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Mortgages


 

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Mike Barley (Managing Director)

 

Top 10 tips for getting a mortgage

Taking out a mortgage is likely to be the biggest financial commitment you’ll ever make. So you’ll want to find the best deal you can. The good news is there’s plenty you can do to improve your chances of getting your mortgage application accepted. Follow our top 10 tips to help you get what you want.  

  1. Your credit score matters with a mortgage application.

Before applying for a mortgage get a copy of your credit report. This is held by credit reference agencies such as Experian or Equifax. Your report will allow you to see what lenders see when they review your application. If your credit rating isn’t looking that great, there are lots of simple things you can do to give your score a boost. Check you are on the electoral roll and close down credit card accounts which you no longer use.

  1. The starting point is your own sums.

Sit down and work out your budget before applying for a mortgage. You will need to be sure you can borrow enough to cover the purchase of the property. Also make sure you have enough spare to cover all the associated costs and fees. Our cost of moving calculator can help you work out these costs. Monthly mortgage repayments will depend on how much you want to borrow (and over how long).

  1. You’ll be better off in the same job.  

Most lenders like to see that you’ve been with your employer for a decent length of time before they’ll offer you a mortgage. If you’re thinking of switching jobs, it’s a good idea to hang on until you’ve got your mortgage in place. Usually, it’s a good idea to have been in your existing job for at least three to six months before applying.

  1. Debts don’t help.

Before you apply for a mortgage, try to reduce any debts you have.  Demonstrate that you manage your money responsibly  and your mortgage application is more likely to succeed. It will also mean you will potentially be able to borrow more when it comes to a lender’s affordability calculations.

  1. You’ll need proof of income.

Mortgage lenders will want to see proof of how much you earn, so you’ll probably need a P60 form.  You will get one every year from your employer and shows a summary of your pay and how much tax has been deducted. You’re also likely to be asked for three months’ worth of bank statements and payslips.  The lender will look at both  to see how much you have coming in as well as your outgoings.

     6.  Accounts if you’re self-employed.

Getting a mortgage when you’re self-employed doesn’t have to be tricky. Lenders want proof that you’ll be able to keep up repayments, so they’ll usually ask to see an SA302 form relating to the last three years from HMRC or your full accounts for the last three years.

      7. The bigger the deposit the better.

A bigger deposit  helps the choice of mortgages that will be available to you. Lenders reserve their best rates for those with hefty deposits. You’ll also benefit from lower monthly payments because you’ll have qualified for a better deal

        8. Buying with someone else can be easier

If you’ve no hope of building up a decent deposit on your own, you might want to think about buying with someone else. This could boost your chances of securing a decent mortgage, particularly if they’ve got an excellent credit history and a higher income than you. But remember that this is a big commitment, so you’ll need to sit down and work out with the other person what would happen if one of you wanted to move in future.

  1. You shouldn’t chop and change your application

Once you’ve started your mortgage application, don’t mess around with it and start changing figures as it could hold up your property purchase. David Hollingworth said; “Changing the figures further down the line will mean the offer being reassessed which, although may not necessarily be a problem, could add unnecessary delay.”

  1. It can pay to get help

If you’re struggling to find the right mortgage deal, or you don’t know what you’d be eligible for or how much you can borrow, it might be a good idea to enlist the help of a mortgage broker. They can research the market for you and help you through the application process so you don’t have to go it alone.