The world of mortgages can be seriously confusing, but luckily, we’ve got six simple ways you can streamline your application.
Deciding you want to climb onto the property ladder is a big decision. And, for most of us, applying for a mortgage comes part and parcel with buying a home. Within that process though, lies a lot of uncertainty.
To help improve your odds of being accepted for a mortgage, our experts have rustled up six tips to put you in the best possible light to lenders.
1. The bigger the deposit, the better
Stashing your savings away for a mortgage deposit can be a long and tiring process. But, the longer you save, the more you can put away, and the higher your odds are of being accepted.
This is because mortgage providers keep back their most attractive interest rates for borrowers with the biggest deposits. So, not only can a larger deposit improve your application, but it can save you money on interest payments, too.
If you’re a first-time buyer and you’re struggling to put enough away for a decent deposit, it might be worth looking into a Help to Buy ISA. For a closer look at what exactly this is, head over.
2. Get your credit score in check
Your credit score plays a huge role into whether or not your mortgage application’s accepted. It shows lenders what kind of borrower you are, and it gives them a good idea as to whether or not you’re a responsible and reliable candidate.
Before you even think about applying for a mortgage, check your credit score (you can do this for free on sites likes ClearScore and Noddle) and if there’s anything dragging your digits down, you can see what you can do to correct them.
It’s worth remembering thatcan take time, so the earlier you start taking action, the better.
3. Clear debts and unused accounts
Another thing mortgage lenders will look at is how much debt you have against your name, and how much credit you have available to you - if either or both of these are high, to them, it could be a sign you’ll struggle to keep up with your repayments.
So, try to clear or at least reduce any debts you have, and close down those accounts that you no longer use regularly.
4. Prepare all your paperwork
You’ll need various bits of paperwork to complete your mortgage application, like an up-to-date passport, proof of your current address, bank statements and payslips. If you’re unable to produce the goods, you’ll hit a dead end.
For an easy life and a smooth-sailing application, find out which documents you’ll need from the off and get them all lined up before you start filling the form in.
5. Do your research
There are various types of mortgages out there, all offered by various different lenders. As with any type of credit, if you want to increase your odds of being accepted, you’ll need to apply for the right type of product for you - i.e. one that fulfils your needs and one that you’ll be eligible for.
For example, if you’re applying for a mortgage and you know you have a less-than-perfect credit history, it might make sense to apply with a provider who specialises in lending to people with bad credit, because they’re more likely to look beyond your borrowing history.
Taking the time to do some research will also allow you to find the best deals, which could save you thousands of pounds in the long run. And who wouldn’t want that?
5. Avoid hard-to-sell properties
If there’s one thing mortgage providers like, it’s knowing they’ll still get their money back if, for whatever reason, you can’t keep up with your repayments.
If this did happen, they’d recover what they lent you by repossessing your property and claiming the money back from the sale. Because of this though, they could be less likely to lend against homes that are harder to sell - like flats above a convenience store, for example, old or unusual buildings, and properties built with unconventional materials, like concrete or steel.
6. Don’t play with your application
Before you put pen to paper (or should we say finger to keyboard), make sure you’re certain about the information you’re giving, like how much you’re asking for and the size of the deposit you’re putting down.
If you start messing around with your figures mid-way through, you might not only struggle to secure the extra funds (if you’re asking for more), but the lender could turn around and reject your application full stop.
If you’d like to get a taste of what your mortgage payments could look like, why not use a mortgage calculator? It might not paint a completely accurate figure without the real interest rate, but it’ll give you an idea before you apply.
Disclaimer: All information and links are correct at the time of publishing.