I'm breaking this down into three parts because otherwise this could get really confusing.
1. Your affordability
2. What you want to buy
3. Your deposit
4. Finding a good advisor/broker
Anyone who'd like to add anything to this please leave a comment down below!
1. Your affordability
This consists of a mortgage advisor/broker looking through you bank statements from at least the past three months. What they look for at this point is that you have a steady income and that you're reliable at paying your bills/debts.
Ideally, you won't have any debts you can't afford to pay off before getting a mortgage.
You need to be able to prove you will be able to pay your mortgage easily each month - making the lenders feel safer giving you a huge amount of money for a property. They only give out what they know they'll be able to get back.
2. What you want to buy.
Or rather, what you can afford to buy. By taking into consideration what you can afford, you can then see what kind of amount you can borrow and then fit that into what you intend to buy. If, for instance, you want a three bed house, but at the moment you can only afford a bedsit, it's time to get back to saving/ cutting down on your bills.
If you have a low income, but have a lot of money saved up for a deposit they tend to slacken down on the affordability factor. And you can scale down your repayments over a longer period of time to suit what you can pay out each month.
At the moment the best interest rates are given to those with a 40% deposit. (We put 45% down so we got a super deal and our repayments are less than £300 a month).
4. Finding a good broker/advisor
We have had meetings with six mortgage advisors. Meeting with different firms with different price points means you get a good idea of what you can ACTUALLY borrow rather than what debt a company (ahem, the bank) wants to sell to you. There are mortgage advisors in most Estate Agents nowadays and most of them offer an initial appointment for free so make use of what they're giving out! Independent brokers generally get paid by the lender when their clients apply for mortgages so are free to their clients, however we came across a couple of them that also charge for their services alongside getting paid by the lenders too (cheeky!). The general price we found them to be was £250-£500+. On top of all the moving costs and general legal fees, this extra cost shouldn't be considered vital!
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