Getting a mortgage is one of the biggest things you can do. It is a major commitment. That’s why it is very important to make sure you find the best mortgage you can get.
By now you should have worked out how much you can afford in mortgage repayments per month. The next step is finding out both how much you can borrow and how much you should borrow.
As a rough guide most mortgage lenders will lend you in the region of three times your annual income as an individual, or if you will be buying a house with another person, two and a half times your joint income.
Deposits
If you want to get a competitive mortgage, you are going to need a deposit. Some lenders offer 100% loan to value mortgages, but these rarely offer a competitive rate and cost a lot of money in both the long and the short run, due to high fees and rates. I’d recommend gathering making sure you have a deposit of at least 5% of the property value you would like to look at, 10% being preferable.
At this stage you can get a rough idea of how much you can borrow using the estimating techniques mentioned above, or a simple estimating tool and start looking, but it might be better to enquire about a mortgage and get one agreed in principal first.
Mortgage Advisors
As a first time buyer, I would highly recommend using an independent mortgage advisor/broker. They know the markets and how to deal with every situation you can throw at them. They will take down your details, discuss anything unusual about your circumstances and come back to with the best deal you can find. If you make sure you find an ‘whole of market’ independant advisor, that is that they compare products from all companies, not just a select few, you can’t go wrong. Even better if you use one such as London and Country, they are commission based so it doesn’t cost you anything. Use them to get a better idea of how much you can borrow or even a mortgage agreed in principle and then you can get down to looking more seriously.
