If you applying for your first ever mortgage then you will be surprised at the amount of information you have to hand over and how much you are expected know off the bat. Rather than finding out about all of the nuances of first mortgages the hard way we have put together a list of our top tips to shortcut your first time mortgage application.
1. Know the Value of the House and How much you can Borrow
As surprising as it seems, many people start house hunting before checking out how much they can actually borrow and what they can afford. This is where using a mortgage calculator is extremely useful, rather than seeking out your dream home only to get rejected, use a calculator to work out what kind of mortgage you are likely to be offered. This way when it does come to the real application, you are actual able to borrow the amount you need and don’t end up wasting time by having to reapply.
2. Get all Paper Work in Order
Mortgage lenders will require a vast amount of information about your household incomings and outgoings so you need to have it all to hand. You will need income tax information form the last three to six months, any existing debts in the form of credit cards or overdrafts, cost of your bills and monthly food spend – pretty much everything. This helps them ensure you are able to pay back the mortgage and afford to live at the same time. This process is a lot more pain free if you have calculated everything and have all this information to hand before you apply. You will breeze through the process without having to stop every minute to think about how much you spend on petrol or food.
3. Be Honest
This is extremely important, be honest with the mortgage provider and yourself. There is a massive temptation to under guess what your expenses actually are, hide debts or say you earn more than you really do. The lender is not there to judge you personally, the questions are there as guidelines to help them give you something you can actually afford. Tweak the numbers to make it look like you have more free cash than you actually do will only hurt you later down the line when you have a monthly mortgage bill that you can no longer pay.
4. Look for Insurance
The vast majority of mortgages will require some kind of guarantee that your debt will be paid in the event of your demise and insurance that will cover the mortgage is required. Rather than winding up in a situation where you impulse buy an insurance solution at the mortgage desk, find a decent insurance package beforehand. Shop around and look for a good deal, often expert insurance brokers can help you out with this. This way you have both a happy lender but also an insurance package that you can afford and suits you.