If you’re currently renting you’ll already be used to budgeting for household costs such as utility bills, shopping and insurances. We look at how much you earn, what regular payments you make and your day-to-day living expenses and whether you’re buying on your own or with someone else.
How much do you spend each month?
You can use our handy budget calculator to help you work out how much you spend each month.
Are you eligible for a mortgage?
You must be over 18 years old and a UK resident. When we’re checking to see if you’re eligible to take out a mortgage we look at things like:
- Is the amount you earn enough to make payments on the amount you want to borrow?
- Are you able to provide confirmation of your income?
- How much outstanding debt do you have?
- How much do you want to borrow compared to the value of the property? (This is known as the Loan to Value ratio or LTV)
- How good is your credit rating?
- Have you ever missed payments on any credit commitments?
- Do you have any County Court Judgements or Individual Voluntary Arrangements (IVAs)?
- Have you ever been bankrupt?
- Do you want to borrow on an interest only basis?
Our 'How much could I borrow?' calculator can give you an idea of what you could borrow, based on your earnings and spend each month. It can then show you how much your monthly mortgage payments might be for the mortgages we offer.
Another, vital, part of being able to apply for a mortgage, is having a good credit rating. All lenders use a credit reference agency to see how people have managed their money in the past, looking at, for example, whether they have made payments on time or gone over their borrowing limits.
There are a few ways to improve your credit rating:
- Check your credit file. There are three main credit reference agencies: Experian, Equifax and TransUnion. You can ask them for a copy of your credit file so that you can check its accuracy. Contact the agency if you see any details are wrong so that they can correct them for you.
- Register to vote – you may find it more difficult to get credit if you’re not on the electoral role.
- Cancel any unused credit cards or bank accounts. Unused credit cards can push up the amount of available credit you could have and could reduce your credit score.
- Keep your credit card and loan debts as low as you can.
- Never miss or be late for payments – this will reduce your credit score.
There are several costs you need to think about other than your monthly mortgage payments. Some of them are listed here, but you should also check with your mortgage provider, solicitor/ conveyancer and surveyor if there are any other costs.
We offer a range of mortgages which have no product fee.
Mortgages with a product fee usually have a lower interest rate during the initial rate period. It can often be added to your mortgage but that means you pay interest on the product fee unless it’s repaid within 21 days of completing on your mortgage.
Most of our mortgages offer a free standard valuation. It makes sure the property is worth the amount you’re paying for it.
Surveying firms in the UK are governed by The Royal Institution of Chartered Surveyors (RICS). There are a number of surveys available, and costs vary depending on which type you want.
Some of our first time buyer mortgage deals offer a free HomeFact condition report (provided by Countrywide Surveying Services). Available when you apply by phone (not available online or in branch or on new build properties). It aims to show up potential issues and defects before you buy. For details of the mortgage deals which offer the HomeFact condition report, see our mortgage calculator.
To find out what type of survey would be best for the property you’re looking to buy, talk to a licensed surveyor. Paying a little extra on a survey before you buy could save you money on potential unpleasant surprises once you’ve moved in.
The administrative legal work around transferring ownership of a property from one person to another is known as conveyancing. You’ll need a solicitor or a licensed conveyancing firm to help with this. Always get a quote upfront.
Solicitors or licensed conveyancers also carry out searches on the property, to check, for example, whether there are plans to develop new roads nearby. These will normally be covered in the conveyancing costs, but it’s best to check exactly what the fee includes.
You must pay Stamp Duty Land Tax (SDLT) to HM Revenue and Customs if you buy a property over a certain price in England and Northern Ireland. First time buyers will only pay SDLT if the purchase price is above £425,000. Check the government’s website to see the current rates. If you’re buying in Scotland there’s a Land and Buildings Transaction Tax, and if you’re buying in Wales there’s a Land Transaction Tax
Costs can vary so get a few quotes so you can compare prices. A few points to check are: does the price include packing? Does it include insurance? What is the capacity of the van provided? Is access suitable?
The account fee is charged by us for providing and administering your mortgage. It’s payable on completion, however you can defer this fee until the end of your mortgage.