Seeing a mortgage broker and feel completely out of my depth!

[Blarn]

I've been looking at properties every couple of days for months now. The market is slow where we are and houses are usually reduced in price a couple of times before being sold.

A house has kept catching my eye. It's been reduced quite heavily and I couldn't work out why. Mentioned it to dh who said, well view it. We are just about in a position to buy. It was lovely, needs a bit of fresh paint, possibly slightly smaller than we wanted but bigger than where we are now with a bedroom each for dc! It's been dropped in price as the owners have found a house and want to move. It's about 20-30k less than other houses on the road which have sold recently.

So we have a mortgage broker appointment later where hopefully we will get a mortgage in principle and go for a second viewing. But what should we be asking! Our deposit is small, we have got just about 10%. Do we ask for the mortgage in principle at a higher price than this house? Do we discuss mortgage options at the same time? I've been under a bit of stress recently and am just finding this a lot!

Dh and I have waited years to get to this point and I hate feeling so excited and terrified and confused all at the same time!

How exciting OP.

The mortgage broker will lead the meeting so you don’t need to worry.

From memory the mortgage in principle is decided by the bank based on your joint earnings so it might come back much higher than the house you want to buy or lower depending on how much you want to borrow.
I think ours did nationwide as they will give you one whilst only doing soft credit checks so it won’t come up on your credit history.

I would ask them for an idea of rates you might get & the different terms.
E.g x% for 2 years vs X% for 5 years. However, the actual rate won’t be decided for a while,

They’ll likely want to know some details about your jobs, savings etc.

Thank you. Our deposit is in to LISAs. Dh is a much higher earner than me, we think that we could do a mortgage of £1200 each month easily and could go higher if we cut back a bit on frivolous spending, we are in a fortunate position.

We've been asked to take payslips, sick leave policies at work etc.

It's seemed so out reach for so long. We had an awful couple of years money wise a few years ago when everything went wrong at once. It was horrible but I need to keep reminding myself we are not in that position anymore and try to look forward to owning a home! We could save for a bit longer but really need to move.

You won’t get offered a mortgage for more than the property is worth. My DS has recently got his first mortgage, a lot has changed since we last got ours, so we were unable to help, but what they had to decide was to fix the mortgage for 2 years or 5 years. They went for 5 years just because the 2 years would be up before you know it. They were given a list of about 10 different mortgage companies and the various differences that each one offered. There are 2 types of mortgage, interest only or repayment, if you think it’s going to be your forever home, it might be better to go with repayment, but mortgage broker will explain everything.

Exciting! ... as advised the mortgage in principle is a guide as to the maximum amount the bank would lend you, obviously you don't have to go that high!.

The advisor will look at your spending, including any loans, stuff on HP etc and when they end.

They'll ask you if you've thought about fix terms or trackers etc, and the different £'s for those products.

It can feel like information overload but it will all sink in!

Yes, a few of the basic calculators give us higher than we would be comfortable going. We are looking at 90% loan which I know will curtail our mortgage options. It's why I'm really hoping this house works out as it is what we want at a price lower than similar properties.

When we get to the conveyancing point (when, Im being optimistic!) do people usually stick with the legal team that the broker suggests or look for their own?

With my DS they were offered a package with the broker, it was around £2,500 for property £285,000. This covered conveyance surveyors fees (basic one as it is a flat) and Solicitor fee. I did tell him that it would probably be cheaper to use a local Solicitor that we know, but DS stuck with the brokers one, as it was a fixed fee. There was a few small errors and personally I think the sale took far longer than it should have, 4 months when there was no chain involved.

Just to correct a previous poster do not get an interest only mortgage regardless whether you think it’s your forever home.

Property values aren’t guaranteed to keep going up you can’t afford to not be paying down the debt. That would be extremely stupid in the long term.

Landlords used to take out interest only mortgages and they are now trying to exit on mass!

I would find your own - everything is commission based. Get a quote from a few and go with the cheapest that has good reviews. I would suggest local firms so you can hold them to account. (We went with the cheapest we found only and they were crap so wouldn’t make that mistake again).

Thank you everyone! I feel like I have a better idea of what sort of things I need to consider when there later.