Top tips for getting a mortgage
Getting a mortgage is a big deal. There are a lot of companies out there shouting for your attention claiming to have the best rates and options. So where do you start? Here’s our quick tips to making the process run smoothly…
The numbers bit…
How much can you afford to pay each month?
This, amongst other things, will determine how much you can borrow. You can get a quick idea of options by chatting to Nuvo.
There are a few things that affect the monthly payment, some of these are pretty obvious, like how much you want to borrow. Another one to think about is what period you want to borrow the money over. The typical mortgage term is either 25 years or 35 years. The longer the term, the lower the monthly payment.
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The more you can put down as a deposit, the bigger the choice of mortgages that will be available to you. The loan to value or LTV basically means the amount you need to borrow as a percentage of the house value. So, if you buy a house for £200,000 and you put a deposit down of £50,000, that could mean you are borrowing £150,000. Therefore, your LTV would be 75%. A lower LTV can mean a better rate too and a lower monthly payment.
Don’t forget the stamp duty and fees
When working out what you can afford it’s easy to forget some of the other things you will need to shell out for when buying a house. If you are planning to buy a house over £125,000 in value, then you will have to pay stamp duty. How much depends on the value of the house:
In addition to stamp duty it’s likely you will have some fees to pay, for example legal fees, valuation fees etc. Some mortgage deals will cover these costs but not all. When working out which mortgage deal is best it’s important to take all costs into account and not just the initial rate. You can get a quick idea of options by talking to Nuvo.
The other bits…
- Whatever you do, don’t change — The longer you have been with an employer the better. Lenders expect a minimum period of employment, it helps if you have been with your current employer for between 3 and 6 months. Also, most lenders will not accept your application if you’re still on probation.
2. How’s that credit score looking? — This is really important when it comes to getting a mortgage as it will determine which deals and lenders you have access to. Most people don’t know what their credit rating is. It’s easy to find out yourself, or if you choose to deal with a broker they can help.
If your credit rating doesn’t look too hot, don’t panic. There are simple things you can do to give it a helping hand. For example, make sure you’re on the electoral role and close down any accounts you don’t use anymore — including credit cards, store cards etc
3. Once you’ve submitted your mortgage application don’t change it! — -Changing figures or information in your application can lead to delays in the process so it’s best to make sure you get all the information right from the off. It can also affect your application if you rack up additional debts after the application is submitted so might be best to hold off taking out that credit card!
4. It can pay to get help — If you’re struggling to find the best deal or work out your options, there is help available and it doesn’t have to cost you a penny. Some mortgage brokers charge you a fee and some will take a commission from the lender. Why pay a fee if you don’t have to?
Brokers have access to significantly more mortgage deals than you can access directly. In addition, they are qualified in mortgage advice, so they will make sure you get the best option for you. They will also manage the whole process through from start to finish, taking the hassle away from you. To find out more, say hello to Nuvo!
