Many first time buyers hope to make this year the year they get on the property ladder, thanks to the increasing availability of 95% mortgages. But while there are higher numbers of suitable mortgages available, there’s no guarantee you’ll be approved. To improve your chances, here are five of our top tips on how to improve your chances of mortgage approval as a First Time Buyer.
- REGISTER TO VOTE It might not sound like this has much to do with your mortgage, but you’ll find it impossible to get approved if you’re not on the electoral roll. Though the main purpose of this register is to prevent fraudulent voting, it’s also used in credit applications and is one of the first things a mortgage provider will check. The process of registering is easy (as long as you’re a British citizen, an Irish citizen, or a Commonwealth or EU citizen who is living in the UK) and it can be completed online.
- CHECK YOUR CREDIT REPORT Your credit report includes any financial issues on your record in the last six years. If you’ve received a county court judgement or filed for bankruptcy in that time, more than likely you’re aware of the issue and how it could affect your mortgage application. But even smaller incidents, such as late bill payments, can impact your score, and occasionally you’ll see something on the report you weren’t aware of. Very occasionally you may also find an error, which can be corrected by contacting the creditor. You can check your credit report for free with ClearScore, Equifax or Experian. Here’s a blog post on how to check your credit score.
- ORGANISE YOUR FINANCES Lenders want to see that your financial affairs are in order, so is now a time you need to tidy them up? If you have bank accounts that you no longer use, close them. If you have small amounts of money in different accounts, consider pooling them together into one to give a clearer picture of your financial position. If you have a Lifetime Individual Savings Account (LISA), top it up to the maximum £4,000 annual allowance, so that the £1,000 government bonus will be added to boost your savings.
- PAY OFF OUTSTANDING DEBTS Mortgage providers will check to see how many credit arrangements you already have before they approve your mortgage, and they want to see that number as low as possible. So, if you have small outstanding debts that you can clear without subtracting from the money you have saved as a deposit, it makes sense to do so.
- DELAY NEW CREDIT APPLICATIONS Usually, when you make a new credit application, the lender will perform a hard enquiry on your credit score. If several hard enquiries are made during a short period, that can temporarily affect your credit score. So, until your mortgage application is approved, it’s best to delay new credit applications, whether this is a new credit card, a new phone contract, car financing or any type of loan.
Is it time to step on the property ladder for you? Finding the right mortgage may seem like a confusing process – so you need to make sure you are mortgage ready. Which is the best first-time buyer mortgage to go for? How much can you borrow? What deposit will you need? To discuss your mortgage options, contact Yes Mortgage Services Limited – telephone 01425 478111 – email [email protected]
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