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Mortgage help guide – 8 Steps toward success when buying your home

Mortgage help guide – 8 Steps toward success when buying your home.

Getting the right help and guidance can save you a lot of money. Follow our 8 simple steps toward success when buying your home. Homepage’s mortgage help guide can help you apply for your mortgage and guide you on your way.

Buying a home is expensive. For most buyers a mortgage or other financial assistance is the only way they will be able to purchase a property.

Getting the right advice and assistance can save you a lot of money. Mortgages on average are long term loans over 25 – 30 years, which accumulate tens of thousands in interest payments for individual home owners alone.

Get help from an adviser

What is a mortgage?

  • A loan taken out to buy property or land
  • Most run for 25 years but the term can be shorter or longer
  • The loan is ‘secured’ against the value of your home until it’s paid off

Following a few simple steps to gather additional information before agreeing to a mortgage or finance offer could save you thousands, and lots of heartache.

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Simple mortgage steps

We have broken down the process of getting a mortgage into 8 easy to follow and simple steps the homepage mortgage help guide. Everyone should have access to information that helps them easily understand how to get a mortgage. So here is our homepage mortgage help guide to simplify the mortgage process and put you on the right path to buying your home.

Mortgage help guide: Step 1 Budget

What can you afford to spend and how much have you saved or can raise as a deposit?

Go through your monthly income and take note of all payments you receive. Then take note of any bills, expenses and payments you make on a regular basis. Knowing these figures will give you an idea of how much cash you have available for the running costs of your home and mortgage repayments going forward.

Try this easy to use mortgage affordability calculator to help you work out your budget. These calculations will be important later when you speak to a broker or adviser.

Mortgage help guide: Step 2 Improve your credit score

Applying for any form of loan or finance will require the provider to carry out checks on your credit score or rating.

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The higher your credit score the more likely you are to be approved for a loan or mortgage. You won’t be able to see the score or rating the potential lenders give you. To get a head start however you can check how your credit score looks with other providers before applying for a mortgage and work to improve it. There are some great free tools to check your relative score.

Or you can pay for a full personalised credit report from Experian or Equifax which will provide details on what is affecting your score positively and negatively and give advice on how to improve it.

Maintaining a good credit score over a longer period demonstrates your ability to manage your debts responsibly. This enables lenders to validate you as a credible customer.

Mortgage help guide: Step 3 Research

Get to know the key words and phrases that are used when talking about mortgages or finance.

Having a knowledge of the language used will help you keep track of what an adviser is saying when you make an enquiry.

Brokers or financial institutions will use phrases like APR, APRC, fixed rate, variable rate, interest only, capital repayment, early repayment, base rate, per annum, LTV, discounted mortgage, tracker, offset, guarantor etc. These phrases aren’t in our everyday vocabulary and it can all get very confusing.

Having a sound understanding of the language used in the mortgage industry will allow you to have clear conversations with an adviser or provider about what you are looking for. It will also help you explain to your partner or family member etc. if you are applying together.

Mortgage help guide: Step 4 Speak to Providers

Time to contact lenders, a broker and your personal bank to discuss the possibility of getting a mortgage.

Getting a range of quotes is the best way to ensure that you are getting the best possible deal. When you contact any of these party’s they will request personal details and financial information from you. This is where the information from steps 1 – 3 will help speed up the process.

You will discuss

  • What type of mortgage you want
  • What type of property you want to buy
  • How much you want to borrow and for how long
  • The type of interest and rate that you want to borrow at

Each party will discuss the potential mortgages available to you and the pros and cons of each. You don’t need to rush into any decisions.

Review the information they give you and request clarity on anything you are unsure about. It is important to think about what suits your financial position now, but also over the next number of years.

Mortgage help guide: Step 5 Find the home you are interested in

Decide where you want to purchase and what is available within your budget.

Choosing the right house is itself a process.

Research the market in your chosen area. Find a few homes you are interested in and view them. Consider the pros and cons of each house and settle on a favourite. View your favourites a couple of times to make sure you don’t miss anything.

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This helpful guide by Propertypal, Where should I buy a house in Northern Ireland  will help you decide on the right home.

You can continue with the mortgage process when you are confident you know your budget and have a good idea of the home you to purchase.

Mortgage help guide: Step 6 Get an agreement in Principle

If you are happy with one of the mortgage deals offered to you and it is affordable, then request an agreement in principle.

Having the finance agreed in principle is a great bargaining tool if you hope to make a successful offer on a home.

Before you make an offer to the seller, request a decision in principle on the mortgage from the provider or broker. They will apply to the lender you have chosen that best suits your needs based on the information you have provided. If you meet the lenders criteria, they will issue an agreement in principle. This is a non-binding offer which states that based on the information you have provided and subject to further checks they would be in a position to loan you the money to complete a purchase.

Once you have received an agreement in principle you can confidently make an offer to purchase a home.

Mortgage help guide: Step 7 Get offer accepted

Speak to the agent marketing your favoured property and make an offer if you want to progress things.

When making an offer there may be some negotiation required. There may also be a time delay to receive a response from the seller. It is important that you inform the selling agent that you have a mortgage agreement in principle. This helps them understand your buying position.

Once the offer is accepted it will most likely be subject to contract, which will follow on after your mortgage approved offer.

Step 8 Mortgage Approved

Once you have a purchase agreed, go back to your mortgage broker, lender or adviser and let them know to continue with the mortgage application.

As you already have an agreement in principle there should be very few barriers to receiving a mortgage offer. The lender will request a valuation to be carried out on the property.  This ensures that the Loan to value of the mortgage is within their lending terms.

The valuation will be carried out by a qualified valuer. In most cases you will have to pay for this upfront in order to progress. The valuer will arrange with the selling agent when this will take place. So you don’t have to worry about being available to attend. If the lender is satisfied with the valuation report and your application meets their criteria they will make you a mortgage offer.

When you receive an offer you are in a position to continue with the purchase and progress towards exchange of contracts and completion. A mortgage offer tends to last for 6 months, which is normally enough time to exchange contracts and complete the sale. If you need additional time you can request an extension to the offer.

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Important to remember

Mortgages are big financial commitments and your home will be secured against the borrowing. So it is important to remember that the lender could repossess your home if you do not keep up with repayments.

Long term financial planning and safeguarding yourself against the risks of getting in trouble with your debt repayments. It is always advisable to take professional financial advice before taking on any debt or loan.

Dont forget this information is available anytime so come back again and read our simple mortgage help guide if you are ever in doubt.

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