As more affordable deposit options are coming back, we wanted to share with you our five steps to becoming mortgage-ready this year
Due to changes to the stamp duty threshold, there has been a surge in homeowners and first-time buyers looking to make the most of the tax break and buy a house in 2021.
Have you reviewed your finances?
At least six months before you look at applying for a mortgage, you need to ensure all of your finances are in order.
– Avoid applying for too many credit cards or other loans within that time.
– Don’t miss any payments on outstanding debts, including your overdraft.
– You need to look as financially responsible as you can to lenders, so make sure you make smart choices with your purchases.
Boost your credit score
In order to loan money from the bank for your mortgage, you need to make sure you have a strong credit score.
This serves as evidence that you can pay back your loan.
A requirement by lenders is often to prove that you can regularly keep up with the monthly payments.
It is also worth checking that you are not linked financially to anyone with a poor score, as this can reduce your chances of being approved.
Save for your deposit
The size of your deposit will impact the rates that you’re offered and the amount you can borrow.
It is also worth noting that an increasing number of lenders are now paying closer attention to how first-time buyers are saving, and whether they have had to rely on financial support from friends or family members.
Have a dependable income
Your employment status, income and financial history will be looked into when applying, as lenders need to know if there is a stable income that can cover repayments.
Try holding off any job moves until after this period, as it may raise concerns about your suitability.
Lenders also need to see proof of income, so get a head start and gather your paperwork early to save time. You may be asked to provide bank statements, any P60s and proof of deposits.
Register to vote
This is a simple step that is often forgotten in the process of a mortgage application.
Sometimes lenders will use the electoral roll to check things such as names and addresses.