Top tips for your first mortgage

Thinking about getting on the property ladder? Whether you’ve just started house hunting, or you’ve seen a home you like, you’ll need to have a mortgage in place before you can make an offer.

Thinking about getting on the property ladder? Whether you’ve just started house hunting, or you’ve seen a home you like, you’ll need to have a mortgage in place before you can make an offer.

For first-time buyers, the prospect of securing a mortgage can feel daunting. There’s a lot to get in place and a lot to consider. If you’re thinking about buying a property in Leeds, our tips for getting a mortgage can help guide you through the process.

Check your credit score

First things first. In order to understand how mortgage lenders view you, you’ll need to get a copy of your credit score from one of the three credit reference agencies: Experian, Equifax or TransUnion.

There are some simple things you can do to improve your credit score: Correct any errors that appear there, such as updating your married name or new address, and ask to remove any paid bills that are still showing as unpaid. Remove any old credit card accounts and ensure you are on the electoral role.

Do your sums

Mortgage providers will run their own affordability calculations based on your income, monthly outgoings, and any debt you owe. It’s beneficial to do this yourself before applying so you can get a good sense of your financial situation and what you can afford.

If you haven’t already done this, list all your monthly expenses, including debt and credit card repayments to work out what you have left over each month. This will give you an idea of what monthly repayment you can afford. You can obviously increase this amount by cutting out non-essential monthly outgoings such as TV packages, takeaways or meals out.

Get your paperwork together

Mortgage providers want to know every little detail of your financial life, so it helps to have everything ready to go before you apply for a mortgage.

Every lender will have their own list of required paperwork, but it can include bank statements; payslips or year-end accounts if you are self-employed; proof of address; and details of any loans including credit card debt and student loans.

Pay off as much debt as you can

Credit card and loan debt won’t necessarily stop you from getting a mortgage, but it can certainly affect the interest rates you receive.

As part of their affordability checks, lenders will consider your debt-to-income ratio. You should try and reduce this as much as possible before proceeding with a mortgage application.

Another thing to consider is your credit utilisation rate (how much of your available credit you’re using). Lenders look for under 30%, so try and get your debts down to under this level.

Finally, close down any unused credit card accounts and make regular, timely overpayments to show potential lenders that you’re committed to reducing your debt.

Speak to a mortgage broker

The mortgage world can be confusing and there are lots of products out there to choose from. Do you want an interest only, repayment, or a tracker mortgage for example? A fixed deal or a variable rate?

Mortgage brokers can help find the best mortgage to suit your personal requirements, and also have access to deals that aren’t available to general customers. Particularly if it’s your first mortgage, their advice can prove essential as they can talk you through the different types of mortgages and the processes. They can also case manage your application.

Some brokers may charge you a fee, while others are paid commission by lenders, so check their fees before taking on their services. Ensure that your broker is qualified and regulated and authorised by the Financial Conduct Authority (FCA).

Here at Stoneacre Properties, we have great relationships with some of the top mortgage brokers in the area, so get in touch and we will be happy to make an introduction for you.

 

If you’re considering buying a property in Leeds, simply browse our available properties or get in touch with us to get started. We have a large range of properties throughout Leeds and the surrounding suburbs and would love to help you find your dream home.

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