Buying a house can be stressful at the best of times. Arranging the mortgage, if you plan in advance, need not be one of the larger headaches. Whether you are at the beginning, saving for a deposit or ready to apply for a mortgage, there are steps you can take to make the chances of a successful application better.
Saving for a deposit
You will need at least 5% of the property price to go with a mortgage, so understanding house values in the area you want to buy in will help you understand what your savings goal should be. It is worth bearing in mind that mortgage providers reserve their lowest interest rates for people with larger deposits. This means that even if you don’t plan to apply for a mortgage straightaway talking to an advisor and being aware of the rates that apply to different levels of deposit can help guide your thinking.
Manage your expenditure
Part of the application process will put your spending under scrutiny so keeping an eye on your outgoings will not only help your savings plans but help you demonstrate an ability to manage your money. Review your utility bills regularly, which is sensible advice for everyone, clear as much of your other debt as possible and close down any accounts you no longer use. When deciding whether to take you on as a customer, mortgage lenders will often look at the total amount of credit available to you and your current debts. Paying your bills by direct debit is a good way of demonstrating your ability to manage your money.
Join the electoral roll
This is one of the principal ways that credit agencies check your current address, which, in turn, impacts your credit score. If you are not registered on the electoral roll at your current address it can affect your chances of being approved for a mortgage.
Mortgage lenders will expect you to prove you are who you say you are. Making sure you have an up-to-date passport and that the address on your driving licence is correct helps with this. Other documents you will need to provide proof of your address will be bank statements or utility bills. If you are employed then P60s, bank statements and proof of other income such as child benefit or bonuses will be required. For the self employed the requirements are different and talking to your accountant and mortgage advisor will help you understand what is needed.
The final step is talking to a mortgage advisor. We have talked in the past about the different types of mortgage available. Talking to an advisor who understands the local market and can discuss your personal circumstances. Getting to know a customer and their goals is important. Get in touch to talk about how I can help you.
A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Mortgage deals may not be available and lending is subject to individual circumstances and status.