How to Get a Home Mortgage in the United Kingdom

So, you’re ready to get a home mortgage and buy a new flat? Choose wisely as you go through the process of getting a home loan in the United Kingdom. A mere one-fourth of a percent could mean thousands in savings in the long run. Follow these steps to getting a United Kingdom home mortgage loan.

Difficulty: Easy

Instructions

1. Contact the credit reference agencies and obtain your current credit report. Your score will have an affect on the type of loan and the interest rate that you can get.

2. For first time home buyers, check to see if you qualify for assistance from the HomeBuy scheme. The programs include First Time Buyers, Open Market HomeBuy, New Build HomeBuy, Social HomeBuy, Key Worker Living, and the Right to Acquire.

3. Know that the First Time Buyer Initiative by English Partnerships, the national regeneration agency, may offer to pay for one half of your property for the first three years. Key Workers especially may find themselves eligible for assistance.

4. Contact a HomeBuy agent near you for details of home buying schemes in your area and to assess your eligibility. To find a HomeBuy agent near you, visit their Web site(see link below).

5. Research more government programs at these sites:
   • United Kingdom Housing Corporation
   • English Partnerships
   • Financial Services Authority

6. Speak to banks, mortgage brokers and online mortgage lenders so that you can find the right type of loan to meet your specific situation.

7. Get pre-approved for a home loan with your preferred lending institution. This allows you to react quickly when you find the home that you want.
   

8. Contact a real estate agent. Look for someone that has longevity in the business and knows the area well.

9. When you find the right home, fill out a loan application at your selected financial institution.

10. Bring all the requested documentation and select the mortgage that’s right for you.

11. Close on the home and pay all the applicable fees.

Tips & Warnings

• Look around for the lowest interest rates. Just one quarter of a percent can mean thousands of savings over a long-term mortgage.
• Get your home professionally inspected, and discover problems before the deal is secured.
• Do not be pressured into buying a specific home, as the real estate agent may have another agenda.
• Before you sign anything, make sure that you thoroughly understand all the terms of the mortgage contract.
• Beware of endowment mortgages. Because most endowment policies are linked to the performance of the stock market, there is no guarantee that policy will be able to repay your mortgage at the end of the mortgage term.
• Never pay a lender to apply for a loan.
• Be aware of predatory lending. That is when lenders intentionally coerce consumers into contractual loans with unusually high payment terms and interest rates, often directed at uninformed borrowers or those with poor credit. Some unscrupulous agents or lenders may attempt to rip off you or the government. Make sure you are not an accessory or a victim of predatory lending.
• Never sign something you aren’t sure of, such as blank documents, documents containing false information, or documents you don’t fully understand. Make sure the people you are working with are trustworthy.
• Record low interest rates of the recent past have led to an explosion of unethical lending and loan scams. You may wish to have an attorney review any documents before you sign them.
• Be sure that the title of the home is clear of liens before you purchase it.