If you compare the pros and cons of renting a property or buying one on a mortgage, the latter seems like the better option. While renting may cost lower, buying a property on mortgage helps you build an asset that will benefit you in the long run.
However, buying your home on a mortgage has its own challenges. Here, we will review some of the common problems you might face when it comes to getting a mortgage and how you can remedy them.
Delays in the Mortgage Process
Mortgage delays are rated as the biggest problem when it comes to buying a new property. Delays can be caused by several factors, many of which are beyond the control of the home buyer.
The parties that are involved in the mortgage process are from the buyer, seller, and mortgage lender. Your lender will also want to do several background checks on you, including credit checks, employment verification, and tax record verification.
A typical mortgage process takes a month or two from the first application submission to final document signing. A Mortgage brokers can help you speed up the process by finding you the perfect lender and providing assistance with your documents.
Getting a Bigger Mortgage than You Can Afford
A property mortgage is supposed to be a blessing, but it can become a constant source of headache. Many first time buyers go overboard with their mortgage limit and buy the best, most expensive property that they can find. They take out a very big mortgage with monthly installments that are higher than they can afford.
The reality sinks in when the mortgage payments start making a big dent in their monthly budget and negatively affect their standard of living. The result is that they start missing payments or default on their loan, which can put them in great financial difficulties.
Many mortgage lenders with a good reputation understand the borrower’s habit. They make thorough calculations on the amount that you can reasonably afford each month and limit the maximum mortgage.
Borrowers may see this as the mortgage bank being picky about the loan. However, if you really think about it, they are just trying to ensure that you get a mortgage that you can actually afford without getting into trouble.
Mortgage Is a Long Term Commitment
Mortgage loans are long term commitments and generally last for 15 to 30 years. You are, of course, allowed to pay up sooner or refinance the mortgage with different terms. But most of the time, you need to wait for the fixed period to end before you can change the mortgage term..
Mortgage Application Rejections
This can be a real bummer. Mortgage application rejections are not very common, but they do occur frequently enough that you should be careful about them.
There are two main causes of application rejections. First, your credit score is really low, or your source of income is not good enough to qualify. If you have not held a stable job in the last couple of years, have a bad track record of clearing payments or show red flags about your financial situation, the lender may deny your application for a loan.
The second common reason for loan rejection is that there is something wrong with the property you are trying to buy. Perhaps you’ve negotiated a price that is much higher than the actual value of the property? Or maybe there are structural or safety hazards in the property that the lender is not willing to go through.
Instead of rejecting the application in such cases, the lender will allow you to switch and buy a different property. However, if you have made up your mind about the property, the lender will lend at the amount they valued the property for, however, you will have to pay the difference to the seller.
A team of experienced mortgage brokers can help you solve this problem. They can look at your circumstances and find you the right lender that is most likely to approve your loan.
Getting your home financed through a mortgage loan is no easy process. There are many difficulties that borrowers face when trying to find the right mortgage. With the right help, however, the process can become much easier.
In this blog, we covered some of the common problems that borrowers face in home mortgage and discussed ways to solve these problems. To find out more, please get in touch 0207 822 2290.