Are you looking for a mortgage loan? There are several factors that you must consider before applying for one. A mortgage has many up-front costs involved that many people do not know about. Knowing the exact requirements involved with getting a mortgage loan will make it easier for you when considering a mortgage. Here are the factors you must consider:
There are certain costs that you will incur even before paying the mortgage. These costs vary according to the aspects of work involved in the process. There are legal costs involved since a licensed solicitor is required to deal with all the legal aspects involved with purchasing a property.
Mortgage application fee
Many mortgage lenders charge an application fee for taking a mortgage. This fee may be paid before taking the loan or together with the loan. The fee amount varies depending on the mortgage amount and the lender.
It is important that you get a qualified estate agent to value your current property so that it may be acceptable as security for the mortgage. The lender may also decide to value the property to identify the actual value. The valuation of the property can save you a lot of money for unforeseen repairs that may be needed in future.
The mortgage portability
In case you will move to another place within a specified or unspecified duration, you need a portable mortgage. This could save you a lot of money since you can keep the mortgage even if you move houses.
For a mortgage that is not portable yet you want to move, the lender will require you to make early repayments that may be very costly.
Are you able to repay the loan?
This is a question that you and the lender must answer. Always take a mortgage loan for what you can repay. If possible, have a contingency account that can help you repay even with a risky future. Also consider that the mortgage rates may rise in future. The mortgage rates depend on the base rate which varies from time to time. Hence, the rates determine what you pay ever month. If you have a tight budget, apply for a fixed rate mortgage.
Can you afford the property?
The amount of mortgage that you can take depends on how much you can afford. If you can afford to buy your dream house, you will need a substantial deposit to buy it using a mortgage loan. Compare different mortgage offers for the property and get it while paying in easy installments.