Buying a home can be one of the most exciting times in anyone’s life. New home, new location, new connections and the beginning of an exciting new chapter.
I appreciate that it can also be a daunting time for many too, as many people ask the same question ‘where do I start?’ When you’re looking to buy a home, it’s all about being prepared. Some of the questions that you may have:
How much can I borrow?
What will that look like in monthly payments?
What size of deposit will I need?
What documents will I need to apply for a mortgage?
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What kind of mortgage should I be applying for?
What if I am part way through my current mortgage deal?
What will I expect to pay in professional fees? These may range from solicitor fees, estate agency fees, home report surveys, LBTT (stamp duty), and any mortgage fees.
In my opinion, it’s important to seek independent financial advice when looking for a mortgage. An independent (whole of the market) mortgage broker has the ability to look across all lenders to ensure that you get the best mortgage deal to suit your needs. Going directly to your bank limits the range of products available to you, as banks will only arrange a mortgage deal based on their own products.
An Independent mortgage broker may also be able to access deals that are not available on the high street, or by going directly to your bank. Given that your mortgage is likely your biggest monthly outgoing, independent professional advice is definitely worth considering.
A good mortgage broker will take the time to understand your individual needs and be able to answer all of your questions in detail, meaning you are well informed prior to viewing, and potentially submitting an offer on any new property.
You will be asked to provide documentation to support your application. It’s very important that you have all personal correspondence registered to your current address, so as not to impact on your application. Documents include:
Passport;
Driving licence;
Last 3 pay slips and P60;
Last full 3 months bank statements;
Proof of deposit.
If you are self-employed, most lenders will require your last two years tax returns. There are a few lenders that would consider a mortgage application based on one year, but it’s important to note that this would only apply if you have only been self- employed for one year.
During the application process, lenders carry out a detailed assessment of your income and expenditure to ensure that the mortgage you are applying for is affordable. All lenders have different lending criteria, and this has the potential to impact a borrower greatly. This is dependent on various different factors such as occupation, credit commitments and other regular outgoings.
The amount that each lender will lend you can also vary widely, despite the fact that assessments are based on exactly the same information. This is where a good mortgage broker can make all the difference to you, as they will liaise with the various lenders on your behalf, meaning you have a much greater chance of placing your mortgage correctly the first time round.
As we approach Christmas it’s easy to get carried away with spending, but if you are looking to buy a home, try to keep to a sensible budget, and avoid taking on any extra credit commitments, as this could affect your ability to get the right mortgage.
Going into the new year I will cover off income and expenditure in more detail, looking at the importance of managing your monthly budget, avoiding taking on unnecessary credit, and protecting your credit score, to put you in the best possible position to buy a home.
Graeme Nichols is the Managing Director and mortgage specialist at West End Mortgages, an independent mortgage and insurance advice company, based in the West End of Glasgow, and working with clients across Glasgow, and throughout the rest of the UK.
Once a month he will share with Glasgow Live readers advice and tips on everything mortgages and the housing market. Here he explains more about his background and what readers can expect in the months ahead.
West End Mortgages are authorised and regulated by the Financial Conduct Authority. Your home may be repossessed if you do not keep up repayments on your mortgage.
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