What do you need to ask before applying for a mortgage?

June 19, 2017 by Brendan

Advice & Tips

Taking out a mortgage can be a complex situation for all parties involved, which is why mortgage advisors are required to have studied on a CeMAP training course. Although a mortgage is simply a loan, it is possibly the most expensive loan you will ever take on, so it is important not to make any mistakes.

The first consideration is whether you are ready to be tied to paying off a loan which will take many years to repay. In addition, there will be household bills to pay, which account for a large proportion of your income. Once you have decided that buying a home really is for you, finding out how much you can borrow is the next step.

Income and expenditure are the main factors to be considered when applying for a mortgage, but the lender will generally offer a multiple of your income, often around four times your salary. There are several types of mortgage available, including a discounted rate and a fixed rate option, both of which may reduce monthly repayments. If you have a strict budget, it may make sense to apply for a fixed rate mortgage.

Although the most common method of payment is a repayment mortgage, it is also possible to apply for an interest only product, although these can be far more difficult to obtain and have stricter criteria.

The most common mortgage term used to be 25 years, but now there are more longer term products available, which may be an option if you have borrowed a large amount and know that you will remain in your home for many years before moving.