Lenders will conduct an affordability assessment when a buyer is applying for a mortgage.
This includes looking at your annual salary, any other income you earn, as well as your outgoings.
These tips will help you get the mortgage that you desire.
1. A good credit history is essential
When applying for a mortgage, your credit history will be taken into consideration. This is so that the lender can determine if you are likely to be a reliable borrower. To determine if there are any problems, mortgage lenders will usually look at the six years of credit history of applicants. The assessment will use this information to determine how much you are eligible for.
There are a few things you can do that will help improve your credit score.
Credit rating will improve if you open and manage a current account responsibly.
To pay your bills, such as your car loan and mobile phone bill, set up regular direct debit payments.
Don’t forget to pay your bills on time.
You might consider getting a credit line: If you use it well, it can help build your credit score over time.
2. The larger the deposit, the better
A higher deposit is better. This will lower your risk to lenders and give you access to better deals from providers.
3. Sign an Agreement in Principle (AIP/DIP).
A decision in principle (AIP or DIP) is an estimate by a bank or building society about how much they might be willing to lend you to purchase your property. To prove that you are eligible for a mortgage, you can show the document to vendors and estate agents.
AIPs can usually be obtained within 15 minutes of consultation and are valid for up 90 days.
4. It may be more cost-effective to buy with someone else.
You might consider purchasing with someone you trust if you are having trouble saving for a deposit.
This could increase your chances of making your first move on the property ladder. You might also consider sharing ownership, which allows you to buy a portion of the property and makes it more affordable.
But buying a house is not the same as renting. It’s a legally binding financial and legal commitment. A joint mortgage is difficult to get out of and can have financial consequences for your future.
5. Be aware of hidden terms and conditions
It can be confusing and time-consuming to apply for a mortgage. There are many forms you need to complete. You should be aware of hidden terms and conditions when applying for a mortgage.
If you are looking to exit your mortgage agreement, make sure you understand the costs.
If you close or switch your mortgage before the deal ends, an exit fee will be charged.
You may also face charges if you have just paid off your mortgage. These fees are known as a mortgage redemption fee or an exit administration fee.
6. For a first-time buyer, proof of income
A mortgage lender will require proof of income. You’ll need a P60, which you receive each year from your employer. It provides a summary of your earnings and any deductions.
Sometimes, you will need three months’ worth of bank statements and three months’ pay slips to show the lender how much you have come in.
7. It’s cost-effective to seek help
A mortgage broker from Mortgageexpertsonline.co.uk can help you if you are having trouble finding the best first mortgage deal or don’t know how much you can borrow.