If you’re on the market to buy or move a house, you’re likely to have to borrow to fund it, that’s why finding out if you can get a mortgage can be a real ”Make or Break” moment.
Here is the 9 best tips to help and give you the better chance to be accepted for a mortgage.
1. Save As Much Deposit As You Can
For people with large deposits, mortgage providers reserve their lowest interest rates.
That means most of the top deals on the market are limited to buyers who can lower the value of a property between 35 percent and 40 percent, while those with only 10 percent to lower will have to pay a higher rate.
Save as much deposit as you can, in other words. A Help to Buy ISA can be a good starting point if you are a first-time buyer.
2. Pay Off Your Debts And Close All Unused Accounts
When deciding whether to accept you as a customer or not, mortgage lenders will look at the total amount of credit available to you–as well as the amount that you owe.
So clear your debt as much as you can and close any accounts you don’t use anymore. Otherwise, lenders may be concerned about your ability to keep up with repayment of your mortgage.
3. Get On The Ballot System And Update Your Address
Many companies use the ballot system (electoral roll) to verify your identity, so if you are not registered in the ballot system at your current address, your mortgage application may well be refused.
However, this can be easily remedied. Contact your local authority and request an online registration form or register.
It also makes sense to ensure that the address the credit agencies have is up-to-date for you to avoid any issues.
4. Avoid Any Unusual Properties
Mortgage lenders like to know that if you default on your repayments, for example, they can get their money back. As a result, they are often less willing to lend against properties that are considered unusual and therefore may prove more difficult to sell on.
Properties in this category; best if avoided – including flats above commercial premises such as cafes and bars, old or unusual buildings and homes constructed using non-standard building materials such as concrete or steel.
5. Be Prepared With All The Necessary Papers
No mortgage lender will accept you as a customer unless you can prove who you are, so make sure you have an up-to-date passport and your driving license address is correct.
Other documents that you need to provide include a recent letter that proves your address, such as a bank or utility company.
Employed workers will also need to get their bank statements and payslips for the last three months and their P60s for the last two years, while those who receive a bonus will also need to provide proof of that.
If necessary, your company’s accounts or HR department should be able to provide duplicates.
If you get any other income, like Child Benefit, you will also need documents to prove this.
6. Collect Proof Of Self-Employed Earnings
Self-employed workers are nervous about lenders and need to provide more evidence of their earnings as a result than those with full-time jobs.
Therefore, if you’re self-employed, you’ll need an HMRC SA302 form for the last two to three years, or your full accounts for the last two to three years.
7. Know The Type Of Mortgage You Want In Advance
You have to decide, for example, whether you want the security of a fixed rate, but that will also lock you in for the entire term. Also you can opt-in for a tracker deal that may not come with tie-ins and may even start cheaper, but will rise in line with the base rate of the Bank of England.
When working out your affordability, mortgage lenders will contribute to potential interest rate rises, but if you have any concerns that you would not be able to manage an increase in repayments, the safer option is a fixed rate deal.
8. Shop Around Or Use A Broker If Needed
Once you’ve decided what kind of mortgage you’d like, the next step is to make sure you get the best deal for your circumstances. Finding the cheapest deal could save you thousands of pounds over a 25-year term, if not tens of thousands.
However, checking with a broker also makes sense as they can offer some deals that are not directly available. The advice service provided by London & Country will help you find the right mortgage, giving you peace of mind that you have made the right choice for your specific circumstances.