When it comes to buying your first home, looking at the affordability of property is only one part of the process. Looking for a way to responsibly finance it is also something that many first-time homebuyers struggle with. Obtaining a mortgage can help cover the costs needed to secure the transaction, but the application process can be tricky and difficult to understand. Moreover, not knowing what to look for can cause your application to get rejected.
That being said, many prospective homeowners worry about whether they can apply for a mortgage if they have never taken out a loan before. Fortunately, there are ways that you can increase your chances of getting your application for a mortgage approved, so you can get a home loan that is right for you. If you feel lost and don’t know where to begin, here are a few tips that can help you get started:
Familiarise Yourself with the Requirements of a Mortgage Application
Generally, mortgage lenders will request that you provide certain documents as proof of your eligibility. Some requirements include a copy of your credit report, and employment certificate, and bank statements. However, some unscrupulous lenders might take advantage of your first-time buyer status and require you to submit certain files or disclose sensitive information so that they can exploit you.
People who are inexperienced with loans are often made to believe that they are unqualified for any sort of property financing option. But this is not always the case. Even if you have never taken out a loan in the past, you can still qualify for a grant if you can show that you are capable of managing your finances well and making payments on time. You can enlist the help of a mortgage broker to get your requirements and paperwork in check prior to your mortgage application.
Explore Different Mortgage Options
To put yourself in a better position to get the best mortgage possible, you must take the time to look into different types of property financing and understand how they work. While it can be overwhelming, having some knowledge of your options can help you get the best deal possible on a home loan. While banks are popular lenders when it comes to mortgages, home loans can also be provided by assistance programmes, government agencies, and more.
Mortgage interest rates and details may vary between lenders, so it is important to research your options and compare them to each other. You can even find out what types of mortgage may be possible for you to get based on your loan-to-value (LTV) amount. Knowing what type of mortgage is best for you will help you put together an application that has a higher chance of getting approved.
Have a Substantial Amount Set Aside for Your Deposit
The number of financing options available to you will largely depend on how large your deposit is. Many lenders usually offer their most competitive rates to individuals who can put down a hefty sum for their first home because they will need to borrow less money. As the home buyer, your monthly payments will also be lower if your initial deposit is already large, to begin with.
Consider Applying for a Joint Mortgage
If you find that you cannot put together a decent deposit by yourself, consider buying your home with someone else. It can be your significant other, a family member, or a close friend. Just ensure that you and the other person are on the same page and have a clear agreement when it comes to making payments. Your chances of getting a mortgage application approved can greatly increase when you opt for a joint mortgage, as you and the other person will be putting down a larger sum for the initial deposit.
Finalise Everything Before Applying for a Mortgage
Once you begin the process of getting a home loan, you need to avoid making any changes if possible. Correcting and updating your information once your application is already in progress will inevitably cause delays, as your application will need to be reassessed to ensure that all the details are correct. This can stall or halt your property purchase altogether. To prevent this from happening, take the time to carefully research your options, sort out your finances, and prepare all the necessary paperwork prior to your application.
For most people purchasing their first home, getting a mortgage is an essential step that can ease the financial burden of such a big purchase. Though there are a plethora of options available to first-time home buyers, taking the time to learn about them can give you an idea of the home loans that are most appropriate for you. Moreover, you can also consult a mortgage broker or mortgage banker for assistance. Doing so does not just help you save time and money, but it can also help you with your application.
Have more questions about obtaining a mortgage? Get in touch with Gerard Partners today!