Getting on the property ladder
It’s a Monday morning and well before eight when we arrive at the office CCC Mortgages, a Plymouth based brokerage.
Its director, Charlotte Callaway, is already busy finalising her schedule for the week ahead. Lots of appointments and lots of enquiries.
Coffees are made. We take a seat and we start to talk about inflation and how the cost of everything is rocketing upwards. Charlotte really understands the difficulties people face. Her brokerage is here to help people get on the property ladder.
She’s keen to cover a number of ‘easy to overlook’ points which are often forgotten when you start to think about taking out a mortgage agreement – and that includes income protection.
It’s a big issue when you consider one recent survey found that only 9% of adults hold some form of policy to help them through tough times.
‘So much can change in your life. It’s important to have some money put aside and have income protection in place,’ she says. ‘What happens if you cannot work? At that point, interest rates are not your problem.’
‘The classic scenario is Dad brings in the income, and, all of a sudden, he gets injured then what will the family do? If you’re on a salary of £30,000 then statutory pay won’t cover you. Prepare when life is good.’
‘People are relucted to budget for insurance but if something happens then these plans can help minimise the impact of illness on your life, and, in some cases, for members of your family.’
The squeeze: cost of living crisis
The economy is currently front and centre in the minds of a lot of people. Interest rates are on the up and it looks like we’re all going to be tightening our belts as we head into the autumn and winter months.
The goal of owning a home is suddenly becoming a more and more distant dream for many people – but it certainly doesn’t have to be an impossibility.
‘We are back to 5% deposits which is good news for people who’re paying rent. In Plymouth a three bedroom house costs £900 a month which you lose to a landlord.’
‘If you’re waiting to save up 10% then putting cash into a 5% deposit will save you money. The rate might be higher with a 5% deposit but putting that money in will save you the cost of renting over a period of 12 months.’
‘There are lenders which will engage with homebuyers who are solely on a benefit based income.’
‘For the self-employed, there is a big myth that you have a two year or three year wait before submitting accounts to a provider.’
‘You do need some sort of a track record so the lender has some security there that you can pay off your loan.’
‘Ideally we would like someone to have accounts for a year to 18 month period so you can submit something of value and have projections for the next year.’
What to do and what not to do
The cost of living crisis is beginning to make its impact felt in households across the country. Charlotte is keen to point out that there are products out there for people who might be looking to buy – but don’t necessarily have enough to put down a deposit.
‘If you have a good income but cannot get the cash together then there are certain lenders which will accept an unsecured loan from the bank as a source of deposit – as long as you can afford it and it fits their criteria.’
The upside of working with a mortgage broker is they can provide you with tips before applying for a mortgage to try to help increase your chances of being accepted. She lists a number of definite ‘no nos.’
At the top is not doing anything which may adversely affect your credit rating. This would include applying for a loan, credit or store card in the months leading up to completing the all-important mortgage paperwork.
The other pitfall is not to rely on friends and family for advice. Go to someone who is suitably qualified, knows their stuff and can talk the jargon which the client might not be familiar with.
‘I’m a regulated professional which means I hold qualifications which allow me to practice and provide mortgage advice.’
Much of Charlotte’s work is building a strong professional relationship with a number of mortgage providers. It means she knows instantly which company is a ‘good fit’ for your needs.
It seems the industry has moved away from the traditional imagery of full Windsor knots and Saville Row suits. It’s now a far more approachable sector.
We begin to wind down the meeting as we head to 0900. We’ve covered much ground in a short space of time. Pleasantries are exchanged. Coffees are finished. The phone starts ringing. Charlotte’s day, and week, has now officially started.