Making sense of mortgages
Warning: THE MORTGAGED PROPERTY (WHICH MAY BE YOUR HOME) MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Making Sense of Mortgages
Buying a house and taking out a mortgage is an exciting time. Whether saving for your deposit, hunting for your dream home or exchanging contracts, there is lots to do and big decisions to make. To help make sure you are as prepared as you can be, one of our expert mortgage advisers, Andrew Wallace has provided some of his top tips for the mortgage application process.
Do your research.
"Buying a property is the biggest purchase that you are likely to ever make, so making sure that you find the right home is important. Talking to a mortgage adviser is a great start to find out how much you can borrow and to work out your price range.
Take your time to look at as many properties as you can, remember to consider your current circumstances and any possible changes. Websites such as Rightmove and Zoopla are great ways of keeping an eye on the market or take a look at the property map* on our website to see the average prices and local information for your chosen area. Pop in to your local estate agents, leave your details with them and what you are looking for – they are likely to contact you before a house even makes it on to the open market, putting you ahead of the competition.
Once you have found the right property make sure that you know as much about it as you can, speak to your estate agents to find out if there is a chain and to find out what the sellers plans are, this may give you an idea of the expected turnaround time from having your offer accepted to getting the keys."
"It’s a great idea to prepare for your mortgage interview as much as you can. We hope to make the process simple and straightforward, but you can help make it even easier by having all of the correct documents and information ready for your appointments. Use a budget calculator to explore what you could afford each month, research potential solicitors or conveyancers for the legal work (get as many quotes as you can). Personal recommendations from friends and family are great if they have had a good experience with a particular firm.”
ID is key.
"Making sure that you have the right Identification and documents is key to starting things right. What you need will vary depending on the type of mortgage, but there are a few things that are needed for all applications such as: proof of Identity, proof of address, proof of income, last 3 months bank statements. You may also be asked to provide your current tenancy agreement or most recent mortgage statement. If you are self-employed it may need your last 3 years accounts and a completed certificate from a suitably qualified accountant.
Your mortgage adviser will let you know which documents are needed for your second appointment, but having the basics available from the very start will make life easy for both you and your mortgage adviser."
"Every application is assessed individually and the advice you are given at application stage is completely tailored to your needs. This means that your current circumstances and any potential changes are taken in to consideration.
Being upfront and honest at the start of the application is a must. Failure to disclose information can result in the application being delayed or even declined all together. Making sure that you quote true figures for your income and committed expenditure will mean you get a more accurate borrowing figure."
Testing the water.
A Decision in Principle (DIP) is confirmation that Leeds Building Society is able to lend the money that you need to either buy your new home or remortgage from a different bank or building society. It is only in principle and until you have your offer, the amount on the DIP could change.
The DIP relies on evidence of incomings, outings, your credit score and credit history, in addition to a valuation of the property that the mortgage is to be secured against.
Although it is only lending in principle, a DIP provides evidence for an estate agent that you have spoken to a lender and they are willing to lend the funds needed, this may also mean that the seller and the agent may remove the property from the market (sold STC)."
Let us help.
"Applying for a mortgage can be overwhelming; but at Leeds Building Society we’ll talk to you about your individual needs and seek to recommend the right mortgage product, term and repayment method for you. To help make things simple we have created our First Time Buyers Guide to give you help on finding a home and the costs of buying. We can help offer peace of mind to every customer that applies with Leeds Building Society; not only for the mortgage but also for the cover and protection they need in their new home through our relationship with Aviva."
This article is intended as a summary only and does not constitute advice given by Leeds Building Society. No reliance should be placed on this article and you must make your own decisions, we recommend that you seek advice if you have any questions or queries.
Buildings and contents insurance arranged by Leeds Building Society is underwritten by Aviva Insurance Limited. Registered in Scotland, number 2116. Registered Office: Pitheavlis, Perth PH2 0NH. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Registration number 202153. Aviva Insurance Limited may decline to quote in some circumstances.