A Guide to Applying for Your First Mortgage

Posted on June 28, 2024

Buying your first home is an exciting milestone, and here at Hackett Property in Sunderland, we’re here to help you every step of the way. From finding the perfect property to securing your first mortgage, our friendly and professional team is dedicated to making the process as smooth and stress-free as possible. In this guide, we’ll walk you through the essential steps to applying for your first mortgage.

Step 1: Assess Your Finances

Before diving into the mortgage application process, it’s crucial to take a close look at your finances. Determine how much you can afford to borrow by reviewing your income, expenses, and any existing debts. It’s also a good idea to check your credit score, as this will play a significant role in your mortgage application. A higher credit score can help you secure better interest rates and terms.

Step 2: Save for a Deposit

Most lenders will require a deposit of at least 5% of the property’s purchase price. However, aiming for a larger deposit, such as 10% or 20%, can improve your chances of being approved for a mortgage and reduce your monthly repayments. Start saving early and explore government schemes like Help to Buy, which can assist first-time buyers with their deposits.

Step 3: Understand Your Mortgage Options

Mortgages come in various shapes and sizes, so it’s essential to understand your options. The two main types of mortgages are fixed-rate and variable-rate. Fixed-rate mortgages offer stability, as your interest rate and monthly payments remain the same for a set period. Variable-rate mortgages, on the other hand, can fluctuate based on market conditions, potentially offering lower rates but with more risk.

Step 4: Get a Mortgage Agreement in Principle

Before you start house hunting, it’s a good idea to get a Mortgage Agreement in Principle (AIP). An AIP is a statement from a lender indicating how much they might be willing to lend you based on your financial situation. While not a formal mortgage offer, an AIP can give you a clearer picture of your budget and make you a more attractive buyer to sellers.

Step 5: Gather Your Documentation

When you’re ready to apply for a mortgage, you’ll need to provide various documents to your lender. These typically include:

• Proof of identity (passport or driving license)
• Proof of address (utility bills or bank statements)
• Proof of income (payslips or tax returns)
• Bank statements (usually from the last three to six months)

Having these documents ready in advance can streamline the application process.

Step 6: Choose a Lender and Apply

With your AIP and documentation in hand, it’s time to choose a lender and submit your mortgage application. You can apply directly with a bank or building society or use a mortgage broker to compare multiple lenders and find the best deal. At Hackett Property, we have a network of trusted mortgage advisors who can help you navigate this process.

Step 7: Wait for Approval and Complete the Process

Once you’ve submitted your application, the lender will assess your financial situation and the property’s value. This process can take a few weeks, so be patient. If approved, you’ll receive a formal mortgage offer. Review the terms carefully and, if everything looks good, accept the offer.

Step 8: Finalise the Purchase

With your mortgage secured, you can now finalise the purchase of your new home. Your solicitor or conveyancer will handle the legal aspects, ensuring all paperwork is in order. Once completed, you’ll receive the keys to your new home and can start this exciting new chapter in your life.

We’re Here to Help

At Hackett Property, we understand that buying your first home can be daunting. Our friendly and professional team is here to support you through every stage of the process, from finding the perfect property to securing your mortgage. Contact us today to learn more about our services and how we can help make your home-buying journey a success.