Getting a Mortgage
At first it might feel like a mountain to climb when you start thinking of getting a mortgage, but with the right mortgage advice and support it could be easier than you think.
How much can I borrow? What will I have to pay each month? Can my mortgage payments go up? What happens if I become sick or have to have a length of time off work? All these questions can preoccupy your mind.
It is generally accepted that the best mortgage’s available are for those buyers who are able to provide at least 15% of the property value for their deposit, with the remainder coming from the lender.
The mortgage market is ever changing and you should get the rates and deals of today, but as a guide and providing you have borrowed 85% you should add 1.75% on the Bank of England base rate. This will give you an estimate of the mortgage rate.
Getting a mortgage
- Get an idea of what’s available. Check the internet out on major lenders.
- Speak to a prospective estate agent.
- If you have a good relationship with someone at your bank then go and have a chat and get their advice.
- Seek out online advice from a mortgage broker who might be able to put you in contact with lenders for advice.
- Check out the Home Builders Federation who will be able to put you in contact with home builders and developers
- Closer to home seek advice from parents, friends and employers, the latter might have a scheme running.
You can always check with the Housing Association or council who might run schemes for first time buyers.
Mortgage lender assessment
Mortgage lenders will use a number of assessment criteria and the two main ones will be your income and expenditure and your credit history. Your credit standing is important so before you go to a lender make sure you have checked your credit report using one of the credit agencies like Experian who will be able for a small fee to give you access to your credit file, and there’s loads of advice on this site about your credit, so that’s a good starting point.
Even if your credit report is poor you might be able to apply for a Sub Prime Mortgage this usually comes with a higher rate of interest from the lender. But the best place to start is cleaning your credit report, sometimes there is misinformation on there and the credit agency will help you get this rectified.
Questions you need to ask yourself
- Will my lifestyle change when I have a mortgage to pay?
- What would happen if I lost my job?
- If I become sick or have to leave my job because of serious illness how will I make my mortgage payments?
- The BIG one: what if interest rates go up? How much could they rise before I cannot afford my mortgage?