10 Things to Think about when Applying for a Mortgage
When the time comes for you to think about applying for a mortgage; there are certain things you can do to make the process simpler. Your mortgage could be processed faster if you ensure you are as ‘mortgage ready’ as possible.
Here are our top 10 things to think about when applying for a mortgage:
Consider using a financial adviser
Using a financial adviser whilst applying for a mortgage can make for a smoother and more efficient application process. Financial Advisers have access to the whole market and will ensure you, as a buyer, do not miss out on deals that are more beneficial to you at that time. Your financial adviser can also look at whether you are buying responsibly given your current financial situation.
Show you are capable of keeping your finances in order
When applying for a mortgage or when re-mortgaging, it is important to demonstrate financial stability. Your lender will perform an affordability test on you, to see if your finances are in order, and ultimately decide if you are trustworthy enough to lend money to.
Pay off any existing loans before applying
This is relevant to all first time buyers. It is important to not further the debt you are already in. However, for someone thinking of re-mortgaging, this may be a way of helping to pay off current debt.
Avoid taking out any more loans during the application process
Such as credit cards or finance deals. However, responsibly using a credit card can help some people with their application (see below).
Keep on top of current monthly mortgage payments
Budget effectively to be able to maintain monthly payments. If you miss any, not only will you be penalised by your lender, but future lenders will not look positively on your application.
Register on the electoral role
Registering on the electoral role will help your credit rating. Lenders like to see clear residential history.
Have stable employment
Having a stable income ensures monthly payments will not be missed. If you’re self-employed you may need to show additional records to prove your earnings.
Establish a contingency fund
Establishing savings will help immediately for first time buyers as a deposit. For other buyers it is a way of covering yourselves. Monthly payments will not be missed and if there were any problems with the house you can avoid draining your monthly income.
Consider credit rating
Using a credit card responsibly can help improve your credit score, showing that you are able to look after your own finances and pay off any outstanding debts within a certain timeframe.
Prove that your spending patterns are in line with how you see yourself
If there are any cutbacks you can make, then now is the time to make them. Try to avoid wasting money on items/monthly memberships you don’t use. This money can all go towards extra savings.
Read our news post about Top things to know about Buy To let Mortgages
IEP Financial is authorised and regulated by The Financial Conduct Authority (FCA)
10 things to think about when applying for a mortgage Was First Published 20 October 2016
The value of investments can fall as well as rise and past performance is not a guide to the future. The content of this publication is for information only. It does not represent personal advice or a personal recommendation, and should not be interpreted as such. Please do not act upon any part of it without first having consulted an Independent Financial Advisor’