What to expect when applying for a mortgage
What to Expect When Applying for a Mortgage
Buying your first home is at once a highly exciting and highly stressful experience. On the one hand, owning a house of your own will give you more space and more freedom than you will likely ever have experienced before. You now have your own real estate that you can decorate any way choose and you’ll never have to deal with estate agent fees again.But on the other hand, this is also very likely to be the most money you’ve ever spent and it’s a huge responsibility to take on. You’ll now be making regular repayments worth a huge amount of money and will likely be in debt for at least the next 30 years…And the other stressful bit is just getting the mortgage in the first place. It’s going to involve your finances being scrutinized and if you don’t get a ‘yes’ then your hopes and dreams go up in smoke. Worse still, no one seems willing to give you any advice as their hands are legally tied!
So here’s what you need to know and how you can give yourself the best chances of a positive outcome.
Considering Your Budget
When you first set out to get a mortgage, you should have a think about what your maximum budget is, both in terms of your deposit and in terms of the repayments. Think carefully about this, as when you first start looking at houses you’re going to need to know what your budget is – which means you need to know how much you can borrow!And of course you need to carefully consider how this will impact on your quality of life after you’ve got your loan. Don’t make the mistake of buying the most expensive house possible if it means you can never travel or have nice things!
Finding a Mortgage
Once you know what you’re looking for, you can then begin applying for your ‘mortgage in principle’. This is an agreement from a bank or mortgage broker that states they’ll be willing to offer you X amount of money based on your current income and a soft credit check (not as in-depth as a full credit search and doesn’t leave a mark on your credit score).You need to get this before you start house hunting, as many estate agents will be weary to show you properties until they see a mortgage in principle. The good news is that you can get carry these out online.
If You Get Rejected…
If you can’t find a bank willing to lend you the money, then try calling a mortgage broker. They will be able to help you find a mortgage by looking at some smaller lenders, or lenders that will be sympathetic to your specific situation. They may charge a fee, or the lender may pay for their services.
Applying for Your Mortgage
Once you have had an offer accepted on a house, the next step is to actually apply officially for your mortgage. To do this, you will need to speak with the mortgage advisor at the bank and will normally need to bring bank statements and payslips. They will carry out a full credit search and if that goes to plan, you’ll have your mortgage offer in the post in no time!