Keep calm, follow this checklist, then call your broker
Now you've absorbed this deluge of information, you're probably a little stunned. A rabbit in the headlights wondering, "what's next"?
Here's a pre-mortgage checklist you can run through to get prepared:
Be prepared: collate your documents
First, get all your documents together. Having everything to hand will speed along conversations with your broker:
- CV, updated to include your latest and current contract and any gaps between contracts;
- a copy of your contract;
- ask your client/agency about a renewal or extension if you have less than 2 months remaining;
- 3-6 months' bank statements;
- proof of ID, including your passport and utility bills.
Work out your deposit and how much you can borrow
You'll want to know what you can afford to borrow based on your contract rate.
A contractor mortgage calculator will give you a ballpark amount.
Knowing your borrowing ceiling will also help keep your house search realistic.
The calculator is based on average contractor-friendly mortgage lending criteria.
So, please don't take the output figure as definitive.
It's neither an AIP nor a firm mortgage offer; it's a guide based on your contract rate.
If you've seen a home and need a specific quote, you need to talk to a broker, but first…
…think about what you can afford as a deposit.
Consider possible associated costs to keep your deposit realistic.
Draw up a proper budget plan if the numbers don't jump out at you.
Housecleaning: tidy up your debts; improve your credit rating
Check your credit rating. Money Advice Service offer a guide to building your credit score.
Are there nagging little debts or loans you can clear without impacting your deposit? Are there loans on there that count against you that you don't recognise?
Clearing up your credit file can make a real difference to you getting a mortgage. The less risk, the more an underwriter is likely to approve your application.
Don't go in blind: get your AIP and arrange your surveys
If you've seen the house you want, you can go a little further. First, talk to your broker. Get them to secure an AIP.
An AIP is not a mortgage offer. But, from a specialist broker, it will prove two things; that:
- you're a serious buyer, to both vendor and estate agent;
- based on your income, you can theoretically afford the mortgage.
Then take a good look at the property. Is it old or are there any obvious signs of dereliction? Is it brand new and you want to make sure the developers have done a good job?
You will have to pay for any surveys you want beyond those that solicitors and the lender carry out. But they can pay for themselves.
The RICS offer a range of surveys for homebuyers. The property's condition and how deep you want to dig will dictate the cost.
Make the call (it's good to talk)
If you're moving in with someone else, make sure that you're both set on moving. Talk to each other. Discuss the logistics. That includes commutes and any expectations of pitter-pattering tiny feet. You're in this together and it's a huge commitment.
Then, once you're all happy, start making the calls. Use any results from your survey to bargain with the estate agent.
Once you've agreed the price, call your broker back to put your offer in. Fingers crossed, the vendor will accept.
I can't speak for all specialist brokers, but at this point, we'd take over. We'd handle everything from thereon in for you, right up to you picking up the keys. Job done.
Thank you for your interest in our contractor mortgage FAQ, which ends here. If there's anything we've missed or you need to know more about, talk to us. Even if it's just advice at this stage, we're here for all your mortgage enquiries. Thanks again.