Top 5 things to consider when going for a mortgage
Being smart when it comes to money is all about putting into practice what the experts tell you to do. There are always different ways to save money, and new things to consider whether you’re booking a holiday or going for a mortgage.
Looking for the right mortgage, can be just as difficult as finding a job – and people rate moving house as the second most stressful thing to do in life (after divorce). So, with this in mind you need to be ready for the knockbacks and understand the top five things to consider:
What will the lender be looking at?
Ultimately, it’s all about whether you will be able to make enough money to pay off your loan. In order to get an approval on your mortgage, you have to show that a five year fixed-rate isn’t beyond your means. To do this you have to show:
- Your income
- Value of the house
- Life and work situation
- Credit rating
- Net worth
Where should you look for your mortgage?
There are many options to seek out the best deal for your life. Going straight to the banks tends to be the first idea of many, but now it is mortgage brokers and checking mortgage rates online that are the most popular outlets for finding the best deals. Going straight to the lender means that you can fall for a marketing ploy or be talked into something that you don’t really need. Always do your homework and keep your eyes peeled for the discounts that can be found through using a place that can view the whole market.
Why am I buying a certain house?
What many people try to look for when buying a property is that the payments should be no more than a quarter or 30% of your income monthly. So, consider what you earn annually and mark this down as how much to put aside each month to pay for the house. Is this feasible? And, how could things change? Don’t overestimate yourself because for one it could put you at risk, and it will also make the lender think twice about signing off your mortgage.
How is your employment status looking?
Have you just been promoted or are you in the first three months of a new job? These are two things that are at opposite ends of the spectrum and you need to be secure in your employment so that you can be sure of outlasting the unemployment lull seen all around us. Don’t risk your long-term security by jumping in to buying a house.
What does this mean for your savings?
Savings are something that we all need because we never know what tomorrow might have in store for us. Is buying this house going to see a savings wipeout? If so, then think very carefully about what you are going to choose. If something needs doing in the home, this will now be your responsibility and, while this doesn’t happen often, it is something to think about.