Getting a mortgage is very different from getting a loan for 2 obvious reasons. The first reason is the amount of money that you would be loaning when you are taking a mortgage would be much more than what you would be taking if you were getting a loan. Secondly, the time it would take you to pay back the mortgage would be much longer than what it would take you to pay back the loan. This article will provide a step by step process on how to get a loan.
Mortgage companies would want to be sure that you would be able to pay back your mortgage. Based on this, they carry out a lot of checks that go beyond the check carried out when you are getting a loan. For instance, when getting a loan, lenders might only be interested in your income and that you can easily pay up the loan. However, when it comes to mortgage, the lenders carry out a stress test to be sure that you would be able to make up with the payment of your mortgage. Based on this, they will carry out a credit check through the credit reference agency the instance you apply. The check entails going through your history and credit score to know if it will be risky for them to give you the mortgage or not. Thus, you should also be sure that you can pay back the mortgage before applying.
Check your financial history
Checking your financial history could go a long way to help you get a mortgage. This is considering that there could be negative entries about you with credit reference agencies. Thus, you should order a credit report from about 3 of them and go through to be sure that every information that has been entered about you is correct. This is to avoid incorrect information that could hurt your chances of getting the loan on their reports.
Some documents would be required from you when you want to apply for a mortgage. They include one or more of the following: utility bills, tax return form, statement of accounts for 2 to 3 years, statement of the current account from the bank within for between 3 and 6 months, driving license or passport, payslips for the previous 3 months, p60 form to be gotten from your workplace and proof of received benefits. Ensure that you provide all the required documents requested on you and make sure that the information on the documents is accurate as well.
Expenses and other loans
There are chances that they would request for a breakdown of your expenses, especially the recurrent ones like utility bills. They would also be interested if you have other loans. The idea is to subtract your expected spending from your income and be sure that the balance would be able to sort out your monthly mortgage repayment.
Getting the Mortgage
Once you are sure you have all of these requirements, you might decide to approach a mortgage company directly or go through a broker. Both have their advantages and disadvantages. In most cases, it might be better you go through a broker because even though you would pay a fee, in the long run, what you might save and other benefits might be worth more than the fees. You can read about mortgage simplicity to see the experiences of other people who took a loan through them and if such experiences would be worth you patronizing their platform.