If you are applying for a mortgage for the first time, then the first thing you will note is just how much information you are required to hand over, and how much information you are expected to know off the bat. Rather than find all of this out the long way, we have decided to shortcut your journey by giving you some of our top tips for first time mortgage applications.
1.) Know the Value of the House and How Much you Can Borrow
Shocking as it may seem, many people start house hunting and checking out rooms before they even know what they are able to afford. Rather than seek out a home only to get rejected at the application, use a mortgage calculator to work out what kind of mortgage you are likely to be lent, so that when it does come to your application, you are actually able to borrow what you need. No use applying for a mortgage that you know will get rejected before you even start!
2.) Get your Paperwork in Order
Mortgage lenders will want to know your household incomings and outgoings. That means information about your income for the last three to six months, the cost of your bills, any existing debts in the form of credit cards or overdrafts how much you spend per week or month on food: everything. This is to make sure that you will be able to pay back what you owe, and survive at the same time. In order to make the process as painless as possible, have all of this information ready to hand, and calculate everything before you apply, so that you can breeze through the process without having to stop every three minutes to have a good long think about how much you spend on petrol and how much you spend on food.
3.) Be Honest
Although there is a massive temptation to under guess what your expenses are, hide debts or say that you earn more than you do: don’t! These questions are there as guidelines and the bank is not there to judge you personally, but rather to give you something that you can afford, which will be better for you in the long run. As tempting as it is to fudge the numbers to make it look like you have more free cash than you really do, this will only hurt you later on down the line when you have a monthly mortgage bill that you can no longer pay.
4.) Search for Insurance
Most mortgages will require some kind of guarantee that your debt will be paid in the event of your demise, and insurance of some form that will cover the mortgage will be required. Rather than being placed in a situation where you impulse buy an insurance solution at the mortgage lenders desk, find a good insurance package beforehand, so that not only do you have a happy lender on your hands, but you also have an insurance package that suits you and that you can afford.
Ben is a property expert who writes for www.livingroom.gg. He loves to give property and mortgage advice online.