When investing in property it may be quite difficult to know where you can get mortgage and finance advice from. Investment Consultant Michael Johns reviews that even though most estate agents are not FCA approved, they can still help you find the best person to answer your financing questions and support you with your investment choices.
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Please see below the full transcript of the video:
Hi and welcome to the latest Ask Johnsy. The next question’s a general one, it’s not from somebody in particular but it’s a question that I come and get asked all the time. As an estate agent, we are not FCA approved or regulated so we can’t really discuss in-depth financial mortgages or financial options, we have to refer those to a broker. So, we have several partner brokers. And the question that I’m constantly asked is:
“Can you get me a mortgage? So, you’re selling me an investment, can you get me a mortgage?”
The answer is no. We don’t deal with mortgages, you’re much better dealing with the professionals, the people who are in the market all the time, they know who to go to. So, we will gladly put you in touch with brokers who we work with or brokers that we know, but there’s hundreds and thousands of brokers out there that you can use but we do tap into some seriously big players who have relationships with a lot of the business development managers at lenders that can tap into really good deals. So, it’s always worth asking for our recommended brokers details.
Normally with off-plan, you would get a decision in principle, or as known as a dip. That will give you an idea of how much you can lend, whether you’re credit-worthy, it doesn’t assess the property. So, any mortgage that you are offered will be subject to evaluation so it’s worthwhile asking your agent whether there’s anything that will hinder any potential mortgage. You can get these details from your broker, such things as are there commercial units at the bottom of the block, is it an ex-council owned building, what’s the structure of the building, is it a brick and steel or is it a concrete based building because that can have a big impact as well. So, ask your broker for anything that he needs to know in order to make a measured decision on whether he thinks you can mortgage on that property.
But beware, if you are applying for a mortgage within 6 months of completion, you can get your mortgage in place and can apply for your mortgage but any delays then in construction might mean that you’re going to lose out on that offer and you might have to reapply. Now, a lot of mortgage offers you can have an extension to them, so it’s worthwhile understanding what extensions may be available and how much it’s actually going to cost you to apply and then reapply. I deal with a lot of people who want to get the finance in place, end up going and spending a lot of money getting a mortgage in place and then it expires and they have to pay for it all again. But actually, it really is a key issue with a lot of people and whether they can actually have that finance in place and whether they’re actually going to be able to get the finance and whether the property is mortgageable or whether it’s subject to special lenders and special condition because that can really put the prices up.
So, that’s really it about can you get me a mortgage. The best thing to do is stick with the experts, but we can refer you to those and give you details of who we deal with. Thank you.
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*DISCLAIMER* Residential Estates can recommend mortgage brokers and solicitors to help facilitate the buying process, however, any companies recommended are not associated, financially or any other way with Residential Estates. If looking to purchase via a mortgage it must be noted that the provision of lender finance for your purchase is dependent upon individual circumstances and cannot be guaranteed. Residential Estates advise you to obtain independent financial advice before entering into an agreement upon which you will be relying upon lender finance. Any decision to proceed with lender finance is your decision only. If lender finance cannot be obtained you will be required to complete on your purchase in any event. Residential Estates are not regulated by the FSA, nor are they a finance company and cannot be held liable for any purchaser being unable to obtain mortgage monies for their purchase.