If you’re thinking about how to get a mortgage, you should be aware of the factors that affect your eligibility. These include: credit score, length of time in current job, current debts, whether you’re self-employed and the size of your deposit. Our top tips for 2018 will allow you to put yourself in the best position to make the most of securing your mortgage this year.
Before applying for a mortgage, get a copy of your credit report which is held by credit reference agencies such as Experian or Equifax. This will allow you to see what lenders see when they review your application. If your credit rating isn’t looking that great, there are lots of simple things you can do which can give your score a boost. For example, check you are on the electoral roll and close down credit card accounts which you no longer use. Find out more here by reading our dedicated guide on your Credit Score.
Sit down and work out your budget before applying for a mortgage. You will need to be sure you can borrow enough to cover the purchase of the property and that you’ll have enough space to cover all the associated costs and fees. Our cost of moving calculator can help you work out these costs. Monthly mortgage repayments will depend on how much you want to borrow (and over how long) and the interest rate charged. Our mortgage calculator will help you do the sums.
Most lenders will want to see that you’ve been with your employer for a decent length of time before they’ll give you a mortgage, so if you’re thinking of switching jobs, it’s a good idea to hang on until you’ve got your mortgage in place. Usually, it’s a good idea to have been in your existing job for at least three to six months before applying. David Hollingworth, of London & Country mortgage brokers, said; “If someone has recently changed job then it need not be a problem but if still in a probationary period it makes sense to double check if the lender will be happy to lend before it finishes. Even then there should be lenders that can consider the situation.”
If you’re submitting a mortgage application, the last thing any prospective lender is going to want to see is that you owe a load of cash on credit cards or you’ve got outstanding loans. Before you apply for a mortgage, try to reduce any debts you have – this will help demonstrate that you manage your money responsibly, and will mean any mortgage application you make is more likely to succeed. It will also mean you will potentially be able to borrow more when it comes to a lender’s affordability calculations.
Mortgage lenders will want to see proof of how much you earn, so you’ll probably need a P60 form which you get every year from your employer and shows a summary of your pay and how much tax has been deducted. You’re also likely to be asked for three months’ worth of bank statements and payslips so the lender can look at both how much you have coming in as well as your outgoings.
The more you can save up to put down as a deposit, the bigger the choice of mortgages that will be available to you. Lenders reserve their best rates for those with hefty deposits, so you’ll also benefit from lower monthly payments because you’ll have qualified for a better deal.
If you’ve no hope of building up a decent deposit on your own, you might want to think about buying with someone else. This could boost your chances of securing a decent mortgage, particularly if they’ve got an excellent credit history and a higher income than you. But remember that this is a big commitment, so you’ll need to sit down and work out with the other person what would happen if one of you wanted to move in future.
Once you’ve started your mortgage application, don’t mess around with it and start changing figures as it could hold up your property purchase. David Hollingworth said; “Changing the figures further down the line will mean the offer being reassessed which, although may not necessarily be a problem, could add unnecessary delay.”
If you’re struggling to find the right mortgage deal, or you don’t know what you’d be eligible for or how much you can borrow, it might be a good idea to enlist the help of a mortgage broker.
Here at Edward Mellor we have a team of highly qualified mortgage experts who compare the latest deals of 50+ high street and niche lenders in order to find the right mortgage for you. If you’d like to find your perfect mortgage this 2018 or you’re in need of some free, friendly, advice then call our team today on 0161 443 4548 or fill in the contact form below.