Applying for a mortgage certainly isn’t an easy task, especially if you’re trying to manage everything yourself. The majority of homeowners will only ever have one mortgage in their lifetime, so it isn’t something that people get accustomed to. Furthermore, the mortgage market is constantly changing, so it’s understandable that many simply don’t know where to start.
Specialists at Expert Mortgage Advisor have put together this quick and easy guide to outline 4 things that you can do yourself, before applying for a mortgage.
1. Check your credit file
It may seem obvious, but checking your own credit file prior to applying for a mortgage is vital. We say this because it’s very common for credit reports to be incorrect or they may be showing credit issues which you didn’t know about. Applying for a mortgage will leave a small footprint on your credit file, so it’s important that you’re applying to the right lender.
Every lender is different and certain lenders may be better suited, especially if there’s credit issues involved. If you did apply to a generic lender and you did have credit issues, the chances are you’ll be declined. The fact that you’ve been declined will further damage your credit report, so it isn’t something you’d want to try and chance. Credit websites such as check my file are great, as they’ll give you access to all 4 major credit reports.
2. Speak to a mortgage broker
It goes without saying, but having a mortgage broker is paramount. If you truly want the best mortgage deal available in the market, then you’ll need a broker. Many borrowers will flock to their own banks to get a mortgage; however, this doesn’t make financial sense. This is because banks only display their own headline mortgage deals. Using a mortgage broker that is whole of market, ensures that every deal in the market is considered. Furthermore, one lender may not be suitable whereas another lender will happily approve.
Mortgage brokers apply for mortgages on a daily basis. Over the years, brokers build up their expertise and understand which lender to approach based on borrower criteria. Furthermore, brokers can assist you at every stage of the transaction, ensuring the process runs smoothly.
3. Get a decision in principle
A decision in principle is simply a document from your lender, outlining that a mortgage in principle. This isn’t a formal mortgage offer, however it’s a very important document. Estate agents will often ask you for this at the time of making an offer on a property. However, another advantage of having an agreement in principle, is that it gives you a budget to work towards.
Many homebuyers will begin their property search without knowing their actual budget. This is a waste of time and can result in potential buyers being left disheartened as they’re not able to purchase a property that they’ve viewed.
4. Begin your property search
Once you have all of the above, you should be in a great position to make offers on properties. You’ve got a prospective lender, you have a budget and a decision in principle and also a broker that can work as soon as you’ve found a property.
This is a perfect time to view houses, as if you did want to make an offer, you’d have all the necessary paperwork in place to move fast. Often enough, estate agents will request your broker’s details along with your decision in principle upon making an offer. Being able to present the requested information instantly can result in you appearing a credible and ready buyer, which can ward away other buyers who have also offered.