In the current climate gaining approval for a mortgage is a challenge. However, that’s not to say you should abandon all hope of buying your own property, as it’s still possible to achieve providing you have made the right preparations. Here are few tips to help you towards gaining that all important approval:
Check your credit rating
If you’ve a record of using credit cards responsibly and making debt repayments on time you should find a larger range of mortgage options available to you. If you’ve not previously used one it’s probably worth making a credit card application and paying off the balance in full each month to improve your trustworthiness in the eyes of lenders. It’s also worth checking you’re on the electoral roll and other details such as the address registered with your bank is where you currently live.
Get a deposit together
It might take quite some time to get together a deposit for your first home, so start saving as much as you can afford as soon as possible. The more cash you have at your disposal the better the rate you’re likely to achieve. As a minimum you’ll likely need between five and 10 per cent of the property’s total value. So in simple terms, if the house you desire costs £100,000, you’ll need £5,000 stashed away. It’s worth doing your research about how best to get your deposit together.
Organise your paperwork
Preparation can make the mortgage application process far easier, so make sure you get documents such as payslips and P60s together now so you’re not rummaging through files and folders later!
Reduce your debts
If you already have outstanding debts it makes sense both financially and in terms of increasing your chances of approval to try and reduce them. Similarly, it’s a good idea to avoid making an application for additional credit while your mortgage application is being considered as this might have an effect on your chances.
Speak to an independent mortgage broker
To get a good idea about what mortgages are available and affordable for your financial needs it’s worth speaking to an independent mortgage broker approved by the Financial Services Authority. These can give you a comprehensive overview of the market and work out the total costs of any deal. It may also be worth speaking to a mortgage adviser at a bank or building society, but keep in mind they will only tell you about products of their own.
Special guest post provided to Jen is on a Journey.
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