Starting out on the journey to buy a home is exciting and challenging all at the same time, you probably will spend lots of time looking at houses on the online sites like Right Move and Zoopla and rather less time trying to wade through the complex information on mortgages from all the various banks and lenders this is where an experienced Mortgage Advisor like Mortgage force Worcester can really help, saving you time and money.
How much can I afford?
There are lots of different mortgage affordability calculators out there and if you are reading this you have probably tried out a few of them. The complexity involved in each mortgage application means that everyone is unique and so mortgage rules will apply uniquely to them, the same is true of how much each person will be able to borrow. If you tried two or three different calculators they will probably give you different amounts, or give you a range so wide you don’t really know where you would sit. The best way to find out how much mortgage a lender would be able to provide you with is to sit down with a mortgage advisor with your financial information and they will be able to give you expert advice on realistically how much mortgage you could get.
Is there an average amount?
There are some average rules that apply, for example the lender has to cap the loan-to-income ratio at no more than four and a half times your income although they can (and sometimes do) cap it at a lesser ratio based on your application information. So in theory if your annual income was £40,000 the maximum they could lend to you would be £180,000 you then can add any of your own savings to that number to find out your maximum purchase price.
Why use a Mortgage Broker?
The 4.5 loan-to-income ratio is the maximum a lender will offer; this does not mean that you automatically are eligible for this ratio. There are a huge amount of other factors that lenders take into account when assessing you for a loan, including things like deposit amount, credit score, other loans, expenses and a ‘stress test’ for a change in circumstances. A mortgage broker is a qualified professional who spends all their time in the mortgage world, they know which lenders have the best rates or which lenders are most likely to lend to someone in your circumstances. Because there is a no ‘one size fits all’ mortgage, a mortgage advisor is your link between your personal circumstances and the range of offering available in the mortgage market.
Independent mortgage brokers, are just that – independent, they are able to offer solutions customised to your personal finances rather than working for one lender with only one or two mortgage products available. For example, a first time buyer looking for their first home will need a very different type of product that a couple looking to sell their home and downsize so they can retire. The first time buyer’s priority may be just getting their first mortgage so they can get on the property ladder and keep up with their mortgage repayments, the retirement couple who have a lot of history of mortgage repayments priority may be the best rate for a smaller mortgage.
Can it be difficult to get a Mortgage?
Wading through the paperwork required for a mortgage can be daunting, if you are employed with a good credit rating then getting a mortgage can be straightforward, for the self-employed ensuring you have the correct paperwork can be difficult, but an experienced mortgage broker will be able to give you a list of exactly what is required so the lender can understand your financial situation. For those with a poor credit rating or lots of loans or credit cards it can be difficult to get a mortgage but going to see a mortgage advisor can be your first step in understanding how reducing your debt and increasing your credit score can give you a much better chance at getting the mortgage that you want.
For helpful, practical mortgage advice in and around Worcester contact Mortgage Force today to arrange to talk to an experienced mortgage advisor.