How You Can Get A Mortgage The Cautious Approach

How You Can Get A Mortgage The Cautious Approach



How you​ Can Get a​ Mortgage – the​ Cautious Approach.
A popular mortgage at​ the​ time of​ writing is​ an​ interest-only one .​
This requires that only the​ interest on​ the​ mortgage is​ paid off on​ a​ monthly basis .​
The rest of​ the​ actual amount borrowed is​ then paid off via other means e.g .​
a​ pension,​ an​ endowment,​ or​ in​ the​ UK,​ an​ ISA.
This means that the​ monthly repayments do not actually pay back any of​ the​ initial loan,​ therefore you​ must make regular payments to​ the​ other method to​ ensure can own your house outright at​ the​ end of​ mortgage term .​
The first step towards is​ to​ find out exactly how much money you​ can borrow .​
This is​ worked out according to​ your income .​
In the​ UK,​ it’s calculated as​ three times your annual salary before Tax and National Insurance are taken away .​
Currently,​ some lenders will offer up to​ seven times your salary .​
This is​ due to​ high demand for property and the​ low cost of​ borrowing .​
It is​ unlikely to​ last.
Write up your monthly expenses; factor in​ daily,​ weekly,​ monthly and yearly outgoings .​
It's always worth making a​ few calculations,​ using a​ mortgage calculator,​ as​ incomes and expenditure can vary from time to​ time,​ as​ do interest rates payable .​
Allow some leeway for the​ unforeseen.
For joint mortgages,​ the​ lender is​ likely to​ offer you​ either three times the​ annual income of​ the​ higher earner plus the​ total second income,​ or​ two-and-a-half times the​ total joint income .​
You can add your savings to​ the​ amount offered by them in​ order to​ estimate the​ range of​ house prices you​ can afford.
TIP: you​ may find many lenders offering very low initial rates,​ but hiding high additional costs in​ the​ small print .​
Ask the​ lender to​ explain all payment conditions,​ fees,​ additional costs and variable rates.
Don't just read the​ small print yourself .​
If you​ have doubts even after having it​ explained to​ you,​ or​ if​ you​ have a​ feeling that a​ particular lender is​ hiding something,​ just walk away and continue looking for something more suitable.
The lender will run credit checks,​ confirm income with an​ accountant,​ or​ even access your bank account to​ review your balance over a​ period of​ time .​
Not all lending institutions will do this; however,​ they do have the​ right to​ check your income is​ what you​ claim it​ is.
TIP: Don't buy a​ property without a​ professional survey .​
Human beings can be perverse; happy to​ spend $234,​000 on​ a​ house after a​ half-hour's viewing,​ but begrudge spending $400 finding out whether it's worth buying in​ the​ first place! At the​ very least,​ get a​ builder-friend in​ to​ give the​ place a​ thorough going-over.
Find out the​ true market value of​ the​ place .​
Get more than one independent valuation .​
Compare it​ with the​ prices of​ similar-sized properties currently on​ sale in​ the​ same area .​
This is​ what mortgage companies and estate agents do .​
They value houses based on​ what other people will pay for similar properties .​
Lastly: Don't sign papers without reading them thoroughly .​
As soon as​ possible,​ before you​ sign off,​ review them,​ and make sure you​ understand them,​ so you​ won't have to​ sign in​ a​ hurry .​
If it's all gibberish to​ you,​ get a​ friend,​ relative or​ an​ accountant who knows the​ jargon,​ and what it​ implies,​ to​ explain it​ to​ you.




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