When it comes to the mortgage for first time home buyers, there is an avalanche of advice both good and bad while some are great. The type of wisdom that makes you feel great to hear sticks with you for the rest of your life. Same is the case with having a bit of great free mortgage advice as it helps in making your buying decision easy and you can pass it around to all those who need it.
If you are in the market for first time home search, the process may seem daunting, especially in getting a mortgage approval. However, the better knowledge you have about mortgage, the better prepared you will be, so here are 7 mortgage pieces of advice straight from realtors and homeowners that might save you thousands of pounds.
- Know the Value of Your Credit Score
A huge difference factor in determining how much you can afford and how much you will end up paying for interest is your credit score. The credit must be considered good enough by the bank if you want that all-important mortgage. Our first free mortgage advice is to keep your credit score positive as there is no minimum score needed. The exact score you need depends from lender to lender, so be sure to keep your score higher. Simply put, the higher your credit score is, the better your chances of getting a better deal on a mortgage.
- Estimate How Much You Can Borrow?
Another free mortgage advice is to determine the limit you can borrow. Lenders usually determine the limit for your borrowings by using two different debt ratios. The first one is that your monthly housing payment, including taxes and insurance, should be no more than 28% of your pre-tax income. The second ratio is the total debt that should be no more than 36%, including your mortgage payment. Speaking to a broker will help you determine how much you can borrow.
- Do Not Push Your Limits
If you have a credit card of £20,000 that does not necessarily mean you should spend all of it on purchases. The same logic is true for a mortgage process if you qualify for a mortgage that does not mean maxing out your budget. This free mortgage advice states of being sure that the mortgage not only fits your bank standards but also to your budget as well. Do not push your budget limits just because you qualify for an application. A broker will inform you, according to your circumstances, how much you can borrow and it is for you to decide what you can afford.
- Orderly Documentation
Another free mortgage advice is to get all your documentation in order before applying. Lenders will need documented proof of everything like your employment status, income, identity, and more. Be sure to start gathering all the necessary documents beforehand to save time. There is no specific list of documents, but you should have at least, payslips, your statements, proof of defiant, and if self-employed, 2 years of tax calculations and tax year overview.
- Search For Low Rate
The major mistake first-time buyers make is to accept the first mortgage they are offered. The free mortgage advice that brokers give you can lend you a deal in much lower rates that you will definitely appreciate.
- Small Lenders
While looking for mortgage deals, it is not just big national mortgage lenders that will be best for you. Some local banks or regional lenders may also offer some unique plans, especially for first-time homebuyers. Do not ignore this free mortgage advice that a broker can give you
Looking for a home as a first-timer is not an easy job, and you can easily get overwhelmed just by the number of free mortgage advice presented to you. The recommendation is to use a mortgage broker who will research the market for any potential deal that suits your needs. Make sure to take advantage of the service to get the best loan deal and make your buying decision easy.