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You’re in the homebuying process and following all the required steps. Well done - and keep going.
However, there's something else that you should be doing alongside saving: making yourself look like a good bet to a mortgage lender.
I’m going to start with a question: if you saw your neighbour every day, and one day she asked to borrow £1, would you lend it to her? I’m guessing you probably would. It’s only £1 and you’ll see her tomorrow.
Now imagine if a week later, your neighbour asked for £5. And then the next week, she asked to borrow £20. Would you lend it to her? You might - but only if she paid you back each time.
But would you be so generous if your neighbour came straight up and asked for £20? What if she didn’t pay you back last time? At some point you’d either say no, or offer her less than she wants. You’d probably have a few questions before handing over the cash.
Now imagine it’s you doing the asking. You would want to give her the confidence that you’ll repay it. Finally, imagine that instead of asking for £1, you’re applying to borrow £200,000!
The reality is that you may be asking a bank or building society to lend you a significant amount of money, so you want to be as appealing to them as possible - after all it’s likely to be a long term relationship!
You’ve probably noticed by now, I love a quote, so here’s another you probably already know - “By failing to prepare, you are preparing to fail\" - Benjamin Franklin. Preparation is key. Getting mortgage-ready is something you should be doing as soon as you start saving.
So, what’s appealing to lenders? And what can you do to look your best? Broadly, you should be aware of the following areas:
Many advisers will say ‘It’s all about your credit score!’ and that’s a common belief, but it’s not strictly true. Your credit score is important and it’s something that lenders will most definitely pay attention to, but it’s not everything.
Basically, a credit score is a number that depicts your creditworthiness or the extent to which you’re considered suitable to receive financial credit. A credit score is one of the factors a lender will use to evaluate the how likely you are to pay them back on time
The higher your score, the better you look to potential lenders. Your credit score affects:
It is affected by:
So, what can you do to improve your credit score? There are a few things that everyone should do:
Let’s start by looking at what a lender ideally wants from you? It’s simple really - pay them back on time, every month. So, your credit score aims demonstrate if you're likely to be good at this.
It might seem obvious but the single most important thing to do is to pay your bills on time. Any missed payments will look bad to a potential lender. You need to show you can manage your finances.
Missed or late payments will remain on your credit report for at least six years.
The next step is to find out your score and check your credit report for its accuracy, especially any errors or omissions. If anything is incorrect, make sure you get it updated straight away.
Even having a slightly incorrect address can impact on your score!
You can get credit reports from a number of companies, some of the big names in the business are shown below and different lenders use different ones and sometime more than one -
Experian - https://www.experian.co.uk/
Equifax - https://www.equifax.co.uk/
Check My File - https://www.checkmyfile.com
Clear Score - https://www.clearscore.com/
Most offer a free version as well as premium options. So, have a search around and choose whichever grabs your fancy. They generally all do the same thing and it’ll help you get to grips with your credit score.
Welcome back Ben! Yes, it's Ben from the previous articles. He’s on track with his saving and his LISA is building up nicely. He’s now looking at getting ‘mortgage ready’ and he’s just got his credit report, which shows 550 out of 999.
He’s shocked, it’s so low. He says he pays his mum and dad his rent money in cash on time and although he has a hefty car loan, he always pays it on time. He has no other debt and always has cash around the house.
Just picture what his credit report looks like and what a lender may see (or not see).
The next thing to do is make sure that you are registered on the electoral roll. This is fairly easy to do and is a quick win. In England, Scotland and Wales, you can register to vote by post or online. In Northern Ireland, you can register by returning a completed voting registration form.
The reason this increases your credit score is simply that it means that lenders can easily confirm your name and address and they know you’re not trying to hide from a past bad debt.
Ben’s on the electoral roll, but only because his dad completed the form when it came through the post. Unfortunately, he spelt his name wrong(!), so that needs fixing for a start!
So you’re doing the basics, but what other steps can you take? This is likely to depend on your situation.
If you have a limited credit history, it would make sense to build it up. You can do this byvia several methods, such as taking out a credit card. Alternatively, as promoted by Which, you might even utilise a service like LoqBox or 118 118 Money, which are also good for repairing credit scores.
Credit cards
As a Financial Adviser, it pains me to tell someone to take on a credit card, but for some potential home buyers it may be a good idea. If you have no credit history, your credit score is likely to be lower as a lender can’t see how you might manage debt. So, using a credit card sensibly can show a lender how sensible you are.
Using a credit card sensibly means:
The longer your payment history is, the better. So, if you have no payment history, it’s a good idea to get started as soon as possible.
A word of caution - If you don’t trust yourself with a credit card, then ignore this tip. I don’t want to create you more issues. Similarly, if you quickly find yourself not clearing the balance each month, shred the card and focus on clearing the balance.
LoqBox
An alternative to credit cards is LoqBox, which basically is a clever piggy bank designing specifically for both saving or building a credit history. It can also be great for people who unfortunately are looking to ‘rebuild’ their credit score.
You agree a sum to save over a year and they set that much aside in a locked away account. You save your money across the year and the money is then made available to you. Sounds like a savings account, but in reality it’s set up as a 0% loan and your monthly savings are shown as repayments. It is a good way of building up your credit score without getting into debt. For some of you it may be worth investigating.
118 118 Money
This is what I would call a ‘low start’ credit card and not for everyone. It can be useful to build or rebuild your credit score. Most credit cards charge interest or fees on certain transactions, such as cash withdrawals or foreign transactions.
118 118 Money offers a low credit limit card but charges no interest or fees on transactions. Instead you pay a subscription of around £8 to £17 a month, depending on your credit limit. This is great for rebuilding a score, but beware that as your credit score improves, they offer higher limits (and bigger subscription costs) and we believe that this is the time to shop around.
Ben feels he manages his day-to-day money well, so is going to take out a credit card with the sole object of building his credit history. He’s looking at a card that offers £1,000 of credit. He's going to use it as a fuel card and pay it back every month. He usually spends around £200-£250 a month on fuel.
He’s also saving more than the £4,000 per annum LISA allowance. He’s going to look into LoqBox as well.
If you have significant amounts of debt, you really need to look at clearing what you can. Focus on any high interest debt as it will be the most cost effective to clear first, freeing up money to clear other debt.
There may be debt that you don’t want to repay, such as a car loan. Whilst having a car loan can be a positive in showing you can manage debt, you have to be aware that this will reduce the amount you can borrow for a mortgage.
You should be staying out of your overdraft, especially if it is a regular event. This is because a mortgage lender may conclude that you can’t live within your means and of course it’s just another debt you’ll need to pay.
Loan defaults, missed or late payments will remain on your credit report for at least six years.
You should also look to close any old, inactive credit facilities that you no longer use.
When you apply for the mortgage, lenders often like to see 3 to 6 months of bank statements. They are looking to assess how you manage your money and ultimately assess if you could afford the mortgage repayments. Specifically, they are assessing the following:
The Bank of Mum and Dad’ (BOMAD) can help you buy a home, but not if it simply shows a lender you can’t live within your own means and need bailing out. The best way to use their help is with building up your deposit.
So when you apply, make sure your bank statements are as ‘tidy’ as they can be. Lenders aside, it is good for you to have a good understanding of your spending habits, so you know what is affordable and comfortable for you.
If there are outgoings you could cull or reduce, now is the time to do it. Even if it means deleting certain food delivery apps from your phone.
Keep that job - I mean, if you get offered a promotion at work, take it. Congrats! However, moving to a new employer within a few months of applying for a mortgage could prove disastrous, even if it's for more money. Lenders might tell you to come back later.
Why? It's not the change of job itself, it's the timing. Lenders are a cautious bunch and are more comfortable lending you money if you have been in your job for a decent amount of time. As a rule of thumb, 3 to 6 months would be seen as an ideal minimum. Specifically, they don’t want you to be in your probation period, when there’s a higher risk that your employer might terminate the contract.
Lenders also tend to get even more concerned if you’ve had a complete career change or decided to go out on your own. Typically for self-employed applicants they really want to see at least two years' accounts. Your income during the first two years may well be lower, which also means they are likely to lend less.
As I have said, lenders are cautious by nature and they will not take your word for anything. This leads to them wanting a whole load of documents to prove everything. There are as follows;
Get on top of and build your credit score, make sure that you are clearing as much of your other debt as possible, and manage your spending within your income.
We also touched on the importance of your record keeping and the impact of things as simple as changing jobs. I’ll leave you with my top picks again, but I think I’ll leave the next article for Dan to write. He’s gone through ‘Finding your home’ more than once and more recently than me, but I’ll be back soon and I’ll be reading his thoughts with interest.
“I don't know how much I'm supposed to save.”
“At the end of the month, I just don’t have anything left to save.”
“I just don’t earn enough to save”
I have heard many reasons people give for not saving.While there will always be some who genuinely struggle, most people are just not sure where to start.
As we progress into the world of homebuying, we now turn to the less exciting area of savings.
So far, we’ve established that buying a home usually requires a large deposit as well as the other costs set out in Part #2 - Set a target. The resulting total often seems unreachable, especially if you don’t have a plan.
It’s been said “success is a few simple disciplines, practiced every day; while failure is simply a few errors in judgment, repeated every day”. This resonates well with me for many forms of saving, especially saving a larger amount like a house deposit. So the first discipline is to build a plan.
A plan is simply ‘a set of actions that takes you from A to B’, but a good plan is ‘a set of actions that takes you from A to B, where A has been properly assessed and B has been properly defined’.
Note - I also have a definition for a great plan, but for now let’s get a good plan up and running and we can revisit great plans another day.
If you’ve read Part #2 - Set a target you’ve already made a start by defining B (your target). Well done. Now let’s define A and create the route to get you from A to B.
The high level plan to saving towards a home buying goal can be summarised like this:
So let’s get started, getting started!
My first tip is really simple but critical: just start! However, start with a habit and start with a a small amount, so that it's so easy you simply can't say no to yourself.
I don’t care how much you save or even where you save it - it can be a jam jar or a 0% savings account. Let’s be honest, interest rates are so low you’re not missing out on much and you shouldn’t delay getting started. I’m not saying you shouldn’t use the right products and I’ll look at the main ones in a while.
But for now, just get started because:
If you’ve already started - well done. If you started a while ago and still have it saved, then Multiply salutes you. If not, don’t worry: start right now and become one of the millions in the UK who are actively saving for a home.
Our example: Previously we met Ben who needed a total of £25,000 to be ready to buy. He’s a little down though because it seems so far off.
I told him \"If you want to change something in your life, change something in your life!’ So, he’s put 5 £1 coins from his wallet into an old whisky jar his Dad had. He’s feeling a bit better and now wants to build on his plan.
Right so you’ve started with something small. Did you notice how you did that without thinking about how much you can afford, or assessing your income and outgoings? That was deliberate - just starting is key.
However, to really build your savings you need to budget and follow a savings plan. The process is simple but it takes some time to do it properly:
The objective of this exercise is to better understand your spending and commit to specific amounts of spending through the budget period. I’m not talking about saving yet, I’m talking about fully understanding your spending and committing to the budget.
A budget is not a review of your previous income and spending. A budget is an estimate of your income and outgoings over a set period of time in the future. However, having your previous income and outgoings to hand is helpful and this leads us nicely into timescales.
Many people tend to budget in timescales aligned to their payday frequencies, typically monthly. It seems logical, but I often see these people struggle, or use the credit card, when the less frequent costs come along, e.g. Christmas and birthdays.
For this reason, we recommend you budget over a year and then divide it down to suit your pay frequency. That way, by the end of January, you’ve already got some money aside for next Xmas.
So on a piece of paper or spreadsheet carry out the actions below, understanding that ‘essential’ and ‘commitment’ have two different definitions. A commitment means you are currently committed to paying something, ‘essential’ means you ‘have to pay it’. I’ve given some examples to help. List out your:
Now adjust the above to reflect any specific known changes coming up (e.g and increase in rent or an increase in your Spotify account)*
*Please don’t at this stage try and adjust your spending. We are just trying to understand and live within your current lifestyle. We’ll look at boosting these savings in a bit!
You should also remember that my view of which category an item goes into may be different to yours - It’s your budget not mine, so take control!.
What you should have established is a plan of your next year’s spending, which should include some short term provision for outgoings later on in the year. The fact that you have a plan of your spending means you are much more likely to keep to it (or much closer than before!).
Let’s reintroduce Ben. He’s written his list of income and outgoings and tweaked it to guess how it might change next year. He’s surprised himself, his take home pay after tax and pension contributions is £29,500 pa or £2,458 per month, but doesn't think that this will change next year.
His outgoings estimate has come to £26,000 per year, or £2,166 per month. He’s wondering why he hasn’t got anything left from last year, but guessed it’s just been frittered away because he didn’t have a plan - He’s probably right, but we can’t change the past!
Now he has a plan, he’s established that out of his monthly pay, £1,800 is needed for his regular monthly commitments, but he’ll now put an extra £366 a month aside for the less regular outgoings.
The objective of the budget exercise is to identify a budget to live within.
However, if you are fortunate enough to have excess income over your spending plan, then you have also just identified the base level of savings you can commit to and an amount that should not impact your current standard of living.
Back to Ben - He’s identified that he can still save £200 a month right away and he’s already wondering if his Dad has a bigger whisky jar!
So hopefully at this stage, you’ve identified a sum you can save if you stick to your spending plan. If not, and you’re spending everything, don’t worry. You might be able to eke out some savings when we look to boost your savings later on.
So far, apart from putting a few pounds aside in a jam jar, we’ve only carried out a paperwork exercise. We need to turn it into reality - we need to commit.
Here comes the next tip, which echoes the American business tycoon Warren Buffet who once said “Do not save what is left after spending; instead spend what is left after saving”.
In short: don’t wait until the end of the month. Save when you get paid. “Easier said than done”, I hear you cry. I hear you, but it’s the mindset you need to instill in yourself. That goes not just for home buying, but any goal that requires regular savings and especially larger sums that can seem daunting to achieve.
For example, all too often people defer retirement planning because it’s far off. Then one day it comes along to bite you, and you wish you started earlier.
Remember, all we’ve done is establish a sum that your own figures indicate you can save without impacting your lifestyle and I’m suggesting you decide to save this at the beginning of the month.
Ben gets paid on the 28th of the month, so wants to set up regular savings of £200 a month. He’s a bit concerned about keeping money in the house, so wants to know where he should save it.
We’ve established a level of saving that you’ve calculated you can afford. Let’s call this your basic savings. This may be a small amount, or nothing at all.
Either way, you can now start to consider the following areas to boost your savings and bring your dream closer to reality.
I said earlier that a jam jar would suffice, but it won't be long before holding notable sums of money in a jam jar is not that safe an option.There are other products that could keep your money safe and maybe even pay you a bit of interest:
Any traditional savings account will do the job and keep your money safe, but you should also consider an e-wallet, such as the easy access savings pot that comes with a Multiply account. The benefit of these is that they keep your money away from the rest of your day-to-day spending. However, the money usually remains completely accessible in the event of an emergency or a bit of over spending (no one's perfect).
If you are happy to commit to a certain amount of money, but not yet ready to lock the funds away, regular savings accounts can do the job and offer slightly higher interest rates than current accounts. The downside is that you’ll need to commit a certain amount each month to benefit from the fixed interest.
Here’s a tip: look into Lifetime ISAs. You can put in up to £4,000 in a tax year and get a government bonus of up to £1,000. If you're buying with someone else and they're also a first-time buyer, you can both do it. This is currently the best boost you can get for your home buying goal. Check you’re eligible first though!
Some people have asked me why I wouldn’t suggest a Stocks & Shares ISA. To be honest they are for medium to long term goals that are at least 5 years away.
Ben’s a first-time buyer, so he’s looking at the Lifetime ISA for his £200 a month savings.
Now things start to get a bit tougher. If you want to squeeze out some more savings, something has to give. So let’s start by going back to your budget and see what we can do.
When we created your budget, I suggested that you list out your non-essential regular and less frequent commitments. Revisit them now - is there anything on that list that you are prepared to give up or possibly reduce? Could you live without a Netflix subscription? Lockdown aside, are you really using the gym membership?
I’m not saying that you need to reduce anything, but your own budget may have some answers to where you could save a bit more. Failing that, do you get bored in your spare time? Fancy a second job or taking on some overtime, maybe just whilst you are saving for the deposit?
You’ll know about these savings up front, so you can increase your upfront monthly save!
Now you are on top of your commitments and saving what you can, the next step is to look at the ad hoc non-essential spending. This is where it's hardest to save, but it can give you the biggest wins. One less takeaway, one less coffee, buying a medium rather than the large...all these mini savings add up.
As these are smaller, more ad hoc savings, you probably shouldn’t assume you can always make them every month. Therefore, for this type of savings I recommend you consider using a ‘round ups’ feature in an e-Wallet. You’ll hardly see the money go, but you’ll certainly see your savings start to build.
Ben’s sticking to his budget for now, but will implement roundups via his e-wallet. He doesn’t think he’d miss the money and he can always move some money back if he needed to. If all goes well he’ll look to move the funds over to his new LISA in the future.
This is a huge subject and is the subject of many good books. I’m not a psychologist, I’m a financial planner and whilst I know the value of keeping motivated when it comes to home buying, I’ll leave this to the experts. Suffice to say though, there are a few tips that are worth following to stay motivated.
Phew...there we go: a deep dive into building up your deposit and boosting your savings. I’m sure I could add lots more to this, but maybe we can revisit this another day in another forum.
Just time for my top tips from this article.
1 - “Carpe Diem” - Seize the day; just get started!
2 - Start small, but make it a habit - 21 times regularly repeated typically makes something a habit. Smaller savings make it easier to build this habit.
3 - Budget over a year, not just a pay packet - It will help you pick up all your irregular outgoings and better plan for those events like Christmas.
4 - Pay yourself first!! - I strongly recommend that you set aside your savings when you first get paid, not what you’ve got left at the end of the month.
5 - Take advantage of Lifetime ISA - If you're eligible, take advantage of the government bonus with a LISA.
","url":"https://multiply.ghost.io/first-time-buyer-guide-4-build-deposit/","uuid":"19920176-8b97-4393-9679-401a2bfe3cf2","page":null,"codeinjection_foot":null,"codeinjection_head":null,"codeinjection_styles":null,"comment_id":"601c16e9254cab0039e00fca"}},{"node":{"id":"Ghost__Post__60116c9b4d5b8a0039691271","title":"First-time buyer guide #3: Understand the process","slug":"first-time-buyer-guide-understand-the-process","featured":false,"feature_image":"https://multiply.ghost.io/content/images/2021/01/the-process.png","excerpt":"Buying your first home is exciting, but the process can also be complicated and confusing. Let's break it down.","custom_excerpt":"Buying your first home is exciting, but the process can also be complicated and confusing. Let's break it down.","created_at_pretty":"27 January, 2021","published_at_pretty":"27 January, 2021","updated_at_pretty":"27 January, 2021","created_at":"2021-01-27T13:37:31.000+00:00","published_at":"2021-01-27T14:21:16.000+00:00","updated_at":"2021-01-27T14:21:21.000+00:00","meta_title":null,"meta_description":null,"og_description":null,"og_image":null,"og_title":null,"twitter_description":null,"twitter_image":null,"twitter_title":null,"authors":[{"name":"Peter Fairweather","slug":"peter","bio":null,"profile_image":null,"twitter":null,"facebook":null,"website":null}],"primary_author":{"name":"Peter Fairweather","slug":"peter","bio":null,"profile_image":null,"twitter":null,"facebook":null,"website":null},"primary_tag":null,"tags":[{"name":"#blog","slug":"hash-blog","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"internal"},{"name":"#feed","slug":"hash-feed","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"internal"},{"name":"tips-from-team","slug":"tips-from-team","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"public"}],"plaintext":"Buying your first home is an exciting time.\n\nYou've set your target\n[https://multiply-blog.appspot.com/first-time-buyer-guide-set-target/] and\nstarted saving up. How hard can it be?\n\nThe first steps into anything new are exciting, but the homebuying process can\nalso be complicated and confusing. Let's break it down.\n\nThe homebuying process - an overview\nOver a short Zoom meeting, Dan tells me that Art Brut once said “it’s a bit\ncomplicated”. ‘Who?” I replied. “You know, the art punk band, Art Brut?”. \n\nIt has been a few years but I don’t remember that particular album being about\nthe homebuying process. Dan should also have known I'd be more likely to\nunderstand an Metallica or Iron Maiden reference.\n\nAnyway. In some ways, buying a home is fairly simple - you find a property you\nlike, agree a price with the seller, borrow some money, and then buy the home. \n\nEasy. Done. \n\nWell, not quite. Although the high level view seems simple, it becomes more\ncomplicated when you start getting into the details. So, while it's a good idea\nto get to grips with the process, we suggest you try not to get bogged down in\nminutiae before you even begin. \n\nKnowledge is power, and it will help you to know what is meant to happen and\nwhen. It also doesn’t hurt to understand why each step is happening. Personally,\nI find it comforting to know where I am and where I'm going next.\n\nSo, the basics of the homebuying process look like this: \n\n 1. Set your target and save up\n 2. Get a mortgage in principle\n 3. Find the right property\n 4. Agree a purchase price\n 5. Get a mortgage offer\n 6. Instruct a solicitor\n 7. Get a survey completed\n 8. Exchange contracts\n 9. Complete your purchase\n\nLet’s look at each step in more detail.\n\nSet your target and save up\nWell, maybe not this one. We have already covered this in the previous article\n[https://multiply-blog.appspot.com/first-time-buyer-guide-set-target/], and the\nnext one will look at building up your savings.\n\nGet a mortgage in principle\nLet’s call it a MIP to save my typing fingers. A MIP is also sometimes called an\n‘Agreement in Principle’. It’s a way to firm up your target amount, but it also\nshows sellers and estate agents that you’re serious. \n\nA MIP is an indication of how much a lender could lend you, based on your\nincome, spending, and debts. \n\nMIPs don’t generally affect your credit score as lenders don't run a full credit\ncheck. That comes later. However, the lender is likely to ask credit reference\nagencies to confirm whether some of the details provided match your credit file. \n\nThe MIP doesn't guarantee that you can get a mortgage. It simply gives you an\nidea of whether that lender would be willing to lend the amount you need. \n\nTiming a MIP can be crucial as I’ll try and explain below. \n\nFirstly, you should be aware that if you've had some money problems in the past,\nyour MIP might give you a figure notably lower than you’d hoped.\n\nThe major issues that may impact on what or if a lender will lend to you are:\n\n * A bankruptcy order in the past 6 years\n * A County Court Judgment (CCJ) in the past 6 years for debt that you haven't\n repaid\n * Being refused for a mortgage or having a home repossessed in the past 6 years\n * Less than 3 months' employment history\n\nSecondly, if you already have debts then this may impact the amount that a\nlender may agree (in principle) to lend, even if you have every intention of\nclearing the debt. More details on that here\n[https://multiply-blog.appspot.com/first-time-buyer-guide-set-target/].\n\nIf any of these apply to you, it may be prudent to hang fire before charging out\nto get a MIP. It may be helpful to wait until you have either cleared the debt\nor simply allowed more time to pass.\n\nDon’t worry if you aren’t 100% certain on this, we’ll be doing a separate post\non getting mortgage ready and we’ll cover this again.\n\nAlso, if any of the major issues above apply to you, I’d recommend you speak to\nan independent mortgage adviser before applying for a MIP as they will know what\nlenders are looking for and which ones you'd be better suited to.\n\nFind the right property\nArt Brut and now Voltaire? Pretty high brow stuff. Anyway, Voltaire is famous\nfor saying “the perfect is the enemy of the good”.\n\nEven with an unlimited budget, unless you design and build your own home, it\nwill never be perfect. And most us are not working with an unlimited budget.\n\nIt is very important that you are able to separate your wants from your\nessentials, and your preferences from your deal-breakers.\n\nWhat are you willing to compromise on?\n\nIs location everything? Are you willing to lose a bedroom to stay in that area?\n\nJust make sure that you are clear on what it is you want from a property.\n\nAgree a purchase price\nThis can be tricky but you need to try and remain as stoic as you can.\n\nKnow what you can afford and do not go beyond that line. If you find a property\nyou love, it can seem like the only one. But if it's outside your budget, take a\ndeep breath and pass - and wait for one you can afford.\n\nHome buying is emotional but don't forget the facts and figures of your\nfinancial situation.\n\nTry and do some research into the housing market where and when you are buying.\nAre properties selling quickly or staying on the market for ages? Use this\nresearch to help you when you make an offer. More info on house price data here\n[https://multiply-blog.appspot.com/house-price-hype/].\n\nYou can see sold prices on the Land Registry\n[https://www.gov.uk/government/organisations/land-registry] but be aware that\nonly the most recent prices will be relevant.\n\nAlso, think about how your choice may lead to other costs. For example, you\nmight pay more stamp duty on a more expensive property. If purchasing a new\nbuild or a ‘doer-upper’, you might need to spend extra on making it habitable.\nAnd if you're like me and paint like a 5 year old, then you'll need to pay a\ndecorator too.\n\nGet a mortgage offer\nYou’ve got the mortgage in principle, now it's time to turn that into a formal\nmortgage offer.\n\nThis is when you apply for a mortgage against the specific property you want to\nbuy. The lender will check your income, credit history and financial\ncircumstances, and consider whether you can afford the repayments now and in the\nfuture.\n\nIf you are applying via a mortgage adviser, they should explain the different\nmortgages available. The main types are:\n\n * Fixed rate - an agreed fixed interest rate for an agreed period which is\n usually between 2 and 5 years\n * Tracker - a mortgage that tracks an agreed rate (usually Bank of England Base\n Rate) plus an agreed additional amount e.g. Bank of England Base Rate + 1%\n * Standard variable - the lender's standard mortgage rate which will change\n over time\n * Discounted variable - The lender's standard variable rate, with an agreed\n percentage discount for an agreed period\n\nFixed, trackers and discounted variables usually have higher set up costs and\nlonger exit penalties.\n\nFor many people, this is the scariest or most anxious part of the whole process\nand can lead to some sleepless nights until the offer has been made.\n\nEven when the lender is happy that your personal finances stack up, it doesn’t\nend there. They then turn to the property itself to make sure they protect their\ninvestment.\n\nThe lender will obtain a valuation of the property to make sure its value is\nbroadly in line with what you are paying for it. Remember, if you cannot make\nthe repayments, they will try to get their money back by selling the property.\nThey need to make sure they could get their money back if they had to repossess\nand sell the property.\n\nPlease be aware that a mortgage valuation is not a survey - it's compulsory and\nlargely for the benefit of the lender. To understand more about the state of a\nproperty, you can order a more complex report. More on this in a bit.\n\nAt this point, you should also be considering life or critical illness\ninsurance, which would pay off the mortgage in the event of your death or\nillness. It may even be a condition of the loan.\n\nInstruct a solicitor\nThe mortgage offer has come through and the seller is happy. It’s time for the\nlegal eagles to get involved\n\nThis is when it can feel like the process moves outside of your control and\ncomes to a screeching halt. There are lots of other people involved who need to\nget many different things done, which means it rarely goes smoothly.\n\nSo what are the solicitors doing in all those hours you wait for them to reply\nto your emails? Well, they will:\n\n * Complete all of the required legal paperwork needed to complete the\n transaction\n * Request and check the required searches, typically Land Registry, local\n council, drainage, and environmental checks\n * Draft contracts\n * Exchange contracts\n * Gather the funds from the various sources (e.g. you, the lender, ISA\n providers)\n * Handle the exchange of the money\n * Pay any stamp duty bills. Whilst technically you have 14 days after\n completion to pay the stamp duty to your solicitor, most solicitors require\n it to be paid to the solicitor before completion\n * Register the property in your name with the Land Registry and register the\n mortgage lenders ‘first charge’* against the property\n\n*A legal charge is used to secure the main mortgage. A lender with a first legal\ncharge over a property has a first call on any funds available from the sale of\nthe property.\n\nIf you are purchasing as a couple, it is worth deciding (or at least talking\nabout) how the ownership of the property should be set up. This might seem\nsimple but there are options here.\n\nYou can own a property as either ‘joint tenants’ or ‘tenants in common’.\n\nAs joint tenants:\n\n * You have equal rights to the whole property\n * The property automatically goes to the other owners if you die\n * You cannot pass on your ownership of the property in your will\n\nAs tenants in common:\n\n * You can own different shares of the property\n * The property does not automatically go to the other owners if you die\n * You can pass on your share of the property in your will\n\nGet a survey completed\nYou won't usually need a survey if you're buying a new build, as the house is\noften still being built. However, I would still recommend a snagging report.\n\nIn all other cases, you should consider a more detailed survey report and there\nare two main options.\n\n * Homebuyers report - This is usually suitable for conventional properties\n which are less than 50 years old.\n * Full structural survey - This is usually used for older or quirkier\n residences. This survey is much more detailed but is often well worth the\n expense. It could find serious issues with the property or at least highlight\n issues that need fixing which may mean you need to renegotiate the purchase\n price.\n\nExchange contracts\nNow you can relax, the property is going to be yours. This is when the sale\nbecomes legally binding. The seller can not pull out. If you pull out, you can\nbe sued by the seller for any losses.\n\nThis is also the painful moment when you have to pay your deposit, which is\nalways a bit scary.\n\nAt this stage, you should look into insurance for your new property so that you\nhave it in place when you have completed. Your mortgage lender will probably\ninsist that you have buildings insurance in place at a minimum.\n\nThis is also the moment to sort out life or critical illness cover. If you are\nusing a mortgage adviser, then can usually sort this for you.\n\nComplete your purchase\nYou can complete on the same day that you exchange contracts, or leave a gap of\na week or two. If you're buying a new build, you might need wait for the\nproperty to be finished.\n\nYou will agree a completion date with the seller. If the seller is also buying a\nnew home, you can ended up with the dreaded \"chain\" where you all complete on\nthe same day.\n\nOnce completed, you collect your keys (usually from the developer or estate\nagent) and can either move in or start doing any work or redecorating.\n\nSummary\nSo, there it is, an overview of the homebuying process.\n\nIt can seem confusing, but take it one step at a time. Don’t worry too far in\nadvance - just make sure you're clear on what you need to do next. For most\npeople reading this, the next step is probably just to keep saving.\n\nOver the coming weeks, we will go into further details regarding each of the\nsteps.\n\nIf there is anything you want covered in detail, just get in touch and let us\nknow at support@multiply.ai.\n\nAdviser top picks\n\n 1. Get to grips with the high level process - but don't worry about the\n details.\n 2. A mortgage in principle doesn't guarantee you can get a mortgage. It gives\n you an idea of how much a lender might be willing to lend you.\n 3. \"The perfect is the enemy of the good” and I can almost guarantee that when\n looking for a home, you will have to compromise on something.\n 4. Buying as a couple? Agree the legal basis of how you are going to own it.\n 5. Don’t forget to protect yourself! This could be life insurance or illness\n cover, but will definitely include home insurance.","html":"Buying your first home is an exciting time.
You've set your target and started saving up. How hard can it be?
The first steps into anything new are exciting, but the homebuying process can also be complicated and confusing. Let's break it down.
Over a short Zoom meeting, Dan tells me that Art Brut once said “it’s a bit complicated”. ‘Who?” I replied. “You know, the art punk band, Art Brut?”.
It has been a few years but I don’t remember that particular album being about the homebuying process. Dan should also have known I'd be more likely to understand an Metallica or Iron Maiden reference.
Anyway. In some ways, buying a home is fairly simple - you find a property you like, agree a price with the seller, borrow some money, and then buy the home.
Easy. Done.
Well, not quite. Although the high level view seems simple, it becomes more complicated when you start getting into the details. So, while it's a good idea to get to grips with the process, we suggest you try not to get bogged down in minutiae before you even begin.
Knowledge is power, and it will help you to know what is meant to happen and when. It also doesn’t hurt to understand why each step is happening. Personally, I find it comforting to know where I am and where I'm going next.
So, the basics of the homebuying process look like this:
Let’s look at each step in more detail.
Well, maybe not this one. We have already covered this in the previous article, and the next one will look at building up your savings.
Let’s call it a MIP to save my typing fingers. A MIP is also sometimes called an ‘Agreement in Principle’. It’s a way to firm up your target amount, but it also shows sellers and estate agents that you’re serious.
A MIP is an indication of how much a lender could lend you, based on your income, spending, and debts.
MIPs don’t generally affect your credit score as lenders don't run a full credit check. That comes later. However, the lender is likely to ask credit reference agencies to confirm whether some of the details provided match your credit file.
The MIP doesn't guarantee that you can get a mortgage. It simply gives you an idea of whether that lender would be willing to lend the amount you need.
Timing a MIP can be crucial as I’ll try and explain below.
Firstly, you should be aware that if you've had some money problems in the past, your MIP might give you a figure notably lower than you’d hoped.
The major issues that may impact on what or if a lender will lend to you are:
Secondly, if you already have debts then this may impact the amount that a lender may agree (in principle) to lend, even if you have every intention of clearing the debt. More details on that here.
If any of these apply to you, it may be prudent to hang fire before charging out to get a MIP. It may be helpful to wait until you have either cleared the debt or simply allowed more time to pass.
Don’t worry if you aren’t 100% certain on this, we’ll be doing a separate post on getting mortgage ready and we’ll cover this again.
Also, if any of the major issues above apply to you, I’d recommend you speak to an independent mortgage adviser before applying for a MIP as they will know what lenders are looking for and which ones you'd be better suited to.
Art Brut and now Voltaire? Pretty high brow stuff. Anyway, Voltaire is famous for saying “the perfect is the enemy of the good”.
Even with an unlimited budget, unless you design and build your own home, it will never be perfect. And most us are not working with an unlimited budget.
It is very important that you are able to separate your wants from your essentials, and your preferences from your deal-breakers.
What are you willing to compromise on?
Is location everything? Are you willing to lose a bedroom to stay in that area?
Just make sure that you are clear on what it is you want from a property.
This can be tricky but you need to try and remain as stoic as you can.
Know what you can afford and do not go beyond that line. If you find a property you love, it can seem like the only one. But if it's outside your budget, take a deep breath and pass - and wait for one you can afford.
Home buying is emotional but don't forget the facts and figures of your financial situation.
Try and do some research into the housing market where and when you are buying. Are properties selling quickly or staying on the market for ages? Use this research to help you when you make an offer. More info on house price data here.
You can see sold prices on the Land Registry but be aware that only the most recent prices will be relevant.
Also, think about how your choice may lead to other costs. For example, you might pay more stamp duty on a more expensive property. If purchasing a new build or a ‘doer-upper’, you might need to spend extra on making it habitable. And if you're like me and paint like a 5 year old, then you'll need to pay a decorator too.
You’ve got the mortgage in principle, now it's time to turn that into a formal mortgage offer.
This is when you apply for a mortgage against the specific property you want to buy. The lender will check your income, credit history and financial circumstances, and consider whether you can afford the repayments now and in the future.
If you are applying via a mortgage adviser, they should explain the different mortgages available. The main types are:
Fixed, trackers and discounted variables usually have higher set up costs and longer exit penalties.
For many people, this is the scariest or most anxious part of the whole process and can lead to some sleepless nights until the offer has been made.
Even when the lender is happy that your personal finances stack up, it doesn’t end there. They then turn to the property itself to make sure they protect their investment.
The lender will obtain a valuation of the property to make sure its value is broadly in line with what you are paying for it. Remember, if you cannot make the repayments, they will try to get their money back by selling the property. They need to make sure they could get their money back if they had to repossess and sell the property.
Please be aware that a mortgage valuation is not a survey - it's compulsory and largely for the benefit of the lender. To understand more about the state of a property, you can order a more complex report. More on this in a bit.
At this point, you should also be considering life or critical illness insurance, which would pay off the mortgage in the event of your death or illness. It may even be a condition of the loan.
The mortgage offer has come through and the seller is happy. It’s time for the legal eagles to get involved
This is when it can feel like the process moves outside of your control and comes to a screeching halt. There are lots of other people involved who need to get many different things done, which means it rarely goes smoothly.
So what are the solicitors doing in all those hours you wait for them to reply to your emails? Well, they will:
*A legal charge is used to secure the main mortgage. A lender with a first legal charge over a property has a first call on any funds available from the sale of the property.
If you are purchasing as a couple, it is worth deciding (or at least talking about) how the ownership of the property should be set up. This might seem simple but there are options here.
You can own a property as either ‘joint tenants’ or ‘tenants in common’.
As joint tenants:
As tenants in common:
You won't usually need a survey if you're buying a new build, as the house is often still being built. However, I would still recommend a snagging report.
In all other cases, you should consider a more detailed survey report and there are two main options.
Now you can relax, the property is going to be yours. This is when the sale becomes legally binding. The seller can not pull out. If you pull out, you can be sued by the seller for any losses.
This is also the painful moment when you have to pay your deposit, which is always a bit scary.
At this stage, you should look into insurance for your new property so that you have it in place when you have completed. Your mortgage lender will probably insist that you have buildings insurance in place at a minimum.
This is also the moment to sort out life or critical illness cover. If you are using a mortgage adviser, then can usually sort this for you.
You can complete on the same day that you exchange contracts, or leave a gap of a week or two. If you're buying a new build, you might need wait for the property to be finished.
You will agree a completion date with the seller. If the seller is also buying a new home, you can ended up with the dreaded \"chain\" where you all complete on the same day.
Once completed, you collect your keys (usually from the developer or estate agent) and can either move in or start doing any work or redecorating.
So, there it is, an overview of the homebuying process.
It can seem confusing, but take it one step at a time. Don’t worry too far in advance - just make sure you're clear on what you need to do next. For most people reading this, the next step is probably just to keep saving.
Over the coming weeks, we will go into further details regarding each of the steps.
If there is anything you want covered in detail, just get in touch and let us know at support@multiply.ai.
Adviser top picks
So, you’ve decided you want to be a homeowner?
I want you to visualise your goal and get excited about it. Sounds strange? There is lots of evidence to support the theory that if you engage in a goal and visualise the actions you need to take, you're far more likely to succeed.
But if you don’t have a realistic goal that sets you up properly for your objective, you'll make it a lot harder for yourself. So let's take a look at how to set a target.
I have a confession to make: I just might be too old to write this guide alone.
If you read the first article in this series ‘Should I buy?’, you may recall that my wife Michelle and I bought our home back in 1994.
Although the principles are the same, things were a little different back then. Our 3-bed house cost £43,000 and the mortgage covered £40,850 of it (i.e. a 95% loan to value or LTV).
Rising house prices and the impact of the pandemic mean that things have changed and my experiences (while still valid) need to be supplemented with a younger person’s experience.
Lucky for me, I can introduce you all to Dan Lock. Dan is a valued member of the Multiply Advice Team and has extensive financial planning experience. Dan bought his first home back in 2014 and more recently moved in 2018.
His first pointer was that first-time buyers today need to get realistic early on about what they can afford. This comes down to:
Another important factor at this early stage is not to worry about whether the markets are about to go up or down. You're buying a home, not some shares in a FTSE 100 company, and things can change a lot while you're saving up.
For most people, the majority of the property is likely to be funded by a mortgage. So, our recommended starting point is to get an estimate of your borrowing capacity.
Once you know this, the other parts are more under your control - for example the size of your deposit.
At this stage you can go by a rough rule of thumb, and get a more accurate figure when you get nearer to buying.
This rule of thumb is to take your gross income (for couples just add them together), deduct the annualised amount of any loan or credit repayments, and then multiply that by 4.5.
For example, Ben earns £40,000 a year before tax. He has a car loan for £300 per month and a credit card with a £50 monthly minimum payment.
Ben could borrow £161,200, calculated as follows:
The annualised debt repayment (car loan plus credit card) is £4,200:
(£300 x 12 = £3,600) + (£50 x 12 = £600) = £4,200
So the calculation is 4.5 x (£40,000 - £4,200) = £161,200
Ideally, you should clear short term debt before buying. In the example above, if Ben were to clear his debt before applying for a mortgage, he would be able to borrow £180,000 - an extra £18,800.
Lenders will usually only lend up to a certain value of a property, known as the maximum loan-to-value (LTV). This percentage has changed a lot over the last year.
Traditionally you needed a 5% deposit as a minimum. Now, most lenders want you to have 10%, although some specialist schemes such as the Help to Buy Scheme make it possible to buy with a 5% deposit.
We typically recommend that people initially aim to own 100% of their home, but I'll dive into the reasons why in a separate article on Help to Buy and other ‘shared ownership’ type schemes.
In our example, if Ben were to clear his debt and borrowed the maximum £180,000, he would be looking at properties costing around £200,000. Of course, it's always good NOT to borrow the maximum.
I’m afraid we can't do this bit for you, but we can suggest a process to follow.
Create your ‘wishlist’ on a piece of paper. Divide it into four boxes and in each box list out:
If you are struggling to do this, then you can get ideas from a property site like Rightmove or Zoopla.
The next step is to start getting realistic. Against each type, location or feature, mark up whether or not it’s a ‘must have’ or ‘nice to have’, ‘must not have’ or ‘prefer not to have’. Spend some time thinking about this because it may become important when assessing if your goal is realistic.
Finally, you may need to consider if you can’t meet all your objectives, so decide whether location trumps property type or vice versa. My tip is that your gut/initial reaction is generally the right choice, but do justify it to yourself.
Ben decided that he wanted a 2-bed house on the outskirts of Canterbury in Kent. He would be prepared to look within a 10 mile radius, but did not want to look at smaller properties or flats. He must have a driveway or parking for 2 vehicles, would be happy with or without a garage, but doesn't want a large garden.
This is relatively simple but can take some time. It’s simple because the size of deposit you need is simply the asking price of a property minus the amount you can borrow.
It’s time consuming because you need to do a lot of research to get a feel for property types and prices in the areas you're interested in. You're probably familiar with property sites such as Zoopla - these are a great place to get a feel for what's available.
Are they affordable? Within reason, everything is potentially affordable, if you are prepared to save for long enough. So, at this point you need to balance whether you are happy to save for longer to get your ideal place, or if you’d prefer to compromise in order to buy sooner.
For most people, this is where they need to start compromising. Again, we can’t do this for you, but hopefully you can use your ‘must have/nice to have’ assessments to help guide you to the right type of place for you.
Ben realised he couldn’t afford near Canterbury (unless he saved until he was 75) but he found an area nearer to Dover that gave him what he was looking for. A 2-bed house with no garage, but with parking for three vehicles and no garden costs around £210,000. His parents have said they'll help him with £10,000. He's decided to clear his debts and save up £20,000, plus the extra costs.
The easiest way to work these out is to use the calculator in the Multiply app, which will do the heavy lifting for you.
As well as your deposit, you'll need to save for:
This can be a complex area, but for now let's focus on the basics:
Use our in-app calculator if you're in doubt.
Mortgage fees vary depending upon the deal you are applying for. Generally you’re looking at around £1,000 to £2,000.
However, lenders do often allow these fees (or part of) to be added to the loan amount. Remember adding it to the loan means you will pay interest on it.
Conveyancing costs can vary depending upon the area you live, which type of valuation you go for, the results of local searches, or whether you use the mortgage company recommended conveyancer. However, if you budget for £2,000 to £2,500, you should be covered (and hopefully get some change).
Your moving costs can be £0 if you're lucky enough to know the right people, up to £1,500 if you want to just hand everything over to someone else to do it all. We tend to find that if you budget around £1,000, you should be OK.
Ben hadn’t thought about the extra costs! He won't pay any stamp duty, and he's going to look for a mortgage where he can add what he can to the loan. He's decided he needs another £3,000 to cover these extra costs. All done, right? Nearly...
When I bought my first home, within 6 months we had to pay for a new boiler and windows. Unlike me, Dan planned in advance and had an emergency fund before he bought.
No one knows if and when an emergency might happen. Although it might mean you need to keep saving a bit longer, good financial planning says never leave yourself too short.
How much do you need? Rarely will two advisers completely agree on this. I’ve seen advisers base recommendations on people’s monthly income, monthly outgoings, net disposable income or just specific monetary amounts.
I like to recommend based upon your expected outgoings. I used to recommend saving enough to cover your costs for 3 to 6 months, but in light of the pandemic I have tended to recommend 6 months. Am I closing the stable door after the horse has bolted? Maybe, but I'm only human too!
Ben has decided that he wants an emergency fund of £2,000 at the point he buys and will look to build this up higher when he has moved in. He now has a savings target of £25,000. He feels in control and reassured that he has considered everything. He knows he still has a lot to learn, but he can start saving straight away with a real vision of where he is going.
The purpose of this section was to make you think about the type of home you want and where you want it to be, and to be realistic about what’s achievable.
We also introduced some of the extra costs of homebuying and the importance of having an emergency fund. I guess we have got you to the starting line and you now realise that homebuying is a marathon, not a sprint.
In the next article, I’ll build on your knowledge and help you get to grips with the high level process.
","url":"https://multiply.ghost.io/first-time-buyer-guide-set-target/","uuid":"78f78095-33e2-4ae2-a925-d5aa8ee2875d","page":null,"codeinjection_foot":null,"codeinjection_head":null,"codeinjection_styles":null,"comment_id":"600ea338acb33e00395a4746"}},{"node":{"id":"Ghost__Post__5ff86a671eb0d00039bca726","title":"First-time buyer guide #1: Should I buy?","slug":"advisers-guide-part-1","featured":false,"feature_image":"https://multiply.ghost.io/content/images/2021/01/homebuying-guide-part-1.png","excerpt":"Over the years I’ve heard a lot of people assume that buying is always the right thing to do. And every time I need to explain why it’s not quite that simple.","custom_excerpt":"Over the years I’ve heard a lot of people assume that buying is always the right thing to do. And every time I need to explain why it’s not quite that simple.","created_at_pretty":"08 January, 2021","published_at_pretty":"08 January, 2021","updated_at_pretty":"25 January, 2021","created_at":"2021-01-08T14:21:27.000+00:00","published_at":"2021-01-08T16:40:00.000+00:00","updated_at":"2021-01-25T14:17:37.000+00:00","meta_title":null,"meta_description":null,"og_description":null,"og_image":null,"og_title":null,"twitter_description":null,"twitter_image":null,"twitter_title":null,"authors":[{"name":"Peter Fairweather","slug":"peter","bio":null,"profile_image":null,"twitter":null,"facebook":null,"website":null}],"primary_author":{"name":"Peter Fairweather","slug":"peter","bio":null,"profile_image":null,"twitter":null,"facebook":null,"website":null},"primary_tag":null,"tags":[{"name":"#blog","slug":"hash-blog","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"internal"},{"name":"#feed","slug":"hash-feed","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"internal"},{"name":"tips-from-team","slug":"tips-from-team","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"public"}],"plaintext":"“Buying is right and renting is wrong”\n\n“You’re throwing money away when you rent”\n\n“You can’t lose if you buy property” \n\nOver the years I’ve heard a lot of people assume that buying is always the right\nthing to do. And every time I need to explain why it’s not quite that simple.\nWhy has it taken me 25 years to decide to write it down? Procrastination I\nexpect, but no excuse now. \n\nShould I buy? - It’s not for everyone\n\nThe starting point is to dispel a couple of myths.\n\nMyth 1: You can’t lose.\n\nIf you don't carefully plan both buying and running a home you can lose money on\nproperty.\n\nMyth 2: Buying is always better than renting\n\nFor many people renting is the better option because it can fulfil more of their\nneeds.\n\nI’ve met many people who regret buying a house or believe that they should have\nat least waited before buying.\n\nI guess it’s only fair to declare my own position and say that my wife\n(Michelle) and I are homeowners and have been since 1994, which was just before\nI came into the financial services industry. We went through all the same\nemotions and thoughts that many of you will be going through now. If we knew\nback then what we know now, there are a number of things that we would probably\nhave done differently.\n\nThe first one was asking ourselves “should we own or rent?”. Both our parents\nowned, so we just assumed buying was right and didn’t even look at renting as an\noption.\n\nSo buying must be right, right? Wrong, for many reasons. Renting can be right\nfor many people in many scenarios.\n\nHere are the important questions to ask yourself when considering the benefits\nof renting or buying:\n\n 1. Do you want ultimate control over the property itself?\n 2. Which gives me more flexibility now?\n 3. Is now the right time to sink savings into a long term commitment?\n 4. Do you want the responsibility of a large long term debt?\n 5. Is renting the better option for now?\n\nKnowledge is power, so try not to answer these questions without first giving\nyourself the information to give a reasoned and balanced response. There are\nfinancial and non-financial elements to this, so let's go through each.\n\nNon-financial aspects\nI am putting these non-financial aspects first because in my experience they are\n often forgotten or glossed over. Even if you just confirm what your instincts\nwere, it's worth going through the process.\n\nDo you want ultimate control over the property itself? Which gives me more\nflexibility now? \n\nOwning\n * Owning your home usually means you can make any changes or improvements you\n wish. \n * If you own your home, as long as you maintain your mortgage payments, no-one\n can make you move out.\n * When relationships break down, owning a home can make things more\n complicated. If you are buying as a couple, be brutally honest with one\n another and ask yourselves if you’re both ready. Of course, there’s nothing\n stopping you saving up while you decide.\n * If you are homeowner and not DIY-inclined, then basic redecoration or minor\n changes to the house might be beyond your ability and you will be incurring\n the costs of tradesmen.\n\nTrust me, you might not find out how proficient you are (or are not) at DIY\nuntil it’s too late. After 26 years Michelle still won’t let me touch a paint\nbrush.\n\nRenting\n * Generally, but not exclusively, renting gives you more options over where you\n live and in what type of property. You might be able to rent in an area you\n couldn’t afford to buy in.\n * Renting is generally easier and offers greater flexibility (and lower costs)\n when it comes to moving. \n * If you’re renting, usually you will need to get permission from the landlord\n to make changes. This can include simple things like painting a room or\n putting up a new TV.\n * Some landlords don’t allow pets or they might restrict the type of pets. Some\n might even reject tenants with children.\n * If you’re renting and the landlord wants to sell the place, you will most\n likely need to move out.\n\nFinancial aspects\nAside from the impact of taking on a mortgage (which we'll come to later), you\nneed to consider the things that might impact whether or not now is the right\ntime to buy. \n\nAlso, it's important to remember that things can go wrong and have an impact on\nyour finances. Let’s delve into these areas.\n\nIs now the right time?\nDo you have goals that are more of a priority to you now? Renting does usually\ninvolve paying an upfront bond (or deposit), but it doesn’t involve the same\nhigh up-front costs that owning does.\n\nThis could mean that you can prioritise other shorter term goals such as a\nwedding. In short, renting may suit you more now, even if you choose to buy\nlater.\n\nOn the flip side, while this is not guaranteed, the past shows us that house\nprices (and rental costs) have risen over time. The rate of house price growth\nhas historically exceeded both inflation and the interest you can earn on\nsavings accounts.\n\nSo if house prices keep growing, this makes it a good investment doesn’t it?\n Well maybe, if you keep hold of it over the longer term.\n\nHowever, my experience shows that it is an investment where the money is rarely\never accessed yourself. Owning a home should be seen as buying an illiquid\nasset that you can only access by ‘downsizing’ (i.e. selling and buying a\ncheaper property) or taking out some form of equity release loan.\n\nIf you can afford to, our advice is to both repay debts such as a mortgage and\nalso build up other savings, pensions and investments to meet life’s other\ngoals.\n\nWhen things go wrong with the property\nOwning your home means that if things go wrong then you're on the hook - unless\nit's covered by insurance or a warrant. The typical examples are leaks and\nbroken down boilers.\n\nLike when you buy a car, many sellers may know things are on their last legs but\nare crossing their fingers that they sell before they break down completely.\nWe’ll look more into valuations and surveys another day.\n\nIf you're a tenant, it’s usually the landlord’s job to fix big problems. These\ncosts can often run into the thousands and tenants are all too pleased not to\nhave to foot the bill.\n\nWhen I bought my first home, within 6 months we needed a new boiler and windows.\nWe had no emergency fund, so spent a number of weeks wearing extra clothing\nbefore eventually taking on an extra loan to get the work done. It's one reason\nwhy we recommend building up an emergency fund before buying a home. \n\nWhen things go wrong with your income\nIf your income is not secure or you suddenly find yourself with a lower income,\nthen you might be in a better position as a renter. It is usually easier and\ncheaper to move somewhere else if you rent. \n\nHowever, if you own your home and your income is suddenly reduced, you run the\nrisk of losing your home. At the very least, you’ll incur some significant costs\nif you need to move house.\n\nIt's worth noting that banks and building societies won’t resort to forcing\nhouse sales in the first instance, but they won't wait forever for their money\neither.\n\nThe mortgage\nMost wannabe homeowners need to take on the responsibility of having a large\nlong term debt, i.e. a mortgage. This means taking on the risk that you might\nlose your home if you don’t keep up repayments.\n\nMortgages and your emotions\nI don’t think you would be human if this didn’t invoke some worry. Michelle and\nI were worried for a good number of years and this is only natural.\n\nHowever, if this fear totally paralyses you to the point that you can’t sleep at\nnight or it is negatively affecting other parts of your life, then I would\nsuggest that renting might be better for you.\n\nThere is no shame in this. In fact, big respect from me if you recognise this in\nyourself and decide that renting is best for you.\n\nMortgages and their impact on where you live\nAssuming you are happy to consider borrowing, then you should next be aware that\ndepending on where you want to live, mortgage payments might be more or less\nexpensive than rental costs in the same area. \n\nSo while you may be comfortable with a mortgage, you may feel that renting in a\nnicer place outweighs the potential benefits of owning in a less desirable area.\n\nI’ve seen many people living in the more central areas of London choose to\ncontinue renting in the city, rather than buying on the outskirts.\n\nMortgage impact over the longer term\nEven assuming house prices continue to escalate in the long term, there is still\nno guarantee that you will make money, especially when you add in all the costs\nof homeownership and the amount of interest you may pay on a mortgage over it’s\nfull term.\n\nI totally understand people who say paying rent every month doesn’t give you\nanything back. But make sure you also appreciate that a big chunk of a monthly\nmortgage payment is simply to cover the interest on the loan itself. The amount\nof capital you pay off in the first few years is minimal.\n\nIt’s also very important to remember that interest rates might not always be as\nlow as they are now. \n\nFor example, if you secured a 25 year £200,000 mortgage today at a rate of\n1.75%, this would cost circa £825 a month. But if rates went up just 3% you'd be\nshelling out £1,140 a month.\n\nAccessing competitive mortgages\nFinally, if you want competitive mortgage rates, you will need to have a larger\ndeposit. Your credit score and the size of your deposit will all impact your\nmortgage arrangements. More on this in future articles.\n\nAs a minimum under the Help to Buy scheme, you will need at least 5% of the\nvalue of the home. Saving for a larger deposit should mean lower mortgage\npayments, but might take longer t in the first place.\n\nSummary\nThe purpose of this first section of my guide was to make you think long and\nhard about buying a home and not believe the hype that renting is wrong and\nowning is the only option in town.\n\nHopefully, it will make you think hard about what being a homeowner means,\nconsidering if it is right for you or if renting is the better option.\n\nI guess even at this late stage it’s also worth pointing out that even if you\ndecide to rent for now, you can still save money for your future and if your\ncircumstances change, then any savings you built up just puts you further ahead\nif you decide to buy in the future.\n\nUltimately, only you can choose what’s right for your circumstances and your\nbudget. There are pros and cons to each aspect and the reality is that things\nchange and over time. The important thing is to make an informed decision.\n\nIf decide that you want to become a homeowner, then the next step is working out\nhow much you can afford to borrow and how much you need to save. This is covered\nin the next article, ‘Setting your target - Getting realistic’.\n\nBye for now!\n\nAdviser Top Picks - Should I own?\n 1. Lose the mindset that says you have to buy. You need to make a balanced\n decision that is right for you.\n 2. Never let the answer be driven solely by the numbers. The decision to buy is\n a very personal decision and lies between a mix of what the numbers and the\n physical and emotional aspects.\n 3. Don’t buy your home with a primary objective of it being an investment. You\n are buying a place to live. The reality is that any growth in the property\n value will most likely be seen by the beneficiaries of your will, unless you\n choose to ‘downsize’ or take out a loan against the property.\n 4. Taking on a huge debt is scary. If borrowing large amounts of money scares\n you, then I'm pleased. It means you are taking it seriously. However, if it\n scares you to the point that it is affecting other aspects of your life,\n renting may be the better option for now.","html":"“Buying is right and renting is wrong”
“You’re throwing money away when you rent”
“You can’t lose if you buy property”
Over the years I’ve heard a lot of people assume that buying is always the right thing to do. And every time I need to explain why it’s not quite that simple. Why has it taken me 25 years to decide to write it down? Procrastination I expect, but no excuse now.
The starting point is to dispel a couple of myths.
Myth 1: You can’t lose.
If you don't carefully plan both buying and running a home you can lose money on property.
Myth 2: Buying is always better than renting
For many people renting is the better option because it can fulfil more of their needs.
I’ve met many people who regret buying a house or believe that they should have at least waited before buying.
I guess it’s only fair to declare my own position and say that my wife (Michelle) and I are homeowners and have been since 1994, which was just before I came into the financial services industry. We went through all the same emotions and thoughts that many of you will be going through now. If we knew back then what we know now, there are a number of things that we would probably have done differently.
The first one was asking ourselves “should we own or rent?”. Both our parents owned, so we just assumed buying was right and didn’t even look at renting as an option.
So buying must be right, right? Wrong, for many reasons. Renting can be right for many people in many scenarios.
Here are the important questions to ask yourself when considering the benefits of renting or buying:
Knowledge is power, so try not to answer these questions without first giving yourself the information to give a reasoned and balanced response. There are financial and non-financial elements to this, so let's go through each.
I am putting these non-financial aspects first because in my experience they are often forgotten or glossed over. Even if you just confirm what your instincts were, it's worth going through the process.
Do you want ultimate control over the property itself? Which gives me more flexibility now?
Trust me, you might not find out how proficient you are (or are not) at DIY until it’s too late. After 26 years Michelle still won’t let me touch a paint brush.
Aside from the impact of taking on a mortgage (which we'll come to later), you need to consider the things that might impact whether or not now is the right time to buy.
Also, it's important to remember that things can go wrong and have an impact on your finances. Let’s delve into these areas.
Do you have goals that are more of a priority to you now? Renting does usually involve paying an upfront bond (or deposit), but it doesn’t involve the same high up-front costs that owning does.
This could mean that you can prioritise other shorter term goals such as a wedding. In short, renting may suit you more now, even if you choose to buy later.
On the flip side, while this is not guaranteed, the past shows us that house prices (and rental costs) have risen over time. The rate of house price growth has historically exceeded both inflation and the interest you can earn on savings accounts.
So if house prices keep growing, this makes it a good investment doesn’t it? Well maybe, if you keep hold of it over the longer term.
However, my experience shows that it is an investment where the money is rarely ever accessed yourself. Owning a home should be seen as buying an illiquid asset that you can only access by ‘downsizing’ (i.e. selling and buying a cheaper property) or taking out some form of equity release loan.
If you can afford to, our advice is to both repay debts such as a mortgage and also build up other savings, pensions and investments to meet life’s other goals.
Owning your home means that if things go wrong then you're on the hook - unless it's covered by insurance or a warrant. The typical examples are leaks and broken down boilers.
Like when you buy a car, many sellers may know things are on their last legs but are crossing their fingers that they sell before they break down completely. We’ll look more into valuations and surveys another day.
If you're a tenant, it’s usually the landlord’s job to fix big problems. These costs can often run into the thousands and tenants are all too pleased not to have to foot the bill.
When I bought my first home, within 6 months we needed a new boiler and windows. We had no emergency fund, so spent a number of weeks wearing extra clothing before eventually taking on an extra loan to get the work done. It's one reason why we recommend building up an emergency fund before buying a home.
If your income is not secure or you suddenly find yourself with a lower income, then you might be in a better position as a renter. It is usually easier and cheaper to move somewhere else if you rent.
However, if you own your home and your income is suddenly reduced, you run the risk of losing your home. At the very least, you’ll incur some significant costs if you need to move house.
It's worth noting that banks and building societies won’t resort to forcing house sales in the first instance, but they won't wait forever for their money either.
Most wannabe homeowners need to take on the responsibility of having a large long term debt, i.e. a mortgage. This means taking on the risk that you might lose your home if you don’t keep up repayments.
I don’t think you would be human if this didn’t invoke some worry. Michelle and I were worried for a good number of years and this is only natural.
However, if this fear totally paralyses you to the point that you can’t sleep at night or it is negatively affecting other parts of your life, then I would suggest that renting might be better for you.
There is no shame in this. In fact, big respect from me if you recognise this in yourself and decide that renting is best for you.
Assuming you are happy to consider borrowing, then you should next be aware that depending on where you want to live, mortgage payments might be more or less expensive than rental costs in the same area.
So while you may be comfortable with a mortgage, you may feel that renting in a nicer place outweighs the potential benefits of owning in a less desirable area.
I’ve seen many people living in the more central areas of London choose to continue renting in the city, rather than buying on the outskirts.
Even assuming house prices continue to escalate in the long term, there is still no guarantee that you will make money, especially when you add in all the costs of homeownership and the amount of interest you may pay on a mortgage over it’s full term.
I totally understand people who say paying rent every month doesn’t give you anything back. But make sure you also appreciate that a big chunk of a monthly mortgage payment is simply to cover the interest on the loan itself. The amount of capital you pay off in the first few years is minimal.
It’s also very important to remember that interest rates might not always be as low as they are now.
For example, if you secured a 25 year £200,000 mortgage today at a rate of 1.75%, this would cost circa £825 a month. But if rates went up just 3% you'd be shelling out £1,140 a month.
Finally, if you want competitive mortgage rates, you will need to have a larger deposit. Your credit score and the size of your deposit will all impact your mortgage arrangements. More on this in future articles.
As a minimum under the Help to Buy scheme, you will need at least 5% of the value of the home. Saving for a larger deposit should mean lower mortgage payments, but might take longer t in the first place.
The purpose of this first section of my guide was to make you think long and hard about buying a home and not believe the hype that renting is wrong and owning is the only option in town.
Hopefully, it will make you think hard about what being a homeowner means, considering if it is right for you or if renting is the better option.
I guess even at this late stage it’s also worth pointing out that even if you decide to rent for now, you can still save money for your future and if your circumstances change, then any savings you built up just puts you further ahead if you decide to buy in the future.
Ultimately, only you can choose what’s right for your circumstances and your budget. There are pros and cons to each aspect and the reality is that things change and over time. The important thing is to make an informed decision.
If decide that you want to become a homeowner, then the next step is working out how much you can afford to borrow and how much you need to save. This is covered in the next article, ‘Setting your target - Getting realistic’.
Bye for now!
As the year draws to a close…..
Vivek, CEO: “Peter, people want to hear from you. Can you write a blog article for us?”
Me: “Absolutely. Count me in. What’s a blog?”
Simon, COO: “Peter, you’re on mute again!”
Having corrected the situation for the hundredth time, we decided on the title ‘An adviser's guide to first time homebuying’. But I’m still not sure what a blog is.
I’m on draft 34.
Me: “Guys, it’s not working, it’s either short and basically meaningless or it goes on for pages and pages. I want to run a series on the home buying process, similar to the debt series we ran earlier on in the year”.
Vivek: “Great idea, go for it. Can you have the first one ready for next week?”
Me: “Yep, no problem”
...damn.
So, let’s get the basics over and done with first and answer a few questions.
It may seem obvious, but for clarity this series has been written assuming that you have no real understanding of the homebuying process. You’re likely to be a first-time buyer, but you may or may not have started the homebuying journey. Your credit history might be good, bad or indifferent.
Don’t worry if you don’t know all these terms, we’ll cover them as we go along.
This guide is also aimed at second-time buyers who may have forgotten much of the process (although most don’t forget it in the short term!) or who maybe didn’t really get involved the first time round.
It’s not really aimed at people who are either looking to remortgage, although we will touch upon it in one of the latter articles regarding the ‘mortgage afterlife’. Similarly, this is not aimed at individuals looking to purchase property as an investment, what we call ‘Buy to Let’.
It’s been written by me, Peter, Head of Advice at Multiply. I’ve been in the financial advice industry since 1995 and seen both good and bad practices in the market. There are two things that my experience tells me are fundamentally important when it comes to looking after your finances - and they might not be what you expect.
Firstly, regardless of your level of financial acumen, everyone needs reassurance. For some, this may simply be a quick overview of what they’re doing and a “yep, you’re on track, keep going”. Others need hand-holding throughout the process. Many of you will be somewhere in between. What I can assure you is that there is no right or wrong place to be, as long as you are on the right path in the first place.
Secondly, knowledge is power. In the case of homebuying, understanding the process will help you feel in control. Additional ‘adviser tips’ will help you stay on track and feel confident throughout your journey.
As an adviser, I have always found imparting knowledge to people delivers 80% of what you need to take action. The other 20% is the reassurance that an expert is giving you the thumbs up.
Someone recently said to me that they liked me checking what they were doing because it was like having someone check their homework. If they got an ‘A*’ they felt reassured. Even if they got a lower score, they felt confident that I would help them get the knowledge and power they needed to improve their position.
You will find a number of very good guides out there that cover the raw process of homebuying. I have found them useful myself while investigating how best to build this guide. However, I noted areas that I think are missing. Unless you are a regulated adviser, there are some areas you just can’t touch.
Luckily, I’m a regulated adviser and so is Multiply, so we have free reign (pretty much).
This guide will be split into a number of sections, directly aligned to the home buying process as we see it:
We will release them one at a time, in order, to empower you with the necessary knowledge to buy your own home (if it’s right for you) and give you confidence in what you are doing.
As an adviser, I will point out key areas for your understanding and (where applicable) any actual points of advice.
So, that’s it for now and I look forward to discussing the important question of “Should I own?” in the new year. Until then - although for many of us it will be different this year - enjoy the Christmas break and see you soon in 2021.
We’re so excited to tell you that you can now open a market-leading Lifetime ISA in a few taps through the Multiply app.
A Lifetime ISA could help you buy your home sooner - it’s a must-have for eligible first-time buyers.
It pays a 25% government bonus on everything you save, up to £4,000 per tax year, plus you won’t pay any tax on the interest your savings earn.
We’ve partnered with Unity Mutual to bring you the market-leading Lifetime ISA, which pays 1.5% fixed-rate interest on your balance.
A Lifetime ISA (LISA) is an Individual Savings Account that helps you build your house deposit faster. It pays you a 25% government bonus on everything you save, up to £4,000 per tax year.
It’s designed to be used for purchasing your first home, or to use after you turn 60. That means you’ll lose the bonus if you use your Lifetime ISA savings for anything else.
It’s also a tax-efficient way to save, as you won’t pay any tax on the interest your savings earn.
Our recommended Lifetime ISA is the Unity Mutual Lifetime ISA paying 1.5% interest, which is the best rate on the market (true as of March 2021).
You’re eligible for a Lifetime ISA if you’re aged 18-39 and you’re planning to:
Or, if your plans change, you can access it penalty-free when you turn 60 and use it as part of your retirement income.
If you'd like help deciding if a Lifetime ISA is right for you, we'd recommend checking out the advice in the Multiply app.
Yes - but they’re similar. The Help to Buy ISA is no longer available, although anyone who opened one before November last year can continue saving into it.
The Help to Buy ISA has more restrictions than the Lifetime ISA - you can only put £200 a month in, and outside London you can only use it on a home costing up to £250,000.
It also pays the 25% bonus at the point you buy your home, whereas with the Lifetime ISA the bonus is paid directly into your account each month. That means with the Lifetime ISA you can earn interest on the bonus as well as your savings.
Yes - just head to the Lifetime ISA in the app and hit the \"Transfer existing ISA\" link. It takes 2 minutes to apply and we'll do the rest.
We recommend the Unity Mutual LISA because this account currently pays 1.5% annual interest, which is the highest rate you’ll find anywhere (true as of December 2020)
They offer a Stocks & Shares LISA which looks and feels like a Cash LISA. Your interest payments are guaranteed and your capital is not at risk. This means that this account is no riskier than keeping your money in cash, but offers a better return than the best Cash LISA.
Unity Mutual is authorised and regulated by the FCA. Any money you save into this Lifetime ISA is protected by the FSCS scheme, without the usual cap of £85,000.
Founded in the UK in 1810, Unity Mutual has over 309,000 members across 121 branches nationwide. Being a mutual means that they are owned by their members and customers, not by shareholders.
You might be used to seeing a FSCS limit of £85,000. Unity Mutual isn’t a bank or building society, so FSCS protection works a little differently for this Lifetime ISA, which offers unlimited protection without the usual cap.
Although this LISA behaves like a cash product (in that your interest payments are guaranteed and your capital is not at risk), the FSCS categorises it as a long-term insurance product.
That means you’d be covered for 100% of your claim with no upper limit, in the unlikely event that Unity Mutual went bust and you needed to get your money back.
The interest rate is guaranteed at 1.5% until 5th April 2022.
Unity Mutual reviews the interest rate once a year, in March. Based on how the stock market has performed, they’ll decide what happens to the interest rate. Sadly, we can’t predict the outcome of that review!
When you come to buy a home, the money in your Lifetime ISA is paid directly to your solicitor or conveyancer.
Just give us a shout once you’ve instructed a solicitor, and we’ll get the ball rolling. If you’re not sure when that’s meant to happen, check out the timeline in your app.
To use the bonus for your home, you’ll need to take out a mortgage and you must have had your Lifetime ISA open for at least 12 months.
You can open a Lifetime ISA in a few taps through the Multiply app. If you have any questions, give us a shout at support@multiply.ai.
","url":"https://multiply.ghost.io/market-leading-lifetime-isa/","uuid":"25f03ac7-6b81-4bd0-8eb8-a51b7bc35c3f","page":null,"codeinjection_foot":null,"codeinjection_head":null,"codeinjection_styles":null,"comment_id":"5fbbc0bdf089c700397c423a"}},{"node":{"id":"Ghost__Post__5f3c36e6f0f8cf0039a1ea12","title":"Autonomous finance: our team's vision for the future","slug":"autonomous-finance","featured":false,"feature_image":"https://multiply.ghost.io/content/images/2020/08/vivek-ceo.jpg","excerpt":"A new type of financial experience is evolving - one that we call autonomous finance.","custom_excerpt":"A new type of financial experience is evolving - one that we call autonomous finance.","created_at_pretty":"18 August, 2020","published_at_pretty":"18 August, 2020","updated_at_pretty":"26 October, 2020","created_at":"2020-08-18T20:15:34.000+00:00","published_at":"2020-08-18T20:19:46.000+00:00","updated_at":"2020-10-26T16:18:44.000+00:00","meta_title":null,"meta_description":null,"og_description":null,"og_image":null,"og_title":null,"twitter_description":null,"twitter_image":null,"twitter_title":null,"authors":[{"name":"Vivek Madlani","slug":"vivek","bio":null,"profile_image":null,"twitter":null,"facebook":null,"website":null}],"primary_author":{"name":"Vivek Madlani","slug":"vivek","bio":null,"profile_image":null,"twitter":null,"facebook":null,"website":null},"primary_tag":null,"tags":[{"name":"#blog","slug":"hash-blog","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"internal"},{"name":"tips-from-team","slug":"tips-from-team","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"public"}],"plaintext":"Vivek Madlani, CEO and cofounder.\n\nWe’re living in an age where technology is making many of our everyday\nexperiences simpler, safer, and more convenient. Soon you’ll be able to ride in\nan autonomous, self driving car that will pick you up and safely drop you off at\nyour desired destination.\n\nAs part of this shift, a new type of financial experience is evolving - one that\nwe call Autonomous Finance.\n\nOver the last few decades we’ve seen a lot of traditional in-person activities\nsuch as opening a bank account transformed into simple, delightful app\nexperiences. Most of the high street banks now have apps that can serve most of\nthe banking needs of their customers.\n\nA lot of work that has taken place has been around laying the infrastructure for\nthese digital experiences - such as identifying customers and moving money\nelectronically. We call this the “infrastructure layer” of finance and it\ninvolves areas such as open banking and automated identity verification. As this\ninfrastructure has evolved, financial regulators have become increasingly open\nto the use of more sophisticated technology in finance\". This has been driving\nthe “every company is a fintech” trend popularised by some.\n\nHere, in the UK, this means we can now set up a bank account in as little as 24\nclicks or an investment ISA in less than 20 steps. Essentially, once we decide\nthat we want to save, invest or transfer, making it happen has never been\neasier.\n\nBut how do we make those decisions in the first place? The step before -\nfiguring out what to do with your money - still involves a lot of friction. How\nmuch to save or invest? Which accounts are best, and when should I make my\nmoves?\n\nMultiply exists to answer these questions. Technology can now make decisions\nwhere once human beings were required.\n\nWe’re seeing a lot of this in the utilities space already. It is now common to\nswitch energy suppliers via your current account rather than by going direct or\nthrough a price comparison site. It is only a matter of time before this extends\nto other types of products. Advancements in technology will help fill gaps in\npeople’s skill, will, or time to help them make financial decisions, like which\nfunds are best for them, or the ins and out of different tax wrappers.\n\nThe end point of this is Autonomous Finance: a person’s money is moved to the\nright products at precisely the right time automatically in line with what they\nwant and what they need.\n\nAutonomous finance is where the progress that has been made with infrastructure\nis combined with the progress made in computer decision making and artificial\nintelligence. It provides a customer experience that figures out what to do, and\nthen does it for you.\n\nIn the UK there is already a name for this financial intelligence: regulated\nfinancial advice. Multiply has spent the last 4 years building technology to\nautomatically generate, risk manage and scale financial advice to as many people\nas possible.\n\nWe’ve solved the decision making part of Autonomous Finance. And with the launch\nof Multiply Accounts, we’re solving the infrastructure part too.\n\nAs an experience, customers will tell us their desired futures, information\nabout how much they spend, how much they work, their goals (such as buying a\nhome), and that’s it. After that our product works out whether they should be\nsaving, investing, purchasing life insurance, or whatever is required to hit\ntheir goals. We tell our users the specific products that they can automatically\nset up and send funds to. Our users then only need to tell us when something\nchanges - if they get married, for example - whilst we automatically help them\nachieve their goals.\n\nThe results of this are profound.\n\nThe default setting in personal finance is bad. Most people don’t make the best\nuse of the products available to them. They miss out on optimal returns for what\nthey’ve earned. Very rarely are their finances aligned with the future that they\nwant, and the majority of people don’t have the time, experience or knowledge to\nplug the gap.\n\nAutonomous finance will change this - by moving money to the right accounts in\nthe right amounts at the right time, optimised finances will no longer be a\nluxury.\n\nThis is our vision at Multiply - to make the default setting for finance great,\nfor everyone.","html":"Vivek Madlani, CEO and cofounder.
We’re living in an age where technology is making many of our everyday experiences simpler, safer, and more convenient. Soon you’ll be able to ride in an autonomous, self driving car that will pick you up and safely drop you off at your desired destination.
As part of this shift, a new type of financial experience is evolving - one that we call Autonomous Finance.
Over the last few decades we’ve seen a lot of traditional in-person activities such as opening a bank account transformed into simple, delightful app experiences. Most of the high street banks now have apps that can serve most of the banking needs of their customers.
A lot of work that has taken place has been around laying the infrastructure for these digital experiences - such as identifying customers and moving money electronically. We call this the “infrastructure layer” of finance and it involves areas such as open banking and automated identity verification. As this infrastructure has evolved, financial regulators have become increasingly open to the use of more sophisticated technology in finance\". This has been driving the “every company is a fintech” trend popularised by some.
Here, in the UK, this means we can now set up a bank account in as little as 24 clicks or an investment ISA in less than 20 steps. Essentially, once we decide that we want to save, invest or transfer, making it happen has never been easier.
But how do we make those decisions in the first place? The step before - figuring out what to do with your money - still involves a lot of friction. How much to save or invest? Which accounts are best, and when should I make my moves?
Multiply exists to answer these questions. Technology can now make decisions where once human beings were required.
We’re seeing a lot of this in the utilities space already. It is now common to switch energy suppliers via your current account rather than by going direct or through a price comparison site. It is only a matter of time before this extends to other types of products. Advancements in technology will help fill gaps in people’s skill, will, or time to help them make financial decisions, like which funds are best for them, or the ins and out of different tax wrappers.
The end point of this is Autonomous Finance: a person’s money is moved to the right products at precisely the right time automatically in line with what they want and what they need.
Autonomous finance is where the progress that has been made with infrastructure is combined with the progress made in computer decision making and artificial intelligence. It provides a customer experience that figures out what to do, and then does it for you.
In the UK there is already a name for this financial intelligence: regulated financial advice. Multiply has spent the last 4 years building technology to automatically generate, risk manage and scale financial advice to as many people as possible.
We’ve solved the decision making part of Autonomous Finance. And with the launch of Multiply Accounts, we’re solving the infrastructure part too.
As an experience, customers will tell us their desired futures, information about how much they spend, how much they work, their goals (such as buying a home), and that’s it. After that our product works out whether they should be saving, investing, purchasing life insurance, or whatever is required to hit their goals. We tell our users the specific products that they can automatically set up and send funds to. Our users then only need to tell us when something changes - if they get married, for example - whilst we automatically help them achieve their goals.
The results of this are profound.
The default setting in personal finance is bad. Most people don’t make the best use of the products available to them. They miss out on optimal returns for what they’ve earned. Very rarely are their finances aligned with the future that they want, and the majority of people don’t have the time, experience or knowledge to plug the gap.
Autonomous finance will change this - by moving money to the right accounts in the right amounts at the right time, optimised finances will no longer be a luxury.
This is our vision at Multiply - to make the default setting for finance great, for everyone.
","url":"https://multiply.ghost.io/autonomous-finance/","uuid":"6b3e33fc-75cd-4237-beaa-bb40dec47de3","page":null,"codeinjection_foot":null,"codeinjection_head":null,"codeinjection_styles":null,"comment_id":"5f3c36e6f0f8cf0039a1ea12"}},{"node":{"id":"Ghost__Post__5f0449a8ddc9880039666897","title":"How to navigate house price hype","slug":"house-price-hype","featured":false,"feature_image":"https://multiply.ghost.io/content/images/2020/07/erol-ahmed-FTy5VSGIfiQ-unsplash.jpg","excerpt":"There’s more to the housing market than pound signs and percentages.","custom_excerpt":"There’s more to the housing market than pound signs and percentages.","created_at_pretty":"07 July, 2020","published_at_pretty":"07 July, 2020","updated_at_pretty":"09 February, 2021","created_at":"2020-07-07T10:08:40.000+00:00","published_at":"2020-07-07T10:27:18.000+00:00","updated_at":"2021-02-09T19:16:40.000+00:00","meta_title":null,"meta_description":null,"og_description":null,"og_image":null,"og_title":null,"twitter_description":null,"twitter_image":null,"twitter_title":null,"authors":[{"name":"Annie Mellor","slug":"annie","bio":null,"profile_image":null,"twitter":null,"facebook":null,"website":null}],"primary_author":{"name":"Annie Mellor","slug":"annie","bio":null,"profile_image":null,"twitter":null,"facebook":null,"website":null},"primary_tag":null,"tags":[{"name":"#feed","slug":"hash-feed","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"internal"},{"name":"#blog","slug":"hash-blog","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"internal"},{"name":"tips-from-team","slug":"tips-from-team","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"public"},{"name":"#milestone","slug":"hash-milestone","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"internal"}],"plaintext":"House prices have been in the news a lot lately, as the property market reacts\nto the coronavirus pandemic and the economic aftermath.\n\nBut there’s more to the story than pound signs and percentages. Let’s take a\nlook behind the headlines to help you navigate house price hype as a first-time\nbuyer.\n\nHow to read the headlines\nNext time you see a news story about house prices, make sure you check which\nhouse price index the data comes from.\n\nFYI: if you read the Multiply Minute, you’ll always see a source alongside the\nfigures.\n\nIf it’s from a lender:\nMortgage providers like Halifax\n[https://www.halifax.co.uk/media-centre/house-price-index/] or Nationwide\n[https://www.nationwide.co.uk/about/house-price-index/headlines] produce an\nindex based on the mortgage deals they’ve approved.\n\nThey don’t always reflect the market as a whole, and can be skewed depending on\nwhat type of mortgages that lender specialises in.\n\nFor example, Nationwide does a lot of first-time buyer mortgages which means its\ndata may be biased to the more affordable end of the property market.\n\nIf it’s from a property website:\nRightmove [https://www.rightmove.co.uk/news/house-price-index/] has an index\nbased on average asking prices. Asking prices tell you about how sellers are\nfeeling - if they’re feeling optimistic then asking prices are higher. But it\ndoesn’t tell you the actual prices that are agreed with the buyers. \n\nIf it's from the government:\nThe official UK House Price Index [https://landregistry.data.gov.uk/app/ukhpi] \n(UK HPI) uses data from the Land Registry. Ir's the most reliable, as it uses\nreal purchase price data from property sales. It’s published monthly, but\nthere’s a lag of six weeks.\n\nOne downside is that this index may also include transactions that are not at\nmarket values, for example property being passed at discounts to family members.\n\nHere's a quick summary of the four different indices we've mentioned.\n\nThe big “but”\nLike everything else in life, house price data has been disrupted by coronavirus\n. \n\nAccurately tracking shifts in house prices relies on having plenty of\ninformation available about recent house purchases. That’s not easy at the\nmoment.\n\nThe property market all but shut down for several months, and the number of\ntransactions is only just starting to pick up again.\n\nWith fewer property transactions, all house prices indices are less reliable\nthan usual. The last UK HPI report was published on 20 May and has been\nsuspended altogether since then.\n\nThat means there’s less certainty than usual, and all predictions should be read\nwith an element of caution.\n\nWhat it means for you\nSo you're reading the news and you understand the data. What do you do with the\nintel?\n\nIf you’re ready to buy now:\nIt’s useful to be armed with information about house price trends. A significant\ndrop in house prices might mean that you can expand your search to new areas,\nfor example, or even have a nosey at places with an extra bedroom.\n\nWhen it comes to making an offer and negotiating with the seller, a knowledge of\nthe market can help you avoid paying over the odds, and maybe even get a bit of\na discount.\n\nIf you’re less than six months from buying:\n You should keep one eye on the market while you keep saving. A drop in house\nprices could mean that an opportunity comes up sooner than you expected.\n\nSet up alerts from property websites such as Zoopla [https://www.zoopla.co.uk/] \nand Rightmove [https://www.rightmove.co.uk/] to keep tabs.\n\nIf you’re more than six months from buying:\nIt’s best to ignore what the property market is doing and focus on your plan.\nThings might change fast, so try not to get distracted by current trends and\nfluctuations.\n\nThe best thing you can do is keep saving and following your financial plan to\nget mortgage-ready.","html":"House prices have been in the news a lot lately, as the property market reacts to the coronavirus pandemic and the economic aftermath.
But there’s more to the story than pound signs and percentages. Let’s take a look behind the headlines to help you navigate house price hype as a first-time buyer.
Next time you see a news story about house prices, make sure you check which house price index the data comes from.
FYI: if you read the Multiply Minute, you’ll always see a source alongside the figures.
Mortgage providers like Halifax or Nationwide produce an index based on the mortgage deals they’ve approved.
They don’t always reflect the market as a whole, and can be skewed depending on what type of mortgages that lender specialises in.
For example, Nationwide does a lot of first-time buyer mortgages which means its data may be biased to the more affordable end of the property market.
Rightmove has an index based on average asking prices. Asking prices tell you about how sellers are feeling - if they’re feeling optimistic then asking prices are higher. But it doesn’t tell you the actual prices that are agreed with the buyers.
The official UK House Price Index (UK HPI) uses data from the Land Registry. Ir's the most reliable, as it uses real purchase price data from property sales. It’s published monthly, but there’s a lag of six weeks.
One downside is that this index may also include transactions that are not at market values, for example property being passed at discounts to family members.
Here's a quick summary of the four different indices we've mentioned.
Like everything else in life, house price data has been disrupted by coronavirus.
Accurately tracking shifts in house prices relies on having plenty of information available about recent house purchases. That’s not easy at the moment.
The property market all but shut down for several months, and the number of transactions is only just starting to pick up again.
With fewer property transactions, all house prices indices are less reliable than usual. The last UK HPI report was published on 20 May and has been suspended altogether since then.
That means there’s less certainty than usual, and all predictions should be read with an element of caution.
So you're reading the news and you understand the data. What do you do with the intel?
It’s useful to be armed with information about house price trends. A significant drop in house prices might mean that you can expand your search to new areas, for example, or even have a nosey at places with an extra bedroom.
When it comes to making an offer and negotiating with the seller, a knowledge of the market can help you avoid paying over the odds, and maybe even get a bit of a discount.
You should keep one eye on the market while you keep saving. A drop in house prices could mean that an opportunity comes up sooner than you expected.
Set up alerts from property websites such as Zoopla and Rightmove to keep tabs.
It’s best to ignore what the property market is doing and focus on your plan. Things might change fast, so try not to get distracted by current trends and fluctuations.
The best thing you can do is keep saving and following your financial plan to get mortgage-ready.
","url":"https://multiply.ghost.io/house-price-hype/","uuid":"ae64ca19-4c25-4131-8f2b-d0c14003a2cc","page":null,"codeinjection_foot":null,"codeinjection_head":"","codeinjection_styles":null,"comment_id":"5f0449a8ddc9880039666897"}},{"node":{"id":"Ghost__Post__5ec3f2d33ee1f30039c4171e","title":"Is coronavirus good or bad for first-time buyers?","slug":"what-does-coronavirus-mean-for-first-time-buyers","featured":false,"feature_image":"https://multiply.ghost.io/content/images/2020/05/surface-DMVU0XqiT90-unsplash.jpg","excerpt":"Here's our take on the current outlook for first-time buyers.","custom_excerpt":"Here's our take on the current outlook for first-time buyers.","created_at_pretty":"19 May, 2020","published_at_pretty":"19 May, 2020","updated_at_pretty":"22 May, 2020","created_at":"2020-05-19T14:53:07.000+00:00","published_at":"2020-05-19T15:13:41.000+00:00","updated_at":"2020-05-22T09:48:21.000+00:00","meta_title":null,"meta_description":null,"og_description":null,"og_image":null,"og_title":null,"twitter_description":null,"twitter_image":null,"twitter_title":null,"authors":[{"name":"Annie Mellor","slug":"annie","bio":null,"profile_image":null,"twitter":null,"facebook":null,"website":null}],"primary_author":{"name":"Annie Mellor","slug":"annie","bio":null,"profile_image":null,"twitter":null,"facebook":null,"website":null},"primary_tag":{"name":"tips-from-team","slug":"tips-from-team","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"public"},"tags":[{"name":"tips-from-team","slug":"tips-from-team","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"public"},{"name":"#feed","slug":"hash-feed","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"internal"},{"name":"#blog","slug":"hash-blog","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"internal"}],"plaintext":"If you’re hoping to buy your first home any time soon, you’re probably trying to\nwork out what impact coronavirus has on your plans. \n\nThe Multiply advice team has been working on it too. Here's our take on the\ncurrent outlook for first-time buyers.\n\nThe headlines\nThe situation is not simple; it’s a mixed bag of both positives and negatives,\nas well as some uncertainties that are hard to predict.\n\nYour plans to buy a home will be influenced by three key factors:\n\n 1. Your own personal financial situation\n 2. What the banks do\n 3. What happens to house prices\n\nYour financial situation\nThis is all about the money you’re earning and how much you have in savings and\ninvestments.\n\n * Negative: Lots of people have already seen their income reduced. Unemployment\n could go higher and wages may decrease. You can usually get a mortgage for up\n to five times your household income. If your income is affected, it might\n mean you can’t borrow as much as you originally planned to.\n * Negative: People whose incomes are affected are more likely to be eating into\n deposit savings to fund day-to-day living. If you’re living off savings at\n the moment, it could push back your target date for buying your home.\n * Neither: Most first-time buyers have their deposit savings in cash savings\n accounts, so haven't been as affected by stock market falls. You might be\n getting a reduced interest rate on your savings account, but it's nowhere\n near as drastic as the volatility we've seen in the stock market.\n\nWhat the banks do\nThis affects how big a mortgage you’ll be able to get, and at what rate.\n\n * Positive: Bank of England interest rates are very low at the moment and are\n generally expected to stay there for the foreseeable future. This is in order\n to stimulate the economy. There is a connection between these rates and the\n mortgage rates offered to borrowers, so you can expect mortgage rates to be\n low for a long period of time. \n * Negative: Banks are more likely to lose money from businesses going bust and\n failing to repay their loans. That might mean they reduce the risk they take\n with any new lending. If so, we’ll see banks getting stricter with mortgage\n assessments and asking for higher deposits (Nationwide is already doing\n this).\n * Could be either: Some lenders are working through a backlog of applications\n and may not currently be open to new mortgage applicants. You might have to\n wait a bit longer before applying.\n * Negative: If you’ve been furloughed, some banks might not take the furlough\n pay into account for your mortgage application. The bank might also ask that\n you wait until your longer term employment status is better understood before\n applying.\n\nWhat house prices do\nHouse prices are driven by supply and demand, which is tricky to predict. But\nhere goes:\n\n * Negative: In the short term, people may be less likely or willing to sell\n their homes, so this could reduce the short term supply of typical first-time\n buyer properties significantly. This could actually push house prices up if\n the demand stays strong. This would be deemed a ‘sellers market’.\n * Positive: On the other hand, in the short to medium term, if people are less\n keen to buy then house prices may fall due to a drop in demand. Existing\n homeowners who cannot defer selling might then be forced to accept a lower\n price. This would be deemed a ‘buyers market’. \n\nWhat to do about it\nThe only thing we know for certain is that the short term future of the property\nmarket is uncertain. \n\nWe will be following all the latest developments for first-time homebuyers, and\nwe’ll keep you in the loop with our opinions as new information comes to light.\n\nIn the meantime, it's important that you monitor your finances and keep to your\nplan [https://www.multiply.ai/app/plan]. You should also regularly check in to\nmake sure that you’re getting the most up to date advice.","html":"If you’re hoping to buy your first home any time soon, you’re probably trying to work out what impact coronavirus has on your plans.
The Multiply advice team has been working on it too. Here's our take on the current outlook for first-time buyers.
The situation is not simple; it’s a mixed bag of both positives and negatives, as well as some uncertainties that are hard to predict.
Your plans to buy a home will be influenced by three key factors:
This is all about the money you’re earning and how much you have in savings and investments.
This affects how big a mortgage you’ll be able to get, and at what rate.
House prices are driven by supply and demand, which is tricky to predict. But here goes:
The only thing we know for certain is that the short term future of the property market is uncertain.
We will be following all the latest developments for first-time homebuyers, and we’ll keep you in the loop with our opinions as new information comes to light.
In the meantime, it's important that you monitor your finances and keep to your plan. You should also regularly check in to make sure that you’re getting the most up to date advice.
","url":"https://multiply.ghost.io/what-does-coronavirus-mean-for-first-time-buyers/","uuid":"53e245b1-2aa9-4a4e-ab81-5a0d1202cf4d","page":null,"codeinjection_foot":null,"codeinjection_head":"","codeinjection_styles":null,"comment_id":"5ec3f2d33ee1f30039c4171e"}},{"node":{"id":"Ghost__Post__5ebbfecc5a55390039474b6c","title":"Housing market unlocked: what it means for you","slug":"housing-market-unlocked-what-it-means-for-you","featured":false,"feature_image":"https://images.unsplash.com/flagged/photo-1564767609342-620cb19b2357?ixlib=rb-1.2.1&q=80&fm=jpg&crop=entropy&cs=tinysrgb&w=2000&fit=max&ixid=eyJhcHBfaWQiOjExNzczfQ","excerpt":"For hundreds of thousands of people whose plans to move house have been hold, things just got interesting.","custom_excerpt":"For hundreds of thousands of people whose plans to move house have been hold, things just got interesting.","created_at_pretty":"13 May, 2020","published_at_pretty":"13 May, 2020","updated_at_pretty":"13 May, 2020","created_at":"2020-05-13T14:06:04.000+00:00","published_at":"2020-05-13T14:14:33.000+00:00","updated_at":"2020-05-13T15:42:34.000+00:00","meta_title":null,"meta_description":null,"og_description":null,"og_image":null,"og_title":null,"twitter_description":null,"twitter_image":null,"twitter_title":null,"authors":[{"name":"Annie Mellor","slug":"annie","bio":null,"profile_image":null,"twitter":null,"facebook":null,"website":null}],"primary_author":{"name":"Annie Mellor","slug":"annie","bio":null,"profile_image":null,"twitter":null,"facebook":null,"website":null},"primary_tag":null,"tags":[{"name":"#feed","slug":"hash-feed","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"internal"},{"name":"tips-from-team","slug":"tips-from-team","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"public"},{"name":"#blog","slug":"hash-blog","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"internal"}],"plaintext":"The lockdown is easing very slightly this week, and that includes the housing\nmarket. For hundreds of thousands of people whose plans to move house have been\nhold, things just got interesting.\n\nWhat's changed?\nThe property market has been at a near-total standstill since March. The\ngovernment released instructions telling people not to move house, whether they\nwere buying or renting.\n\nViewings and valuations were banned, estate agents were closed, and mortgage\nlenders were pulling up the drawbridge.\n\nFrom Wednesday 13th May, the government has released advice to say that we can\nproceed with caution, as long as everyone follows the new rules.\n\nEstate agents, removals companies, conveyancers, surveyors, and other essential\npeople involved the homebuying process have also returned to work while\nfollowing social distancing guidelines.\n\nAlthough restrictions are being eased, the mortgage market might take a little\nlonger. Many providers shut up shop at the start of the crisis. Your broker or\nlender will be able to tell you more about what deals are available to you.\n\nWhat you CAN do\nViewings\nIf you're in the market to buy a place, you can now go to viewings, provided you\nfollow social distancing. That means the seller will probably leave the property\nwhile you're looking around, and the estate agent should stay two metres away.\n\nThe estate agent and seller should be aware of the new rules and should be\nenforcing the guidance to keep you safe. This includes opening all the doors and\nwindows, and cleaning all surfaces between viewings.\n\nWhen you book viewings, the estate agent will be able to tell you what they're\ndoing to follow the guidelines.\n\nGovernment advice also states that while you're viewing properties you should\navoid touching surfaces, wash your hands regularly, and bring your own hand\nsanitiser.\n\nIf possible, you should try and avoid using public transport when you travel to\nthe viewing.\n\nOffers\nYou can make an offer on a property as normal. However, you should be aware that\nthere's a risk of delays if someone in the chain starts showing symptoms and\nneeds to self-isolate.\n\nSurveys and searches\nConveyancers and solicitors should be able to carry out searches online as\nnormal, so the legal bit of the homebuying process shouldn't be affected.\n\nSurveyors and other tradespeople can also go into the property as long as they\nand the seller both follow social distancing guidelines.\n\nMoving house\nEveryone might need to be a bit more flexible with dates and arrangements for\ncompleting and moving. If someone gets ill, you might have to delay moving into\nyour new home.\n\nRemoval companies are going back to work, and you should book your van as early\nas possible. You should do as much of your own packing as you can, and clean\nyour boxes and bags before the removal people pick them up.\n\nYou can't offer them a cup of tea while they're loading your stuff into the van.\nIt'll feel weird, but it's for the best.\n\nIt might also be a good idea to have your new home professionally cleaned before\nyou move in, even if it's a new build.\n\nWhat you CAN'T do\nIf you or anyone in your household has tested positive, is showing symptoms, or\nis self-isolating, you shouldn't go to viewings or move house.\n\nIf you're vulnerable or shielding, or live with someone who is, government\nadvice says you should consider personal circumstances carefully before deciding\nto move.\n\nNo sellers or estate agents should be holding open viewings. You should make an\nappointment to view a property, and no one else should be there while you are.\n\nAnd remember: no tea. Not during viewings, while moving house, or even after the\nremovals guy has lugged your sofa through your new front door. Keep that kettle\nswitched off.\n\nGot questions?\nYeah, us too. This is new to us all. If you want the full rundown, you can read\nthe full government advice on moving house here\n[https://www.gov.uk/guidance/government-advice-on-home-moving-during-the-coronavirus-covid-19-outbreak#advice-to-the-public]\n.\n\nThe future is still pretty uncertain, and lockdown restrictions could tighten up\nagain in the future. Bear this in mind before you decide whether to dive back\ninto buying a home.\n\nIf you have any other questions about buying a home or your financial plan\ngenerally during these strange times, you can get in touch at \nsupport@multiply.ai.","html":"The lockdown is easing very slightly this week, and that includes the housing market. For hundreds of thousands of people whose plans to move house have been hold, things just got interesting.
The property market has been at a near-total standstill since March. The government released instructions telling people not to move house, whether they were buying or renting.
Viewings and valuations were banned, estate agents were closed, and mortgage lenders were pulling up the drawbridge.
From Wednesday 13th May, the government has released advice to say that we can proceed with caution, as long as everyone follows the new rules.
Estate agents, removals companies, conveyancers, surveyors, and other essential people involved the homebuying process have also returned to work while following social distancing guidelines.
Although restrictions are being eased, the mortgage market might take a little longer. Many providers shut up shop at the start of the crisis. Your broker or lender will be able to tell you more about what deals are available to you.
If you're in the market to buy a place, you can now go to viewings, provided you follow social distancing. That means the seller will probably leave the property while you're looking around, and the estate agent should stay two metres away.
The estate agent and seller should be aware of the new rules and should be enforcing the guidance to keep you safe. This includes opening all the doors and windows, and cleaning all surfaces between viewings.
When you book viewings, the estate agent will be able to tell you what they're doing to follow the guidelines.
Government advice also states that while you're viewing properties you should avoid touching surfaces, wash your hands regularly, and bring your own hand sanitiser.
If possible, you should try and avoid using public transport when you travel to the viewing.
You can make an offer on a property as normal. However, you should be aware that there's a risk of delays if someone in the chain starts showing symptoms and needs to self-isolate.
Conveyancers and solicitors should be able to carry out searches online as normal, so the legal bit of the homebuying process shouldn't be affected.
Surveyors and other tradespeople can also go into the property as long as they and the seller both follow social distancing guidelines.
Everyone might need to be a bit more flexible with dates and arrangements for completing and moving. If someone gets ill, you might have to delay moving into your new home.
Removal companies are going back to work, and you should book your van as early as possible. You should do as much of your own packing as you can, and clean your boxes and bags before the removal people pick them up.
You can't offer them a cup of tea while they're loading your stuff into the van. It'll feel weird, but it's for the best.
It might also be a good idea to have your new home professionally cleaned before you move in, even if it's a new build.
If you or anyone in your household has tested positive, is showing symptoms, or is self-isolating, you shouldn't go to viewings or move house.
If you're vulnerable or shielding, or live with someone who is, government advice says you should consider personal circumstances carefully before deciding to move.
No sellers or estate agents should be holding open viewings. You should make an appointment to view a property, and no one else should be there while you are.
And remember: no tea. Not during viewings, while moving house, or even after the removals guy has lugged your sofa through your new front door. Keep that kettle switched off.
Yeah, us too. This is new to us all. If you want the full rundown, you can read the full government advice on moving house here.
The future is still pretty uncertain, and lockdown restrictions could tighten up again in the future. Bear this in mind before you decide whether to dive back into buying a home.
If you have any other questions about buying a home or your financial plan generally during these strange times, you can get in touch at support@multiply.ai.
","url":"https://multiply.ghost.io/housing-market-unlocked-what-it-means-for-you/","uuid":"da014efa-ca31-4184-b521-7d9b464527a3","page":null,"codeinjection_foot":null,"codeinjection_head":null,"codeinjection_styles":null,"comment_id":"5ebbfecc5a55390039474b6c"}},{"node":{"id":"Ghost__Post__5ea6d365b4b5540039b680ca","title":"Get your mortgage in principle","slug":"how-to-get-a-mortgage-in-principle","featured":false,"feature_image":"https://multiply.ghost.io/content/images/2021/07/Multiply-Mojo.png","excerpt":"Mojo is a leading mortgage broker that can give you a mortgage in principle.","custom_excerpt":"Mojo is a leading mortgage broker that can give you a mortgage in principle.","created_at_pretty":"27 April, 2020","published_at_pretty":"12 May, 2020","updated_at_pretty":"30 July, 2021","created_at":"2020-04-27T12:43:17.000+00:00","published_at":"2020-05-12T11:40:20.000+00:00","updated_at":"2021-07-30T15:43:37.000+00:00","meta_title":null,"meta_description":null,"og_description":null,"og_image":null,"og_title":null,"twitter_description":null,"twitter_image":null,"twitter_title":null,"authors":[{"name":"Annie Mellor","slug":"annie","bio":null,"profile_image":null,"twitter":null,"facebook":null,"website":null}],"primary_author":{"name":"Annie Mellor","slug":"annie","bio":null,"profile_image":null,"twitter":null,"facebook":null,"website":null},"primary_tag":null,"tags":[{"name":"#milestone","slug":"hash-milestone","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"internal"},{"name":"#blog","slug":"hash-blog","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"internal"},{"name":"tips-from-team","slug":"tips-from-team","description":null,"feature_image":null,"meta_description":null,"meta_title":null,"visibility":"public"}],"plaintext":"We've partnered with Mojo, a leading mortgage broker that can give you a free\nmortgage in principle.\n\nWe haven’t shared any of your personal details, so they’ll ask a few questions\nof their own.\n\nReady to get your mortgage in principle? Continue to Mojo\n[https://multiply.mojomortgages.com/].\n\nOr, you can find more info about Mojo here [https://mojomortgages.com/].\n\nWhat's a mortgage in principle?\nGetting a mortgage in principle (MIP) is the first step in the mortgage process.\nIt should give you a good idea of how much you’ll be able to borrow and at what\nrate.\n\nIf you're doing viewings, go with a MIP in your back pocket to show sellers\nyou’re serious.\n\nA MIP is sometimes also known as a DIP (decision in principle) or AIP (agreement\nin principle).\n\nIt isn’t a binding agreement and it doesn't guarantee that the lender will give\nyou a mortgage offer, but you're not tied to it either. It's generally valid for\n90 days.\n\nSome brokers, including Mojo, run a ‘soft’ check to confirm your personal\ninformation - this doesn't affect your credit score. Others may run a ‘hard’\ncheck - this is a full credit check and leaves a footprint, which other lenders\ncan see.\n\nThe process\nYou can either get a mortgage in principle via a broker, like Mojo, or from the\nlender directly.\n\nThe process starts with a few questions. They'll assess your affordability and\nestimate how much you'll be able to borrow.\n\nYou'll get an official document with this info - that's your mortgage in\nprinciple.\n\nHow much you can borrow\nThe amount you can borrow is generally:\n\n * Up to five times your annual income.\n * Up to 95% of the property value.\n\nThey'll also want to check you'll be able to make the monthly repayments.\n\nYou'll need to show that your income covers fixed outgoings such as travel and\nfood, as well as your anticipated bills once you're a homeowner.\n\nWhat's next?\nYou can get a free mortgage in principle from Mojo here\n[https://multiply.mojomortgages.com/].\n\nUse this as a guide for viewings and making offers. You'll still need to make a\nmortgage application for real once you've found your home and had an offer\naccepted.","html":"We've partnered with Mojo, a leading mortgage broker that can give you a free mortgage in principle.
We haven’t shared any of your personal details, so they’ll ask a few questions of their own.
Ready to get your mortgage in principle? Continue to Mojo.
Or, you can find more info about Mojo here.
Getting a mortgage in principle (MIP) is the first step in the mortgage process. It should give you a good idea of how much you’ll be able to borrow and at what rate.
If you're doing viewings, go with a MIP in your back pocket to show sellers you’re serious.
A MIP is sometimes also known as a DIP (decision in principle) or AIP (agreement in principle).
It isn’t a binding agreement and it doesn't guarantee that the lender will give you a mortgage offer, but you're not tied to it either. It's generally valid for 90 days.
Some brokers, including Mojo, run a ‘soft’ check to confirm your personal information - this doesn't affect your credit score. Others may run a ‘hard’ check - this is a full credit check and leaves a footprint, which other lenders can see.
You can either get a mortgage in principle via a broker, like Mojo, or from the lender directly.
The process starts with a few questions. They'll assess your affordability and estimate how much you'll be able to borrow.
You'll get an official document with this info - that's your mortgage in principle.
The amount you can borrow is generally:
They'll also want to check you'll be able to make the monthly repayments.
You'll need to show that your income covers fixed outgoings such as travel and food, as well as your anticipated bills once you're a homeowner.
You can get a free mortgage in principle from Mojo here.
Use this as a guide for viewings and making offers. You'll still need to make a mortgage application for real once you've found your home and had an offer accepted.
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