If you’re thinking about buying your first home you’ll probably also be looking into how to get a mortgage. A mortgage is a big financial commitment and all options should be considered in order to make sure you choose the right product for you. We’ve put together the most important steps to getting a mortgage, to help you to secure your new home.
1. Get a credit score check
There’s lots of things that mortgage lenders take into consideration when deciding whether you are eligible for a mortgage and how much they can lend to you. Your credit score is very important as it’s the first thing lenders will look at to give an indication of how you’ve handled money in the past. Check and improve your credit score to find out your situation.
2. Look into the terms and types of mortgages
It’s important to look into all the different types of mortgages, as not one size fits all! Fixed-rate mortgages will guarantee you a set rate of interest for a fixed period, while tracker and standard variable rate mortgages are usually linked to the Bank of England’s base rate, so can change over time. Most mortgage loans taken out are fixed rate.
You also need to consider the mortgage term – this is the amount of years it’ll take to repay the loan. A longer mortgage term will mean lower monthly repayments, but over a longer period of time. Most lenders offer longer terms to help spread the cost over 30 to 40 years, depending on the age of the borrower.
3. Work out how much you could afford and borrow
You really need to take the time to look at all your outgoings alongside the level of monthly repayments you might be comfortable paying towards your mortgage. A mortgage calculator is a great tool to check how much you could borrow, based on the size of your house deposit and your income. You can also use an affordability calculator to calculate your estimated monthly mortgage repayments.
4. Get in touch with a mortgage broker or advisor
It’s helpful to use a mortgage broker or advisor when applying for a mortgage. You are able to apply for a mortgage directly with a lender, but mortgage brokers are qualified to give independent advice for the best deal in your circumstances. They can look at a range of mortgage products and assist you through the full mortgage application process, and many do not charge a fee for their advice.
5. Apply for a mortgage Agreement In Principle
You can apply for a mortgage in principle on your own or with another person; this isn’t a full mortgage offer but it’s really helpful when looking at buying a home, as it’s a good indicator of how much a lender would loan you. Once you’ve completed the application, you’ll be given the results of how much you could borrow with a mortgage. You’ll have all this paperwork ready for when you make a full mortgage application. You’re not committing to anything by applying and your credit rating won’t be affected.
We hope these steps in getting a mortgage are helpful and that you’re able to find the best advice and deal to suit your needs. If you’re looking for a property, check out our properties for sale here at Townsends.