Freaking out about getting a mortgage? Relax, it’s not as hard as you might think, check out how to set yourself up for success.
One question we hear a lot from first time buyers is would it be hard for me to get a mortgage? Now, while there can be a lot of reasons that do make financing a purchase harder, being a first time buyer in the UK in itself does not have to be an obstacle. If you are buying a house for the first time and currently in the market for a mortgage, there are some ways you can set yourself up for success.
Read on to discover tips and strategic advice on how to secure the best mortgage deal to finance your first home.
What Is A Mortgage?
A mortgage is a loan from a bank to finance the purchase of a residential property. It comes with interest which is paid back in monthly installments and set over a certain amount of years. You can choose to overpay your mortgage every month to clear the debt sooner. Alternatively, you can pay off the entire loan along with any early repayment fees. Every mortgage lender has different requirements and terms on which they lend. Hence, having an experienced mortgage broker to help navigate the market and find you the best deal is recommended.
What Do You Need To Get A Mortgage?
A lender will require a number of things to assess you for a mortgage, the following are pretty standard across the board;
Proof Of Income
This can be a payslip from your employer or if you are self-employed you will need to provide proof of income for up to the last two years. This is to reassure the lender you have consistent income and will be able to keep up with the repayments.
Credit History
The lender will want to make sure you have a healthy credit history, they are doing so to assess your credit score. The stronger your credit history the better in terms of how much they will lend.
Bank Statements
You will need to provide a history of your bank statements, this can be up to six months or beyond depending on the lender. They will be looking at monthly outgoings to ensure you can keep up with the loan.
Address and ID
Standard proof of address and ID will be required across all lenders, this can be a bill or council tax payment along with a copy of your passport.
Evidence Of Deposit
The larger your deposit, the smaller your mortgage. Many deposits are in the 10-15% range. However, if you have a larger deposit this is great and means you will have lower repayments and a shorter repayment term.
How Can First Time Buyers Strengthen Their Application?
The mortgage process can be a little overwhelming and many first-time buyers feel intimidated by their confusion. The good news is, it is not as scary as it seems. Many who are buying a house for the first time secure great deals to buy their dream homes. After all, we all have to start somewhere. Here are some ways that you can strengthen your application;
Improve Your Credit Score
Before approaching lenders, see if there are any ways you can improve your credit score. This includes your history of loans, other debts and overdrafts. Make sure they are all up to date and if there are any you can close or pay off before starting the application. While having a poor credit history does not make it impossible to get a mortgage, it can make it harder.
Embrace Healthy Spending Habits
Lenders will be looking into bank statements to assess spending habits. Splurging on clothes, dinners and holidays a bit too much? Clear this up. Cut back where you can and try to build a healthy six month history of bank statements. This will help you get ready for the future repayments and a sustainable lifestyle as a mortgagee.
Raise A Strong Deposit
The higher your deposit, the lower your loan to value so getting this as high as possible makes sense. Putting every spare bit of cash into your deposit will help you save in the long run. Do you really need that takeaway or extra coffee a day? Every little helps.
Speak To A Mortgage Broker
A good mortgage broker can be a lifeline for first-time buyers to navigate the mortgage world and find them the best product. Not only can they talk you through everything you will need, they have access to a wide range of deals. Furthermore, they can connect you with the lenders that are most likely to lend to you. Speaking to an experienced and friendly broker like the team at Keevilia mortgage can calm your nerves and get you ready to ship, shape and shine to secure your loan.
So, In A Nutshell…
First-time buyers can naturally be nervous about approaching mortgage lenders, however there is no need to be. With a little preparation you have a high chance of securing a loan. There are things you can do to get prepared. Clearing up your credit history, improving your spending habits and putting a bit extra every month towards raising your deposit will set you up for success. And speaking to a mortgage broker can be a game changer – they can help you navigate the process and get you the best lender.
As for your legal fees? We provide a much loved service for first-time buyers with a fixed conveyancing fee. You get a dedicated solicitor and speedy completion. All buyers have access to a private property portal to track updates. We remain by your side from start to finish to answer any questions and work with all third parties to keep the transaction smooth and easy.
If you have any questions, speak to one of our awesome teams today.
We are always a call away to support you on your residential property journey.
