Buying a property you can call home is everyone’s dream, but it’s also the biggest purchase you are likely to make. With the help of a mortgage though, you can afford it without many hassles. But ensure that you know what you can afford to borrow. Also, where you can get a mortgage and all other important details about it.
Let’s Start With Understanding What A Mortgage Is:
Simply put, a mortgage is a loan taken to buy a property or a piece of land. Often they run for more or less 25 years. It is ‘secured’ against your home until the entire amount is paid off. So in cases when the borrower fails to repay, the lenders can take their home and sell it to get their money back.
The source of these loans vary, some borrow from banks, building societies. In urgent situations, people connect with online bridging loan firms all the time. Let’s discuss this in detail: Where to get a mortgage?
Apply for a mortgage directly from a bank or a building society, selecting from their product range.
Use an independent financial adviser or a mortgage broker who can compare various mortgages on the market.
Also, the mortgages that are not offered directly to customers.
And as mentioned above, in crucial circumstances, people resort to bridging loans for commercial property.
Things You Would Be Expected To Know:
While applying for a mortgage, you should have an idea about what kind of mortgage fits your requirement? Which property do you want to buy? How much do you want to borrow and for how long? The type of interest and the rate you want to borrow at?
You can use a mortgage payment calculator to work out the repayment amount and the interest on it.
Now having covered where to get a mortgage, we come to an obvious question: How to apply for it?
The Process of Applying for a Mortgage is divided into Two Phases:
The first stage is all about basic fact-finding, so you can calculate how much you can afford, and which type of mortgage you might need. Mostly, the lender or mortgage broker asks you certain questions to know what kind of mortgage you want and how long you will take to return. They might also assess your financial situation. Lastly, they will give you key information about their product, service, the fees involved or charges applicable.
The second stage is when the mortgage lender will have more details for you to confirm the affordability check. Also, they might ask for evidence of income. In this stage, you begin your application. The lender or broker will do a detailed affordability assessment and ask for your specific expenditure and income. Plus, they will stress test your finances. It could also involve detailed questioning of finances and future plans that could affect your future income. Mostly, they assess whether you have the ability to make continued repayments or not.