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Applying for a mortgage is one of the most significant financial decisions you’ll ever make, and a mortgage adviser can be an invaluable guide through the complexities of the process. To ensure you’re fully prepared, here are the top questions you should ask before applying.
What types of mortgages are available to me?
Fixed-rate, variable-rate, tracker, offset mortgages…how do you know which is best? Each type of mortgage comes with its benefits and drawbacks. Fixed-rate mortgages provide stability, while tracker mortgages fluctuate based on the Bank of England’s base rate. Asking your adviser to explain these options will help you determine which is best suited to your financial situation.
How much can I borrow?
This question is pivotal to setting your expectations. A mortgage adviser will calculate your borrowing potential based on your income, expenses, credit score, and deposit size. This will help you focus on properties within your budget and avoid unnecessary disappointment.
What deposit do I need?
Deposits typically range from 5% to 20% of the property price, with an average of 15% for first-time buyers. However, a larger deposit can unlock better interest rates. Discuss with your adviser whether you should aim for a higher deposit and if there are any government schemes, such as Shared Ownership, that could assist you.
What interest rates and fees should I expect?
Interest rates significantly impact the overall cost of your mortgage. Ask about the current market rates and whether fixed or variable rates are more favorable. Don’t forget to enquire about fees such as arrangement costs, valuation fees, and early repayment charges to avoid surprises later.
What will my monthly payments be?
Your adviser should give you a clear breakdown of your anticipated monthly payments under various scenarios. Don’t just consider affordability now; ask how these payments might change if interest rates rise, particularly with variable or tracker mortgages.
What additional costs should I prepare for?
Beyond the deposit and monthly payments, there are numerous costs associated with buying a home. Stamp duty, legal fees, survey costs, and mortgage arrangement fees can add up quickly. Make sure your adviser provides a detailed estimate of these expenses so you’re not caught off guard.
How long should my mortgage term be?
A typical mortgage term ranges from 20 to 35 years. Shorter terms mean higher monthly payments but less interest paid overall. Your adviser can help you weigh up the pros and cons of shorter versus longer terms based on your financial goals.
What documents do I need to provide?
Preparation is key to a smooth application process. Ask your adviser for a comprehensive list of documents, such as proof of income, bank statements, and ID. Knowing what’s required can save time and prevent delays.
Preparing a list of questions and sharing your priorities maximises your time with a mortgage adviser and will ensure you leave with a clear understanding of your next steps. At Verve Financial, we are always happy to answer any questions you have. Get in touch today and let us walk you through your mortgage journey.
