Applying for a mortgage certainly gets the adrenalin running, doesn’t it? It’s full of nerve-wracking excitement and anticipation like few other things in life. And then we fill out our forms – and hope that this is the point at which we don’t stall.
Buying a property isn’t usually a spur of the moment thing. In order to reduce worry, stress and the potential for the deal to come to a halt, there are things that you can do to ensure that you are as mortgage-ready as you can possibly be.
Develop a winning credit score strategy
Ensure that underwriters can easily find you, identify you and demonstrate that they have little to worry about when it comes to repayment. Make sure that you:
1) Are you on the electoral roll so that your address can be confirmed?
2) Don’t apply for credit left right and centre because every credit check affects your credit score negatively.
3) Have an understanding of your credit score in advance of applying – and tell your mortgage broker what you’ve found. There are various apps and online credit checks that you can carry out without affecting your credit score.
4) Try to reduce your debt-to-income ratio (the amount of debt that you have in relation to income). The lower the number the better because this indicates a lower risk for the lender.
Dig deep when it comes to your deposit
Regardless of whether you are a First Time Buyer or remortgaging/moving, the bigger your deposit the better. This is because the less you borrow compared the expected value of the property is perceived as a smaller risk for the lender.
Have a strong payment track record
Missed payments can result in defaults and County Court Judgements which will have an adverse effect on your credit rating. If you regularly miss payments, a new lender will understandably see you as a high-risk borrower.
Get your income all lined up
Are all of your income sources declared? Lenders will look at all of your income sources, although many will weight the most reliable sources more heavily. For example, a basic salary would be considered more important than any commission or bonuses earned. Make sure you declare everything!
And have your paperwork ready. You’ll need to provide proof of income at some point and doing this up front will save time. Preparedness also demonstrates that you have absolute transparency. Have ready:
1) 6 months’ worth of pay slips (different lenders require 3 – 6 months’ worth).
2) Your latest P60.
3) Bank statements (at least 3 months’ worth).
If you are self-employed the proof of income documentation required is slightly different and you’ll find more information here.
The process of obtaining a mortgage is a process that must be adhered to; and when we’ve ticked all the right boxes it can be reasonably straightforward and, dare we say it, stress-free. By planning ahead, you can ensure that you’re mortgage-ready and don’t stumble on the starting blocks!
Call 0844 69 333 60 to speak to the Mortgage Search Go team today!
*Your home may be at risk if you do not keep up payments secured on it.