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Top Tips for getting a Mortgage

Mon 08 Jul 2013

According to the Nationwide Building Society, house prices again saw an increase last month and with interest rates low and the introduction of the government Help to Buy scheme, now is a great time to consider buying a home of your own.

However, getting a mortgage is not always as straightforward as many would like, so we’ve put together our top tips to help you to get that first foot on the property ladder.

Do a credit health check

Check out your credit rating and ensure that all of your debts are satisfied, monthly payments are up to date and you’re registered on the electoral roll. Make sure that you don’t continually go overdrawn with the bank, and if you don’t have a credit card, get one and use it to further build your credit. A healthy credit rating will stand you in good stead when it comes to the point when you want to apply for a mortgage.

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Make an appointment with a broker

The first step any home buyer should make is to seek the advice of an independent mortgage broker, preferably a reputable one who has been recommended to you. Ensure that when you have an appointment, you take all of your financial information with you, including:

  • Bank statements

  • Payslips/accounts

  • Employment contracts

  • Financial commitments such as loan repayments, credit cards etc.

Get a mortgage agreed in principle

Before you get too excited and begin looking at properties, it’s wise to get a mortgage agreed in principle with a lender. Doing this will mean that you will know exactly how much you can afford to spend when viewing properties and will ensure that when you find a property you like, you can get the purchase moving quickly.

This means that if you have competition on a property, you will be well placed to agree the mortgage and selling price quickly.

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If you’re self employed

People who are self-employed find it much more difficult to get a mortgage in general than those in employment. For some reason, banks don’t look favourably on those who work for themselves, so give yourself the best chance by getting your paperwork in order.

The bank will need to see that you have been earning a good living through self-employment for around three years and it’s likely that they will ask a lot of questions. Keeping excellent records such as accounts, bank statements, details of employees and any business loans will give you the best chance. Try to find a good broker who knows the best banks to approach for mortgages for the self-employed for the best results.

Don’t apply here, there and everywhere

It’s not a good idea to take the scattergun approach to applying for a mortgage, so don’t be tempted to apply to more than one bank at a time. Obviously it’s a good idea to shop around, but numerous applications will harm your credit rating and therefore your chances of being approved.

Look into government schemes

The newly launched ‘Help to Buy’ scheme may help make a mortgage more affordable, so look into it to see if you qualify. The Equity Loan Scheme is available for the purchase of new build properties for first time buyers and existing home owners alike. The Mortgage Guarantee scheme is also due to be launched in January 2014 and will run through to 2017.

If you are having problems getting a mortgage, we are happy to help via the comments. Send us your questions and we will give you answers!