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Why preparation is key to getting the mortgage you want

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Buying your home will probably be the biggest purchase of your life so you’ll want to be prepared.

With so many different mortgages on the market – different types, rates, and deals – choosing the right one for you isn’t easy.

But preparation is key and we’re here to help you. Here are some simple things you can do before you apply, to put yourself in the best position to get the right mortgage for you.

  • Know where your relevant paperwork is

Lenders will ask you for information on your income and expenditure. They need to know that you can afford to repay the mortgage and they will likely ask for the following:

  • Bank statements covering at least the last six months
  • At least three months’ payslips
  • Your most recent P60
  • Two to three years’ accounts if you’re self-employed
  • Your tax return form SA302 if you have earnings from multiple sources or are self-employed
  • If you are providing an SA302 also find all supporting documentation you have, such as bank statements.

Preparation can help relieve your stress and speed up an application. Have the above ready and available if you can.

  • Make sure you’re on the voter’s roll

As part of your preparation be sure to check you’re on the voter’s roll.

A prospective lender will look at this when conducting a check of your credit score. Registering adds your electoral details to your credit report, helping the lender confirm your name and address. This, in turn, will increase your score.

If a lender can’t find the information they need from your credit report, they will need to request further documentation from you. Supplying further information can be time-consuming and cause unnecessary delays to your application.

  • Know your credit score and check for mistakes

Check your credit score before you start applying. Doing this at the start of the process means you won’t receive any unpleasant surprises. It also gives you time to rectify any mistakes.

You can check your credit score using companies like Experian, TransUnion, and Equifax.

Be sure to stay on top of any credit you currently have – credit cards or an existing mortgage – in the run-up to making an application. Make payments on time if you can as any missed or late payments will damage your credit score.

Also remember, don’t apply for new credit in the months or weeks before submitting a mortgage application. Any application you make for credit will result in a credit check and from a lender’s point of view, the more credit searches you have in a short time, the more desperate for money you can look.

Be sure to stay out of your overdraft too.

  • Cut back on spending before you apply

As part of the lender’s affordability assessment, they will undertake a ‘stress test’.

Your lender will want to know that you can afford to make repayments now. But also, that you could continue to make payments if your circumstances changed. This might be a rise in interest rates, sudden redundancy, or future retirement.

Cut back on your discretionary expenses – monthly subscriptions, meals out, holidays – in the months before your mortgage application and you could improve your chances of passing an affordability ‘stress test’.

  • Save as much for a deposit as you can

Whether your deposit is coming from savings, a parental loan, or an inheritance, the larger the amount you have, the higher your chance of getting an application approved. You’ll likely benefit from lower interest rates too.

If you’re struggling to save for a deposit as a first-time buyer, consider a Lifetime ISA (LISA).

Introduced in 2017 and open to anyone aged between 18 and 39 years old, a LISA is an individual savings account designed to help first-time buyers save towards a deposit for their first home.

The annual LISA Allowance is £4,000 but the government adds a 25% bonus to the amount invested. That means that you can receive up to £1,000 a year from the government to top-up your savings.

It’s important to remember though that the fund must be used to buy your first house. If it isn’t used for that purpose, it will need to remain invested until you reach age 60.

If you take your money out before age 60 or don’t use the money to help towards a deposit for your first house, you will lose the government bonus.

A LISA isn’t the right choice for everyone, but if you’re looking to save money for a deposit for a first home, get in touch and we can talk through the pros and cons.

Get in touch

Please contact us if you’d like to discuss a mortgage application or help in saving for a deposit for a house.

Please note:

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

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