3 Important things to consider before applying for a mortgage
Whether you’re wanting to take your first step onto the property ladder or jump up a rung or two, it’s important to look carefully at your finances months in advance, if possible. A mortgage is a huge financial commitment and is certainly something you shouldn’t take on lightly, which is why you should consider the following.
Not all mortgages are created equal
1. Consider your savings
You’ll need a deposit of at least 5% of the purchase price of the property that you want to buy, so now is the time to look at how much you’ve saved so far and see if there are ways you can maximise your savings over the coming months. If you’re a first-time buyer and you don’t have a Help to Buy ISA, make getting one a priority, as the government will boost your savings by 25% (up to a maximum of £3,000).
2. Never forget your sums
It’s easy to get carried away, especially when you see a property that ticks all of your boxes, but it’s very important that you’re realistic about what you can afford, not just now, but in the long term. Your heart might be saying yes, but your head needs to say yes too. If you’ve already found a property you want to buy, you’ll want to work out how much you’ll need to borrow to purchase it, and how much you’ll be required to pay in fees and charges. Once you have this figure, you can use our mortgage calculator to find out how much you’ll have to pay each month (depending on the mortgage deal you choose). Even if you haven’t found a property yet, you can still use the mortgage calculator to help you determine what price range you should be looking at.
3. Remember to be open and honest
You can’t bend the truth when it comes to applying for a mortgage. When you make an application, your mortgage provider will go through your finances with a fine-tooth comb, looking in detail at your credit history, bank statements and wage slips. They’ll look at your income and outgoings, what you spend your money on and how you’re paying off any debts you currently have.