What’s involved in getting a mortgage?

Searching for a mortgage involves securing funds from a lender to purchase a home, a process nearly everyone must undergo. During this the lender will evaluate your financial situation, affordability, and credit score. Additionally, they will look at your deposit and where it is coming from.

Understanding the varying interest rates and terms of different mortgages, and comparing them, is important.

Paperwork and documentation

During the application process, you will need to provide documents validating your income, assets, and creditworthiness. Commonly required documents include:

• Proof of income
• Verification of employment
• Bank statements
• Credit report (although lenders may obtain this independently)
• Details of any debts
• Identification

Specific documentation requirements may vary depending on the lender and the type of mortgage you are looking to get.

Affordability

Lenders use mortgage affordability assessments to gauge the amount they’re willing to loan you. This is based on your financial situation, and includes your income, expenditures, and credit report. Key factors they assess include:

• Income
• Expenses
• Credit history
• Employment history
• Debt-to-income ratio

By considering these aspects and other details, work out how much you can afford and what your monthly repayments would be. They will also factor in your deposit into their decision. It’s important to note that these assessments can differ from lender to lender, so make sure you know what’s required before applying.

Deposits

Deposits are an important part of buying a home, and the required amount depends on the mortgage type and the lender’s criteria. For first-time buyers with a small deposit, lenders might propose a mortgage featuring a higher loan-to-value (LTV) ratio.

Alternatively, certain buyers may opt for a mortgage guarantor, an individual agreeing to cover your mortgage in case of you not being able to pay. Some may have family members willing to help with a gifted deposit.

Who can get a mortgage?

Anyone who meets the lender’s eligibility criteria and has the financial capacity for the monthly repayments are eligible for a mortgage. Various mortgage types cater to different needs, making it essential to select one that aligns with your specific requirements.

Adding another individual, like a spouse or partner, into the mortgage is also an option, but it’s crucial to think about the implications associated with joint ownership.

Seeking guidance from a mortgage adviser is highly advisable when starting on the home buying journey.

What mortgage type will suit you best?

Selecting the best mortgage for your situation depends on factors such as your financial situation and future goals. Below are some of the most common types:

• Fixed-rate mortgages
• Standard variable rate mortgages
• Tracker mortgages
• Interest-only mortgages
• Offset mortgages

Mortgages and credit scores

Credit scores have a significant influence on mortgage applications, as they’re one of the key factors a lender will consider during your application. Based on your credit history and financial standing, it directly impacts the interest rate you’ll be offered.

A good credit score enhances your likelihood of being approved for a mortgage with a lower interest rate. However, it’s possible to obtain a mortgage even with a poor credit score.

Applying for a mortgage

Getting a mortgage often means navigating a complex and lengthy process. However, using a mortgage broker can streamline the process. We will offer you tailored advice and help for your individual financial circumstances and goals.

Ultimately, whether you’re buying for the first time or not, working with someone who knows the ins and outs of the property market can be a massive asset in your home buying journey.

Ready to book your appointment?

Request a callback from our team online or simply call our office on 01634 968111.