The Redmove guide to buying a home in York – Pt 2
This is the second part of the Redmove guide to buying a home in York and will detail how to find a mortgage, what a mortgage will cost and checking a credit history.
How to find a mortgage
There’s no doubt that an estate agent should be able to help give a broad idea of what mortgages are available; here at Redmove we are happy to help provide any necessary information when it comes to buying a home in York.
An estate agent should also be able to provide information on good local mortgage brokers, also known as an intermediary, and they will be able to search the entire market to find the best deal.
It’s always worthwhile asking your building society or bank to see what mortgage products they have on offer also. It’s also worth noting that some of the better mortgage deals may not be provided by banks and building societies.
Some property developers and new home builders also offer some very attractive mortgage deals in a bid to help them sell property – if you’re interested in a new build this may be a viable route to finance.
What a mortgage provider will look for when buying a home in York
This Redmove guide is not just for people buying a home in York, it’s for use by house buyers around the country and we’ve already looked at the criteria on calculating how much you can afford when it comes to repay a mortgage.
The mortgage lender will then take this information and there will also need to calculate how much of a risk you will be in repaying the loan.
This means that the mortgage lender will analyse your credit history and whether you have kept up your existing credit repayments and whether you have defaults on repayments or even have county court judgements (often referred to as CCJ’s). The mortgage lender will also check whether you have been declared bankrupt previously.
If your credit history may be of some concern, it may be worthwhile checking with a credit reference agency such as a Equifax or Experian. This may cost you a small amount but it is worth checking with them, just in case.
If there is a problem or a mistake in your credit file, then you can have it corrected.
Just a quick word of warning here; be careful about running too many checks on your credit file and don’t apply for a mortgage with too many lenders because every check by them will leave a footprint and too many footprints on a file will, inevitably, hurt your credit rating.
Get a mortgage with poor credit history
However, for those with a poor credit history there may still be an opportunity to get a mortgage, or often a sub-prime mortgage, but these are more costly to get and run so it may be more worthwhile in improving your credit record.
There’s no doubt that most lenders are more cautious when it comes to their lending criteria than they used to be, and those they consider to be a risk will find it more difficult in finding a mortgage.
For people who are self-employed and looking to buy a house, they will have to provide extra proof of their income which usually means showing their business income for at least two years. If you are a contract worker then you may be asked to prove that your level of earnings will continue.
In addition, for couples who are looking to buy a home, the mortgage lender will need to see confirmation of both incomes.
Getting a mortgage for a group of friends
With property prices rising so quickly in recent years, there are some on mortgage lenders who will consider making a loan on a property purchase for a group of up to four people.
These types of arrangements are fraught with difficulties and anyone considering buying a property with one or more of their friends should think carefully especially since the mortgage will be ‘jointly and severally liable’ which means you will have to pay another person’s share if they don’t pay.
It’s also worth considering what might happen if your circumstances change, if you lost your job for instance, are you wanted to have a child and leave the workplace for a time.
How to choose a mortgage when buying a home in York
It’s always a good idea to shop around for the best mortgage deals that are on offer but you need to be careful when comparing them so they are on a like-for-like basis when buying a home in York.
Essentially, what may appear to be a good offer with lower repayments may not be when compared with another deal, for instance.
Most mortgage lenders will run special offers at various times in the year so don’t be shy about looking to get the best mortgage deal that suits you and your circumstances.
Indeed, it’s also worth looking at the term of the mortgage you are wanting. Most mortgages run for 25 years though you can ask for a mortgage that is over a shorter or longer period if you need it to be.
Obviously, mortgages that run over fewer years will be more expensive but it means you will also be debt free more quickly and own the property sooner.
What is a ‘mortgage in principle’
Once you’ve investigated various deals and met with a potential lender then it’s time to get the mortgage in principle agreement from them. This means you can then begin looking for a property knowing that your mortgage up to a certain value has already been agreed and arranged.
And with the relevant piece of paper, you will be one step ahead of most other homebuyers to put you into a better negotiating position.
Parts 3 and 4 of this ‘Redmove guide to buying property in York’ will cover finding the property that’s right for you, whether it’s new build or established, and what to look for in an area you would like to move into.
Contact Redmove, York’s leading award-winning estate agents and ask us more about buying a home in York on 01904 488 444.
Redmove prides itself on being a professional and friendly award-winning estate agent that is a member of the industry’s leading organisations. We conform to guidelines and codes of practice. Redmove are members of the Association of Residential Letting Agents (ARLA), the National Association of Estate Agents (NAEA) and The Property Ombudsman (TPO). The firm is also registered with the Trading Standards Institute (TSI). For the best levels of experience and expertise we can be contacted on 01904 488 444 or visit our website to find out more.