More often than not the house is bought from licensed lenders on money borrowed. Therefore, it’s important to know exactly what you’re in for when you get your first mortgage. For more info click Blue Square Mortgage.
Broadly speaking, the mortgage lender provides you with the money you need for your home and expects you to pay back the same with interest within a specified period of time. In the mortgage market there are two main types of players: borrowers and brokers. You have the option to go straight to an approved lender, or you could contact a mortgage broker who will help you get the mortgage from any of the many lenders on the market. It’s a jungle out there and finding someone who can help you survive in it could be helpful. Yet note that the price that pays for the mortgage broker may be higher than charges that the approved money lenders. Be also mindful that most of these brokers are not accredited, and are therefore not bound by any regulations.
What are borrowers looking for in mortgages?
Principally, mortgage lenders are worried about your credit report. You scrutinize your debt ratio in a credit report, which is an estimate of your earnings and how much you owe, as well as over all credit ratings. Earnings proof is another main factor for determining whether or not the lender would end up approving your loan amount. Such knowledge is usually collected from you’ve submitted tax returns and pay stubs. It is important to keep your records clean and unquestionable, in order to get the mortgage without much trouble. But what if you do have a credit report that is not so perfect? Well then there are several other lenders who can still give you a loan, paying you a higher interest rate.
Why do mortgage lenders often turn down applications for mortgages?
This may be due to factors like bad credit reports, low annual income or even if they’re not happy with the house you’re planning on buying.
How much of a mortgage loan can these borrowers reasonably expect?
A sort of thumb rule says you can get a loan amount which is 4-5 times your annual income. So the more you receive, the larger the mortgage to which you are entitled.
What is the mortgage-buying process?
You can either contact the lender to get your situation reasonably measured and ask them how much they’re willing to give you, and then search for a house in that budget. You can even choose a home, and then apply for payment to the lender. Any way you go, you must first obtain a’ Principle Agreement’ which specifies the sum that the lender is willing to pay for your property. This document is usually accurate for a span of around three months. Following that you are expected to complete the’ Hypothecary Application’ and apply the same with your financial stability and creditworthiness documents required. Afterwards, a trained valuer inspects the building.
The lender may submit a’ Mortgage Bid’ or’ Advance Offer’ after the mortgage application is found to be acceptable. The document will also state the terms under which the lender will give you the mortgage.