Mortgage Lenders Explained - part 2
by Robert Campbell
How much of a mortgage loan can you reasonably expect from these lenders? A kind of thumb rule states that you can get a loan amount that is 4-5 times your annual income. So the more you earn, the bigger the mortgage you are eligible for.
What is the process of obtaining a mortgage? You can either approach the lender to get a fair assessment of your situation and ask them how much they are willing to give you, and then look for a house in that budget. You can even select a house and then apply to the lender for payment. Whichever way you go, you have to first obtain an 'Agreement in Principle' which states the amount the lender is willing to pay for your house. This document is valid generally for a period of 3 months or so. After this you are expected to complete the 'Mortgage Application' and submit the same with required documents pertaining to your financial stability and creditworthiness. The house is then inspected by a qualified valuer.
After your mortgage application is found to be satisfactory the lender will issue a 'Mortgage Offer', or an 'Offer of Advance'. This document will also state the conditions on which the lender is offering you the mortgage.
What are the fees associated with mortgage application process? One is generally required to pay an 'Administration or Application fee' for setting up the mortgage. A separate 'Valuation Fee' may sometimes also be charged.
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