How to secure your ideal mortgage

With new mortgage rules being put into effect, which challenges your spending right down to your weekly shop, applying for a loan may seem a little terrifying.

However, your interview with a mortgage provider shouldn’t be scary business and there are ways to make sure you get the deal you want.

Be realistic

Looking over your finances is a good way to determine how much you can afford to pay back. Before you apply for a mortgage, keep a record of all your expenses and see how you can kerb spending habits that are avoidable.

Months before you apply for a loan take a portion of your monthly income and put it in an easy access ISA. That way you will gain interest on your savings, making you one step closer to your dream home.

If you’ve done the maths and can’t afford your ideal mortgage, be patient and wait until it’s realistically possible, so you don’t end up scraping the cash together to pay it off.

Spend wisely for three months

Mortgage providers will ask you to bring in a few documents, from proof of your income to monthly purchases.

Three months before you send your application, be careful of how much you spend on purchases that you don’t need. For example, if you buy a drink from a coffee shop on your way to work each morning, try to cut this out of your daily routine temporarily. Even the smallest of purchases can add up, which may reduce how much the provider is willing to loan you.

Most providers ask to see the last three bank statements you received, which shows all your outgoings from your bank account. If you can steady your spending for these months, you’ll more than likely receive the mortgage you want.

Make sure you have a good credit rating

Your credit score will be vital when it comes to applying for a mortgage. If you have large outstanding debts or you’re behind paying back a large sum of money, you could be declined a loan.

If you have a credit card, pay back what you owe and cancel it if you don’t need it. If it’s necessary to pay by plastic, make sure you are keeping up with your monthly repayments.

Missing payments can also be a hindrance to your credit score. If a payment has bounced, charges will be incurred on your account and can see you slip further down the ratings.

Make a list at the beginning of every month to see how much is going out of your account. This way you won’t receive any nasty surprises on your bank statement.

Two is better than one

Unless you have a substantial income and hardly any outgoings each month, then you could potentially get a mortgage independently.

Unfortunately, due to the cost of owning a home, having two people apply for a mortgage together is better than one.

Both of your incomes will be considered in the mortgage application process, giving you a better chance of it being approved.

Of course this doesn’t mean you can’t get a mortgage independently, but you’ll need to pay more attention to your spending.

Keep all documents in a safe place

When you file your mortgage application, keep all documents together in case the lender needs to see any of them again.

If you misplace even just one of your official documents, you could find your application takes longer to go through, which puts you at risk of missing out on your ideal property.

Mortgage providers try to make the process a painless and stress-free as possible, so keep an organised file of everything you need to make your deal complete.

Search for the best mortgage provider

In the UK, there are so many mortgage providers offering competitive rates that it can be hard to choose which one to consider.

Before you send off an application for a loan, shop around to find the latest rates and services from providers.

Category: Mortgages

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