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Buying a home comes with plenty of questions. And speaking as a mortgage broker, we would much rather you asked us than lost sleep over them.
There’s a funny thing about mortgages. We’re expected to understand them, despite nobody really teaching us how they work. One minute you’re browsing properties over a cup of tea, and the next someone is asking about affordability, bank statements and something called an Agreement in Principle. Before long, everyone has an opinion, from your parents and colleagues to your mate who bought a flat in 2009 and is now apparently a mortgage expert.
Most of that advice is well meant, of course, but working out which bits actually apply to you isn’t always easy. What worked for someone else, with a different lender and very different circumstances, might not be the right approach for you today.
Over the years, I’ve spoken to countless people who have put off getting advice because they thought they needed a bigger deposit, a better credit score or an actual property to buy first. Others have convinced themselves that being self-employed rules them out altogether, often without ever having had a conversation about what might be possible.
The good news is that you don’t need to know everything before you get started. That’s what we’re here for. But whether you’re buying your first home, moving somewhere new or reviewing your current mortgage, there are a few things we wish more people knew that could save a little time, a few worries and perhaps the odd unnecessary argument over the kitchen table.
I completely understand why people start with the property search. Looking at homes is much more enjoyable than digging out bank statements, and it doesn’t take long before you’ve mentally knocked through the kitchen, chosen a sofa and decided where everyone will sit at Christmas.
However, having a conversation with a mortgage broker before you get too attached to somewhere can make the whole experience easier. We can help you understand what you might be able to borrow, how much deposit you’ll need and, crucially, what the monthly payments could mean for your everyday life. There’s a difference between what a lender might offer you and what you would actually feel comfortable paying, especially if you’d quite like to carry on having a life once you’ve moved in.
We can also help arrange an Agreement in Principle, which gives an indication of what a lender may be prepared to lend, although it isn’t a guaranteed mortgage offer. Getting this groundwork done early means you can search with more confidence and be better prepared when the right property comes along.
Credit scores have become something of a national obsession, and I can see why. Having an app put a number against your financial life makes it very tempting to treat that number as the final word on whether you’ll ever get a mortgage.
In practice, lenders look at much more than a single score. Your credit history is important, but so are your income, existing commitments and overall affordability. Different lenders also have different criteria, so something that causes a problem with one may be acceptable to another.
That doesn’t mean past credit issues can simply be brushed aside, but it does mean you shouldn’t write yourself off without having a proper conversation. Tell your broker about anything you’re concerned about early on, even if you feel a bit awkward discussing it. We’re here to understand your circumstances and help you work out your options, and that’s much easier when we have the full picture.
Buying a home has a habit of making everything else you own look as though it could do with an upgrade. Suddenly the sofa isn’t quite right, the fridge seems too small and a new car starts to feel like an entirely sensible addition to the moving budget.
The trouble is that taking out finance, a loan or other new credit during your mortgage application can change your monthly commitments and affect the lender’s affordability assessment. Even once you have a mortgage offer, lenders may carry out further checks before completion, so it’s worth keeping your finances as steady as possible until everything has gone through.
If you’re considering new borrowing, changing jobs or making another decision that could affect your income, speak to your broker first. It may be perfectly manageable, but a quick conversation beforehand is considerably better than trying to untangle a problem when the removal van is already booked.
Saving a deposit is a big challenge, particularly when you’re paying rent at the same time. It’s hardly surprising that people feel discouraged if they believe they need to save 20% of a property’s value before anyone will take them seriously.
A larger deposit can certainly help and may open the door to more competitive rates, but it isn’t always essential. Depending on your circumstances, the property and the lender’s criteria, mortgages with a 5% deposit may be available. You’ll need to allow for the other costs of buying as well, including legal fees, surveys and any applicable property tax, so it’s important to look beyond the deposit itself.
What I’d encourage you to do is find out where you stand rather than assume you’re years away from being ready. Even if buying isn’t possible just yet, understanding what you’re working towards can make saving feel a little more purposeful.
This is one we hear regularly, often from people who are running successful businesses but have somehow been left with the impression that being employed is the only acceptable way to earn a living as far as mortgage lenders are concerned.
Being self-employed can involve more paperwork, and the way your income is assessed will depend on your circumstances and the lender. Some lenders may look at salary and dividends, while others may consider your share of business profits. That difference can matter, which is why understanding your business properly is such an important part of finding a suitable mortgage.
Getting your accounts and income documents organised early will help, as will speaking to a broker who understands how self-employed income works. You’ve probably got quite enough to do running the business without spending your evenings trying to decipher every lender’s criteria.
I like a competitive rate as much as anyone, but choosing a mortgage purely because it has the lowest headline rate can be a bit like booking the cheapest flight and then discovering what it costs to take a bag with you.
Fees, incentives, early repayment charges and the flexibility of the mortgage all need to be considered. Depending on the amount you’re borrowing, a slightly higher rate with a lower fee could work out cheaper over the initial deal period. Equally, a deal that looks attractive today might not suit you particularly well if you’re planning to move or want the freedom to make substantial overpayments.
A good mortgage conversation should cover both the numbers and your plans. We want to help you find something that represents suitable overall value and fits the way you expect to live, rather than simply pointing to the smallest number on a comparison table.
Mortgage expiry dates rarely compete well with everything else going on in life, which is why it’s so easy to put the paperwork to one side and promise yourself you’ll deal with it next month.
Starting a conversation around six months before your current deal ends gives you time to consider your options without a last-minute rush. Depending on the lender and product, you may be able to arrange a new deal in advance, and your broker can explain the timing, costs and any early repayment charges that need to be taken into account.
It’s also worth reviewing what your existing lender can offer alongside options elsewhere. The aim is to make an informed decision before your deal expires, rather than drift onto the lender’s Standard Variable Rate without checking what that could mean for your monthly payments.
There is absolutely no reason you should arrive knowing the difference between a fixed rate and a tracker, what an Agreement in Principle actually means or why a lender wants another bank statement when you’re fairly sure you’ve already supplied enough paperwork to wallpaper the spare room.
Mortgages are something we deal with every day, but for most people they’re an occasional and fairly significant part of life. It’s our job to explain things clearly, give you space to ask questions and make sure you understand the decisions you’re making.
If something doesn’t make sense, please say so. And if you need us to go through it again, that’s fine too. I would much rather someone asked the same question twice than went away feeling worried or unsure because they thought they ought to know the answer.
It all starts with a conversation
For me, good mortgage advice starts with understanding the person behind the application. You might be buying your first home, making room for a growing family, starting again after a change in circumstances or simply trying to get your monthly finances into a better place. Whatever brings you to us, it deserves a proper conversation.
At Coreco, we’re here to listen, explain your options in plain English and help you find a mortgage that suits your circumstances. There may still be paperwork, and we can’t promise the house move itself will be entirely stress-free, but having someone in your corner who knows the process can make a real difference.
If you’ve got a mortgage question, or you’re wondering where to start, get in touch with the Coreco team. You don’t need to have everything worked out before you pick up the phone.
Your home may be repossessed if you do not keep up repayments on your mortgage
Savannah joined Coreco in 2020, where she became part of the Client Services Team. After a year of Client Services, Savannah expressed an interest in Social Media and wanted to transform Coreco’ s socials.Savannah then became Coreco's Social Media Queen and fulfilled the role until most recently becoming Marketing Executive.Savannah also won Best Use of Social Media Award in the 2022 Mortgage Industry Marketing Awards!
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