Make The Right Choice When Looking For a Mortgage.
The past few years have been difficult times in the mortgage market, with the chances of obtaining a home loan becoming increasingly difficult. Now the Government Funding for Lending scheme, operated by the Bank of England, has helped the prospects of obtaining a home loan. The interest rates available are very low and lenders are realising they need to lend money. What is more, there are more mortgages available where massive deposits are no longer required. Some mortgage products that require a deposit of 15%, 10% and even 5% of a property's value are once again readily available. This is allowing first-time buyers to realistically try to get on the property ladder,this coupled withe the fact that rents are becoming increasingly more expensive. With that said it can be confusing as to which mortgage product best suits your needs. Preparation Remember that your creditworthiness is still a major factor with the banks and building society, Preparation for your application behind very early and you must ensure you are registered on the electoral role at your own address. Banks like to see you have had credit and more importantly repaid the credit. These factors help them with their decision to lend an build your credit file and improve your credit score. Address history is another factor taken into consideration usually for the last 3 years,also you will often need to provide payslips a P60 and also Bank Statements for the last 3 months. Self employed will often have to produce 3 years accounts.Also remember to declare all loans and credit cards you may have or had. Having all the above in place will speed up your application. Agreement in principle. It is possible to have an "agreement in principle" (AIP). to ensure when you find a property you are set to proceed.The ways you repay your mortgage have options, many factors depending on your current circumstances.The lender will access by means of a credit check or credit score they will confirm the amount and the terms they are prepared to lend in writing. The AIP will give the seller of a property an indication that you may be a "good buyer" Mortgages do come with options you can opt for fixed,variable or tracker mortgages but in reality there is either interest only or repayment mortgages. Not many lenders will offer interest only mortgages to first time buyers if at all. Repayment option will include repayment of interest and a small amount of capital,as the years proceed the amount of interest reduces and more capital is repayed. Interest Only. This option is will only ever pay the interest of the loan and not the capital, most banks or building societies will advise a savings plan to help you repay the loan at the end of the term. Lenders have changed the criteria for the interest only option with homeowners who have 50% LTV (loan to Value) and the value of the property must be a tallest £300,000. In reality you must budget for the repayment option. Once you have obtained your mortgage and agreed your purchase, it will be time to look for a property Solicitor who will guide you through the process.