Buying a home is one of the biggest investments you will ever make, as a result it is important that you are realistic about what you can afford over the long term.
The things that matter to a mortgage company include:
- How much money you have put by for a deposit and where it has come from. The best type of deposit comes from your own savings, but some mortgage lenders will allow members of your family to help you out as well.
- Most lenders will look for a deposit of at least 10%. A few may offer mortgages with a 5% deposit, but it is important to remember, the more money you have as a deposit the better the lending rate will be.
- How much you earn and how stable your job is will also matter. Typically, you will need to provide at least three months of salary slips to show your earnings.
- Different rules apply for the self-employed and you will be advised of what lenders need by your financial advisor.
- Your age is an important factor as the average mortgage is for 25 years. If you are over the age of 50 you will find there are fewer lenders who will accommodate a mortgage, but it is not impossible and a good financial advisor will be able to search the best opportunities for you.
- Finally, although a good credit rating is best, it is not impossible to find mortgages for those who have had problems in the past.
All the above are general guidelines and the rules and criteria differ across the many lenders in the mortgage market. If you are likely to fall into a category where getting a mortgage might be more challenging, then a financial advisor who can search across the entire market might be a better option than one who is limited to the products sold by an individual bank or company.
There are additional costs to think about as well which can include:
- Your solicitor’s fees
- Land registry fees
- Moving costs
- Any fees associated with your mortgage application, such as those to the mortgage advisor
- Survey costs
- Buildings and contents insurance
When you apply for a mortgage you will need to give the lender a great deal of information:
- Your full name – including any middle names.
- Proof of ID, showing you are who you say you are.
- Three years of address history if you have moved around a lot, for instance if you have been renting.
- Your salary slips or business accounts.
Once the mortgage application has been made the lender will arrange for a surveyor to go and view the property. The type of survey will depend on what you have paid for and what the lender requires. You will pay for the survey at the time you make the mortgage application. You will be given a copy of the survey report at the same time as the mortgage lender.