5 Mortgage Questions You Should Be Asking

Whether you’re a first-time buyer hoping to purchase your first home soon, or a second stepper searching for your next property, the mortgage process can often seem overwhelming and confusing.

We sat down with Kyle Wright from Meridian Mortgages, Specialist New Build Mortgage Advisers, to get the answers to the mortgage questions you should be asking.

1. How can I decide on how many years to fix my mortgage rate for?

“The decision of how many years to fix your rate is really personal and depends on you and your circumstances. Your broker will ask you lots of questions about your lifestyle, plans for the future and your priorities and preferences. After that, we will be able to give the most suitable advice for you.”

2. Is now a good time to get a mortgage?

“We are currently in a rising market for the first time in many years, which does mean rates are generally a little higher than they have been in recent times. Buying a home is a big step and only you know if you are ready to do that, but we are here to give you the best advice to find you the mortgage most suited to you and your needs.”

3. How do interest rates affect my mortgage?

“The higher the interest rate, the higher your monthly mortgage repayment.”

3. How do I choose the most suitable mortgage for me?
“The great news is that you don’t have to choose on your own Your mortgage broker will conduct a meeting with you called a ‘Fact Find’ meeting where we will talk about your circumstances. This will cover your income, outgoings, budget planner, priorities and preferences around all elements of your mortgage and your plans for the future. Then we will search all the available products for you and recommend the deal that is best suited to your individual needs.”

4. How do I get a mortgage as a first-time buyer? What do I need?

“As a good start you will need 3 months payslips and 3 months bank statements as well as proof of ID and proof of address, and finally proof of your deposit (which might be a savings account bank statement or a letter from your gifter if your deposit is a gift). That’s not to say if you have recently started a job that you can’t get a mortgage without 3 months’ payslips as there are lenders out there who may help in those circumstances. If you get annual bonuses you may need to provide 2 years of P60s. For the self-employed, you will usually need to provide the most recent 2 years of SA302s and Tax Year Overviews and in addition for limited company directors, 2 years’ worth of trading accounts.”

5. What is a mortgage in principle?

“A mortgage in principle may also be known as an AIP or DIP, but ultimately this is where we have run your personal information, income and outgoings through the lender’s system, and they have completed a basic income and affordability check as well as credit scoring. This shows that in principle, you are agreed for that mortgage.

However, it is worth bearing in mind that it isn’t a formal offer and following a full underwrite the lender may change the decision. Most AIPs are only valid for 30 days so you may need more than one if it takes you a while to find your new home, and lender criteria and your circumstances can change in that time. Lots of these are done as soft credit scores so it has no impact on your credit rating.”

If you’re on the hunt for a new home, speak to Meridian Mortgages for support and advice tailored to you by visiting catalyst.homes/mortgage-advice/

You can also get an estimate of how much you could afford to borrow by using our handy mortgage calculator