How to Get a First Time Mortgage

 
Categories: Buying Property Guest Post Information

If you are entering into the property market for the first time, then naturally you may find yourself somewhat bombarded with information and the discomforting situation of having to hand over a great deal of personal information every time  you speak to someone new. Today, we are going to go through the process of getting a first time mortgage.

1.)   Get your pay slips and accounts in order

In order to get a mortgage, you will need to have a stable job that pays you regularly and this will have to be proven in the form of three months worth of pay slips. Most mortgage lenders will lend four times the amount you earn annually, with some lenders including any commission and bonuses that you receive as part of your income, and others rejecting this completely. If you are a freelance, then you will need to take your end of year accounts to show your earnings.  Banks will also ask to see bank statements as a further proof of your income and to protect themselves against any fraudulent applications.  Clear any existing debts on loans, credit cards and overdrafts if you can as these will affect your credit rating and application.

2.)   Use a mortgage calculator

Borrowing “as much as you can” is a common mistake for first time buyers, who underestimate how manageable a mortgage can be. For this reason, it is better to use a mortgage calculator and figure out what level of monthly repayments you can afford and calculate the level of mortgage you want.

3.)   Be prepared to wait

Mortgage applications take a while, mainly because the good mortgage companies have long waiting lists of mortgage applications to process.  A mortgage application can take up to three months to process, be approved and then granted.

4.)   Use a broker

First time buyers can get swept away in the mortgage process, often being advisor-led which makes them vulnerable to bad advice. If you are applying for a mortgage for the first time, it may be better for you to see a broker, either an independent one which you can find online, or one inside an Estate Agent’s office.  A broker will give you an overview of the entire marketplace and take your personal circumstances into account before making a recommendation, whereas an in-house advisor will  only be able to recommend the mortgages offered by the company they work for, meaning that you could end up with a mortgage that is unsuitable.

5.)   Familiarize yourself with the terms

Before you start applying for a mortgage, it is important that you know what you are looking for and what you are agreeing to. Many mortgages will carry a fine or other form of charge (sometimes up to £5000) to move or change mortgage and many will charge you for various parts of the process such as land registry checks, and legal fees, and all of these charges can either add to your mortgage or deduct from your savings. A quick read up on types of mortgage and the differences between them will serve you well later on.

 

Ben

Ben writes about finance and is a specialist when it comes to Guernsey mortgages. He often guest posts about hints and tips to help people get on the property market.

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