You saved a deposit for your first home and now it’s time to find a mortgage… but what happens next? In this week’s Ask the Expert, Darren Polson helps a reader get the ball rolling with their mortgage application
The Question
I am looking for a mortgage for my first home, but the choice of deals is overwhelming. What should I be looking for and how do I know which deal is right for me?
I am a first-time buyer, aged 32 and I am buying alone. I have a £20,000 deposit and am looking to buy a flat or small house for around £150,000. I earn £38,000 a year and have no children – unless you count the cat, of course!
Darren’s Answer
Buying your first home is an exciting time but it can be an overwhelming process. You have saved a really good deposit, which isn’t easy.
Let’s begin by looking at the process in general terms; this will help when planning out what steps you’ll need to take on the journey towards getting the keys to your first home.
Here are the five key steps, at a glance: –
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Speak to a mortgage broker
They will provide insights into the mortgage market and guide you through the entire process. The broker will also obtain an Agreement in Principle (AIP) also known as a Decision in Principle (DIP). This confirms your borrowing amount and demonstrates to sellers that you are a serious and qualified buyer.
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Property search
Once you know what you can borrow and your parameters, the hard part is finding the right property for you. Have a look online and in your desired location at what is available, within your budget. Be practical and realistic.
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Appoint a solicitor
This can be earlier in the process but important to have a solicitor who can make an offer on a property for you. They will also guide you through the legal aspects of the purchase. Ideally, they will work with or closely with your mortgage broker.
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Exchange and completion
This is where all paperwork is finalised, and you receive the keys to your new home.
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Celebrate
Take a moment to celebrate this significant milestone and reflect on the journey you’ve undertaken.
There are a lot of steps within you’ll encounter during the above such as having your offer accepted on a property, gathering your documents, submitting the mortgage application and receiving the offer, as well as the legal completion noted above. (Don’t worry, a mortgage broker can guide you through the process!)
In terms of affordability, generally lenders will use anywhere from four to five times your income, minus committed expenditure.
A mortgage broker will assess your financial situation, including income, credit history, and existing commitments, determining the most suitable mortgage options for you.
Now that you understand the steps, speak to a mortgage broker and get the ball rolling! I wish you all the best.
Meet our expert…
Darren Polson is head of mortgage operations at Aberdein Considine. He has been writing a regular column for What Mortgage for over two years and is now here to answer YOUR questions.
If you have a question for Darren please email kate.saines@emap.com or leave a message in the comments below.
