Getting the right deal on your mortgage is always important. In the current mortgage market though, with new deals appearing all the time, it is vital that you are ready to press go at the right time. To do that, you need us to advise with a clear picture of who you are and what you want. So, with that in mind, here are a few points that will help us fully understand what will work for you and show you the best options.
When it comes to finding the right mortgage, it’s about your personal finances first.
This is probably the first tip you expected and rightly so. It’s important to know what you can afford and how you will afford it. Honestly, it is quite rare for someone to come and see us without having some idea of their financial situation however, it’s not uncommon for people to misjudge it. So, always start here and have a ballpark idea of where you stand. Don’t worry, if you are not 100%, we will go through it with to anyway. As a preparation exercise we suggest you go through your income and outgoings and look at what your commitments are. Remember this easily forgotten things like monthly direct debits for small amounts. As an extra tip on this subject, it may be worth looking at what you could do to reduce your costs. A few pounds here and there can make a big difference when it comes to affordability.
Check your credit score
There are a lot of free services where you can see your credit score and get an idea where you are in relation to the rest of the UK. The rule of thumb is that the better your score, the better you deal will be. However, it isn’t as simple as a credit score because your financial resilience as a borrower will also be a factor. If you have a low score, don’t panic, and don’t think ‘that’s then end’ when it comes to a mortgage. It may not be. Come see us and we can look at options. We find mortgages for people in all sorts of circumstances every day.
Deal with as much debt as possible
Your mortgage application will be based on affordability as well as your credit score and some other factors (see below) so, the more disposable income you have the better. If you can get rid of or significantly reduce any outstanding amounts on credit cards, loans, and other costs, the lender will get a clearer picture of your finances. Don’t let this stop you coming to see us for an initial consultation though. We are here to help you go through things.
Do the little things that really help.
There are a number of things that you can do that will really make a difference. The lender is looking for someone who stacks up financially and as a reliable borrower. Check you are on the electoral role, again, this could show up as a question about your application. Make sure all your rent, utilities and other commitments are up to date and that you have records of all these.
Paperwork and proof that help us get it right for you
Start to gather your paperwork together as soon as you can. For safety you will want to be able to show the following:
Your salary for at least three months
Your most recent P60
Utility bills for and proof of rental (if you currently rent) as proof of address and they also demonstrate your rental outgoings for consideration in the affordability aspect for some mortgages.
Identification documents (passport for example)
Bank Statements for the previous three months and any savings you have
If you are self-employed, we will need to see tax returns and your accounts, usually three years as a minimum.
Again, this not a complete be all and end all list. If you don’t have some of these or you don’t quite meet the above, it doesn’t mean the end of you application. We deal with that problem all the time, so let’s work it through.
Common mistakes when applying for a mortgage
These are a few of the more common mistakes we see people make.
- Try to be as accurate as possible when you look at your finances. A mistake in the budgeting can be a pleasant or rather shocking surprise when it comes to how much you can afford.
- Forgetting income is also surprisingly common. People sometimes forget to include things like part time additional jobs, overtime elements in their last three months salary, commissions, bonuses, profit related pay, investments, and pensions.
- Make sure your history of addresses is correct and complete.
- Don’t forget to check the basic information for your application. We need your full name (and any previous ones) and correct date of birth and address etc because any mismatching could cause delays.
- Don’t make any significant financial changes before the application. No new loans or credit cards for example.
- Finally, this is an important one, if your deposit was a gift or personal loan, we need to know about it. There is additional paperwork and diligence to be done if this is the case.
Know your timescales
There is a processing time for mortgages and the whole house buying process. For the sake of your own peace of mind it’s well worth understanding timescales to avoid the frustration that comes with not knowing. While this may not strictly be part of the mortgage application, you will feel much better if you know what is happening, when.
As always, the best way to prepare is to talk to an expert and we are here to help.