Obtaining a mortgage is often the biggest financial commitment you will ever take on, so getting it right and getting a great mortgage deal can save you a considerable amount of money.
Whether you’re a first-time buyer, current homeowner or landlord, our below BMI tips will help you understand how to make the most out of your situation, ensuring you get the most suitable mortgage deal available to you.
[1] Save! The absolute minimum deposit to obtain a mortgage is 5% of the property value, and some lenders even require a minimum of 10% now. For buy-to-let properties in Oxfordshire, the minimum deposit varies between 20-40% (usually 25%). To purchase a £180,000 property, you would need a minimum of £9,000, and ideally at least £18,000. The higher the percentage of the deposit is, the lower the mortgage rates you will have access to. You can see this for yourself using our mortgage finder.
[2] Be aware of extra costs
Buying a house incurs a lot of extra costs that you should be aware of:
Required:
- Stamp duty
- Solicitor/conveyancer fees
- Land registry
- Lender valuation fees (some lenders may cover this themselves)
- Buildings (for freehold properties) and contents insurance
- Removal firm
- Ongoing maintenance fees (for buy-to-let properties)
- Mortgage protection
It’s important to know which of these apply to you, and how much money you’ll need to cover these costs.
Our mortgage brokers have extensive knowledge of how these fees vary and will be able to tell you roughly how much you should expect to pay.
[3] Know all available schemes available to you For example, shared ownership mortgages allow you to partially buy and partially rent your property. This is really helpful for lower-income households, people buying a property on their own, and people with smaller deposits.
[4] Know and understand your credit score We recently did a post on this (check out our Instagram). All lenders will examine your credit score when you apply for a mortgage. They need to know that you can handle debt responsibly before they feel comfortable lending you such a large amount of money. All Bright Money Mortgage Brokers will always advise checking your credit score ahead of applying to avoid any unwelcome surprises. This way, if you have a poor score, you can take steps to improve your credit score in plenty of time.
[5] Have your documents prepared and ready Your mortgage broker, lender and solicitor will ask you to provide a number of documents during the buying process. Making sure you have the correct, up-to-date documents is essential and saves lots of time.
- ID – Make sure the expiry date and details are all up to date
- Address – If you have recently changed your name or address, make sure it is amended and correct on all your personal documents. Also, ensure you’re registered on the electoral roll at your current address, lenders search for this & it also impacts your credit score.
- Income proof – If your payslips are hard copies, make sure you keep them safe as you will be asked to verify your income. If you are self-employed make sure you have your tax calculations and tax overviews for the last 3 years.
- Bank statements – Lenders will look out for large transactions, so be mindful of this.
- Tenancy agreements (for buy-to-lets) – Make sure your tenancy agreements are up to date and signed by all tenants. If your rent has changed over the years, make sure that your tenancy agreement reflects this and that rental payments are clearly shown on your bank statements.
[6] Speak to a Bright Money Mortgage Broker ASAP. As independent mortgage Brokers based in Oxfordshire, we pride ourselves on tailoring bespoke mortgage & protection products for our clients. We also specialise in product transfers and remortgaging, and all of our Brokers have a wealth of knowledge and experience and can provide you with valuable advice regarding your situation. We have access to every mortgage available on the market and will always take into account all costs involved and aim to get the most cost-effective deal for you and your situation. If you wish to speak to one of our BMI expert mortgage brokers, give us a call today, or contact us via our online customer service chat function.
