Bank of Mum & Dad – An Alternative to Gifted Deposits

Gifted deposits are on the rise, (Property Industry Eye, Apr 2017). There has been an increase in parents offering financial help to their children in a bid to get them on the property ladder. This can take the form of a gifted deposit which is a non-returnable gift of money forming all, or part, of a deposit. Some parents prefer not to part with their hard-earned money. Below is an alternative, which we endured last year.

It came out of the blue, with no warning.  Our eldest daughter telephoned to ask if she could come and live with us for a year.  And when I say she, I include her partner and six-month old beagle. They had decided that it would be impossible to save for a property and pay rent at the same time.  They were right, of course.  It is a tall order. 

I gave a cautious yes, subject to agreement from Lee, which was by no means a given.  He took it fairly well, then turned pale and went for a long walk. Our daughter is a boomerang child and had already returned home several times since she first left. He was worried that if he let her back in, she would stay forever. 

We entered negotiations with our daughter and decided that both sets of parents would share the load.  They would live with us for the first six months and then with the other set of parents.

There were challenges to overcome.  We have different standards of tidiness and different expectations of dog behaviour.  The beagle considered rules to be something that only applied to other dogs. She took control of the household for the duration of her visit. But six months came and went without any serious disagreements and they moved into her partner’s parents place earlier this year. 

It is now summer and they have moved into their own house and have their own mortgage. They managed to save £12,000 in a year from not having to pay rent. It is more money than we could easily have given and it has been a relatively pain-free way to help.

So, if you have a spare room and limitless patience it is worth considering this option.  If you would rather pay a gifted deposit, than allow your adult offspring to return home ever again, give Lee a call on 01242 673341 for more information.

NB: most banks and building societies accept gifted deposits. They will need a letter from the donor to confirm that they will have no legal right to the money once the purchase is complete.  A word of warning – gifted deposits may have inheritance tax implications. They cannot usually be accepted if they originate from overseas.

 

Do I Need a Mortgage Broker?

The Cotswold Mortgage Broker is an approachable, family-run firm in frequent contact with prospective clients, looking for guidance on a range of mortgage related questions.  We are always pleased to advise without expectation of custom.  One of the most frequently asked questions is ‘Do I need to use a broker?’

The short answer to this is no, and where appropriate, we advise our enquirers accordingly, even though it may seem like we are turning away business.  Reputation is everything and we won’t take a fee that we cannot justify.

The truth of the matter is that if you are looking for a mortgage, you are employed, have good equity and no credit impairment in the background, you are probably better off applying to your existing lender in the first instance.  The same applies if you fulfil this criteria but are looking to move, though if you are a first time buyer, you may well benefit from a broker researching for you.  Regardless, we are always happy to ‘shop around’ on your behalf and if we can save you money, then we will advise you accordingly.  If we cannot save you money, or the amount you save is not worth the hassle of changing lenders, then we will tell you honestly at the outset. 

So, when would you use a mortgage broker? For almost any other scenario.  Every lender has a different underwriting process so where one may have stringent guidelines that preclude self-employed workers, another will not.  Where one will decline the case if the applicant has a CCJ, another will take that client.  If your income multiples are insufficient, if you receive other sources of income, if your age is a factor, if your house is of an unusual construction, if you are purchasing for investment or you have been declined by a lender, then that is when your mortgage broker comes into his own.

Mortgage brokers are highly regulated, regularly scrutinized and work just for you.  At the Cotswold Mortgage Broker, we have decades of combined experience in mortgages and property.  If you become our client, we will find you the most suitable deal, steer you through the application process, manage your expectations (mortgage applications, like conveyancing, are rarely swift-moving) and we will fight like tigers to ensure that your application goes as smoothly as possible through underwriting.  We cannot promise it will be entirely stress free as the underwriting process regularly changes, but we promise to find you the most suitable product for your aspirations, save you money wherever possible and guide you all the way.

Our broker fee (heavily discounted for first time buyers and returning customers) only becomes payable when your mortgage is offered.  If our efforts don’t result in a mortgage offer, then you don’t pay our fee.  Unlike some other brokers, we NEVER charge our broker fee or any part of it up front.

If you would like advice or guidance on any further mortgage related matter, call Lee on 01242 673341

Showing a house – what they don’t tell you……

In a former life, before becoming a mortgage broker, Lee was an estate agent (don’t judge). This month he shares tips on the best way to get your property ready for viewing

Home protectThe do’s & don’ts of showing a house ought to be obvious but from past experience we’ve found that in the excitement of the move, people forget to give their house its manicure, leg wax and makeover and get it in good shape for its big date with the viewing public.

It’s easy to make a house appealing.  From the moment a viewer leaves their car, walks up the clean, weed-free pathway into the tidy hallway with the aroma of freshly perked coffee, their mood is already receptive to the charms of the property.  However, this glitch-free scenario does not always play out in real life.

One particular problem is clutter; especially when the home owner is oblivious to it.  Rooms always look smaller than they are if over-filled with large, dark or mismatched furniture.  Add to that surfaces strewn with miscellaneous knick-knacks, cupboard doors that don’t shut because they are filled to bursting point and bookcases stuffed beyond reasonable capacity and you can be sure that the viewer is distracted from the more pleasing aspects of the property.

So de-clutter – give anything you don’t need to charity, stow all the ornaments away – you have to pack for the move anyway and if you haven’t opened the boxes in the garage/attic/store room since your last move, you don’t need them.

Buy a big tin of Magnolia to paint and freshen up the house, tidying the paintwork as you go and de-personalising the property (you don’t want to be remembered as the vendor with the lime green bathroom no matter how nice you may have thought it looked at the time).  Re-grout your bathroom tiles, polish the chrome and hang new kitchen doors if they are looking tired.

Pay careful attention to cleaning your house – sweep away cobwebs, keep carpets vacuumed and clean the windows.  Check the front door – paint it if necessary then take the lawnmower out of retirement, mow the grass, weed the beds and consider purchasing some cheap, flowering plants to brighten things up.

There are some things that it can be hard to discuss with a vendor.  Just because they love ‘Mauler’ & ‘Killer’ their two Rottweilers it doesn’t follow that viewers will.  Pets are best kept away from the property and pet accessories should be removed until after the viewing.  Which leads me on to the awkward subject of cat litter trays, which should be neither seen nor smelt.  We will never forget the vendor who insisted that every viewer took their shoes off at the front door of the property.  Unfortunately, he owned an elderly cat with very poor aim, invariably missing the litter tray positioned carefully in the centre of the hallway.  Prospective purchasers frequently left the property with cat-urine soaked socks.  Needless to say, the house did not sell.

The other unmentionable is the over-enthusiastic vendor.  Whilst it may seem helpful to follow the viewer around the house pointing out all the electric sockets and each & every light switch, a potential buyer needs to feel comfortable in the house and this is more likely to happen if they are left alone with the agent.  Worse still is the vendor who feels the need to discuss every flaw in the house, recount horror stories about the behaviour of the next door neighbours and mention all the deficiencies in the local schools.  Far better to leave the house, walk the dogs & let the agent get on with it.

That old cliché about freshly brewed coffee works surprisingly well.  There is nothing more off-putting than entering a house to have one’s nose bombarded with strong, unfamiliar or unpleasant smells.  Try to avoid cooking highly-spiced curries – save your baked kippers for another day.  Instead burn a candle or use an air freshener. Try highly-scented cut flowers – sweet peas have a glorious smell.

And when your house is all dressed up, smells beautiful and is clean and sparkling – don’t spoil its big date by keeping it in the dark!  Make sure the lighting is suitable for the time of day and try to avoid viewings after dusk.  Above all, make sure that curtains are drawn & perhaps even consider removing heavy drapes.  Use mirrors to make the most of the light & space and before you know it you will have received a great asking price offer……

From there it’s just a simple matter of arranging the mortgage & insurances for your new property, pack your boxes and pick up your new keys!

A Question of Loyalty

LoyaltyThe subject of a certain motoring organisation and their pricing policy arose during a conversation with a family member last week.  The family member concerned, having been a member of the said organisation in excess of 50 years, discovered he had been paying greatly in excess of the discounted rate given to new customers for many years.  When he challenged the lack of loyalty to long standing members, the customer services operative seemed baffled, implying it was the FM’s fault for not phoning and asking for a discount each and every year. Whilst a long way from ideal, it is at least, an option for young, fit and able bodied people but not always possible for the elderly.  Some find it harder to ‘shop around’.

Likewise, the utility companies have jumped on the same bandwagon caring nothing for loyal customers who remain with them, rewarding those who jump ship every year.

Loyalty, “a strong feeling of support or allegiance” according to the Oxford dictionary, seems to have become a dirty word in business terms.  It is absent entirely from call centres and unused by many salesmen who are only concerned with new customers, considering long standing customers a commodity to gain extra fees.

The Cotswold Mortgage Broker is four years years old and we have not increased our fees from the day we started.  We decided from the outset that we wanted to make loyalty a key feature of our company and not only do we discount our standard fee by 50% for first time buyers, but we also reward loyalty to the tune of a 50% discount from the standard fee of £495.00 for every subsequent mortgage after the first.  No customer is ever asked to pay a full broker fee more than once, not even if we arrange a string of buy to let mortgages. Furthermore, our fee does not become payable until the property or re-mortgage completes. If the property purchase does not happen, we do not get paid, regardless of how much time we have taken to process the application.  

We hope this approach sets us apart from other Mortgage Brokers.  We care about our customers and want them to come back to us.  Loyalty is important – it matters.

Property – Utilising the garden: The Bird’s & Bees

A good sized back garden is an asset to any property and can be used for a multitude of reasons including growing plants & keeping livestock.  Livestock within reason,  that is;  we don’t suggest you pop out to the local cattle market and head home with a dozen merino sheep, a herd of Angus cattle & two pot-bellied pigs unless you have a substantial amount of acreage.  There are smaller & more sensible options if you like the idea of having your own animal products.

The Birds……

 

We kept chickens until recently when we lost them to a fox strike. The chicken keeping experience was rewarding with the girls enriching our lives becoming little characters in their own right as well as prolific egg layers. It is worth doing some research before considering chickens so they may live comfortably and happily alongside their humans.

Firstly chickens need a good home.  It need not be expensive but it is important to consider the size of the chickens in relation to their accommodation.  When we looked for a coop, we considered purchasing online where there was a good range of cheap hen houses.  We settled on one in principle but visited a local poultry seller locally before the final decision – and it was just as well.  The size shown in the photograph was deceptive and the poultry seller had purchased a similar version to demonstrate its unsuitability. Whilst there is no need to take out a mortgage to buy a hen house, something too cheap would not provide adequate shelter.  Our poor girls would have been cramped and uncomfortable had we proceeded with the first choice.  We ultimately bought from eBay having checked the potential new hen house first, paying careful attention to dimensions and fox proofing.  It came flat packed but was easy to build and had a run attached.    To finish, we put a fence around to give the chickens a good sized area to scratch around in.

Chicken run

Chickens are surprisingly easy to keep.  We cleaned our coop every 3/4 days which took about 10 minutes.  Once cleaned mite powder was sprinkled into the corners and on the perches.  We changed food and water  every few days and the chickens often enjoyed our left over vegetables and grass clippings.  They were also partial to a handful of porridge oats as their daily treat.  Chickens are very sociable and ours squatted down for a stroke whenever we entered the run.  They were friendly enough to tolerate being picked up & cuddled by children.

Chickens, like other animals occasionally get sick.  Some illnesses are treatable at home but others need intervention.  When our Columbian black tail chicken was poorly we consulted the vet who prescribed antibiotics but they did not work and we ultimately lost her. 

LuluHowever, the two surviving chickens, Lulu & Doris thrived and lived long, happy lives.  When they were older and their laying diminished, they were joined by two legbars (Cream & Daphne) who took on the main egg laying responsibility while the other two became well-loved pets.

If chicken keeping appeals, try a local poultry stockist like Fosters of Quedgeley or consider re-homing an ex-battery hen through the British Hen Welfare Trust.

……And the Bees!

 

There has been a dramatic decline in the number of bees over the course of the last few years, not just in this country but throughout the world, which is a worthy reason to consider keeping them in your back garden providing the neighbours have been consulted and don’t have any major objections.  As natural pollinators, bees are a gardener’s friend and are naturally interesting to observe in their own right.  They produce delicious honey and provide beeswax for polishing furniture or making candles.

Whilst beekeeping sounds like an interesting hobby with relatively cheap start-up costs, we have yet to attempt it in our garden.  It is something to consider in the future, subject to approval from the neighbours. A good starting point for would-be bee keeper is to visit the website of the local branch of the Beekeepers Association  for advice & help on how to get started.

 Whether you opt for the birds or the bees (or something larger), keeping animals is a productive and rewarding experience.  Relaxing by the hen house, listening to the soft chirruping of chickens is a great stress buster after a tough day.

Property Exchange – A Big Holiday on a Small Budget

This week we discuss how you could use your own property to mitigate your holiday costs.

We’ve just returned from a week’s holiday in Majorca; a glorious week of sunshine & relaxation in Port de Pollensa.  It’s our first holiday in three years – we don’t get away much what with the business, the dog & the chickens but a kindly friend offered to house sit so we jumped at the chance.    After three years of not paying for holidays, the cost of a short break rather surprised us.  Prices have increased – a lot.  And it started us thinking.  Is it time to consider a different kind of holiday? 

So we looked into Property exchange, the swapping of homes on a temporary basis with like-minded people either in the UK or a multitude of overseas destinations.  It’s a great way to make your property work for you with no hotel bills involved and it’s cheaper than a conventional holiday with the added benefit of being able to shop and eat at home as usual.  Holidaying this way allows more opportunity to get to know the area and interact with local people, invariably avoiding the tourist areas.   You could even agree to swap cars making it easier to travel around your chosen destination.   Some swappers arrange mutually convenient plant & pet care which, together with the knowledge that your own home is occupied whilst you are away, can give a greater feeling of security than a normal holiday.

With a Holiday Property Swap, no money actually changes hands between the swappers.  There is usually an annual membership fee or subscription service to a specialist home swap agency.   Homelink charges £115 for a year’s membership and internet subscription site Guardian Home Exchange charges £35 to list your home for a year.  Then it is a simple matter of filling out an online form with details & photographs of your property, stating your exchange offer, and waiting for an interested party to make contact.

It is important to be realistic when listing your home and to be as truthful and accurate as possible.  Mention pets if you have them.  Your listing should include the location of your home, the property specifications and photographs or videos.  You should also detail your preferred destination and favoured dates of travel.  Don’t forget to let your home insurer know what you are doing so there is continued cover while you are away.

When the time comes for you to vacate your property, leave it clean and tidy creating enough space for your swappers to be able to unpack and store their personal belongings.  Make sure that you leave sufficient linen and towels for all the occupiers.  It is useful to compile a guide to the local area including operating details for the washing machine, cooker etc. and give information about rubbish collections, doctors, dentists and babysitters.  Recommendations for good restaurants, transport routes and local tourist attractions will always be appreciated.

Your swappers may well be tired and hungry on their first night at your property so it is helpful to leave enough provisions to allow them to make a meal at home if they don’t feel like going in search of the shops on arrival. 

There is a huge diversity of places and properties available for swap. The Guardian Home Exchange latest listing shows properties available in Tuscany, Provence, Finland and Rio de Janeiro, most eager for UK swaps.  On the same short page are further listings for properties in Northumberland, Brighton, Australia and New York – the variety is endless!

So before you decide on a package holiday this year and corner your trembling credit card in its wallet, think about the alternatives.  Is there another way to holiday?  Might it even open up new possibilities for a holiday like no other before?

By Jacqui Beard

Buying a house – when things aren’t quite what they seem….

It’s easy to get caught up in the excitement of finding a property especially in this internet age where you can see so much of a house before you ever go to view it. But there are other considerations to bear in mind over and above the number of rooms, garden and location so do your homework and try not to let your heart rule your head.

The House…

You will probably have given some thought to how much work you are prepared to do to a property and will have tailored your house search accordingly. So it is important to make sure you look carefully when viewing so you don’t have any shocks when the valuation is carried out. If you are purchasing the property to include appliances, check those appliances are in working order! Sounds obvious we know, but many people don’t do it. Similarly, turn on the taps & check that they work and that the water pressure is reasonable. Cast your eye over the double glazing units to see whether they are intact, and make sure there are keys available for the window locks & that the locks work.

Outside, you might want to take a brief look at the brickwork – diagonal cracks could be a sign of subsidence and you should check whether the guttering is intact and whether the soffits, fascia and bargeboards are in good condition. Back inside it is worth having a quick glance at the fuse box to see if it is modern with flip switches or older with fuse wire. Find out whether there is loft or cavity wall insulation & ask the owner when the boiler was last serviced.

Should you decide to go ahead with the purchase you can elect to instruct a homebuyer’s report which gives a good indication of the state of the property and its level of repair and expected maintenance but it is still worthwhile keeping your eyes peeled for potential problems in the meantime.

….And it’s surrounds

You can alter pretty much anything inside a house but you can’t change its location. Whilst it is commonplace to check for good local schools & amenities, it is perhaps less well remembered to check other geographical issues. Now we have a south facing garden, we can’t imagine going back to a garden with a different aspect. If the location of the sun is important to you, make sure you find out where it will be in relation to your property. Failure to do so may see you spending all summer covered in fake tan because your garden is unexpectedly north facing!

Similarly, have a good look at the surrounding gardens. If the neighbourhood frontages are uncared for and unkempt, it may tell a story about the sort of neighbours you will inherit. Visit the property at different times of day to assess noise level and activity. Ask the vendor of the property what the neighbours are like and meet them if at all possible. It would be a great shame to discover your new neighbours use their south facing garden to practice naturism throughout the summer, and you didn’t know because you neglected to ask the vendor about them when you had a chance!

Another thing that you may want to consider is the crime levels in your chosen area. We were in two minds whether to comment on this since our last foray into the http://www.police.uk/ website left us feeling that our well-loved & safe village was, in fact, a hotbed of violent crime & vice. Nevertheless, it does keep you well informed about local criminal matters and may be a deciding factor.

If it’s so good, why are they moving….?

Yes, indeed – why are the owners of the property moving? Is there a genuine need to relocate (bigger house, change of school) or is there something more sinister to consider. Perhaps there is a promotion in the offing, hence the house sale or perhaps they have just had enough of Mr-next-door-neighbour gardening in the nude at midnight. And while you are having an honest exchange of views, ask what they are prepared to include in the sale? It can be useful to know at an early stage whether you can make an offer to include carpets, curtains, appliances etc. It is also a good time to find out what the council tax is and an average cost for utility bills.

One thing definitely worth considering now we are firmly entrenched in the internet age is broadband speed. Although the majority of British homes now have access to broadband, the speed at which they are connected varies widely and this might be a serious consideration if you work from home. It is worth taking time to check this if you decide to offer on a property. http://www.broadbandspeedchecker.co.uk

Asking the right questions and keeping your eyes open can pay dividends in the short term to give you clues about possible difficulties before you consult the specialists. Don’t forget to ask questions, both of your vendor and the estate agent & before you know it you will be properly acquainted with your future house.

By Jacqui Beard

Purchasing Property – The Professionals

PURCHASING PROPERTY – THE PROFESSIONALS!Professionals

In the past property professionals languished somewhere between rats & cockroaches in the popularity stakes, no doubt heaving a collective sigh of relief when bankers slipped to the bottom of the pile during the banking crisis.  This reputation is largely undeserved with agents & brokers fulfilling an important & necessary role.  Working long hours & usually receiving considerable training, your property professionals are key to a successful house move.

You will encounter several property professionals in the home buying process.   Arguably the first you should consult is the mortgage broker, top of the list because it is crucial to know how much you can afford to borrow before you fall in love with a house you couldn’t afford without a substantial lottery win.  Lee Beard, Managing Director of The Cotswold Mortgage Broker, advises prospective purchasers to “consult your broker at the outset to get a clear & realistic idea of the price of property you should be aiming for.  Your mortgage broker will assess your credit & ability to afford the monthly mortgage payment before selecting the most suitable product for your needs”.

Once you are confident about your purchasing power, it is time to find the house of your dreams.  Even in this internet age, there are definite benefits to registering with your local estate agent be it in person, by phone or by email.  An estate agent goes to many property appraisals throughout the day, and is consequently able to let you know about brand new properties coming to the market before the details are made public on the internet.  If you are selling as well as buying and have not already done so, you should also have your own property appraised, not only to establish its value but also to ascertain how long it is likely to take to sell in the prevailing market conditions.

Once ready, view some properties, make an offer and once your offer is accepted and your mortgage paperwork is completed, you will need the third property professional – the surveyor.

Usually a member of the Royal Institute of Chartered Surveyors, this property professional is crucial to the house buying process, establishing the true condition of your property prior to purchase.  There are three different kinds of survey report starting with a basic valuation carried out on behalf of the mortgage lender to check that the agreed price is correct.  The Homebuyer’s Report is more thorough advising the general state of repair of the property and pointing out any defects such as damp and timber issues.  It will recommend any works required and identify items needing further investigation.  The Daddy of all survey reports is the Full Structural survey, an extremely detailed report generally recommended for old, unusual or listed properties.

Finally you will need the services of either a solicitor or licensed conveyancer who transfers ownership of a property.  The conveyancer checks title, prepares contracts, answers enquiries and performs a multitude of other legal requirements necessary for a successful property transaction.  At the point of completion the conveyancer co-ordinates payments, deals with problems and ensures all monies are received before keys are issued by the estate agent.

So there you have it – The Mortgage Broker, The Estate Agent, The Surveyor and The Conveyancing Solicitor – all very necessary and highly qualified; all experts in their own field but working in symbiosis.  Choose carefully – ensure your property professional is a member of their regulatory body – and you will find they are invaluable in your property acquisition.

Cotswold Mortgage Broker Burgundy small

www.cotswoldmortgagebroker.co.uk
lee@cotswoldmortgagebroker.co.uk

By Jacqui Beard