Are you thinking about buying your dream house? This article will guide or help you comprehend the process of applying for a mortgage, the different options available for the clients when borrowing and why you need to speak to a professional adviser.
How can lenders check if a borrower can afford the mortgage?
Lenders like banks will check or investigate the client’s income and financial status – including their basic and net salary, as well as the additional pay they receive from their second job, the benefits they receive, salary from freelancing, bonuses and commissions.
Checking the buyer’s affordability is a very detailed process. Banks or lenders take all the clients regular bills as well as the money going out, into consideration. Not only that, but they will also check their outstanding debts like credit cards and loans, to make sure that the client has enough money left to cover their monthly payments.
They also have to check whether the client can still afford the repayments if the interest rates will rise due to inflation or if they go on maternity leave or retire. Also, they will do a credit check with a respectable credit reference firms once they make the application to take a closer look at their financial history and check how much of a risk they will take if they approve your mortgage application.
For more information about mortgage advice in Belfast, you can check out social media pages, website or forum sites in regards to this topic.
How to prepare yourself for an application?
Before you apply for one, you need to contact at least three credit reference firms and get your credit reports. You need to make sure that every data about you is correct. You can do this by checking it online through paid subscription services, or if you don’t want to spend money, you can always use free online services that are available on the internet.
What are the things you need if you are applying for a mortgage?
You can start gathering all the necessary documents that you need for a mortgage application, that include: utility bills, P60 form from your current employer, any proof of the benefits that you received.
Your latest pay slips (at least the last three months), current bank statement for the previous three to six months, driver’s license or passport to prove your identity.
What is a P60 form? Click here to find out more.
The lending company will also need you to provide two to three years’ worth of bank statements from a legitimate accountant if you are self-employed, income tax return if you are earning from at least two source or if you are self-employed. If you are self-employed, you should provide information, together with your income tax return. It will be a supporting document that will prove that you have a stable income. You need to make sure that all the information is accurate, and it matches the data from the materials that you supplied.
Ask the mortgage brokers for advice
It is a wise thing to do to ask different mortgage brokers for any advice to make sure that you have more options and make sure that you will get the right one for you. You can talk to lender advisers or an independent financial adviser, including mortgage brokers.
Do you want to know how to calculate APR? Visit https://www.thebalance.com/annual-percentage-rate-apr-315533 to find out more.
Calculate the cost of the mortgage that you are planning to get
The brokers or lenders will do this for you, but you need to make sure that they will explain everything, including the fees, as well as the conditional charges like early payment penalties. A lot of brokers will charge clients for any advice, get a percentage from the lenders or both.
They will tell their clients about the scope of the services that they provide and the fees that you need to pay at your initial meeting. Traditionally, building society advisers and in-house banks do not charge a fee for the services that they provided. Lenders and mortgage agents will show you the total yearly cost of the amortization expressed as the percentage of your loan.
It will show, an Annual Percentage Rate of Charge or the APRC calculation, and it includes fees like redemption or valuation fees that are associated with your mortgage, The APRC will help you provide a more in-depth comparison between different mortgage deals that are available in the market today.