Our resident grump, M. Menckens, has been giving us tips on how to be an adult for the last 3 months. Here he finishes his series with the most daunting and seemingly unobtainable task of all...buying a house.
1. Are your finances in order?
Before you can even begin to think about getting a house, you need to make sure it all adds up. Have you got an adequate credit rating? Do you have a sufficient deposit (should be about 20% of the price of your house)? Have you got enough in savings in case there are some unforeseen costs? Also, you should keep in mind that you can usually borrow 3-4 times your annual base salary and you need to demonstrate that you can comfortably afford your monthly mortgage repayments.
2. Obtain a mortgage-in-principle (MIP)
You need to do this before finding the house of your dreams and being disappointed when the mortgage provider rejects your application. A MIP is simply the mortgage provider saying that you sound like you would be able to obtain a mortgage at your level of income, with your deposit and in the area you propose. Obviously this is subject to many conditions but acts as a good starting point to see if you are wasting your time.
3. Use a mortgage broker
This is significantly easier than going directly to the bank or building society. Whilst brokers do not have access to all deals, they will have access to most and some even have access to deals you wouldn’t be able to obtain by yourself. Most importantly though, they want to help you obtain a mortgage as this is how they get paid. They phone you and they keep on top of the process so you don’t have to. A very good provider (unfortunately not a sponsored placement) is London & Country.
4. Learn to love paperwork
Be prepared to spend a couple of months submitting documents that you didn’t even know existed and answering bizarre questions. They will request bank statements, identification documents, bills. They will then request bank statements, identification documents and bills again. You will be asked lots of questions throughout the process, such as, “What hobbies do you have?” or "What's your favourite brand of toilet paper?"*. You feel like you are making a new friend though which is quite nice. Oh, and then you will probably be asked to submit bank statements, identification documents and bills.
Becoming an adult seems tough and intimidating. With all these acronyms, all that pressure, how do some people do it with such ease? The most important point to note is that people are constantly blagging. No one really knows what they are doing but everyone has got really good at pretending they do. As soon as you realise this, you realise that being an adult is not so scary after all.
*probably not this question.