Buying your very first home is always an exciting prospect. To get you started on your journey, we’ve come up with our top tips for taking out your first mortgage.
Taking out a mortgage is not a decision that should be taken lightly. Before starting your application, make sure you have weighed up the pros and cons of both a mortgage and renting.
A good credit score
The better your credit score, the more chance you have of obtaining the best mortgage you can. To improve your credit score, make sure you are on the electoral role and close any credit card accounts that you no longer use.
Stay in the same job
You are more likely to be offered a mortgage if you have been working the same job for an extended period. As a minimum, you should have been in the same job for 3-6 months. If you are considering changing jobs, try to stay until you receive your mortgage.
Pay off your debts
Having considerable debts will not help your application so try to pay them off as soon as you can. This will show you are able to manage your money responsibly.
Seek professional advice
It is important that you seek professional advice when choosing the right mortgage for you. Choose a mortgage lender who can offer you free personal advice with no obligation, such as Mortgage Solutions, allowing you to make an informed decision before committing.
Provide proof of income
You will be asked to provide proof of your income so will need to obtain a P60 form from your employer. This is a form provided annually by employers, providing a summary of your pay and tax deductions. You may also be asked to provide bank statements from the past 3 months.
Save, save, save
The more money you save for a deposit, the bigger range of mortgages you will be able to choose from, it’s as simple as that. You will be getting a better deal on your mortgage, with a lower interest rate and lower monthly payments.
Constantly changing your application will slow down the process, while making you look less reliable. Make sure you are happy with your application, and it is as accurate as it can be before you submit.
Where possible, it will benefit you to buy with another person. Having two incomes will allow you to build up a bigger deposit, but make sure you both have a good credit history. Sharing a mortgage is a big commitment, however, so only do so if it is absolutely the right decision for both of you.
Make sure you can afford the monthly payments
Start saving as soon as you can to ensure you will be able to keep up with the monthly payments, as you will need to prove to the lender than you can do so. Make sure to take into account the running costs of your new home, including bills, council tax and insurance.