BEFORE YOU EVEN think about your application, the first step is to carry out a thorough inventory of your finances. Figure out how much you have on hand as a potential deposit and how much you are saving each month.
You’ll also need a rough idea of the value of house you’re aiming to buy (bearing in mind that you can typically borrow no more than three-and-a-half times your income). All this will save you time when you start talking to a lender.
“You need to check if you have the income ability for a monthly mortgage payment and if you have enough for a deposit. Because if you have neither of those there’s no point looking for a mortgage just yet,” says John Lowe of the Money Doctor.
Once you’re happy with your financial situation, it’s time to approach a bank or credit union, or you could go to a broker or financial advisor who will be able to deal with a lender on your behalf.
At this stage it’s a good idea to shop around and find a mortgage and a rate that will work for you. You don’t necessarily need to stick to your usual bank, as you can typically get a mortgage from any lender without being an existing customer.
“There used to be a time where you had to build up your deposit with a lender, but that’s not necessary any longer. You can walk into any bank now or go to a financial advisor who will look at all the providers for you,” Lowe adds.