If you’re considering purchasing a home, you’ll need to know how to prepare for a mortgage application. For first-time buyers, purchasing a home is thrilling, but it can also be stressful. Put yourself in the best possible situation. Knowing how to effectively prepare yourself so that the application process goes well when the time comes can save you a lot of unnecessary worry. Here are some tips on preparing for your first mortgage.
Preparing For Your First Mortgage- Save Up A Nice Deposit
The larger your deposit, the better. If you are fortunate enough to live with your parents and are able to save a significant portion of your income, don’t hurry into purchasing a home.
Of course, there are numerous plans and mortgages that require only a 5% deposit. However, if you can save more, do so. I understand that, depending on where you live in the country, an extra 5% could be a significant sum. However, I would recommend aiming for a minimum of 10%, and more if possible.
Have Money Put Aside To Cover Costs
You may believe that after you’ve saved your deposit, you’re set to go, but remember that house-buying comes with a slew of other expenses, including:
Fee for a mortgage broker. You are not required to use a broker, but I would strongly advise it because of the time and stress they save you. The cost for our mortgage broker was £150.
Additional Mortgage Fees. Fees for arrangements, etc (usually these are added to your mortgage).
Lawyers’ Fees. The cost of a solicitor will vary based on a number of things, but it’s a good idea to set aside a few thousand dollars for these.
Land Transaction Tax/Stamp Duty. Depending on where you live in the country and how much the house you’re buying is worth (read more here).
Fees for surveyors.
Insurance is a must. Before a purchase can be completed, several mortgages demand that you have enough insurance in place.
Preparing For Your First Mortgage – Other Costs
Moving incurs a slew of additional expenses that most people overlook.
The cost of migrating. Getting a vehicle and/or movers.
Locksmiths are people who specialise in locks. If your locks are changed.
Cleaning materials Before you move in, the house will almost certainly require a full cleaning.
Costs for decorating.
The cost of furnishing.
Preparing For Your First Mortgage – A Good Credit Rating Helps
At the very least six months before you expect to apply for a mortgage, you should begin preparing yourself.
Time is your best friend if your credit is bad. But, in order to know how to improve, the first step is to figure out where you are now.
Don’t be fooled into paying for a monthly subscription if the top three credit reports are all free. I recommend registering with all three agencies and checking your report with each of them.
You must properly inspect each of them for any inaccuracies or missing information.
This is why it’s a good idea to start looking at your credit record before you apply for a mortgage. So you can make sure your report is as clean as possible and have time to address any errors. Ensure you are on the electoral roll, you pay off your debts timeously, and that you do not max out all your credit cards. It is good to have debt for a credit rating, but not too much.
Other Things To Consider
Don’t make any false statements on your application. You’ll have to prove your salary if you say it’s £x.
Double-check your application for accuracy and completeness. Before you submit anything, have it double-checked by someone else. You don’t want to risk being rejected because of a technicality.
Make sure you know where your money originated from. My mother deposited funds into my bank account, which was a huge stumbling block in our application. Cash transactions irritate solicitors and lenders. In reality, new legislation was implemented in April 2019 to prohibit you from depositing cash into someone else’s account. If it’s a gift, you’ll need a letter from the person who gave it to you acknowledging that it is a gift.
Don’t apply for a mortgage until you’ve seen a few houses; online calculators will give you an indication of your eligibility. However, the majority of mortgage offers expire.
