Top 6 Tips on Your First Easy Mortgage
A very brief intro to what a mortgage is- Well, a mortgage is one of the largest financial debts you are likely to encounter, and it can take anywhere from 15 to 30 years to pay off, of course, however, it depends on the principle amount which you are borrowing and the repayments you are making per month to the money-lender, often a bank. Mortgages are usually comprised of three parts- The collateral, the principal and interest payments, and the taxes and insurance. Here, however, I will talk about how to get or win your first mortgage easily. Let’s get your easy mortgage.
1) Build up your deposits. The more money which you can save up to put down as a deposit, the larger will your choices of mortgage options be available. Money-lenders often save up their best rates for people with large sums of money. A better mortgage deal means that you can benefit from lower monthly payments.
2) Be in the same job. What would interest money lenders most is, if you are an employee working under the same employer for a long period of time. If you are thinking about switching jobs, it’s best not to do so before getting your mortgage. The ideal time is to be under the same employer for at least three to six months before applying to the mortgage. Also, with a long-term job you could build up your deposits.
3) What doesn’t help? Debts. Before applying for a mortgage reduce and minimize the amount of debts you have on your credit cards. That’s the last thing a prospective lender would want to see. Paying off debts could also help demonstrate that you manage cash responsibly and this in turn could help in your mortgage application succeeding. It could even allow more money to be loaned to you.
4) Mortgage with another sentient being. This could be your husband or wife depending on your gender, but doesn’t necessarily have to be so restricted. Buying a house with someone else could be easier as it would allow you to build-up a decent deposit. If your spouse has higher income or excellent credit history, the chances of winning the mortgage would be boosted significantly. But remember, this is a big commitment, so sit down and talk everything through, for example, what would happen in the case of a divorce, or what would happen if the other person decided to move out.
5) A proof of income. People who lend mortgages will always to see proof of how much money you earn, and hence, you will need a P60 form which you could get every year from your employer. This shows a summary of how much you are paid, and also the corresponding tax which is deducted. You are also likely to be asked for six months’ bank statements. This gives your broker better insight on how much money you have incoming and outgoing. So, before signing up and applying for a mortgage, these documents are quintessential.
6) The Amount to borrow. Borrow the amount of money you can afford and do not exceed that because if you fail to pay the monthly fees, you could be fined and in extreme cases, the collateral could be triggered. The amount of money you can afford to borrow can be assessed simply by taking a look at your current savings and/or rental payments. An example can be as followed, if you are paying a rent of $800 and are saving $250 regularly, this indicates that you can afford no more than $1050 per month. Another important rule is to leave plenty of room for living expenses and emergencies.
These are among the top 6 most important things which one must know before applying to a mortgage.