Taking out a mortgage will be the biggest financial commitment that you will make, or one of them, at least. So when it comes to taking out a mortgage, naturally you will want to find the best deal that you can, and also choose a mortgage provider who is reputable. Of course, getting a mortgage isn’t always that straightforward, as it’s not always as easy to get accepted as you would think, especially when it’s your first mortgage. For this reason, before you apply for your first mortgage, here are some things that you should know. Take note of the below advice, and you can make the process of applying for a mortgage a little smoother.
Your credit score matters
When it comes to getting any kind of credit, from credit cards to a mortgage, your credit score matters. So if you want to ensure that you will be accepted for a mortgage, it’s vital to make sure that it’s in top shape. The problem with credit scores is that once you have a negative item on it, such as a default, it will stay on there for six years, impacting your ability to get credit for that entire period. To ensure that your credit score is ‘healthy’ enough to get a mortgage, open a Credit Experian or Clear Score account and check your credit score and find out about any positives or negatives listed on it.
Debts aren’t helpful
The fact is if you have any debts, whether they are bank overdrafts, loans, or credit cards, they may impact your ability to get a mortgage. So it could be worth paying them off before you apply for a mortgage - this will increase the likelihood that you are accepted.
Your job has an impact
Most lenders are keen to see that applicants have worked for the same employer for a long period of time, so if possible it’s best to apply for a mortgage when you have been in your role for a long period - ideally a year or more. If you want to increase your chances of mortgage application success, it pays to stay in the same job for a while, to show that you have a reliable income source and will be able to afford the repayments.
Get a quote
Before you choose which mortgage to take out, get a mortgage quote from each provider you are thinking of using. This will give you an idea of which lender is able to offer you the best option. Ideally, you want to pick the option that comes with the lowest rate of interest and can be paid off over the longest time period.
The bigger your deposit, the better
When it comes to deposits for mortgages, the bigger your deposit, the better. Although most mortgage providers only ask for a ten percent deposit, if you are able to offer a larger sum than this, this will work in your favor. You see, mortgage providers tend to favor applicants who are able to offer a larger deposit amount as this reduces the level of risk that they pose, and the lower risk an applicant is, the better.
There you have it, everything that first time buyers should know about taking out a mortgage.