What to expect
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What to expect
As a first time buyer, once you have found the mortgage advisor you would like to guide you through the process of buying your first home and inform you of what to expect during the mortgage process, the next step is to arrange to meet with them. This could be via email, telephone, video-call or in person.
They will then complete a full assessment of your situation, including a review of your:
- Income: Usually three months’ payslips for employed applicants or three years income evidence if you are self-employed will be required.
- Deposit: This can be 5% in certain circumstances, however is usually a minimum of 10% of the property value. Lenders often offer lower interest rates and have more competitive mortgage deals available for clients with a bigger deposit and therefore a lower Loan to Value. In order to get the lowest mortgage interest rates, it is best to save a deposit of 15% or more.
- Latest three months bank statements: Mortgage Lenders want to know that you are likely to be able to pay the monthly mortgage payments each month and want to see how you manage your finances and fund your lifestyle. This means payday loans and living in your overdraft are big no-no’s!
- Credit file: Your mortgage broker will discuss your credit file with you to check if there are any factors which may affect your mortgage application. If this is the case, then your broker can advise you of the best ways to change this. If there are significant issues with your credit rating then it may be that your broker may consider an application for a sub-prime or credit impaired mortgage.
What to expect next?
Once all of this is in place, your broker will then complete research to determine the maximum amount you can borrow to buy your first home given your specific circumstances. They will also discuss mortgage affordability, the type of interest rate and the most suitable term to make sure that the monthly payments for your mortgage and protection policies are affordable both now and in the future.
We understand that the key questions you want answered are…’how much will it cost me to buy my dream home, and what do I need to do to make this happen?’
Your broker will then search and compare mortgage rates to find the best deal that fits your needs. You will then receive a Mortgage Illustration detailing the selected mortgage loan and chosen deal.
A Mortgage Illustration can also be referred to as an ESIS which means a European Standardised Information Sheet. This important document shows you everything you need to know about the mortgage including the rate, monthly payment and Early Repayment Charges.
Protection for you and your mortgage.
It is also important to consider the costs of the policies you will need to have in place to protect your income, and ensure your mortgage payments would be paid in the event that you are unable to work due to sickness or critical illness. Your broker should also discuss this with you and provide quotes for the cover required.
Next up is the fun part. House hunting! Now that you know what you can afford to borrow and how much this will cost you each month, it is the perfect time to start viewing properties. Good luck!