Like the majority of buyers, you’ll need a deposit before you can apply for a mortgage. Typically, you’ll need to put down 10%, but this can vary from lender to lender. Depending on the level of equity you may have in an existing property that you may be able to use towards your deposit.
The mortgage provider may also consider your application more favourably the more deposit you have and offer better interest rates for you.
You may want to first apply for an Agreement in Principle (AIP) or ‘Mortgage in Principle’ – with a mortgage provider to help you get a better understanding of how much you can borrow.
You can apply online and only have to provide a few details. The provider will run ‘soft credit check’ and if approved, the agreement or mortgage in principle is valid for up to 90 days.
This can not only assist you in seeing what you can and cannot afford but help you to see if you may need to do a little more budgeting before looking to buy.
An agreement or mortgage in principle does not, however, ensure that you will be approved for a mortgage with a provider. You will still need to go through the entire approval procedure when you submit a legitimate application at a later time.
You can use our Mortgage Calculator to work out how much you can afford and to see how much the monthly payments would be for your dream property.
People often want to know what the best mortgage products are. The simple answer is it depends on what you feel is the right match for you and your circumstances.
The mortgage provider should always run through the options with you to help inform your decision, but here are some examples of mortgages you might be offered:
Fixed rate: A fixed-rate mortgage means interest rates won’t change for a period of time agreed with the provider. This can range between 2 to 15 years and are a popular choice for buyers who want to pay the same amount towards their mortgage every month, allowing the buyer to monitor their monthly incomings and outgoings. When the fixed period ends you will be moved onto the bank’s standard variable rate mortgage.
Standard variable rate: Standard variable rate mortgages (also known as SVRs) can see the rates fluctuate depending on general market conditions and the decision making of the provider.
Tracker: Tracker mortgages are similar to variable rates but will follow external rates and not those of the provider.
Guarantor: Guarantor mortgages are not strictly a mortgage product, however having a guarantor for one of the above options can help you secure an offer from a lender. These see a third-party (usually a family member) included on the mortgage to ‘guarantee’ the payment will be made if you’re unable to keep up with them.
In order to help secure a mortgage you will need to demonstrate to the provider you’re in a stable financial position and that the risk of lending to you is low. So, in addition to having a deposit it can help to:
We work with independent financial advisors (IFAs) who can help you secure the right mortgage for you.
The New Homes Group can help you, a seller, our team, lenders, all have a clear understanding of your financial status. We therefore request that all potential buyers are qualified by The New Homes Group to help progress along their buying journey.
You can then of course proceed with The New Homes Group or use a provider of your choice. Here is some more information about The New Homes Group.
If you’d like to know more about this or you have an enquiry about our developments of quality new build properties, don’t hesitate to get in touch. You can find our contact details on this page.