Does credit card help your credit score?

Have you heard that getting a credit card can help your credit score? Before you do anything, read this article.

When you want to apply for a mortgage, your credit worthiness is looked at by the lender. They score you and search through your credit history to see if you are a good candidate to lend to.

If you have never had any financial liabilities, your credit history may seem a little flat…. Indeed, one way to build up your credit history may be by sensibly using a credit card. There is a special, score building credit card type, and by using it and regularly repaying it, you build your credit worthiness.

Be careful though, as using up too much of your card’s balance may cost you interest as well as it may affect how much the lender would offer you when taking a mortgage. Also, remember to pay it on time each month – it is very important.

Before you decide to get a new credit card, always first speak to a broker!

Opening any new line of credit may lower your existing credit score and it may lower the amount you will be able to get from the lender! This is surely not the outcome you want!

A broker will look at your credit score and your credit report and will be able to tell you if you need to work on it or if it is good enough for mortgage purposes.

If you have any questions, feel free to contact us.

Is deposit from a loan a good idea when buying a house?

One thing is certain: in most cases, when buying a house, you will be required to have a deposit. So what should you do if you want to buy but don’t have enough deposit? Would taking a loan or borrowing from other people be a solution

We have been recently approached by some customers who had borrowed so they have a deposit and they were very disappointed to learn that this would not help them!

First of all, whilst lenders usually accept a gifted deposit (parents, siblings, grandparents can gift), on condition it is not repayable, only a very limited number of lenders would consider if the deposit was borrowed from a third party or from another lender. By taking this step, you are going to limit yourself extremely in terms of lenders’ choice.

Secondly, a loan for deposit may not only lower your credit score but it will also affect your affordability so the amount you could borrow as mortgage may get reduced!

Deposit coming from a borrowed amount is one of most common issues we see daily. Remember, before you take any financial decisions, you should speak to a broker first. Otherwise, you might end up with a loan but with no mortgage in the end!

Contact us if you have any questions.

Could you benefit from a Lifetime ISA?

What could be better than boosting your savings by further 25% when you are planning to buy a house? Could you benefit from a Lifetime ISA?

Here’s a couple of facts about a Lifetime ISA (LISA):

• A Lifetime ISA can be opened by anyone aged over 18 and under 40

• Savings made before 50 attract a 25% bonus from the Government (capped at £1000 per year).

• This bonus is paid monthly, so interest can be earned on the bonus too.

• A maximum of 4000 can be saved per tax year with no monthly limit.

• Savings can be used to buy a first home, to provide benefits in retirement from age 60, or in case of a terminal illness with less than a year to live.

• If savings are withdrawn for any purpose other than those stated above, a 25% charge is applied.

• If you have both a Help-to-Buy and Lifetime ISA, the benefit from only one of these can be used for a first home purchase.

To be able to buy your first home with LISA savings and bonus you must meet the below conditions:

• the property costs £450,000 or less

• you buy the property at least 12 months after you make your first payment into the Lifetime ISA

• you use a conveyancer or solicitor to act for you in the purchase

• you’re buying with a mortgage

If you have any other questions about buying a house, get in touch with us!