Online Mortgage Calculators
Personally we found a good place to start was using the on-line calculators from the main high street banks which take a top line look at your circumstances and give you a guide of what they will be willing to lend you.
Warning! The different projections of how much you can borrow given by the banks can be wildly different- in our case up to as much as £100,000 different! In our opinion (after having a go at nearly all which come up on a normal Google search- and actually getting a mortgage from Natwest) the best calculator we found was Halifax: http://www.halifax.co.uk/mortgages/mortgage-calculator/calculator.asp
I don't know I just think that the information you have to put in gives the most accurate figure of how much ££££ you can borrow!
How Much Money do I need to save
The online calculators are a really good place to start when thinking about buying a house, but if you haven't already you need to think about all the other fees which are involved.
Based on our own personal experience only, this is a breakdown of the fees which you might pay if you bought a house for £100,000 with a 90% mortgage for example:
Find a Mortgage Advisor
Once you are good to go with your deposit and other fees the best thing to do is to find a mortgage advisor.
You can either go to an independent whole of market advisor (get a friend to recommend one!), an in-house advisor at your local bank or an advisor linked to an estate agent.
The first house we tried to buy was a new build and we were recommended to a whole of market advisor by the developers. The advisor found us the best deal based on our salary, deposit and house price and applied to the building society directly and then we just had to provide her some paper work
After we pulled out of that purchase (more on that here) we searched the Internet for the best interest rate deals for the deposit we had. At the time that was Yorkshire Building Society- who after initially agreeing to lend us the money (after providing them with all the paper work we have ever owned) then decided they didn't like first time buyers!
Finally we got our mortgage by going directly to Natwest who I bank with after 1 hour on the phone they agreed to lend the money and it could not have gone more smoothly.
I think everyone has different experiences when it comes to mortgage's and the route they take to get one. One thing I realised after countless hours reading forums on the Internet is that some banks and building societies are much more lenient than others when it comes to who they will lend to and how much money they will give you.
Make sure you fit the criteria
The first thing I would do is check your credit score on the 3 main credit agencies. They keep information on file about your debts, payment history, address history etc. Make sure everything is in order- sometimes there can be rogue information on there which you will need to rectify before you apply for a mortgage. Just pay the £2 for the standard report.
Experian
Call Credit
Equifax
Each lender uses information from one or more of these agencies along with their own in-house criteria to decide if they will lend to you an if so how much.
A really good website I found which explains credit reporting, how to improve your score and what the different scores mean is Credit Geek - it explains it really well and makes it easy to understand.
Mortgage in Principle
If you are ready to apply- the lender will probably give you something called a mortgage in principle (MIP) or agreement in principle (AIP) firstly which differs from lender to lender but for us it meant they had assessed our income and expenditure and credit history and confirmed (subject to details) how much they would lend us.
Warning! From our own experience with the Yorkshire Building Society and many forums i have read- a MIP doesn't guarantee the lender will give you the money once you have put an offer on a house and go to complete the application. They can change their mind, change the products they offer and in our case mis-input your details so you were never eligible in the 1st place :/ But it should give you a good indication and in most cases the lender will honour the MIP provided all the information you gave them in your application was correct
Later on when you do to put an offer in on a house the estate agent will ask to see this MIP to show you are a "serious buyer".
Start Looking for a house!
Now you know how much you can afford to borrow and you have got your MIP you can start trawling Rightmove (unless like me you have already been looking for months on end in anticipation and already have a short list!) and booking in some viewings with you local estate agents!
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| Viewing a new build in Irlam nr Manchester Aug 2011 |
Next post will be about choosing which houses to view and some tools to help with the search!
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