You are ready to shop for your dream home. The first step is to talk to a lender, who will require documentation detailing your financial picture. What money you make is important, but also critical is how much is currently disposable and how much is regularly allotted to bills and payments. A realistic picture of your budget is required. Your credit score is an important part of the overall picture as well. It’s a good idea to rein in the spending several months prior to going to a mortgage lender.
New home-buyers should expect to pay ten percent down. Co-loaners, such as parents, need to confirm their commitment to the mortgage and monies required in writing. Naturally, the more that you can put down initially the better your rates will be. Lenders typically offer amounts that are equivalent to no more than five times your salary, or that of you and a co-lender.
Fixed rate mortgages lock in a rate for a specific time, while variable rates are based on Bank of England Rates, which can fluctuate. Although fixed rates are generally higher, they are useful for those that must know what they can spend. When calculating your overall costs remember there are numerous fees that are a part of the process, including stamp duties and evaluation charges.
Key Takeaways:
- Your credit score is an important factor that loaners look at, so it’s a good idea to rein in the spending a few months before checking in with a mortgage loan officer.
- It’s normal for mortgage lenders to offer no more than five times your salary, or the salary of you and a co-lender.
- Expect to put at least ten percent down, knowing that if you can put down more it will affect your future rate in a positive way.
“It is worth remembering that first-time buyers purchasing a home for £300,000 or less will pay no stamp duty, while on purchases over this but under £500,000 they’ll pay five per cent on the additional amount over the £300,000 figure.”