Arranging a Mortgage
Whether you're a first time buyer, second (or more) time buyer or are remortgaging, arranging a mortgage should be a simple straightforward process. However as a mortgage is probably the most expensive thing you will ever buy in your life, it's not something to be rushed into.
Before arranging a mortgage there are a few things to consider.
- How much you can borrow?
- Do you need a deposit?
How much you can borrow?
The amount you can borrow for your mortgage is based on your income, The Financial Services Association (FSA) recommends that if you are buying on your own you should be able to get three and a half times your salary as your mortgage. Some lenders will offer you a mortgage based on considerably higher multiples of your income, though typically these are aimed at buyers in London. If you are buying as a couple then the FSA recommends that the amount you can borrow should be two and a half times your combined income.
Before you start looking for a home it's worth speaking to a mortgage provider or mortgage broker to establish exactly what you can borrow. Many mortgage lenders will offer you an 'agreement in principal' without specific details of a property. This gives you a clear idea of how much you can actually borrow. An Agreement in Principle can also be useful to show sellers that you are serious about buying and are able to proceed quickly.
Do you need a deposit?
If you're able to raise the money for a deposit then you're going to be in a much better position when arranging a mortgage. In essence you'll be able to choose from the widest range of mortgage products.
While you do not need a deposit in order to buy a house as there are 100% mortgages available from a number of lenders, 100% mortgages are not often offered at the most competitive rates,
You will get the best mortgage products if you have a 10% or more deposit when applying for your mortgage.
None of the information on this website is intended to promote any specific mortgage product or provide mortgage advice.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
