As we stride into 2024, the mortgage market is undergoing significant changes that can shape the way you approach homeownership. With rates starting to fall and stability to the UK base rate, there's no better time to explore the possibilities of discussing your mortgage.
Our partner CMME covers the mortgage market in early 2024 and what you need to consider if you are moving or renewing your current deal as a self-employed professional.
Competitive Rates Landscape:
Exciting news echoes throughout the mortgage landscape, with major lenders like HSBC and NatWest setting the stage for a fierce competition by offering a five-year fix below 4%, a rate less than 4% for the first time in over a year.
Halifax, Britain's largest mortgage lender, is also joining the race with reductions of its own.
No Movement on UK Base Rate:
Despite the enticing decreases in mortgage rates, the UK base rate remains steady at 5.25%. This stability, observed for the third consecutive time, is the Bank of England's strategic move to curb inflation, currently standing at 3.9%.
While inflation has shown signs of cooling, the Bank remains committed to a restrictive monetary policy, aiming to bring inflation sustainably back to the 2% target in the medium term.
This provides a stable backdrop for mortgage holders, and the next base rate review is scheduled for February 1, 2024.
Market and Housing Trends:
Recent research from Moneyfacts indicates a decline in the average two-year fixed-rate residential mortgage rate from 6.29% to the current 5.87%.
The average five-year fixed rate has also seen a decrease from 5.87% to 5.53%. Despite initial concerns, the UK housing market displays resilience, with only a 1.8% decline in house prices in the year to December, according to Nationwide.
Mortgage approvals in November reached the highest level since June, according to the Bank of England.
A view from the expert "The latest inflation results at 3.9% have triggered noteworthy changes. In the realm of 2-year fixed rates, we've witnessed a significant drop to 4.44%, a substantial decrease from the peak of approximately 6.14% recorded 12 to 18 months ago.
At CMME, we ensure our clients benefit from the most advantageous mortgage options available." – Kevin Kiley, Senior Mortgage Advisor, CMME
5 Tips for Contractors Seeking a Mortgage:
1. Understand Your Day Rate: Your day rate is a crucial factor in contract-based underwriting. Ensure you have a clear understanding of your day rate and provide documentation, such as your current contract, assignment schedule, and CV, to demonstrate your earning potential.
2. Evidence of Income: Bank statements, both personal and business, play a vital role in showcasing your income stability. Be prepared to provide three to six months' worth of statements to validate your financial standing.
3. Maintain a Strong Credit History: An impeccable credit history is essential for contractors, especially those seeking a mortgage from day 1 of contracting. Regularly check and maintain a strong credit score to enhance your mortgage eligibility.
4. Keep Your CV Up-to-Date: Lenders want to see a relevant history in your contracting trade. Ensure your Curriculum Vitae (CV) is up-to-date, highlighting your skills and experience in your current field.
5. Partner with Specialist Mortgage Advisors: Choosing a mortgage advisor with expertise in contractor mortgages is crucial. Specialist advisors, like those at CMME, understand the intricacies of contractor income, ensuring you receive tailored advice that aligns with your unique financial situation.
Need to discuss your mortgage plans?
As a specialist contractor mortgage broker, our partner CMME understand how to present your information to lenders to ensure you can secure mortgage funding. CMME are one of the largest mortgage brokers in the UK, with over 20 years experience.
They have access to the same range of mortgage deals that are available to permanent workers, and they’ll find you the most competitive mortgage based on your contractor status.
If you would like to discuss your mortgage plans call 01489 555 080 and reference Orange Genie or request a call back here: Request Call Back
Your property may be repossessed if you do not keep up repayments on your mortgage.