Mortgage Tips

tommytommy

Hi All,

Myself and my partner are at the early stages of looking at buying a house. I am wondering what should we be doing 2 years in advance of looking for a mortgage. Financial advisers/brokers want to sell us a mortgage right now and banks we approach just advise us to bank with them. Gone are the days of taking a bank at their word without checking about.

I wonder should we be saving a regular amount per month into our separate savings accounts, saving as much as we can a month in separate accounts (this will be varying monthly amounts depending on time of year - I have heard a smaller steady amount looks better even if you have less saved than seemingly erratic amounts) or should we set up joint accounts.

I would love to hear how other people have dealt with these issues.

Any advice would be appreciated.

killers1

tommytommy wrote: »

Hi All,

Myself and my partner are at the early stages of looking at buying a house. I am wondering what should we be doing 2 years in advance of looking for a mortgage. Financial advisers/brokers want to sell us a mortgage right now and banks we approach just advise us to bank with them. Gone are the days of taking a bank at their word without checking about.

I wonder should we be saving a regular amount per month into our separate savings accounts, saving as much as we can a month in separate accounts (this will be varying monthly amounts depending on time of year - I have heard a smaller steady amount looks better even if you have less saved than seemingly erratic amounts) or should we set up joint accounts.

I would love to hear how other people have dealt with these issues.

Any advice would be appreciated.

If you are two years away from applying for a mortgage you have plenty of time to get your finances in order to ensure approval when the time comes. The first part is that you will only be allowed to borrow the up to the maximum that the banks income calculators allow at the time you make your application. The ensure you actually receive approval for up to that amount you need to ensure that you have proven you can afford the stressed monthly repayment on the amount you will be looking to borrow. As rates could increase in the coming years you should allow yourself a buffer above this level to ensure your application is protected from rate increases. Whether you have single, joint or 10 different savings accounts is largely irrelevant. I would suggest you pick a figure you can afford to save on a monthly basis and stick to it. Every couple of months if you have a surplus in your current a/c you can transfer funds to your savings. Try not to dip into the savings as this reduces your repayment capacity. Keep your current a/c's in order, no 'referral fee's', unauthorised overdrawn situations and keep away from online gambling transactions. If you are renting, pay your rent on time by Standing Order from your bank a/c so you have evidence that it is paid every month.

The main thing to remember is that you will only be allowed borrow up to the max your salary qualifies for at the time of application. Your rent + savings show the repayment ability you have to repay a mortgage so always ensure this combined figure is well in excess of the stressed repayment on the amount you are looking to borrow.

Banks will always just suggest banking with them although this makes very little/no difference when it comes to a mortgage application.. If a financial advisor/broker is just looking to sell you a mortgage 'now' you are dealing with the wrong ones.

tommytommy

Thank you so much for your advice. There are some really useful pointers in there to take on board. I really appreciate your taking the time out!

misterdeeds

Hi there
If I was in your position I would be saving as much as possible into a joint savings A/C (look for the one with the highest interest) and then in 2 years have a deacent amount for a deposit and a record showing you can afford to pay x amount amount twoards possible mortage .

best of luck with it