How to prepare for your first mortgage process

Find out a few things you will need to know as you try to obtain your first mortgage.

09:20 18 February 2014

The world of mortgages is filled with applications, jargon, seemingly complex financial formulas, and a myriad of mortgage products from which to choose. If you have never obtained a mortgage before, the process can seem even more overwhelming and confusing than necessary. One of the best ways you can approach the process is to be prepared. 

 

Here are a few things you should know before you begin the process. 

 

• Property—this is usually one of the easiest questions for people to answer. You need to know if you want a residential or commercial property. You also need to think about if you will use your property, even residential property, for additional income such as renting rooms to tenants. 

 

• Amount—there are a few points you will need to consider where amounts are concerned. You will need to know how much you can afford to borrow, how much you want to borrow, and how much money you have to put as an initial payment on the property. Even if you are approved for more than what you absolutely need, unless your property needs repairs, it is a good idea to take only what you need. 

 

• Initial payments—once you have a specific property in mind, you will have a better idea of how much you should put forward for an initial payment. Different programme requirements for loans may not even need an initial payment, but you will save a lot of money in the long run if you can come up with between 5% and 20% of the property purchase price. Just remember to save a lump sum of money to deal with any unexpected property issues that might arise. 

 

• Value—if you know the value of the property it can help you determine if you are paying an equitable amount for it, or if you are overpaying.