbing these costs and getting a new product. It might be otherwise. Equally, as mad as it sounds, your family’s personal circumstances might be different from when you initially took out your mortgage, that you might find that you cannot take the mortgage with you, indeed you might not be able to get this level of mortgage again, and therefore cannot move at all! Either way, ask an independent broker who can give good advice, and can even organise the porting of your mortgage for you, as well as handling any increase you might require with your new home.
If you do not have a house to sell, still start with your mortgage before beginning the house search. Again, the price comparable web sites might say one thing, or indeed you might get an Agreement in Principle over the counter of a local high street lender, but these often can be misleading when the lenders run your formal mortgage application through their systems. As Little Britain might say, ‘The computer … says no …’. I had a case recently whereby the buyer had run his figures by a high street lender over the counter, based on basic income and what he knew he could afford (ie had left over each month). However, when the formal application was submitted, his maintenance payments to a former partner and child, albeit affordable, brought the ‘Computer Says No’ response.
Equally, I had a buyer who was buying a house, based on affordability but the bank they used, (a telephone banking company who work over the phone) refused their application after a six hour session of waiting and interviewing, based on their general spending habits which included the gym, restaurant habits, and regular ‘posh’ haircuts. No amount of pleading ‘but we will give up our gym membership, grow our hair, and have barbecues when we buy this house’ worked for these lenders. ‘The Computer … said …no’. (The broker I put them in touch with found a way around it, computers are not the only way …)
Many buyers also believe that the bank they usually use for banking, and have a long standing relationship with, will offer them the best rate for their products. This is not always the case. Many high street lenders will have an amazing product but offer it at a lesser interest rate via an independent advisor because of the sheer amount of work involved in processing applications, so they offer a rate to a broker who will process the work and package it up, and that broker, in turn, can pass this onto a buyer.
I have had many cases whereby buyers/sellers tell me that they always use the same broker, always have, and they are happy with the advice they have been given. This is where the Hairdresser analogy comes in. Again, I always suggest speaking to another, just in case, and comparing advice. Many people have different ideas and advice, and indeed have some access to products others might not have. This is often difficult when an existing advisor is a friend or family member, but I still advise seeking different advice and comparing. I also have had buyers say that their accountant does their mortgage. Again, I advise seeing a mortgage specialist … this is what they do, all day long.
So, like when you go to a hairdresser and always get the same cut; please do shop around with other brokers, get alternative ideas. I always advise starting by speaking to an independent financial mortgage broker, get them to sweep the marketplace for you to find the best rates and products. What’s the worst that can happen? You find that the rate you found yourself on the computer, or via your current choice of lender, accountant, friend or family member, is in fact, the best out there, but you know that in the knowledge that it has been checked.
I am not directly affiliated with any lenders or brokers – but am happy to pass on numbers of a couple I have used recently, and had positive feedback as a result. They are each local and independent and with access to pretty much all the products out there.
If you are thinking of selling your property and would like to know how I might represent you in the market, please do look at my website www.nonykerr-smiley.com or call me on 07712648740.