What do you need to know when choosing and securing a first mortgage?
Getting a house is probably the biggest financial decision you’ll have to make in life, and not only because of the amount of money you’ll be putting towards a home – the process itself is long, arduous and often exhausting. It pays to be prepared for every outcome and possibility when investing in your dream abode, and while it’s absolutely necessary to pick the best property for you, it’s even more important to get the mortgage details right.
Here’s a quick guide to some of the things you have to remember, as well as other mortgage pointers you may overlook entirely.
First Step: Plenty Of Research
The first thing you must do is look at how much you can realistically afford to spend on your mortgage each month, especially taking into account any possible fluctuations and even situations where you may not get paid (such as the loss of a job); after all, you’re entering a very long-term agreement. Look first and foremost at take-home pay, credit card payments, utility bills and food. This is particularly important if, say, you plan on starting a family or getting a second car; even a simple loan may throw you off kilter.
From there, quickly use a mortgage comparison tool before going to see an adviser about a specific deal. It may be worth doing it thoroughly, but don’t get sucked in; nowadays, and markedly since the recession, you’ll find yourself getting the better deals directly from lenders themselves; not mortgage advisers, brokers or comparison websites. It’s particularly worth considering mortgage providers local to your area such as this one, because they can give you a greater insight into your chosen area.
Second step: Get A Thorough Financial Consultation
Mortgage advisers are indispensable in your search for a good deal, but they must be seen to be doing their job properly and providing you with the advice you need. As such, make sure they explain the service they are offering, confirming this role with an initial disclosure document. They need to confirm what your position is, too, in order to avoid putting you in an untenable position. This means asking you about income, debt and outgoings, as well as how these will evolve over time.
From here, mortgage advisers will tell you of the deals that are available to you, before telling you what they believe to be the most suitable. Overall repayment costs will also be discussed, and everything ought to be compiled handily in a key facts illustration document (referred to as a KFI). From here, you’ll be in a prime position to get a great deal.
Don’t Be Afraid To Demand More Answers
The whole process of getting a house needs to be very clear; if you don’t have clear reasons to invest in the property you desire, or there is anything that hasn’t been made clear to you, you need to tell your adviser or lender and have them to explain it all again to you in further detail.
If you don’t think you’ve been given a good quality of information, don’t be afraid to complain – especially if the organisation that’s being unhelpful refuses to aid you further. Remember that the Financial Ombudsman Service will always fight your case if you’ve got good reason to feel maligned.
While this is only a summary of the initial stages, you have to remember that a lot of your time will be taken up during the completion process. Don’t worry – so long as you have all the documentation, and there’s no chain-breaking at the other end from those you are buying off, securing a first mortgage should go without a hitch.