Lawson & Daughters

If you’re buying a property and not sure of the process, here are a few vital tips to bear in mind when looking to make your life changing purchase. With the recent introduction of the Mortgage Market Review (MMR), the financial regulator has made it more difficult for those who can’t afford it to buy a property, in a bid to make sure financial lenders act responsibly. When going through the application process you’ll therefore need to show the lender evidence of outgoings and prove that if interest rates rise, you’ll be able to afford this; thus eliminating any doubts the lender may have about you defaulting in repayments.

Be prepared!

It’s a good idea to be well prepared before going to the meeting with your mortgage lender. Make sure you take evidence of your income – bank statements and payslips will suffice – and if you’re self-employed you’re likely to be asked for tax returns and business accounts. Details of outgoings will be scrutinised – such as how often you eat out and even if you’re trying for a family. You could try to cut down on the luxuries a couple of months before the interview if you’ve had that notice in advance of course. When you initially speak to an advisor on the phone they’ll most definitely (9 times out of 10) be qualified advisors. You’re also likely to have more than one appointment with your advisor; in order to get everything on your mortgage application in check and to cover all aspects of the mortgage lending process.

Fixed rate?

In this climate, it could be a good idea to fix the interest rate. After all, it’s anyone’s guess when and by how much rates will rise. While it’s not likely to be too catastrophic, knowing how much you’ll be paying for the next few years could help provide security. Also, the longer you fix for, the more likely you’ll be able to ‘pass’ the MMR tests!

Saving for a deposit

It’s important to save at least five percent of the property value – at least under the Help to Buy scheme. We think you’ll probably need more in the future, so we advise to save at least ten percent. Also, the more money you have upfront, the better deals you’ll get on your mortgage rate.

Do your research

Before you purchase a property make sure you do your research on the area you’re looking to buy in. Is it an area you know? Is it up-and-coming and close to transport links? Is it good for families and does it have green space? You need to take these things into consideration when looking as it’s important to know exactly what you’re looking for and to make the necessary calculations and trade-offs. It goes without saying, this all depends on what your intentions are.