Buying a home is one of the most important financial transactions you will ever enter into. I thought I would write a post that looked at the start of the mortgage process in a little more detail today. Of course, each financial institution will have their own processes, but generally they have lots of commonalities.
The Initial Mortgage Meeting
This is the first chance at the building up of your relationship with the Newcastle Pernament . It’s a chance for you both to get to know one another better. The mortgage advisor, will be using this time to access your suitability and this is your chance to do the same. Whether you are looking at funding an existing house, one you have found in a recent property search or are trying find out how much you can borrow, before starting to view houses.
It is important to come prepared. I would suggest that you bring with you some information that determines your monthly income and outgoings. It maybe later on down the line that these are verified when they perform credit checks and contact your employers (if relevant) but for now, bring with you your wage slips, or accounts if self employed, some bank statements and loan agreements if you have any. Whilst looking at these and asking you some questions, the mortgage advisor can find out what the maximum amount of mortgage is you can borrow. You may not need that amount, but often they can issue you a figure, which can be useful when you are viewing houses.
Secondly another extremely useful tool is to fill out a monthly budget planner. By carefully including all of the monthly incomings and outgoings, you can see what expenditure you would have remaining at the end of a given month. Sometimes this is a real eye opener as to where money is being spent, and is something I would recommend everyone to repeat each year. When filling it out it is important to include the approximate new mortgage payment, and the increase in bills (unless of course you are down sizing) to give a true reflection of your outgoings.
This is also an important time for you to get to know more about both the mortgage process, and the types of mortgage deals that are on offer by the mortgage provider. It is important that you put careful consideration into the deals that are available, and take all of your personal circumstances into account. For example, you may feel that you need the security of knowing exactly how much you monthly mortgage payment will be over a set period of time. Fixed Rate mortgages ensure that even if there are changes to the countries interest rate during that period, your monthly payment will not increase. Typically Fixed Rate mortgages are fixed for a set number of years before reverting back to the ‘standard variable rate’.
OK, so this is an outline of the beginning process that most people will encounter, from here is when it gets really interesting, and each time can be very different.
If you would like to write more of these posts, looking at Home Improvement Loans, Remortgages and the Valuation process please let me know in the comments.