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Purple Patch

Property & Finance

Get Ready with a Mortgage in Principle:

by Purple Patch
written by Purple Patch

Buying a home is an exciting journey, but before you start viewing properties, it’s crucial to be prepared. One of the best ways to do this is by obtaining a Mortgage in Principle (MIP), also known as an Agreement in Principle (AIP) or a Decision in Principle (DIP). This document can significantly boost your chances of securing your dream home by showing sellers and estate agents that you are a serious buyer.

What is a Mortgage in Principle (MIP)?

A Mortgage in Principle is a statement from a lender indicating how much they are willing to lend you based on an initial assessment of your financial situation. While it’s not a formal mortgage offer, it provides an estimate of your borrowing potential and reassures sellers that you are financially prepared.

Benefits of Getting a Mortgage in Principle

1. Personalised Result in Just 20 Minutes

Time is of the essence when you’re looking for a property. With a Mortgage in Principle, you can receive a personalised result in as little as 20 minutes. This quick assessment gives you a clear understanding of what you can afford, allowing you to focus on properties within your budget.

2. Find Out How Much You Can Borrow

One of the biggest advantages of an MIP is that it gives you a realistic estimate of your borrowing potential. Lenders consider factors such as your income, credit history, and financial commitments to determine how much they are likely to lend you. Knowing this in advance helps you narrow down your property search and manage your expectations effectively.

3. Get Viewings Faster with Estate Agents

Estate agents and sellers prefer buyers who have their finances in order. Having a Mortgage in Principle demonstrates that you are a serious and credible buyer, making it easier for you to arrange property viewings. In competitive markets, this can be a game-changer, giving you an edge over other buyers who haven’t secured an MIP.

4. No Impact on Your Credit Score

Many people worry about their credit score when applying for a Mortgage in Principle. The good news is that most lenders conduct only a soft credit check, meaning it won’t affect your credit score. This allows you to shop around and compare lenders without any negative impact on your credit history.

How to Get a Mortgage in Principle

Getting an MIP is a straightforward process. You’ll need to provide basic details about your income, employment, and financial commitments. Most lenders offer online applications, making it quick and hassle-free to obtain your MIP.

Final Thoughts

Securing a Mortgage in Principle is a crucial first step in your home-buying journey. It not only gives you confidence in your budget but also strengthens your position when negotiating with sellers and estate agents. With personalised results in just 20 minutes, no impact on your credit score, and a clear understanding of your borrowing potential, an MIP ensures you’re ready to make your dream home a reality.

If you’re thinking about buying a home, start by getting your Mortgage in Principle today and take the first step towards homeownership with confidence. Need help? Get in touch with us today for expert guidance and support throughout your mortgage journey!

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Property & Finance

Stamp Duty: What You Need to Know Before April 1, 2025

by Purple Patch
written by Purple Patch

Ready to buy a property? You’ll need to know about Stamp Duty Land Tax (SDLT), and things are changing soon. Starting April 1, 2025, the rates will shift. Here’s what that means for you:

Standard Residential Purchases:

  • Now (Until March 31, 2025):
  • Up to £250,000: 0%.
  • £250,001 to £925,000: 5%.
  • £925,001 to £1.5 million: 10%.
  • Over £1.5 million: 12%.
  • From April 1, 2025:
  • Up to £125,000: 0%.
  • £125,001 to £250,000: 2%.
  • £250,001 to £925,000: 5%.
  • £925,001 to £1.5 million: 10%.
  • Over £1.5 million: 12%.

First-Time Buyers:

  • Now (Until March 31, 2025):No SDLT on properties up to £425,000, and 5% on properties between £425,001 and £625,000.
  • From April 1, 2025:No SDLT on properties up to £300,000, and 5% on properties between £300,001 and £500,000.

Additional Properties (Second Homes/Buy-to-Let):

  • A slight increase, with a 2% charge for properties between £125,001 and £250,000.

The Bottom Line:

You’ve got until March 31, 2025, to buy at the current rates. After that, expect higher costs. If you can, try to complete your purchase before the new rates kick in.

 

 

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Property & Finance

Mortgages for Self-Employed: How to Get Approved

by Purple Patch
written by Purple Patch

Self-employed individuals often face extra hurdles when applying for a mortgage. Here’s how to improve your chances, with expert support from Purple Patch.

1. Prepare Your Financial Documents

  • Provide at least 2-3 years of tax returns or SA302 forms.
  • Have detailed accounts prepared by a certified accountant.

2. Maintain a Good Credit Score

  • Pay bills on time and avoid high credit utilization.
  • Check for errors on your credit report and fix them promptly.

3. Increase Your Deposit
A larger deposit reduces the lender’s risk and increases your chances of approval. Aim for 15-
20% if possible.

4. Work with Specialist Lenders
Some lenders specialize in mortgages for self-employed applicants. A broker can help you identify these options. Purple Patch has extensive experience working with self-employed clients and can connect you with the right lenders.

5. Avoid Frequent Income Fluctuations
Lenders prefer consistent income. If possible, show a steady or upward trend in your earnings over recent years.

By following these steps and working closely with Purple Patch, you can navigate the mortgage process with confidence, even as a self-employed applicant.

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Property & Finance

Top Tips for Remortgaging and Saving Money

by Purple Patch
written by Purple Patch

Remortgaging is a smart way to reduce your monthly payments or free up cash for other expenses. Follow these tips to get the best deal, and don’t hesitate to consult with the Purple Patch team for expert advice.

1. Know When to Remortgage

  • Your current deal is ending.
  • You’re paying a high standard variable rate (SVR).
  • You want to release equity from your home.

    2. Consider Fees

    • Check for early repayment charges on your current mortgage.
    • Factor in arrangement fees for the new mortgage.

    3. Improve Your Eligibility

    • Pay off outstanding debts.
    • Maintain a stable income and job history.

    4. Fix or Track?

    • Fixed-rate mortgages provide stability.
    • Tracker mortgages may offer lower initial rates but come with risks if rates rise.

    Purple Patch can help you evaluate all your options and guide you toward the best solution for your financial situation.

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    Property & Finance

    Understanding the Impact of Interest Rate Changes on Your Mortgage

    by Purple Patch
    written by Purple Patch

    Interest rates are a hot topic for homeowners, as even small changes can significantly affect
    monthly payments. Here’s what you need to know:

    What Are Interest Rates?

    The Bank of England sets the base interest rate, influencing mortgage rates across the country.
    Rates can either rise, fall, or stay steady.

    How Do Rate Changes Affect Mortgages?
    Fixed-Rate Mortgages: Your payments remain stable, regardless of rate changes.
    Tracker and Variable Mortgages: Payments increase or decrease with rate changes.

    Example: A £200,000 Mortgage

    • At 3% interest: Monthly payment = £948
    • At 5% interest: Monthly payment = £1074


    Tips to Protect Yourself

    • Consider fixing your rate during times of uncertainty.
    • Overpay your mortgage (if allowed) to reduce the overall interest.
    • Seek advice from the Purple Patch team to explore your options and make informed decisions.Prepare documents such as payslips, bank statements, and proof of ID. Once approved, you’re ready to move forward with your purchase!

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    Property & Finance

    First-Time Buyer’s Guide to Getting a Mortgage in the UK

    by Purple Patch
    written by Purple Patch

    Buying your first home is an exciting milestone, but the mortgage process can feel overwhelming. Don’t worry — we’ve got you covered with this step-by-step guide to help you secure your first mortgage. And remember, the team at Purple Patch is here to guide you every step of the way.


    Step 1: Get Your Finances in Order

    • Check Your Credit Score: Your credit score plays a big role in mortgage approval.
      Use tools like Experian or ClearScore to review your report.
    • Save for a Deposit: Aim for at least 5-10% of the property’s value.
    • Budget for Additional Costs: Don’t forget about stamp duty, solicitor fees, and surveys.


    Step 2: Understand Mortgage Types

    • Fixed-Rate Mortgages: Your payments remain the same for a set period.
    • Variable-Rate Mortgages: Payments can fluctuate based on interest rates.
    • Help to Buy Schemes: Government-backed options for first-time buyers.


    Step 3: Get a Agreement in Principle

    A Mortgage in Principle (AIP) shows how much a lender is willing to loan you. This can help you act quickly when you find the right property.

    Step 4: Compare Lenders
    Use mortgage comparison tools or work with a broker to find the best deal for your needs. The experts at Purple Patch can help you compare options and find the right fit.


    Step 5: Submit Your Application
    Prepare documents such as payslips, bank statements, and proof of ID. Once approved, you’re ready to move forward with your purchase!

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