All about getting a Mortgage in the UK

Buying a house is one of the most cherished dreams, but can turn out into a nightmare unless you are aware of the real-estate and financial market trends. So, if you are in the middle of making this big decision, then you have probably done all the required research. Broadly speaking, buying a house involves two factors — the future prospects of asset appreciation and planning finances to buy the desired property. Assuming that you are done with the first part and have finally set your eyes on your dream house, it is more than likely that you are also worried about managing your finances. To make things easier for you, we have put together all the essentials that can help you realize your dream to the earliest.

Pre-Documentation and Self-Assessment

Before you get started with the application and documentation for your mortgage, you need to get a fair idea of where you stand when it comes to your credit ratings. This is exactly how you are going to come across to the Lender as most of them are likely to count on the credit ratings. To confirm where you stand, you can begin by subscribing to the services of 2-3 reputed credit rating agencies. Check if there is some negative information about you and fix that by sending over the necessary clarifications to that specific agency. This step is extremely essential and could help you get rid of some serious issues that could adversely affect the loan approval process.

How to prepare for the big assessment?

You should know that the prime concern of any financial institution that grants you mortgage is to assess your ability to repay that debt. So, the financial institution is likely to follow certain predefined norms to decide the extent of liability that an individual can incur. Therefore, it is quintessential that you understand how this happens, so that you can get the best out of the deal.

You can always check the online eligibility calculator that most Lenders put up on their website. This calculator, is however an application with custom settings to ensure that the prospective borrower gets a fair idea of the road ahead. However, you must know that this is not conclusive and therefore it would be wise to have a personal communication with the financial institution.

Generally, the designated team or professionals at the concerned financial institution ask for the financial statements of your household. Next, they make a detailed study of your income and regular expenses such as existing loans, mainstream income, and income from side hustles that can pay off the debt in case you lose your mainstream income, which could be a job, profession or a business. So make sure to have all the documents in place before you approach the Lender.

Core documentation

The next most important thing to do is to make a checklist of the most frequently sought documents and to procure and file them. Usually the lender requires your utility bills, Payslips for the 3 months preceding the date of applying for a mortgage, P60 form from your Employer along with proof of all benefits received, and proof of income from secondary sources. For those who are self employed or have a secondary income, it is essential to have the SA302 tax form. Also, those who are self employed need to produce Statements of Accounts for three years preceding the date of application. Furthermore, you also need to provide proof of identity, which generally requires you to produce your passport or driving license.

Speak to an Expert

With the innumerable lenders and mortgage types available out there, number crunching can definitely take its toll unless you let an Expert handle that for you. You need to narrow down your options based on several factors such as the type of property you wish to buy, the nature of your profession, ability to repay debt when out of employment etc… Therefore, it is strongly recommended that you seek expert advice before finalizing your mortgage.  

Depending upon whether you are remortgaging or mortgaging, and subject to your existing debts, the Mortgage Advisor would help you make the right decision. Also, these professionals are well versed with the market statistics and are in constant touch with the market pulse. Therefore, depending upon your case they may not only help you plan your mortgage, but also provide you with a viable repayment strategy. This, in turn, makes things easier when you meet the Lender, face to face.

Beware of online resources

There is nothing wrong with using one of the many price comparison websites, but bear in mind that these resources only give you a fair idea of the road ahead. The Lenders often have other requirements and charges, which may not be recorded by these comparison websites. So always use it wisely and do not consider it to be an alternative for personal communication with the Lender.

When you start looking out for a mortgage, you must do your own research as well as speak to an Expert. Generally, lenders provide you with up to four and a half time of your annual income as mortgage. If you are not pleased to hear that and belong to a low-income category, then make sure to enquire about the existing housing schemes available in the desired region. Depending upon which income group you belong to, you may find many options. Also, in case you hire someone to help you out with Expert Advice, look up for reviews and credentials. Seek absolute clarity on the brokerage that the Mortgage Advisor or Independent Financial Advisor seeks, in order to avoid any surprises at a later stage.


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