12 January 2017 | Admin | 0 Comments
Although the rise of online estate agents has made finding a new home easier, it’s been well-documented that buying a house is getting more difficult and securing mortgages are getting harder. Banks are stricter than ever when it comes to lending and with rising house prices it can be hard to raise enough for a deposit to even apply for a mortgage. But once you’re there the rewards can be incredible.
To ensure you’re in the best possible position to secure a mortgage, follow our step by step guide to getting mortgage ready:
Know and understand your credit rating
Before applying for a mortgage you should get a copy of your credit report from somewhere such as Experian. This will allow you to see what lenders see when they review your application and make sure you know exactly what counts towards your score and what doesn’t.
If your credit rating isn’t as you’d hoped, you can do a few things to give it a boost, such as making sure you’re on the electoral roll and closing down credit card accounts that are no longer in use.
Do the maths
Next it’s time to sit down and work out your budget. You will need to be sure you can borrow enough to cover the purchase of a property, and, most importantly, that you’ll have enough cash left over to cover all the associated costs and fees, such as stamp duty and legal fees. MoneySuperMarket has a handy tool to help you work all this out.
Next it’s time to move on to your monthly costs. You can check how much your repayments will be easily online, so simply deduct this, along with estimated bills, utilities, council tax and other outgoings and make sure you have enough left to still enjoy life.
Although most people have a credit card, a car loan or a bit of finance, the last thing a prospective lender is going to want to see is that you owe a lot of money in various areas. Therefore before you apply for a mortgage, try to reduce any debts you have. Whether it be a couple of hundred pounds on a credit or store card or even a loan, every little helps. Not only will this give you a boost financially in the future, but it will also help demonstrate that you can manage your money responsibly and stand you in a better position for getting that mortgage accepted.
Get proof of income together
Once you’re in a position to apply for a mortgage, you’ll need to get paperwork in order as mortgage lenders will want to see proof of how much you earn each month. A P60, recent payslips and bank statements proving the money is paid in is ideal as this will show both gross and net salary – as well as any deductions such as student loans. If you’re self-employed, your accountant will be able to help you get everything together. Lenders will usually ask for a SA302 form relating to the last three years from HMRC or your full accounts for the last three years.
Make sure you’re certain
Buying a house is often the easy bit – believe it or not. If you’re unsure you can afford it, think you might want to move on in a year or so or are simply hesitant about putting down roots, it may be time to reconsider. There’s no going back once you exchange contracts and complete the sale unless you sell – which is often easier said than done.
Don’t mess with your application once it’s in
If you’ve decided home ownership is definitely for you and the application is in, our best advice is don’t mess with it. Changing incoming or outgoing figures, employment details or addresses and contact details can hold up your property purchase or even result in it being denied.
Consider getting outside help
There’s no denying that mortgages can be confusing, so there’s no shame in getting some outside help. If you’re struggling to find the right mortgage deal, are unsure whether you are eligible or how much you can borrow, it could be a good idea to get help from a mortgage broker. Brokers act independently and can research the market for you in order to help you through the application process.
We partner with a number of independent and experienced brokers and are more than happy to recommend the one to suit your needs. All you need to do is get in touch.
Have you recently purchased a property - do you have any advice for those about to get onto the ladder?
We are the UK’s biggest online estate agent. With many years’ experience helping match people with their dream homes, we can help you make your next move. Search our available homes located up and down the country and start your new journey today!