One of the most significant financial commitments you are ever likely to make will be taking out a mortgage. However, choosing the right mortgage isn't easy, and it isn't wise to accept the first mortgage offer that comes your way.
There are a few things that you can do to help improve your chances of getting a better mortgage deal. Let's look at some top tips you can use to help secure the mortgage that is right for you.
1: Do the maths
The first thing to do is look at your finances and work out what you can afford before making a mortgage application. You will need to make sure you can borrow enough money to buy a property and that your mortgage payments won't leave you short.
You will need to have enough money left after paying your mortgage each month to afford your other outgoings, such as council tax, utility bills, and food. The process of buying a house also comes with associated costs and fees that will need to be covered, so these need to be factored in too.
2: Check your credit score
When applying for a mortgage, your credit score will count. You should get a copy of your credit report from Experian or Equifax. This will show you your credit rating and the information that mortgage lenders will use to make their decision.
If you have a poor credit rating, you can build this up, so it looks better to your mortgage lenders. Go through your credit cards and close any that you don't use. Ensure that you are registered on your electoral roll, as lenders will often use this to confirm your identity and your current address.
3: Stick with the same employer
You can improve your chances of getting a better mortgage offer if you can show you have a long and stable employment record. Mortgage lenders are happier loaning money to you if they see that you have a steady job with a regular income.
If you are a person that switches jobs regularly, it is worth sticking with the same employer for a while until you have secured your mortgage. Most lenders will be happy to see you have been inconsistent employment for six months or more before applying.
You will also need to provide a P60 form from your employer to show evidence of your employment status. This form shows your annual pay and tax deductions.
4: Clear your debts
Mortgage lenders don't tend to lend money to people carrying a lot of debt. They don't want to see you default on your mortgage because you cannot afford to pay it. If you have got a lot of outstanding debt on credit cards or loans, it can help pay as many of these off before applying for a mortgage.
Clearing your debts will also stand you in good stead with mortgage lenders as it demonstrates that you are good at managing your money and meeting your obligations. This can mean mortgage lenders will be more likely to accept your application and borrow more.
5: Save a decent deposit
The higher the deposit you can put down on the house, the better the choice of mortgage you can get. If you can save up a substantial deposit, you will be offered better mortgage rates from lenders.
A higher deposit will also help reduce the amount of your monthly mortgage repayments. This is because you will have secured a much better deal with a lower mortgage repayment rate.
If you are looking to buy a home and need mortgage advice, we can assist.
Get in touch with our team here.