10 Steps To Getting A Mortgage – Forbes Advisor UK – Forbes

June 23, 2022 By admin

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The Forbes Advisor editorial team is independent and objective. To help support our reporting work, and to continue our ability to provide this content for free to our readers, we receive payment from the companies that advertise on the Forbes Advisor site. This comes from two main sources.
First, we provide paid placements to advertisers to present their offers. The payments we receive for those placements affects how and where advertisers’ offers appear on the site. This site does not include all companies or products available within the market.
Second, we also include links to advertisers’ offers in some of our articles. These “affiliate links” may generate income for our site when you click on them. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impact any of the editorial content on Forbes Advisor.
While we work hard to provide accurate and up to date information that we think you will find relevant, Forbes Advisor does not and cannot guarantee that any information provided is complete and makes no representations or warranties in connection thereto, nor to the accuracy or applicability thereof.
The comparison service on our site is provided by Runpath Regulated Services Limited on a non-advised basis. Forbes Advisor has selected Runpath Regulated Services Limited to compare a wide range of loans in a way designed to be the most helpful to the widest variety of readers.
Updated: Nov 23, 2021, 2:09pm
The difference between being accepted or rejected for a mortgage can be nothing short of life-changing. Here’s a 10 step guide on how to give yourself the best chance of being shown the green light. 
Before you even think about applying for a mortgage you’ll need a deposit – this is the amount you put down as part of the purchase price of your home. The bigger your deposit, the cheaper the mortgage rates lenders will offer you.
Each mortgage deal comes with a maximum loan-to-value (LTV). This is the percentage of the property price you are borrowing as a mortgage. For example, if you have a 20% deposit, you’ll need to borrow 80% of the property price as a mortgage, so your LTV will be 80%.
When you apply for a mortgage, lenders carry out an affordability assessment to check you can afford the repayments. Part of this involves the lender looking at your bank statements to see what you spend your income on – and you can prepare for this well in advance.
Around six months ahead of your application, you should aim to cut down on unnecessary spending. Examples might be expensive holidays, gambling, entertainment, subscriptions you don’t use, and so on.
The mortgage lender will also check your credit history – so it’s good practice to check it first so there are no surprises, and you can rectify any mistakes. You can apply for a copy of your credit report from a credit reference agency, the main three being TransUnion, Experian and Equifax. 
Check each report to make sure it’s an accurate representation of the financial accounts you hold and your payment history. If you spot any errors, you can request they are rectified. 
Mortgage lenders usually lend up to four-and-a-half times the total annual income of you and any joint buyer. For example, if your total household income is £50,000 a year, you might be offered a mortgage up to £200,000.  
Some mortgage lenders offer larger amounts to people in certain professions or those with higher earnings. For example, Clydesdale Bank has a range of mortgages for ‘professionals’ such as architects, doctors, optometrists and pharmacists.
Other lenders have different rules if you earn over a certain threshold. Halifax, for example, will lend 4.5 times your income if you earn under £40,000, 4.75 times your income if you earn £40,000 to £50,000, 5 times your income if you earn £50,000 to £75,000, and 5.5 times your income if you earn more than £75,000.
Remember that, while you may need it, you don’t have to borrow the maximum amount available to you. 
Some buyers get an ‘agreement in principle’ or ‘decision in principle’ from a mortgage lender before making a formal mortgage application. 
As the name suggests, this involves a lender agreeing ‘in principle’ to offer you a mortgage of a certain amount. It will look at your income and usually just carry out a preliminary ‘soft’ credit check, which won’t affect your credit score.
An agreement in principle isn’t a promise or guarantee of a mortgage but it gives you a fair idea of how much you might be able to borrow.
When you apply for a mortgage, the lender will want to see various paperwork such as:
If you’re self-employed, you’ll also need:
Research the different types of mortgage, so you understand your options. Types of mortgage include:
You also need to think about your ‘mortgage term’ – this is how many years it will take you to pay off the mortgage. The longer the term, the lower your monthly payments will be but the higher the total amount of interest you’ll pay overall.
Lenders tend to impose age limits, so you’ll need to be under a certain age (normally 65 or 70) when the mortgage ends. Bear this in mind when choosing a mortgage term.
There are various fees attached to each mortgage deal too, such as arrangement and valuation fees, which should be factored into your calculations.
Mortgage rates change on a daily basis but you can keep up-to-date with our live mortgage table, powered by Trussle. Just select the circumstances and preferences suited to you.
While you can apply for a mortgage directly with a bank or building society, many people benefit from expert advice from a mortgage broker.
A fee-free mortgage broker such as Trussle can search the vast majority of the mortgage market for you to find the right deal, weighing up the fee against the rate and ensuring it comes with the level of flexibility you require for your circumstances. A mortgage broker will also guide you through the application process.
Free Mortgage Advice
Trussle is a 5-star Trustpilot rated online mortgage adviser that can help you find the right mortgage – and do all the hard work with the lender to secure it. *Your home may be repossessed if you do not keep up repayments on your mortgage.
You can’t make a full mortgage application until you have found a property to buy and had your offer accepted by the seller. Once you’re at this stage you can submit your mortgage application via your broker (or directly). The lender might ask for additional paperwork so be ready to answer any queries quickly.
Since the Covid pandemic, lenders may ask for extra information if you’ve been furloughed or received help from the Self Employment Income Support Scheme (SEISS).  Different lenders have different approaches to workers who have received financial help from the government – your broker will know the lending criteria for each lender.
The lender will also carry out a valuation of the property to check it’s worth the purchase price. 
When the lender is happy with your application, it will make a formal mortgage offer. This can take around four weeks. You need the mortgage offer to move forward with your purchase. 
Mortgage offers are usually valid for six months and can sometimes be extended if your purchase is taking longer. If the mortgage offer can’t be extended, you’ll have to start the application process again.
When you have your mortgage offer and the conveyancing work is complete, your solicitor can exchange contracts with the seller. He or she will then arrange for your mortgage funds to be transferred from your mortgage lender to the seller on the day of completion. 
Forbes Advisor UK’s broadband and mobiles expert, Emma Lunn has reported prolifically on the subjects for more than 16 years. Her award-winning work features in national newspapers, right through to specialist websites and trade titles.

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