They say that moving house is one of the top ten most stressful things you can do in your lifetime, and when you consider everything that has to happen before you can even consider packing your first box, it’s little wonder! From dealing with estate agents and solicitors to hiring a reputable removals company, the list of things to do is seemingly endless...and it all starts with the mortgage application.
A mortgage will usually be the biggest debt people have in their lifetime, so getting the best deal and making sure it’s affordable are both key considerations. Changes to the mortgage process in April this year means that lenders have to conduct full affordability checks on applicants before giving them the go-ahead. This sensible move is to prevent a repeat of the reckless lending and borrowing mortgage crisis a few years back, but has made the application process and acceptance criteria both complicated and tough, with more people than ever being rejected under the new rules.
Submitting the correct paperwork to the lender of your choice can often make the difference between success and failure, but if you’re new to the country or have never been through the process before, knowing how to complete the complicated forms and provide the correct information can be overwhelming. Using a legal service such as Vanner Perez Notaries can really help to simplify this process. Knowing you’re in the safe hands of a legal professional can put your mind at ease and significantly reduce stress levels during an already difficult time.
Prior to applying for a mortgage it’s vitally important you get your finances in order. Be realistic about your affordability and conduct an income and expenditure review, taking every aspect of your personal and professional lives into account. This includes putting aside money for clothing, haircuts and leisure activities - all essential outgoings that you may otherwise have forgotten about.
Don’t be lured into relying on income you haven’t earned yet. Profit or performance related bonuses should be discounted unless they’re guaranteed, and ‘probable’ pay rises should be taken with a huge pinch of salt. Your home could be at risk of repossession if you’re unable to keep up with payments, so base your affordability on the worst case scenario at all times.
Long gone are the days of 100% mortgages and the single biggest factor when it comes to the mortgage rate you can get is the size of your deposit; the bigger your deposit, the lower your mortgage rate is likely to be.
Whilst it’s possible to buy a home with only 5% deposit, the ideal deposit amount to lay down is around 25% of the value of the property you intend to buy. However, to bag the best deals you’ll need to have around 40%.
Use a broker who offers advice
Mortgage brokers who offer advice are regulated by the Financial Conduct Authority (FCA) and are closely monitored to ensure they provide customers with correct information and treat you fairly.
Brokers will help you compare the overall cost of a mortgage and may have access to exclusive deals and offers you wouldn’t be entitled to otherwise. In addition, you can rest assured they’ll only offer you mortgages that are right for your personal and financial circumstances.