Getting a mortgage agreed first time
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Getting a Mortgage agreed first time - Here are ways to help you do this.
Buying a house is one of the biggest and most challenging commitments any client can make financially. There are a number of challenges along they way and being prepared is the most important thing any client can do.
For First time buyers they have the challenge of saving for a deposit on top of paying rent and normal everyday bills. This can be so daunting that unless they have a hand from a family member or start preparing now they can easily give up and let time pass them by.
What can First Buyers, Home Movers and clients who want to remortgage do in advance to improve their situation?
- Check your credit score. The score in itself is not the most important thing as we have seen customers with a high score struggle to get a mortgage and we can get clients a low credit scores a mortgage! The most important thing is to understand what it all means! If you have credit commitments that you are paying late or not at all, you take the risk of being declined for a mortgage or not getting the most competitive deals. Try and keep all credit commitments paid and up to date.
- Low credit score. This can occur if you are not on the electoral roll or if you have high balances on credit cards and near your credit limit. This could unnerve a lender and reduce your chances of getting a mortgage.
- Make sure you have your paperwork together. Generally, a lender will want 3 months payslips and 3 months corresponding bank statements. You will need a copy of your ID and proof of address. Make sure everything matches up. The amount of times we have had a client whose bank statements go to a parent address or Driving Licence is in an address they lived at some time ago. Change it now and be prepared.
- Proof of Deposit. Where is your deposit coming from? If its savings a lender will want to see a build up of savings over a period of time. If it’s a family gift most lenders and solicitors will want a gift letter, bank statements showing the giftor has the deposit and ID to prove who they are. This is part of the money laundering process.
- Know what you can borrow. This is really important. You should speak to a mortgage broker and they should be able to confirm the lender and maximum you could borrow with your current circumstances. This is a free review with Prosper Home Loans and you should always check the costings before you make an appointment.
- Know how much everything is going to cost. At Prosper our qualified mortgage advisers will give you a break down on all the monies you will need to complete the purchase of your new home. This will include deposit, fees, stamp duty and conveyancing costs. You will also need to allow for removals.
- Get an Agreement in Principle. This should be the next step after you have decided which lender or mortgage broker to use. We do not charge for an agreement in principle, and this will give you the confidence to start the house buying
- Start looking for suitable properties. I would always recommend looking on Right Move to get an idea of the market. Please remember a lot of property can be over inflated and there is always movement to negotiate. We can give you some tips and advice regarding this. This will hopefully help you chose the right property at the right price.
- Using an Estate Agents Mortgage Broker. The choice is yours. Most brokers should have their client best interest. The issue could be that using an inhouse estate agents’ broker, are they working for you or the seller. We like to remain independent and by doing this we can work in our client’s best interest even if that disappoints some Estate agents.
Last piece of advice is not to panic! Getting a mortgage can take planning and the sooner you speak to one of our independent Mortgage Advisers the sooner you can start planning and owning your own home will become a reality.
A DREAM written down with a date becomes a goal. A GOAL broken down into steps becomes a PLAN. A plan backed by action becomes REALITY.
On a score of 1-10 I would score you a 10. 10 being great !!
Darren and Katie Hastings, East Sussex