Being able to own a home is a dream shared by many, but before you can do that you have to be able to afford all aspects of homeownership and acquisition. Fortunately, with the assistance of a solid financial strategy and in-depth research around mortgage rates or requirements, purchasing your dream home may be closer than you first thought.
Here are six steps to take to secure a mortgage for your dream property.
Research Mortgage Rates
It is hard to plan for something when you have missing information. Therefore, empowering yourself with the necessary knowledge is a strong initial move that will enable you to proceed with the process more confidently.
A simple yet effective way to achieve this goal is through using a verified loan calculator such as the one from Property Guru. This company is an expert when it comes to all things home related, so it is a safe assumption that the information will be accurate.
You can even use their site to search for potential properties to give your mortgage calculation more accuracy. Having a clearer picture of what a mortgage payment may entail makes it that bit easier to plan for the future.
Gather the Essential Documentation
Missing documents are the main delay in so many mortgage applications! Most lenders will need proof of income and identity, but some will want more like full access to your credit file or residential dealings over a set amount of past time.
This is a largely admin related point, but it is one of the most essential parts. There can be no completed process without all the necessary paperwork, so gather everything and make moves to replace things that have become lost.
Figure Out Your Credit Rating
To stand a chance at being accepted for a home loan, you have to know where you stand financially in the wider picture. To do this, you have to gain access to something called your credit score. This is an accurate depiction of your history with money, and something lenders use to verify identity. It shows your addresses, any names you have gone by, any financial associations, and any bank account or credit asset that exists under your name.
How you manage your finances is very important to lenders, and they will use this information to decide whether or not you are a viable candidate for a mortgage. So, if you have mismanaged money in the past or present, for example, you have a lot of debt that is still floating around, this needs rectifying else you will more than likely be rejected.
Find Some Home Options
Many people go into this process with a very fixed idea in their minds of what they want their prospective house to look like. The truth is you don’t know until you have walked around a set of different homes. Features might jump out that you didn’t even realize you wanted, and the things that your heart was so set on may become irrelevant once you’ve actually seen how they present in a physical space.
So, don’t get caught up on the finer details. While it is good to have a plan and a projection of what you want, it is also good to keep an open mind when it comes to deciding where you’re going to live. Expect to dedicate at the very least, three full days to scouring potential homes.
Every property that you visit to view has to be observed thoroughly and have each detail taken into consideration. Don’t be afraid to take pictures and make notes so that you can compare options after the visits have concluded.
Be Willing to Compromise a Little
Of course, some compromises are not up for discussion; however, run with the theme of keeping an open mind, as there have to be some allowances along the way. Take, for example, the pre-requisite of an en-suite in the master bedroom.
Not every property has this. However, they are fairly easy to install and don’t cost too much money. So, if the house is ticking all the boxes except this one, then it is worth remembering that there are solutions to be considered.
Increase Your Deposit Constantly
To get a better, more affordable mortgage option, try to increase your deposit. The more you put down, the better the chance of a lower rate and fewer interest commitments. You can use the calculator we mentioned above to explore and play around with different deposit amounts to see how it affects the application.
Securing a mortgage is a multi-step process that factors in a lot of considerations. To find your dream home, make peace with having to jump through a few hoops here and there and making a few compromises too.
