Finding a mortgage
Let’s get the scary stuff out of the way. A mortgage is the biggest financial commitment you’ll ever make. And unless you’ve won the lottery, you’ll need a mortgage to buy your own home.
What’s a mortgage?
In simple terms, it’s a loan to buy your home. Most are taken over 25 years.
Work out what’s affordable
Make a list of everything that goes in, and out, of your bank each month. It will give you a good idea of what you can afford. Plus, you’ll need this info when you apply for your mortgage.
Get some advice
All banks and building societies will have their own mortgage adviser. But remember, they can only advise you on their mortgages. If you’re not sure where to start a good independent financial adviser (IFA) can be worth their weight in gold. They can look at lots of different mortgages for you. Most are paid commission by the lender, but it’s worth checking before they start. If you need a hand finding the right IFA for you, pop into your nearest Keepmoat Homes development and talk to one of our helpful home sales executives.
Most lenders look for a deposit between 5% and 40%. The Government-backed Help to Buy scheme can mean you can move in with just a 5% deposit.
Types of mortgages
There are lots of mortgages out there. So whatever your situation, chances are there’s one for you.
Mortgage affordability tests – not as scary as you think
Lenders now have to make sure everyone they lend to can afford their mortgage, now and in the future. So when you apply for a mortgage you’ll have an affordability interview. This will look at what you spend your money on, and whether you could still afford the mortgage if interest rates rise or your earnings change. Your list of what goes in and out of your bank each month will come in handy here.
Know your credit score
All lenders base their decisions on your credit score. So the better your score, the better the rates you’ll be offered. Find out what yours is and a little financial housework before you apply could help improve your score.
Applying for a mortgage
Once you’ve found the perfect Keepmoat home, you’ll need to fill in a formal mortgage application.
Your mortgage provider will arrange for a valuation survey to be carried out on the home. You may need to pay for this. Some add it to the mortgage amount.
When the lender is happy with everything you’ll get a mortgage offer letter. This sets out the agreement between you and the mortgage provider. You’ll need to sign and return the mortgage offer letter and any other documents. Make sure you read them carefully, including the small print. And ask if anything’s unclear.
A mortgage in principle
Even if you’ve not found your dream Keepmoat home yet, or it’s not ready, you can apply for a mortgage in principle. The lender will state how much they are prepared to lend (in principle). This is usually valid for three months.