A mortgage is a loan that is granted for the purposes of buying a house. The loan will be secured on the house which means that if you were to fall behind with the repayments. Then the home could be repossessed by the lender. Taking on a mortgage is a huge commitment and there are several things that you need to be aware of before you make an application. Read More >>
Things To Be Aware Of Before Applying For A Mortgage
Lenders now have strict criteria for granting a mortgage. So it may be harder for you to get a mortgage than it would have been previously. Lenders will want to take a detailed look at your income and expenditure. They are likely to ask a lot of questions about your financial situation.
You are likely to need a deposit that you can put down. Lenders can require that this is as much as 20% of the value of the home. Therefore it is a good idea to start saving for a while before you even begin to think of applying. Look for a high interest account that you can not get access to easily. This will give you the best chance of saving the money that you need.
What the lender requires
Lenders will look at your credit file as part of your application. So there are steps that you can take to make it more likely that you will be accepted. You do not want it to appear that you are over committed on credit. Having a lot of credit cards, loans and other debts can damage your application. If you do have credit cards then it is better if they are not close to the limit. If you are considering applying for a mortgage soon. Then you should do what you can to reduce the amount of debt that you already owe. This can be done by paying off a large part of your balance on existing credit accounts. Even closing some of these accounts altogether.
How To Apply For A Mortgage
If you are applying for a mortgage from your bank then you should make an appointment to see them in branch. This will give them the opportunity to go through all the information that they need. In order to process your application. It also gives you the chance to ask any questions that you may have. You may not get the whole of the application completed in this initial meeting. Hence a follow up may be required. If you are not borrowing from your own bank or another that has a nearby branch. This then this step can be completed over the phone.
It will be useful if you prepare a budget of your income and expenditure as this will be needed by the mortgage company. It is important not to leave anything out. So you should spend plenty of time on this budget to ensure that nothing gets forgotten. Your bank statements can be useful when completing your budget. You are going to need to provide the mortgage company with copies of these. They will also need to see proof of income. Such as wage slips and details of all other bills and payments that you make on a regular basis.
You will also need to provide the mortgage company with the details of the property you want to purchase. The mortgage company will send out a surveyor to the property to check that there are no structural problems with the building. Mortgage companies will be reluctant to lend money to purchase a property that is not structurally sound.
You will also need to employ the services of a conveyancing solicitor. Who will handle the purchase of a property for you. The mortgage company will send the funds to your solicitor. Who in turn will then send them onto the person that you are buying the house from. There are going to be fees that are payable to the solicitor and so this is something else to factor in when you start saving for a deposit.