Whether you live with your parents or want to get on the property ladder after renting for years, you have come to the right place. It might be your dream to invest in property and getting your first mortgage should be an exciting time, not a stressful time.
Securing your first mortgage might seem overwhelming, especially if you lack mortgage and financial knowledge. But don’t worry, this guide will cover everything you need to know about getting your first mortgage.
Let’s dive in.
Seek Support From Financial Experts
The first thing you should think to do when it comes to securing your first mortgage is speak to the financial experts. They will know exactly what your financial positon means for the future of your mortgage. They will provide you with the best steps to take so that you can secure your dream mortgage (or close to it). If you lack financial support, you might make mistakes and/or take a long time to secure your mortgage. They are a great investment if you want to attain a safe and healthy mortgage.
It is best to source a financial expert from your area or the one you wish to move to. For example, if you live in Borehamwood or wish to move to the area, you could search for financial advisers in Borehamwood to see a local list based on your area, which will be more convenient for you.
Have a Budget in Mind
When it comes to securing your first mortgage, you need to have a budget in mind. You will know, better than anyone, what you wish to pay monthly. Although a financial adviser can suggest what you can afford, you might have preferences and want to pay less to feel more comfortable to pay other bills.
Therefore, speak with your partner, friend, or yourself (whoever you are getting a mortgage and first home with) and finalize your budget. This will make life much easier when it comes to looking for a property and speaking with an adviser.
Choose the Type of Mortgage You Want
There are various types of mortgages, depending on where you live in the world.
You should choose what type of mortgage you wish to attain before you get going with the search. Certain properties might not accept certain types of mortgages, while others might only suggest one type of mortgage. For instance, some governments offer a help to buy scheme whereby they will lend you money and you pay a percentage. It is a more affordable option. Hence, only some property companies will allow a person to use this type of mortgage.
This is something you can discuss with mortgage and/or financial advisers. It can depend on your preference as well as how much you can afford to pay each month.
Credit Score Check
Everyone needs to have a specific credit score to secure a mortgage. If your credit score is poor, you might struggle to secure a mortgage. Some advisers might even turn you away from seeking advice as they know your credit score will not allow you to secure any type of mortgage.
Therefore, give your credit score a quick check before you begin your dream property search. If it is poor, you should do the right things to improve it, such as:
- Handling bill payments
- Paying off debt
- Cancelling direct debits
- Limit a new request for your credit limit
Go through the pre-approval process
The pre-approval process is scary and fun. It is the stage where a mortgage lender will assess everything from your finances to your mortgage type and pre-approve your deal.
When you have pre-approval in hand, you can continue with finding your dream property and be one step closer to finalizing your mortgage.
This stage will also give you an indication of what exactly you can afford and what you should expect to pay each month and for how long.
Choose a Lender
To loan money from a company, you need to ask for a deal and prove to the company you will be able to afford to pay them back.
Choosing a lender and securing a deal with them is essential if you do not have the money to cover the total cost of the property. Ensure to pick someone with a great reputation as you will be working with them often and closely, so you want someone you can trust and rely on. Any slow moves from them will delay your entire first mortgage process.