There are a number of factors you need to consider before you apply for a mortgage. We’ll talk about the main ones here – just to get you started. Also, when you look at specific mortgage deals on this site, please check the general terms and general points listed.
• Your age
• Your deposit
• Your income
• Your outgoings
• Your credit and payment history
• What if you’re not eligible for the mortgage you apply for?
Always remember: Your home may be repossessed if you do not keep up repayments on your mortgage
First things first, you need to be at least 18 years old to apply for a mortgage (that’s the law) and the mortgage term must end before you’re 75. If you’re 60 or over – or you’re within five years of your planned retirement, only your retirement income will be considered. Lastly, if you’re aged 65 or over, the maximum you can borrow is 75% of your property’s value.
Provided that’s all OK, your requirements will be considered when you start your application.
When you look at the details of the mortgage deals, you’ll see there are different rates depending on what percentage of the property’s value you need to borrow. You'll find that better rates are available if you have a bigger deposit - that's the amount of money you're putting into the property yourself. With a C&G mortgage, you'll need to put at least 10% of the property's value yourself, but you can get lower rates if you're putting in more than that. Generally, you should try to get together as big a deposit as you can.
Your ability to keep up your payments is the main concern. Your mortgage payments must be affordable. So, with that in mind, you'll need to provide us with bank statements and HM Revenue & Customs documents to confirm your income.
That kind of information will help the lender make a decision about the size of mortgage you may be able to get, and a mortgage won’t be agreed if there’s any indication that keeping up with repayments will be a problem.
You need to consider your existing outgoings. Count up your monthly direct debits and standing orders and add them together. How much do you spend on petrol, getting to work? What’s your monthly grocery bill? Your phone bill, TV subscriptions, repayments on a car? Is there anything else that you have to pay for regularly?
It can be a good idea – especially if you’ve never had a mortgage before – to write down everything you spend; keep a notebook handy and you’ll soon see how it all mounts up: the odd take-away here, a magazine there, a night out with friends… Try to be disciplined and make notes for at least a month and then add it all together. (Be sitting down when you hit the ‘equals’ key on the calculator.)
Then, you might want to consider cutting back on a few luxuries and save for a while to boost your deposit – it all helps.
Before you apply for your mortgage, you'll need to provide us with consent for the information held about you and your financial arrangements to be searched. You'll be provided with more information about exactly what this involves nearer the time.
If your mortgage can't be agreed, don't worry, if you wish we can pass your details to a company called Central Brokers Ltd. They’re specialist mortgage brokers that aren’t part of the Lloyds TSB Group or C&G but they may be able to source a mortgage for you from their selected panel of lenders.
So don’t give up hope: let your mortgage expert know if you agree to having your details passed to Central Brokers Ltd. If you do, they may contact you by phone, letter or text.
Copyright © 2008 Cheltenham & Gloucester plc. All rights reserved.
C&G mortgages are provided by Lloyds TSB Bank plc and administered by us, Cheltenham & Gloucester plc. Registered office: Barnett Way, Gloucester, GL4 3RL. Registered in England and Wales No.2299428. Cheltenham & Gloucester plc is authorised and regulated by the Financial Services Authority and a signatory to the Banking Codes.
You must be at least 18 years old to take out a loan. Before agreeing a loan Lloyds TSB Bank plc will want to satisfy themselves about the suitability of your application. This will include assessing your ability to afford the payments and, normally, valuing the property.
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