When getting a first-time mortgage 🏠 , start by working out how much money you have for a deposit, then find out how much you can borrow.
Applying for a mortgage will typically involve an affordability review and a credit check. The mortgage provider will look at your 💷 annual salary and other income, as well as your outgoings like household bills and debts from loans and credit cards. Plus, they’ll check your credit history to find out whether you’re a reliable borrower or whether you’ve missed payments in the past.
If you opt for a variable rate mortgage or fixed-rate mortgage of less than five years, the lender will also ‘stress test’ your ability to repay your mortgage in the future – in other words, would you be able to keep up your payments if something changed, like a rise in interest rates? They’ll use all the information they’ve collected on your finances to decide how much you can borrow. 🤔
Once you’ve found out how much you can borrow, you’ll have an idea of the type of first home you can afford.
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How does getting a mortgage work if you’re a first-time buyer?
