Applying for a Mortgage

Many people feel that the process of applying for your first mortgage is a stressful or difficult process, and for some people it can be, but these days it really couldn’t be easier to get started.  there are a lot of ways that you can go about applying for a mortgage, here are the three best and easiest:

Option 1: Have a Lender come to you!

This is a relatively new development and really the simplest and most easiest.  The absolutely no effort required approach.  Simply click on the offer and fill out the form and a lender(s) will contact you to lead you through everything you need to do.  Fast, Easy, Free – a great place to start.  If this is the first time you’re looking at getting a mortgage then this is often the way to go.  You get direct assistance to help you through the process, and they come to you.

Option 2: Search and compare lenders

Another great way to go is to use a lender search tool to find out who’s offering the best type of rates and terms for the sort of loan you need in your local area.  Thanks to the internet you can search for and compare a number of lenders offering different types of loans, terms and rates using a simple tool like the one below.  In either case, this option puts control firmly in your hands as you only deal with the lender(s) you select and want to deal with.  Whether this is because of their rates, services offered or reputation is completely your choice depending on which you value most.

There is a lot to be said for doing your own research and getting a few options to comapre first hand is a great way of getting to know who’s offering the best deals at the time.

Once you’ve found one or more lenders that fit your needs, you can request a quote from them, or apply online and they will contact you directly with a response.  This is also a very quick and easy way to apply for a mortgage, but it has the advantage of giving you more options – you choose who you want to get a quote or quotes from.  This method ideally suits someone who knows a bit about loans and has an idea of what they’re looking for.

Option 3: Use a Broker

Brokers are a great idea for people who want the human touch or are a little uncomfortable with online tools.  A Mortgage broker will find you one or more lenders based on your personal situation and give you some options as to who may be the best choice for you.  Brokers have the advantage of working constantly in the industry and knowing exactly what the latest news, developments and offers are, as well as who is the most competitive in your local market, and which lenders offer the most flexibility.  A broker is like an expert in your pocket who goes hunting for you and really is a great choice for those who aren’t confident enough to go it alone, but prefer not to use internet based tools. 

The only down side with a broker is that you are relying on the information and advice you get from them, and that may not always the best option around.  It’s always best to use a broker who has a great reputation, and a recommendation or referral from someone you know or trust is highly recommended.  They also charge fees, though whether these are paid by you, or they get a commision from the lender you end up going with may differ between brokers.  to get you the best range of options, you’ll need to provide the following information:

  • Proof of your (and your partner if applicable) income and employment history
  • Credit Score
  • Current financial position (any other debts and assets you may have)
  • Proposed borrowing amount
  • Value of the property your’re looking to buy

This information will be needed by lenders to assess your credit worthiness and the rates they can offer.

Option 4:  The Direct Apporach

If you know your stuff and have a lender in mind, you can approach the lender directly.  In order to apply for a mortgage directly you’ll need to get all the information the lender needs (likely to include all of the info a broker would need, and possibly more). and supply it to them directly.  They may also want to verify your credit score themselves or request additional information such as a valuation and title search before confirming they will lend to you.  This option suits people who are experienced and confident in applying for home loans – not recommended for people new to the mortgage game.

Mixing it up

The final option is to combine one or more of the methods above  and see what comes out the best for you.  You can request a quote, search lenders and also make enquiries with a broker if you want, in fact there are a number of advanatages in doing this – you cast the widest net and get the most options, you also know how the options provided by a broker stack up against what you’ve found elsewhere.  Remember that your mortgage will most likely be the biggest finanical investment of your life, so it makes sense to take a little time and get it right.