*This post is sponsored by The Nottingham, a mortgage and savings provider.
Being an adult is confusing, stressful and full of moments where you just want to build a pillow fort and hide in it for at least a week.
For me, one of the most confusing and stressful parts is understanding and applying for a mortgage…with credit cards as a close second!
In school they teach you how photosynthesis works, how to find the square root of an isosceles triangle, and what a conjunctive verb is, but never anything useful that you’re going to use in real life like what a credit score is, how to apply for a mortgage, setting up your own business, or even how to vote.
There seemed to be this assumption when I was at school that these are all things your parents would teach you, but the problem is not everyone’s parents know how to do these things themselves.
My parents and grandparents have never owned their own home or even privately rented, they’ve always lived in council housing, so they know about as much as I do about buying a house.
Probably even less actually!
Luckily there are lots of resources available online these days, such as guides for first time buyers and even a handy post on getting a mortgage when you’re self employed, something I had been worrying about ever since I registered my business last year.
Especially as the business has been slow to pick up and I’m not earning as much as I had originally hoped to by this point.
Even though Chris and I aren’t at the point where we can apply for a mortgage yet, I still end up scrolling through Rightmove and drooling over the houses available in my area!
We’ve also been doing as much research as we can, so we’re not feeling overwhelmed and out of our depth when we do finally start looking for a place together.
I’ve even been making use of some unused pages in last year’s bullet journal to write up notes and definitions of words/phrases that I didn’t understand.
So for those of you who might be as clueless as me when it comes to mortgages, this is some of what I’ve found out with a little help from the experts at The Nottingham:
LISA (Lifetime ISA)
If you’re between 18 and 39, you can open a Lifetime ISA and gain a 25% bonus on your savings from the Government; up to £1,000 each tax year!
Basically, if you open one of these, the Government will give you money towards your first home based on the amount you’ve saved – which can be up to £4,000 each tax year.
You can withdraw your money to either buy your first home or when you turn 60 – as you can also use a LISA to save for your retirement.
However, you do need to be mindful that any other withdrawals that aren’t for your first home or retirement will mean a 25% Government charge, so you could end up getting back less than you put in.
Also, you need to have a Lifetime ISA account for a year in order to use it for a first home without a 25% penalty.
Plus, if you open one with The Nottingham, you’ll have access to fee-free advice from Nottingham Mortgage Services once you have a savings balance of at least £500 and have held the account for a year.
Alternatively, as a new saver, you can pay a reduced price of £149 for the service.
Nottingham Mortgage Services are a broker that search over 60 banks and building societies to find the right deal for you, so they’re definitely worth checking out.
Possibly needing to paying for mortgage advice is another expense I hadn’t even thought about!
Not everyone uses a broker of course, but when you’re self employed and don’t really know what you’re doing, it could be a good idea to leave it to the professionals…
Lenders usually require you to pay at least 5% of the value upfront as a deposit, although many of my friends have paid 10% when they bought their own houses.
From what I understand you could get access to more, and better, deals if you can pay a higher deposit, so it’s worth considering if you have the funds available.
If you do end up using a broker, it’s definitely something I would bring up and get their advice on.
Another cost I had no idea about, but the mortgage provider has to value the house so they can work out how much they’re going to lend you.
I always thought it went off the asking price or something like that, so finding out I would have an extra £200 – £500 to pay for was a bit of a shock!
If you’re like me and come from a low-income family, crying into your tea is totally acceptable when you realise how expensive getting your own home is these days!
I’m not going to lie, this one still confuses me no matter how much research I do!
So I cheated a little and asked The Nottingham to explain it instead:
Organised by your solicitor, Stamp Duty is a tax on land and property transactions and charges according to the purchase price. The rules do change from time to time (as with anything) but currently for a £300,000 home, for example, it would be £5,000. On a £200,000 house it would be £1,500 and if your home is under £125,000, there’s no Stamp Duty to pay.
However, it turns out there’s actually some good news here: we won’t need to pay Stamp Duty as we’re both first-time buyers and the house we’ve been eyeing up is under £300,000!
It’s something that was introduced in the past few years, and it means there’s one less expense to worry about, providing the house is under £300,000.
Up to £500,000 you pay a reduced fee and if it’s over that, then Stamp Duty will still apply; even as a first-time buyer.
It’s best to budget about £1,000 for this, but as with anything, it’s a good idea to ask your solicitor upfront about costs.
I’m one of those people who cringes when I have to ask about money, so I think I’ll let Chris handle this bit.
Basically there’s so much more that goes into buying a house than I ever imagined!
My autism isn’t a fan of unknown situations, which is why on top of all this research, I’ve also been looking into what is going to happen/what I need to do for the mortgage appointments themselves, and how I can reduce my anxiety when going to them.
Choose the right style of appointment
Appointments are something that causes me quite a bit of anxiety to begin with, as I never know how I’ll be feeling from one day to the next, let alone a few weeks down the line.
Luckily some places like The Nottingham have the option of both face to face and video conferencing appointments, so you don’t necessarily have to make an appointment in advance to speak to someone.
If I’m having a bad mental health day it makes leaving the house or communicating with people even more stressful than it usually is, and I’ll usually end up forgetting to ask important questions or even forget what the answer was if I do remember to ask it.
So when you’re booking an appointment, you could check to see if they offer something that you would feel more comfortable with.
Also, don’t be afraid to take notes on what’s being said, and you could also write down any questions you have beforehand, which you can refer to during the appointment.
Not only can this help you feel in control of the situation, but it also helps make sure you don’t forget anything important.
Get Your Documents Together
If there’s one thing I can’t do, it’s leave things until the last minute.
I’m one of those people that if I have an appointment at the end of the week, I’ll have all my questions planned out and any documents I need in a file together by the start of the week.
It helps reduce my anxiety to know I have everything I need (and usually a bunch of things I won’t need too, just in case) ready and in one easy to find place, ready for the appointment.
For a mortgage appointment there are a few things they will always ask you for such as your last three months’ bank statements, the last three months’ payslips if you work in a PAYE job or 2-3 years worth of accounts if you’re self employed, and proof of ID for each person applying (a passport, full or provisional photo driving licence, EU national identity card or a blue badge for example).
I would also ask when making the appointment if there are any additional documents they would need, just in case.
Better to be over-prepared than under, and start to panic when they ask you for something you don’t have!
Take Someone With You
It doesn’t matter how old you are, taking someone with you to an appointment for moral support and to help you understand anything new is always a good idea.
I’m 26 and I still take one of my parents or Chris with me whenever I have medical appointments!
My dad came with me to all my appointments last year when they were doing tests on the lump in my neck, and I can’t explain how much it helped my anxiety to know he was there for me.
If you have someone who either owns their own home or understands how the process works, having them with you at the appointment could make things a little easier.
They could take over if you’re unsure what is happening or ask questions that you might not have thought of.
If you don’t have anyone like that, then take someone who knows you well and will be able to tell if you’re struggling.
Not only can they help calm you down, but they might be able to take over the conversation until you feel better, which means there’s less stress and pressure on you.
Plan your route beforehand
As with any kind of travel, if I’m going somewhere new I try and scout out the place beforehand.
If it’s close Chris and I will normally go and have a look around, but sometimes I’ll just look at the area and how to get to it on Google Maps instead.
If you decide to have a physical appointment this might be something to consider doing, especially if you can’t take someone with you.
I would also recommend having a backup route planned too, just in case there are road closures on the day.
There’s nothing worse than planning a route, only to find that you can’t actually use it!
Get there in plenty of time
Being late is a sure-fire way of setting off my anxiety off, and even just thinking about it makes my palms sweat.
As such, I always try to set off earlier than I need to, especially if I’m going somewhere that isn’t exactly local to me.
Public transport never runs on time (if it turns up at all), roadworks pop up overnight without any warning, plus if you’re anything like me, you could still get lost on your way there even with your phones sat nav shouting directions at you!
I usually end up going in at least an hour early and just popping for a cup of coffee in Starbucks.
Not only does this help me relax and mentally prepare before the meeting, but it also means that I’m not rushing around panicking if things don’t go to plan.
Have you bought your own home? Do you have any advice that you wish you’d know yourself beforehand?
Remember, your home may be repossessed if you do not keep up repayments on your mortgage.
Full terms and conditions are available at thenottingham.com.
Whole of market mortgage advice is provided by Nottingham Mortgage Services Ltd (NMS); an appointed representative of Quilter Mortgage Planning Ltd, which is authorised and regulated by the Financial Conduct Authority; registered No. 440718. NMS is a wholly owned subsidiary of Nottingham Building Society and registered in England and Wales, No. 03089887. Nottingham House, 3 Fulforth Street, Nottingham NG1 3DL.
Nottingham Building Society, Nottingham House, 3 Fulforth Street, Nottingham NG1 3DL, is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority; registered No. 200785.