When applying for a mortgage there are many different things you need to consider before even looking for a mortgage lender. There is obviously a set process followed when applying for a mortgage and this process is similar through out most mortgage companies so making sure you have all the relevant information is very important.
Below is the process most mortgage companies follow when customers are applying for a mortgage loan.
Pre mortgage checks
There are a number of checks that any mortgage company will be required to carry out before being able to make a decision on whether to accept or reject your application. These checks will include things such as a credit history check which will show the company things like how prompt you are with existing loan or credit repayments. This will help them gain an idea of how reliable you are when it comes to making repayments. Other checks they will have to do may include references from people such as your employer or your landlord if you are renting a property. As well as these references you would have to be able to prove you have a steady, regular income, if you are employed by a company you could provide things such as bank statements if self employed then audited accounts for the last 2 – 3 years should suffice.
Application process
As well as the checks they will carry out stated above there are other pieces of information you would be required to provide such as an idea on the type of property you wish to purchase, how much you plan to spend and what area you are planning on buying in. It is once all this information is collected that the company will decide whether or not to accept your application as they will have to determine if you can afford the monthly repayments and make them on time. The rate you will be asked to pay is usually affected by how high the deposit you place is so, normally the higher the deposit the lower the rate you are charged.
Special circumstances
There are some mortgage companies that specialise in helping people that are in a position where they can’t provide one or more of the required pieces of information needed by most mortgage providers. This could be proof of income or a poor credit history that would mean they get rejected from many mortgage companies, although they may get accepted by these specialist companies the rates may be slightly higher than normal.
Sometimes it is just as important to make sure you choose the right mortgage company as it is to make sure you have all the right information you need for them. In all instances even if you are having trouble with one of the required pieces of information don’t settle for the first mortgage company you try. If you get quotes from a number of mortgage companies then you will be more likely to get a better rate in the end.