According to various news sources, the number of people in the US and the UK owning their own homes has dropped significantly. The US has seen the lowest home ownership figures since 1965 and the UK is at its worst point in 30 years. What does this mean? Well, it means that house prices are likely to fall – making it the perfect time to get a mortgage, if you can afford it. Here’s my ultimate guide to doing just that.
Can You Afford It?
Before you even consider getting a mortgage, it’s important to work out whether you can afford it first. Most lenders will want at least a 5% deposit, but they could ask for a lot more. If you’re self employed or on a low income, then expect to have around 10-20% of the property cost behind you. It’s important to remember things like legal fees, which many people forget to factor in when they’re buying their first home. As long as you have a good sum of money behind you, then you could be ready to get a mortgage.
Credit Score
Do you know what your credit rating is? If not, then you will definitely need to get a copy of your credit report to find out. Getting a mortgage is just like getting a loan, so banks are going to credit check you first. Those with poor credit might find themselves being declined by big name mortgage lenders or having to cough up a bigger deposit. There are some tricks and tips for increasing your credit score however, so don’t feel like all is lost. It might be best to work on improving your credit rating first, before applying again.
Picking the Right Lender
Once you’ve got the capital behind you – and have made sure your credit score is up to scratch – it’s time to find the right lender for you. There are various comparison websites around to help make your decision easier. Some will even have filters for whether you’re a first time buyer, self employed, and other niche areas. If you’re looking for something quite specific, then it may also be worth talking to a mortgage broker. They will be able to help you sift through the hundreds of different products on the market, to find something that is right for you. Make sure that you read through all of the small print, before making your decision on a lender.
Survey Your New Home
Most mortgage lenders will ask for a surveyor to visit your potential new home, before they agree to lend to you. Even if they don’t, it’s highly recommended that you invest anyway! Things such as damp problems, issues with the foundations, and even pest infestations can be discovered by a proper home survey. This might also give you a bit more bargaining power with the sellers, if you want to try and get some money off the total price.
Getting a mortgage doesn’t need to be a difficult task – as long as you know what you’re doing. Make sure you have enough money behind you and an excellent credit rating to start. Then, find a lender and get your potential new home surveyed. The rest is just a case of signing on the dotted line and collecting the keys.
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