Taking out a mortgage is one of the most serious financial commitments you’ll make in your life. It’s a big decision, and one which will colour your financial future for (potentially) decades to come. That’s why it’s so important that you get a good deal, otherwise you’ll be reminded of it every time you take a look at your bank statements.
The good news is though that the mortgage market is just that – a market, so there’s plenty you can do to improve the rates you’re offered and increase the chances of having your application accepted. Here’s our top 6 tips.
- Speak to a reputable mortgage broker before you start looking at houses
A mortgage broker is often contacted once you’ve found a property you’re interested in, but we’d always recommend speaking to one beforehand. They’ll talk you through what the mortgage market looks like at the moment, how much you’ll likely be able to borrow and on what terms. With that information, you can make a smarter choice when you’re looking to buy.
- Get a copy of your credit score
Go online and get a copy of your credit report from an agency like Experian or Equifax and take a look at what mortgage lenders will see when they review your application. From there, you can make changes to improve your score and therefore, your offer.
- Don’t switch jobs just yet
If you’re unhappy in your job and are looking to buy a new house, we’d recommend keeping your current job. Lenders will look to see if you’ve been in the same job for a long time as a sign of your reliability.
- Reduce your existing debts
Any lender will be given cause for a pause if they look at your credit report and find that you’ve got outstanding debts. That’s why you should go back and make sure any creditors are paid off before you submit your application – yes, that means your credit cards too.
- Prepare as large a deposit as possible
Typically, the bigger the deposit you can put down on a property, the better the rate you’ll be offered will be. That means lower monthly payments and lower interest across the course of your mortgage – it’s always worth waiting another couple of months to prepare a better deposit offering.
- Bring your proof of income or accounts with you
Every mortgage lender is going to ask for proof of income before they can sign off on a mortgage offer. So, you’ll need to bring with you’re a P60 form from your employer, which shows a summary of your pay before and after tax. You’ll also likely be asked for three months of account statements to check your outgoings and to demonstrate how financially responsible you are. If you’re self-employed, bring the bank statements and your accounts for the last three years – without these, you’re unlikely to have a mortgage application accepted.