Steps for a First-Time Buyer to Get a Mortgage
Getting a mortgage as a first-time buyer can seem daunting, but with careful planning and preparation, it can be a manageable process. Here are the general steps to follow:
Assess Your Financial Situation:
- Calculate your income: Determine your annual income, including any additional sources like rental income or investments.
- Evaluate your expenses: List all your monthly expenses, such as rent, utilities, car costs and debt payments.
- Determine your savings: Assess how much you can afford to put down as a deposit. A larger deposit can often lead to lower interest rates.
Check Your Credit Score:
- Obtain a credit report: Request a credit report from each of the three major credit bureaus (Experian, Equifax, and TransUnion) to check your credit score. Checkmyfile will give you all three https://www.checkmyfile.partners/6Z5HMZH/2CTPL/ and you can get it for free.
- Improve your credit if necessary: If your credit score is lower than ideal, take steps to improve it, such as paying bills on time, reducing debt, and avoiding new credit.
Save for a Deposit:
- Set a savings goal: Determine how much you need to save for a deposit, considering the property prices in your desired area.
- Consider housing schemes: Research housing schemes that may offer assistance, like Shared Ownership, Deposit Unlock, First Home Scheme.
- Family Help: Could a family member gift you a deposit or a contribution towards it?
Choose a Mortgage Broker:
- Research mortgage brokers: Compare different mortgage brokers to find one that suits your needs and offers a range of mortgage products.
- Get advice: A mortgage broker can help you understand the different mortgage options available, assess your affordability, and find the best deal for your circumstances.
Find a Property:
- Set your budget: Determine your maximum budget based on your income, deposit, and potential mortgage repayments.
- Start searching: Look for properties that match your criteria, considering factors like location, size, and condition.
Apply for a Mortgage:
- Provide documentation: Gather the necessary documents, such as proof of income, identity, and address, to support your mortgage application.
- Undergo underwriting: The lender will assess your application and conduct underwriting to determine your eligibility for a mortgage. They will also carry out a very basic survey of the property to confirm the value. It’s advisable to organise a more in-depth survey for your own piece of mind.
- Mortgage Agreed: Receive your mortgage offer.
- Complete the Purchase:
- Exchange contracts: Sign the contracts to legally bind you to the purchase.
- Complete the sale: On the completion date, transfer the property ownership and move in!
Remember to seek professional advice from a mortgage broker or financial advisor throughout the process to ensure you make informed decisions.