Pryd i wneud cais am forgais
Last updated: 25/04/2023
Choosing a mortgage and having your application approved can take some time. So, when should you start thinking about applying for a mortgage for your first home?
Getting a mortgage is a way to buy a property without paying for the whole thing in one go. Put simply, a mortgage is a loan. It's a sum of money you borrow from a lender (like a bank or a building society) to buy a home.
A mortgage is a type of secured loan. This means that the money lent to you is ‘secured’ against the property you buy. If you aren’t able to keep up your repayments, it’s possible for the lender to repossess the house to recover the cost of the money they lent you.
A mortgage is a big financial commitment and there’s lots to think about. Our beginners guide to mortgages spells out the different types of mortgages out there, how interest rates work, and how the size of your deposit impacts the type of mortgage deal you can apply for.
Arranging a mortgage can be time-consuming, but you can start planning before you even start house-hunting. Once you work out how much you can afford to spend on a home, you’ll be able to get an idea of what your monthly mortgage payments might be.
As early as possible you want to make sure your credit rating is as good as it can be. Also known as a credit score, this is a number that lenders use when considering your mortgage application. There are actually a few different scores tallied by different credit reference agencies, so it’s a good idea to check them all.
There are lots of different types of mortgages. And you need to find the right mortgage deal for you.. To help you navigate the different types of mortgages out there, consider getting advice from an Independent Financial Adviser (IFA) or mortgage broker.
A mortgage in principle is a conditional mortgage offer from a lender, based off some quick financial checks. It's not a guarantee that you'll be accepted for a mortgage with them but an agreement that you could be accepted.
When the property market is hot, you're more likely to be asked for one by a seller before they accept your offer - a mortgage in principle can give them confidence that you'll be accepted for the full mortgage when you apply and the sale won't fall through. Occasionally, you'll find estate agents will only let you view a property if you have a mortgage in principle in place. It isn't essential to get a mortgage in principle, but you may find you're taken more seriously as a buyer and that the process runs a little more smoothly if you do have one.
Be mindful when applying for a Mortgage in Principle though; too many financial checks in a short space of time can harm your credit rating which could impact your mortgage application later on. Many lenders offer a 'soft' credit check in order to get a Mortgage in Principle, so it's a good idea to find out what type of check the lender carries out before you apply.
A Mortgage in Principle tends to be valid for 90 days; but make sure you check.
What next?
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Use our deposit calculator to work out how to save a deposit for your first home.
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Download our free First Home Steps app for a pocket-guide to budgeting, planning, saving, and buying your first place.
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Explore more blogs in our First Time Buyers hub.
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