Our dedicated brokers and case managers at Moneybox Mortgages help people turn their home-buying dreams into reality every day. We picked their brains to get their insider tips on how you can best prepare for the key moments in the home-buying journey.
Before you start viewing
You’ve got your sights set on buying your first home and you’ve just started saving a deposit. There’s lots you can be doing at this point before you’re ready to start viewing properties.
Save with a Lifetime ISA
Firstly, make sure you’re making the most of all the help available to you. With a Moneybox Lifetime ISA, you’ll get a 25% bonus on everything you save up to £4,000 a year! So for every £4,000 saved per tax year, you’ll get an additional £1,000 from the government on top.
If you open a Stocks, also known as shares or equities, represent units of ownership in a company. & Shares Lifetime ISA your capital is at risk.
A 25% government penalty applies if you withdraw money from a Lifetime ISA for any reason other than buying your first home (up to £450,000) or for retirement, and you may get back less than you paid into your Lifetime ISA.
Plan, plan, plan!
Our experts say that this phase is best used to plan and consider what’s realistic for you. Here are a few questions to ask yourself:
- What you can afford? This includes not only what you can afford to save as a deposit but what you can afford in terms of monthly repayments, taking all your credit commitments into account. Remember to factor in things like student loan repayments and car finance when you’re working this out.
- What kind of deposit will you aim to save? You can put down as little as 5%, but the more you put down, the cheaper your mortgage repayments will be!
- Are you factoring in extra costs? It’s important to remember that in addition to your deposit, you’ll also need to put money aside for extra costs and fees such as solicitors fees and home improvements.
- Is your credit score in a good place? This is a good time to work on paying down any high interest debt.
Reflecting on the above and putting a plan together will help things run smoothly when it comes to viewing properties and working with your broker.
When you’re viewing properties
You’re not far off your deposit goal and are ready to start looking at properties. Here’s what will help you through this stage and get ready to make an offer.
Get familiar with your finances
Get a full picture of your financial situation so there’s no surprises when it comes to your application. Download a credit report to check for any defaults or missed payments you weren’t aware of – popular platforms include checkmyfile, Experian, Equifax.
While the thought of having a lender assess your finances may seem daunting, remember they won’t be judging your spending. You can still treat yourself, buy takeaways and go on holidays. They’re just looking at your credit commitments to assess your affordability.
Experts at Moneybox Mortgages say they’re often asked if it’s possible to get a mortgage offer even if you’re in debt. While it will make things easier if you’re debt free, you can still get a mortgage even if you have some debt – as long as you meet the affordability relative to income and the price of the house. However, it’s a good idea to avoid taking out new credit for the 3-6 months prior to submitting a mortgage application.
Get a Mortgage in Principle
At this point, you should also consider getting a Mortgage in Principle (MIP). Essentially, a MIP is an official estimate of how much you could borrow and reassures sellers and lenders that you can afford the property. You can get a MIP with Moneybox Mortgages by heading in-app to Accounts > Mortgages. It’s free and takes less than five minutes. Armed with all of this information, you’ll be better prepared to speak to a broker.
Learn who your key contacts are
There’s a lot of moving parts and many different people involved in the home-buying process. Which, if you’re not familiar with, can be really confusing to know who you need to contact and when. With Moneybox Mortgages, we’ll do most of the leg work of coordinating and speaking with third parties on your behalf. But, there are times when you may want or need to chat to certain contacts. Here’s a breakdown of who your key contacts are at the main stages of the home-buying process.
- Offer accepted: Estate Agent and Moneybox Broker
- Pre-application up to submitting your application: Moneybox Mortgages Broker
- Application in progress: Moneybox Mortgages Case Manager
- Offer issued by the lender: Solicitor and Moneybox Mortgages Case Manager
If you’re ready to remortgage
Start looking six months before your rate expires
The best tip our experts have when it comes to remortgaging is to tackle it as soon as possible. Doing this ensures you can secure the rate and it protects you from rate rises. You can do this up to six months before your current rate expires.
If you don’t secure a new rate before your current rate expires, you run the risk of being moved onto a standard rate which could be expensive. If you confirm a new rate in advance, your existing rate will run to expiry before shifting to your new rate.
Your current provider will probably get in touch with a rate offer. Our experts say it’s important to shop around first to make sure you’re getting the best deal possible. If you’re unsure, we can help find you the best rates on offer.
Factor in fees
Remortgaging is generally more straightforward and requires less effort than applying for your first mortgage. However, there are some costs to factor in including solicitors fees, which often vary. So factor this in when it comes to planning your remortgage.
To learn more about Moneybox Mortgages, click here or head in-app to Accounts > Mortgages.
You may have to pay an early repayment charge to your lender when you remortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Moneybox Mortgages is provided by Moneybox Mortgages Ltd.