Manage Your Mortgage: The Guide to Your First Mortgage

first mortgage

Mortgages can seem like a complicated process but are pretty straightforward. If you’re applying for your first mortgage and want to get a good idea of the entire process, keep reading.

In this article, we go into credit scores, comparing rates, and more. It’s important to be well informed and prepared before starting your first mortgage.

Check Your Credit Record

The first thing you’ll want to do before applying for a mortgage is to check your credit. Your credit will determine the mortgage interest rates and qualifications. This is where a high credit score will come in helpful.

Low credit scores mean higher interest rates and higher monthly payments. If your credit score is below 580, you might not even be able to qualify for a mortgage. This will be a huge step back to buying a home as you’ll have to take at least a year to boost up your score.

If you’re planning to buy a house in the future, keep your credit score up to get the best rates when you get around to it. You’ll want to keep it improving before you buy your house to reach higher credit tiers. If your credit score is 719, having it one point higher can place you into a higher tier, allowing you to get lower rates.

Paying your bills on time or reducing your credit card balance can do wonders for your credit score. As much as possible, you’ll also want to make sure that it’s accurate. Try and dispute for possible errors, and be thorough when reviewing your account.

Apply With Different Lenders

One mistake that a lot of first-time homeowners come across is accepting the first offer. Once you’ve applied for a mortgage, compare the rates quotes of different lenders. If some have lower rates than others, you could use it to bargain for a lower rate from a different lender.

Doing this gives you a good idea of whether or not you’re getting a good deal. Even a 0.5% difference can make a significant impact on your overall rate, as well as fees. You can never be 100% sure about an offer unless you’ve looked around and contrasted.

To help you with this, you could go to a mortgage broker to help you compare your mortgage checklist at once. You should also remember to check each of the offers’ down payment, loan terms, loan amounts, and more. Be careful not to get fooled by deals that might look better but aren’t.

Don’t Take On Any New Debts

When applying for a mortgage, buying yourself something expensive is a big no. This also applies before you even start the application process. The last thing you want to do is increase your debt.

Mortgage underwriters look at your debt-to-income-ratio. This is the amount that you’re paying monthly on debt compared to your income. If you have a lot of debt, this can have a significant impact on the size of your mortgage loan.

If you can, try and avoid big purchases. If you want to own a home soon, focus on your priorities. Look for ways to save money to get as much as you can on your mortgage, to get the real estate of your dreams.

Select a Conveyancing Firm

A conveyancing firm will help you throughout the legal process of transferring property from one person to another. They will be handling all the paperwork, registry, and contract drafting to smooth it all out. Having them work with your solicitor can speed things up.

Buying a house can be stressful, so you’ll want someone who knows what they’re doing. Get reliable professionals who can get you the best mortgage deals possible. This can cost up to $1000, but it’s worth it for help you can depend on.

Have Your Solicitor Carry Out Searches

While you’re waiting on your mortgage application to get approved by your lender, have your solicitor carry out searches for you. It’s best if you have them all carried out. However, there are some more essential searches than others.

Remember to keep in touch with your solicitor to make sure there are no complications. Communication and working together are key to getting your papers processed quicker.

Finalizing Your Deposits and Contracts

Now that you have your mortgage offer and have everything else in order, you’re closer to owning your home. Once your solicitor’s searches are all good, agree on a completion date. This is when the seller will hand over the keys to the house and find a day suitable for both of you.

The next thing is to hand over your deposit to your solicitor. At this point, your solicitor should get you to sign the contract as well.

Your solicitor will then exchange copies of the contracts with the seller’s solicitor. This exchange of contracts is what legally binds you to buy the seller’s house. Everything should follow from here.

You’ll get a completion statement from your solicitor, with a breakdown of all the money. Your solicitor will most likely carry out some more searches. Afterward, your solicitor will prepare the transfer deed for you to sign.

Paying for the House

To pay for the house, your solicitor will request the mortgage money from your lender. They will then get the mortgage money you agreed to borrow and send it to the seller’s solicitor. Don’t forget to always stay on top of your mortgage payments after everything’s done.

A Helpful Guide to Your First Mortgage

There’s a lot of things you need to research and prepare for when getting your first mortgage. We hope that reading this article helps you get a better understanding of mortgages.

A good credit score is crucial to your chances of getting a loan offer. Remember to check and compare with different lenders to ensure you’re getting the best deal. Staying informed and aware throughout the process will make the flow much smoother.

Looking to purchase a new home? We can help you get started! Contact us today and find the best real estate agents for your needs.