Buying a home brings a different level of excitement for every individual. For first-time home buyers, it means not having to pay rent anymore. For homeowners, home-buying means changing cities or moving to a bigger house. In any case, whether you're switching homes, taking out home equity for debt consolidation, or buying a new home, you require the expertise and services of a mortgage broker in Cork City. 

As you read on, you'll learn everything you should consider before you make a home purchase decision. 

Understand Your Home-Buying Need

Before approaching a mortgage broker in Cork ask yourself- what is my home-buying requirement? Where am I planning to buy the house? How much does the house cost? Am I better off just renovating the house? 

Asking questions to yourself helps you understand your home requirements in a better manner. Various factors determine your home-buying journey, such as distance from your workplace (if you're not working from home), distance from school, the nearest hospital, or nearby park, if any. All these factors may seem trivial but can hugely affect your home-buying decision. 

Your Current Home Equity

If you want to refinance your home to access the home equity, there are certain things you should keep in mind. Firstly, don't get too excited to see a two-fold increase in the home value. For instance, if your home equity increases from €30,000 to €60,000 in 5 years, it doesn't mean you can access the entire equity in one go. If you refinance your home, you can access 80% of your home equity, which amounts to €48,000. Therefore, it's imperative to have realistic expectations. Carry out an appraisal after consulting with your mortgage advisor in Cork  to learn about the exact market value of your house. 

However, if you're using a home equity loan as a replacement for a mortgage, the accessible amount comes further down to 65% of home equity, amounting to €39,000. Talk to your mortgage planing in Cork  regarding how you want to utilise your home equity. 

Loan-to-Value Ratio

LTV, or Loan-to-Value ratio, is a lender's evaluation tool used to calculate the actual value of your home equity. Understand it like this- if you have an outstanding loan amount that exceeds your current home equity, you'll get a higher loan-to-value ratio, negatively affecting your mortgage application. Lenders will view you as a high-risk applicant. Your chances of getting the lowest mortgage rates will also become minuscule. Lenders prefer applicants with a low LTV score. 

Discuss everything with your Cork mortgage broker and maintain transparency regarding outstanding loan amounts to ensure smooth application processing.  

Total Debt Service Ratio

Apart from LTV, the Total Service Debt (TDS) ratio is another criterion lenders use to assess the risk profile of applicants. Technically, a home mortgage isn't the only liability on your monthly income. Car loans, insurance payments, credit card payments, etc.,  put additional pressure on your gross income. TDS ratio considers all these factors by taking your total monthly loan obligation and dividing it by your gross monthly income. Just like LTV, a low TDS score is preferred by lenders. An ideal TDS score lies below 35-40. Your mortgage broker will guide you through the entire process.

Mortgage Calculator

Make ample use of mortgage calculators to get an estimate of your monthly payment schedule. Get creative and find out your refinance monthly payments for the loan term. See how many years you can add or reduce from the loan term to reach the Goldilocks monthly payment amount. Check with your mortgage lender to see if you can get what you expect. 

When Purchasing Home Mortgage For The First Time

First-time home mortgage buyers face a lot of challenges. For starters, they don't know which mortgage broker to approach. Secondly, they have amateur negotiation skills for procuring the lowest mortgage rates. Remember, your first home mortgage can initiate a lifelong partnership for future mortgage purchases. Therefore, choose your mortgage broker wisely, taking everything into account. Your mortgage broker must maintain transparency regarding different charges, such as brokerage, lender fees, processing fees, appraisal charges, etc. 

Wrapping up: Purchasing a mortgage is a difficult feat. It requires a lot of research and perseverance. Commissioning a good mortgage broker can win half the battle for you. A mortgage broker can ease the entire process for you. An experienced broker can get you access to exclusive mortgage rates. They'll check your eligibility, credit score included, and provide the best mortgage solutions you need. Hire a mortgage broker Cork City who understands your vision and implements it perfectly.