How to Become Mortgage Fit: Preparing for Homeownership

In the pursuit of a balanced and fulfilling life, we often dedicate ourselves to improving our physical fitness and mental health. We embark on fitness journeys, meditate, and prioritise self-care to ensure that our bodies and minds are in the best possible shape. But there’s another aspect of life that requires just as much attention and preparation—our financial fitness. Just as you work on your physical and mental well-being, you should also prepare yourself to become “mortgage fit” when aspiring to buy your first property or moving to a new home.

To become mortgage fit you should first book a meeting with one of IMC financial services’ experienced mortgage brokers to ensure you get top quality mortgage advice tailored to your unique financial situation. We recommend you get in contact with us one/ two years prior to your home purchase time period.

Homeownership is a significant milestone that can bring immense joy and stability to your life, but it also comes with a set of responsibilities and financial commitments.

To ensure that you’re well-prepared for this endeavour, we’ve outlined a series of general steps that will guide you on your journey to becoming mortgage fit.

Step 1: Assess Your Financial Health

Before embarking on the path to homeownership, it’s crucial to assess your current financial health. Take a close look at your income, expenses, debts, and savings. Understanding your financial standing will help you determine how much you can realistically afford to spend on a home.

Start by creating a budget to track your monthly expenses and savings. Pay off high-interest debts, build an emergency fund, and ensure that you have a healthy credit score. A strong financial foundation will not only make it easier to secure a mortgage but also provide you with peace of mind as you take this significant step.

Step 2: Define Your Homeownership Goals

What kind of home do you envisage for yourself? Do you want a spacious family house in the countryside, a flat in the city, or something else entirely? Clearly define your homeownership goals, taking into account your lifestyle, preferences, and future plans.

Consider factors like location, size, amenities, and the overall cost of the property. This clarity will help you narrow down your options and set a realistic target for your home search.

Step 3: Save for a Deposit

One of the most significant financial hurdles when purchasing a home is the deposit. Saving for a substantial deposit not only reduces your mortgage burden but can also help you secure a better interest rate and make the monthly mortgage payments more affordable.

Set up a separate savings account specifically for your deposit. Make regular contributions, automate your savings if possible, and consider additional sources of income or windfalls to accelerate your savings. Depending on your location and the price of the property you’re interested in, aim for a deposit of at least 5% of the home’s purchase price. However, know that if you aim for a higher deposit, you may be able to get a better rate because we can get a mortgage with 5% also but depends on the property value.  Overall, this step involves working with a lender to determine the maximum loan amount you qualify for based on your circumstances such as income and credit score.

Step 4: Get Pre-Approved for a Mortgage with IMC

Before you start shopping for homes, it’s a good idea to get pre-approved for a mortgage. This involves working with a lender to determine the maximum loan amount you qualify for based on your income, credit score, financial history and obtaining an Agreement in Principle.

An Agreement in Principle not only gives you a clear understanding of your budget but also makes you a more competitive buyer in the real estate market. Sellers often prefer to work with buyers who have already secured their mortgage financing.

Step 5: Work closely with your mortgage broker

There are various types of mortgages available, each with its own set of terms and conditions. Working with a knowledgeable mortgage broker or financial advisor can help you navigate this process and make an informed decision. Here is where IMC mortgage brokers step in!

CONTACT US to continue your mortgage fitness journey.