If you’re looking to get on the property ladder, there are quite a few things you need to think about to give yourself a chance of being considered by a mortgage lender.
This can feel quite scary, confusing and even intimidating if you’re young or looking to buy your first home. We’ve broken down all of the areas you really need to evaluate if you are to give yourself the best possible chance of securing your dream home! Many of these are not overnight fixes, and you need to give yourself plenty of time to get there.
1. Make sure your credit score is up to scratch
The main priority of a mortgage lender is to ensure that you can keep up your repayments. If you have a history of failing to keep up repayments on other goods such as your car, bills and utilities, unfortunately you won’t be accepted.
Make sure you can demonstrate to lenders that you’re capable of keeping up with payments otherwise they simply won’t look your way. If you are paying regular outgoings and managing these well, it will have a positive impact on your credit rating and allow you to demonstrate that you can manage a diverse range of credit.
2. Save a larger deposit
The more money you have to put down for a deposit the better your chances, as lenders aim to limit the risk they are taking with each mortgage. You will also need proof of the source of your deposit.
3. You need to be on the electoral roll
If you aren’t on the electoral roll and can’t prove who you are then lenders won’t look your way!
4. Sufficient income
You really need to consider whether you are in a position to afford the monthly payments on the mortgage you’re applying for, and have fully considered what might happen if your circumstances changed, or you lost your job for example. If you can’t keep up with your mortgage payments, you will lose your home. Lenders will apply affordability checks to ensure you can definitely afford your monthly payments and that you are not over-stretching yourself financially.
5. Pay off unsecured debt
You should aim to pay off unsecured debts with large monthly payments before you attempt to apply for a mortgage, as this will reduce your regular outgoings and increase the amount of income you have available to pay for your new mortgage.
6. Proof of your income
You will need to be able to prove all of your income through your payslips or bank statements, or between at least 2 and 3 years of accounts if you are self-employed or run your own business. If your business has been operating for less than two years you will find it difficult to secure a mortgage as many businesses under two years old sadly often fail.
These are some of the most important things to consider when looking to apply for a mortgage. As we mentioned above, they can seem scary and intimidating but it is simply a case of thinking ahead and understand what is and isn’t doable for you.
For more in-depth advice on purchasing a home for first-time buyers’, please see this super helpful first-time buyers’ PDF: https://www.moneysavingexpert.com/mortgages/mortgage-guide/