If you are looking to purchase a new home or just to re-mortgage it is important that you give yourself the best possible chance.
If it is your first home you will need a deposit and this can be one of the most difficult things to do, but in the long run it will save you money, your mortgage will be smaller and your repayments will be lower. It also shows the bank that you want to purchase a property and are prepared for the long term. Saving money will be a good way of learning to live before you need to pay a mortgage with a reduced income.
The minimum that you will need is 5 percent of the value of the home that you are looking at as a deposit, this might seem a large but when you consider the money that the lender is preparing to invest in that property it is really a tiny portion. The more deposit that you have the lower the repayments will be and the amount of interest over the whole term that you will be paying will be considerably less.
You must be aware of your credit statistics before you start the mortgage process. You need to know that what you are doing is not going to be hampered by an error on your credit file. It can take a month to sort out your credit report, but it is worth doing before you apply. You can also work on improving your credit rating, paying off any loans or credit cards before you start the application will improve the interest rate that you will be offered.
When you are filling in your mortgage application make sure that you give accurate information and that you declare everything. A mortgage can be rejected if you forget to mention a personal loan which shows up on a bank statement. It can be seen as if you are trying to hide the payments. Be honest and upfront about things and this will make the process smoother, the mortgage lender needs to follow strict guidelines and they need to know that you can afford the loan. For example, Halifax is a mortgage lender in the UK. They will require you to disclose all the information.
If you are re-mortgaging then you will need to consider that the lender might want to inspect the property to make sure that it worth the money that you are asking to be lent against it. Make this easier by having a home that looks in a good state of repair, is clean with all areas available for the mortgage assessor to have access too. The higher the value of the property the better the ratio will be for the value and the amount that you are requiring on the new mortgage, it can mean lower interest rates.
It is important that you have the deposit before you can move forward with any purchase and sometimes this can be difficult to pull together. If you can borrow money from parents for this deposit might make the move quicker. But, be warned, borrowing money from family can sometimes lead to bad feelings and awkward atmospheres so make sure that all parties are happy and have agreed to the repayment of this money in a timely fashion.
These five simple steps might make all the difference when looking for a mortgage. It is important to make sure that these are in place before you start looking, it might take a few months or longer to get your financial situation into a great position, but you will then be able to take advantage of lower interest rates and monthly payments.