So, you’re thinking of buying a home, and you want to get the best mortgage deal out there.
Well, we’ve pulled together our top tips on what to do before you book an appointment with a lender.
Our tips could make your application flow more smoothly – but don’t leave them until the last minute. Many of these you should do months in advance…
1. Check your credit score
Two-thirds of Brits have failed to check their credit history in the last year. This is a record of all the credit card, loan, car finance, mobile phone contract and utility agreements you’ve made over the last six years.
2. Review your bank statement
When applying for a mortgage, the lender may ask for up to six months of bank statements. So, in the months before you apply, be certain not to go over your agreed overdraft limit or miss any payments.
Having money left once your regular outgoings have gone out each month shows you should be able to afford your mortgage payments.
3. Pay off your overdraft
If you’re in your overdraft, pay it off in full before you apply for a mortgage. An overdraft is classed as a debt, and lenders are likely to be cautious of borrowers who have already taken on a lot of debt.
4. Tidy up your credit cards and other credit
Try to keep your credit card balance as low as possible - ideally around 50% of your available credit limit.
Make at least the minimum payments, as not doing so can harm your credit history, but pay more if you can to avoid the interest piling up. Just do what you can to clear as much of your existing debt as you’re able to. A mortgage lender could otherwise be worried about overburdening you.
5. Pay everything on time
Late payments leave a mark on your credit score. Pay your bills on time and you can build a reputation as a responsible borrower. As we said, while it is always better to pay off as much as you can afford, if you can only afford the minimum repayment, make sure this is always paid.
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