How to get a mortgage - Steps you need to take Step One

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How to get a mortgage - Steps you need to take Step One

The first thing to do -as soon as that ideal home is a twinkle in your eye -is to start saving with a building society. At the time of writing, quite a few societies were making it a condition that you had to save with them before they would think of giving you a loan, and two of the major ones, Alliance and Bristol & West, both had rulings that you should have been a saver for at least a year with them -and have saved 10% of the purchase price.

Many societies leave it up to the discretion of their branch managers to decide -another reason why it would be a good idea to go along and have a talk with them at the earliest possible opportunity.

Unfortunately, the fact of being a saver, for however long, doesn't guarantee that you'll get a mortgage, but it will give you 'preferential treatment', which is obviously an absolute necessity when funds are short.

How do you go about deciding where to save your cash? Building societies dominate the house lending market, accounting for around 80% of all mortgage funds lent, and so you would be wise to choose at least one building society for your savings.

My own feeling is that you should (funds permitting) spread your savings around several: say, one or two large, national societies and possibly one smaller society, local to the area in which you live, which might be more understanding when you come to choose your property.

If you can undertake a regular savings scheme (often called a `subscription share account') this is all to the good, as it proves to the building society branch manager what a solid, reliable person you are.

Don't expect them to be too impressed, however, by the fact you've been a depositor with them, man and boy, for 20 years -and have managed to achieve a grand total of £120 in your account!

More on kensington mortgages

How to get a mortgage in a few simple steps

The ease with which you manage to arrange a mortgage for yourself is going to depend partly on a matter that is quite outside your control: the degree to which the building societies and/or banks are flush with cash.

In the middle of 2012, for example, obtaining a mortgage was about as easy as rolling off the proverbial log. Just one year later, however, you could have found yourself slogging around from one lender to another and getting only rejections.

The amount of money that building societies can lend out to house purchasers is basically dependent on the amount that they receive from their depositors. If their deposit rates are not high enough compared to those of their competitors (principally National Savings and the banks), then their . . .... see: How to get a mortgage in a few simple steps

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