ADVICE COLUMN: Q&A with Lanarkshire mortgage advisor Alison Foulds
Hello and welcome to this month's mortgage advice column. This month we have the Senior Mortgage Adviser, Alison Foulds, from The Home Hub giving her insight into the most common questions she's been asked recently.
Alison explains: 'Buying a property in the current Scottish market can be an overwhelming process, especially for first time buyers. Trying to navigate lender's ever-changing criteria, alongside regular product changes, can be a confusing prospect.
'But don't let that first time buyer anxiety hold you back when it comes to looking at owning your first home.'
Here are the top five questions we get from First Time Buyers every day. Hopefully this gives you the confidence needed to start your journey to home ownership.
1) Do I need a Mortgage Adviser?
a. Having an expert on hand to answer all your questions can be a huge comfort. As well as getting you the best mortgage deal based on your circumstances, your adviser will also guide you through the process each step of the way.
Having an adviser on tap with their expert knowledge could not only save you money but save on time and give you the confidence needed to navigate an ever changing market
2) How much can I borrow?
a. Typically, you will be able to borrow around 4 to 4.5 times your gross annual income however this will be affected by other factors such as any outstanding debts or credit scoring.
All lenders are different in how they assess your income and expenditure to calculate how much you can borrow so it's always worth speaking to a mortgage adviser who will be able to assess your circumstances and calculate your mortgage affordability.
3) How much deposit do I need?
a. The majority of lenders require a minimum deposit of five per cent of the property value or purchase price, whichever is lower. A recent survey found on average it takes approximately five to 10 years for first time buyers to save enough to cover their deposit.
To get you on the property ladder faster, some lenders have launched some unique propositions available to first time buyers only.
One lender is helping first time buyers get onto the property ladder with a 99% mortgage and another lender requires no deposit at all.
4) What does my credit score need to be?
a. There isn't a minimum score needed to be approved for a mortgage. Lenders will however look at your credit history to ensure it fits within their lending criteria.
Each lender will view your credit history differently. Things that will have a positive impact on your overall credit profile include paying your credit commitments on time, using a small amount of credit and paying it off in full every month and staying within the credit limits on your account.
Things that will have a negative impact on your credit profile include missed payments, exceeding the credit limit on your account or defaulted accounts.
However, if you have had credit issues in the past this does not mean you can't get a mortgage. Some lenders offer specialist products for those who have a more complex credit history.
5) Will I need a Decision in Principle?
a. Having a Decision in Principle in place is always recommended as it shows you are a serious buyer and the offer you are making is realistic.
A Decision in Principle gives a degree of confidence that you have passed the lenders initial credit assessment and affordability criteria.
Most of the time it will not affect your credit rating as lender usually complete a 'soft' credit search.
There's so many things to consider when looking to buy a property therefore it's always prudent to seek proper advice from a professional who can guide you through the process.
Thanks for reading and see you next month.
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