After many attempts to get a high quality mortgage back in 2018 the I bought my house, I found Accelerate Mortgage, a company who I found to be the most honest, easy to deal with and helpful of all the lenders which I visited. From the outset it was very clear from the team here that the best chance that I would have of actually securing a mortgage would be to come in with the biggest deposit that I possibly could.
Taking this advice I stepped back from the mortgage application process and took 6 months to save up a bigger deposit, which I felt would help me out, and it did. This is an important step to take and here is why a big deposit will help you out.
The clearest and most obvious reason as to why you should get a sizable deposit before applying for a mortgage is that overall you are going to have much less to pay off on the value of the property. I is not just the cash value of the deposit which is then stripped off the overall repayment, but also the additional interest which would have been paid on that loan. for example if this house costs $100,000 and you put down $20,000 up front, you could end up saving around $35,000 by the time you calculate how much interest you would have paid on the full term.
To a bank or lender a mortgage is considered as a product, and there are a number of these products which they are able to offer, depending on who the customer is. If you are a risky customer with a questionable credit score for example, then it is likely that you are not going to get the premium package. If however you can walk in with a healthy sized deposit then you are much more likely to get the high quality product. A high quality mortgage means one which is low cost, which is flexible and which allows you to borrow a much greater sum of cash.
Ultimately being able to put down a large percentage up front is going to enable you to have more freedom and flexibility with your mortgage. IF for example your circumstances such as your job happens to change in the future then you are going to be in a far better position and have far better options with regards to getting some flexibility from the lender. Naturally you don’t want to run into any problems but if you do, and you have already laid out a deposit of 25% or more, you are going to be in a far healthier position should things go awry in any way, shape or form.
Do all that you can to leave a sizable deposit before you go for a mortgage as it will ensure that you have a much happier and more comfortable life.