Many first-time buyers hope to make this year the year they get on the property ladder, thanks to the increasing availability of 95% mortgages. But while there are higher numbers of suitable mortgages available, there’s no guarantee you’ll be approved.
To improve your chances, here are five of our top tips.
1. Register to vote
It might not sound like this has much to do with your mortgage, but you’ll find it impossible to get approved if you’re not on the electoral roll. Though the main purpose of this register is to prevent fraudulent voting, it’s also used in credit applications and is one of the first things a mortgage provider will check.
The process of registering is easy (as long as you’re a British citizen, an Irish citizen, or a Commonwealth or EU citizen who is living in the UK) and it can be completed online.
2. Check your credit report
Your credit report includes any financial issues on your record in the last six years. If you’ve received a county court judgement or filed for bankruptcy in that time, more than likely you’re aware of the issue and how it could affect your mortgage application. But even smaller incidents, such as late bill payments, can impact your score, and occasionally you’ll see something on the report you weren’t aware of. Very occasionally you may also find an error, which can be corrected by contacting the creditor.
As a company we recommend you using Experian to check your credit report.
Obtaining a report (via Experian) on your credit rating independently will have no adverse effect on your rating and is a very useful indicator as to what a lender would see at the point of application. It is also very useful for your adviser to see if there are any detrimental factors that he needs to consider.
Most lenders will use Experian.co.uk and we recommend that you download your credit report and bring it with you to your mortgage appointment.
Visit www.creditexpert.co.uk , scroll down the page and select ‘start my 30 day trial’. You will need to enter your details and your credit or debit card but if you cancel your trial within 30 days no payment will be taken from your account.
Run and download your report to share with your adviser – this will make you both aware of any issues that will arise when applying for a mortgage.
3. Organise your finances
Lenders want to see that your financial affairs are in order, so is now a time you need to tidy them up? If you have bank accounts that you no longer use, close them. If you have small amounts of money in different accounts, consider pooling them together into one to give a clearer picture of your financial position.
If you have a Lifetime Individual Savings Account (LISA), top it up to the maximum £4,000 annual allowance, so that the £1,000 government bonus will be added to boost your savings.
4. Pay off outstanding debts
Mortgage providers will check to see how many credit arrangements you already have before they approve your mortgage, and they want to see that number as low as possible. So, if you have small outstanding debts that you can clear without subtracting from the money you have saved as a deposit, it makes sense to do so.
5. Delay new credit applications
Usually, when you make a new credit application, the lender will perform a hard enquiry on your credit score. If several hard enquiries are made during a short period, that can temporarily affect your credit score. So, until your mortgage application is approved, it’s best to delay new credit applications, whether this is a new credit card, a new phone contract, car financing or any type of loan.
Time to step onto the property ladder?
Finding the right mortgage may seem like a confusing process. Which is the best first-time buyer mortgage to go for? How much can you borrow? What deposit will you need? To discuss your mortgage options, contact Ask About Mortgages – telephone 01794 328365 – email firstname.lastname@example.org