1. Working out what you can afford
When it comes to buying a property, lenders need to know that you’ll be able to afford to repay the borrowed money. To work this out, they’ll conduct what’s known as an “affordability assessment”. To do this, they’ll assess your current income and outgoings and also look at your credit history to decide how much you can borrow in the form of a mortgage.
As part of our services, we’ll gather all the relevant information from you and work out how much each lender will allow you to borrow. As there are so many lenders available, this can take a few days, so it’s crucial that we get all your relevant information and documentation together as soon as possible.
2. Checking what price bracket you can look in
You’re probably asking, “What price bracket can I look in?” Once we’ve confirmed how much you can borrow, we’ll add that figure to your deposit to know what price bracket you can start looking at for your new home.
In terms of your deposit, you’ll need at least 5% of the purchase price as a minimum. The bigger the deposit you have, the less money you’ll need to borrow in the form of a mortgage, and therefore the cheaper the rate of interest the lenders will offer you.
There are government schemes that can help boost your deposit savings; Help to Buy ISAs and Lifetime ISAs are fairly popular, as the government will top up your savings by way of a 25% bonus. Again, this is something we can speak about in more detail if you’re not quite at the 5% deposit figure required.