Posted by & filed under Mortgages.

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It is fairly normal when you start looking for something to buy that you know how much you can spend. Imagine walking in to a shop without knowing how much cash you had in your wallet until you got to the till – it would make picking out something to buy quite tricky. What if you really liked something you’d picked but didn’t have the cash to buy it. That would be quite the let down…
Since the “new” affordability rules came in to play in April 2014, calculating your borrowing potential has become something of a dark art.
The focus of lending has now moved from the traditional multiple of a person’s income to what an individual can reasonably afford and this means lenders will analyse your spending patterns from the last 3-6 months (for a typical borrower) before determining a “safe and appropriate” commitment that you can make.
They must also include in this payment, an allowance which ensures you would still be able to afford the payments should interest rates increase. This is often referred to as a “stress rate” calculation.
Is the borrowing criteria the same for everyone?
Unfortunately not. If you fit into one of these categories you may need to provide 2-5 years of financial information before a decision can be made.

Self-employed
Directors with than 25% equity shareholding
Sole Traders
Partnerships
Contractors

So how can I maximise my borrowing capability?
The key to maximising your borrowing potential is preparation. With a lender requiring access to your previous finances, planning well ahead is key. Here are some quick tips for improving your borrowing capability.

  • Clear any short term debts such as small loans and credit cards
  • Make sure your regular spending does not result in you going over your overdraft limit or incurring charges from your bank for poor planning
  • Use the money you’re saving on cutting down your spending to increase you deposit (an increased % deposit can significantly increase your borrowing power AND reduce the rate of interest you will pay)
  • Make sure you are on the electoral role (this is critical)
  • Avoid job changes / career changes / changing from an employed role with a fixed salary to being self employed (self employed applicants usually need 2 year’s track record of income)
  • Check your credit report using a service such as Experian, Equifax, or Call Credit and make sure there are no hidden surprises (we’ve seen people declined a mortgage over a £20 late payment on a mail order catalogue)

Your home may be repossessed if you do not keep up repayments on your mortgage.

Want to know exactly how much you could borrow?
No matter how challenging your circumstances, Credius has a wealth of expertise to help you maximise your borrowing potential and ensure you get the deal that’s right for you. Call us today to arrange an appointment on 020 7562 5858.

Alternatively why not check out our Mortgage Affordability and Mortgage Cost Calculators here
Please note these calculators should be used for guidance only

Next time: Can I have more than 1 mortgage?

Posted by & filed under Investment.

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If you’re tired of the pitiful interest rates offered to you by savings accounts at the moment, you might be tempted to invest some of your hard earned money into the stock market. But if you’ve never had any dealings with the stock market in the past and are afraid you’re a bit too much of a novice to consider it, where’s the best place to start? The answer is right here with our complete beginner’s guide to the stock market.

So where shall we start…?

Well the stock market is a complex system for trading company shares and it’s actually made of many stock exchanges around the world. The main stock exchanges are the New York Stock Exchange (NYSE), the NASDAQ, the London Stock Exchange (LSE) and the Japan Exchange Group and within each stock exchange you are likely to find indexes.

What’s an index?

An index is a way of splitting up the market, partly as way of being able to measure it and report on it. On the London Stock Exchange (LSE) for example, you have the FTSE100 – an index composed of the 100 largest companies listed on the (LSE). You have the FTSE250 – these are the next 250 largest companies on the stock exchange and you also have the FTSE Small Cap which is anything outside of the top 350 companies. By measuring the performance of these groups of companies we can get a good idea of the state of the economy and this might influence how we make (amongst other things) investment decisions in the future.

Can I buy stock in any company?

No – not every company is listed on the stock market – only ones where the owners have taken the company “public” to raise funds.

What makes the market go up and down?

There are many factors that determine whether stock prices rise or fall. These include the media, the opinions of well-known investors, natural disasters, political and social unrest, risk, supply and demand, and the lack of or abundance of suitable alternatives. The combination of all of these factors creates a certain type of sentiment (i.e. bullish and bearish) and that will determine whether investors want to buy or sell their shares. If you have more sellers than buyers – the stock price goes down and conversely if you have more buyers than sellers, the stock price goes up.

The value of investments can fall as well as rise. You may get back less than you invested.

What should I invest in?

Well, if there was a standard answer to that, we’d be millionaires. The truth is, everybody invests for a different reason, everybody’s financial situation is unique and we all have different levels of risk that we’re willing to take. Investing is for everyone, as long as the risks are explained accurately upfront. We’ll be taking you through a range of different investment options to help you become better informed and understand whether the investment world is right for you, and if so in what capacity.

An important step to make if you are considering investing, is to find a Financial Adviser that you can trust to help you make financial decisions that are right for you. Here at Credius we’ve got a great team ready to help so why not call us today on 020 7562 5858 or email us at info@credius.com. We’d love to hear from you.

Posted by & filed under Investment.

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These days you don’t have to be a ‘Gordon Gekko’ or ‘Jordan Belfort’ to start investing. Opportunities are everywhere and in the age of the internet, you can open an investment account and buy shares in some of the biggest companies in the world in just a few minutes. But even though investing your money has become as simple (in principle) to buying your Nan’s Christmas present off eBay or Amazon – that doesn’t mean it’s suitable for everyone.

Risk

Key to choosing whether you should save or invest is your attitude to risk. One of the great things about investing is that it can deliver an unbeatable return on your investment when compared to savings accounts… especially at the current rates. The downside however, is that there is always a possibility that you can come away with less than you started and if you cannot afford for that to happen or you’re simply not willing to accept the risk of that happening – investing is probably not for you.

Are you in it for the long term?

Another key consideration when choosing whether to save or invest is the length of time you’re willing to let your money be “out of arms reach”. Whilst you might have dreams of investing for just a few weeks, making the perfect choices and then sailing off into the sunset with a boat load of cash – typically investments are made for the mid-long term (5 to 10 years plus). You’re only likely to make it big in a few weeks, if you’re already an experienced, long time trader living and breathing investments, with hundreds of thousands of pounds to play with on a daily basis… and even then there’s no guarantee. With that in mind, if you are going to invest for the long term – it’s important not to let yourself “get spooked” by the market. Markets are by nature volatile beasts and reacting to the short term ups and downs rather than buckling down for the long term will likely see you lose a sizeable part of your initial investment.

Having said that, investing can be a fantastic way of turning a relatively modest post of money into something really worthwhile if done correctly. The best place to start is by talking to a Financial Adviser who can fully explain the risks involved, assess your attitude to risk and capacity for loss, then provide you with a wide range of investment options that match your risk profile and are suitable for your needs. What’s more – an Adviser can add further value by actively managing your investments and proactively advising you when to make changes or invest more money.

The value of investments can fall as well as rise. You may get back less than you invested.

If you would like to learn more about investing, why not speak to a member of the Credius team today on 020 7562 5858 or email us at info@credius.com. We’d love to hear from you.