The Basics of Mortgage Acquisition

Getting a mortgage is not a simple one-step process, there are in fact many stages involved.

It can be a lengthy, complicated, and strenuous thing from start to finish and that is why it’s better to prepare for what’s to come than dive in blind. That is why this guide details the basic process involved in acquiring a mortgage for a property. Read on to find out more. 

Saving for the Deposit

First up is the down payment that every mortgage company will insist upon. This is a percentage sum of the total of the potential home purchase. Most lenders will require at least a 10% value upfront deposit before agreeing to sub the rest of the cost. This is a risk reduction exercise and shows willingness from the future homeowner that they are serious about the investment, can afford the ongoing costs, and are responsible with their cash. A deposit lessens the chance of defaulted mortgage payments because a large sum of personal finance is withheld against the value owed. 

Your Credit Profile

While saving for the down payment, it is also essential to address any issues with your credit file. A credit file is a complete story of a financial history and present circumstances. It shows every line of credit ever taken, every payment that has ever been made or missed and is a reflection on how the individual has tackled their money up until the point of application. 

Good credit tends to happen when payments are not missed, there has been a registered fixed abode, and there are no excessive records of big loans and other major borrowing. Conversely, a bad credit profile, which is far less likely to be accepted, has a lot of missed payments, unresolved debts, and massive amounts of money borrowed. Mortgages require current proof of minimal debt, and explanations for all borrowing, plus a current satisfactory bank account. 

Approaching Mortgage Brokers and Lenders

Once you are happy that your credit is on the straight and narrow, it is time to start approaching and comparing mortgage companies. This can be done through a broker service that takes all of your personal details and offers this up to the highest bidder to secure the best possible mortgage offer. It can also be done by doing some online research or through word of mouth. Most people tend to turn to their bank as a first preference, but you can often get a more competitive rate by shopping around. 

Gathering the Required Documentation Proof

When a mortgage offer is secured, the process to verify your income and other financial assets will begin. This asset verification mortgage process is typical of all lenders, as explained by Yodlee. Yodlee advocates for an electronic asset verification mortgage process to save time and effort on the part of both lender and borrower. It provides a range of solutions for businesses, including bank account verification, APIs, analytics, and apps.

Conclusion 

Though there are many stages, the process is worth it if a mortgage is the end result. Everyone wants their own home after all.