16 May 2016

Planning ahead when applying for a mortgage

Applying for a mortgage isn’t simply a case of filling in some paperwork and hoping for the best. Prospective house-buyers can take a number of proactive steps to improve their chances of being approved as they count down towards an application.

So what action is needed before you sit down and apply for a home loan?

6 months before

Whether you’re a first-time buyer or an existing homeowner aiming to move up the ladder, you can start to get organised even if a formal mortgage application is 6 months away. Consider doing the following:

  • Get your name on the electoral roll.
    Since lenders often use the electoral roll when carrying out identity checks, registering to vote could come in handy further down the line. It’s a good idea to register early since your local council will need time to process your request

  • Check your credit score.
    By signing up with one of the major ratings agencies, you’ll be able to review your current score and see whether you have a decent chance of getting a mortgage. Checking this early will give you time to tackle any problems which could be damaging your rating – such as incorrect information or outstanding debt repayments.

  • Improve your financial discipline.
    As well as facing up to your debts, making a few improvements to your general money management could increase your appeal to lenders. Think carefully about your use of credit, and how you could boost your savings towards a deposit.

3 months before

As your search for a property picks up pace, it’s likely your attention will also turn to the mortgage market. So what steps can you take 3 months before applying for a home loan?

  • Get your paperwork in order.
    Rather than facing a nasty surprise in the middle of a mortgage application, check your paperwork early to see if you’re missing anything. With pay-slips and bank statements among the things lenders need, checking for missing documents now will give you time to ask for replacements.

  • Do your sums.
    As your house-hunting efforts gain momentum, it’s vital that you work out the kind of home you can actually afford – not to mention the amount you’ll need to borrow. To avoid disappointment at a later date, try to be honest with yourself.

1 month before

If you’re close to putting in an offer on a home, there are a number of things still to consider:

  • Avoid a sudden career change.
    Even if you’re keen to apply for another job, now probably isn’t the right time to do so. Lenders often prefer to see a stable, long-term job on a mortgage application, so it may be wise to leave any career changes until after your home loan has gone through.

  • Get your deposit together.
    Whether you’ve been building a nest egg for months or years, now’s the time to carefully track down all of your savings and get statements which officially prove the amount you have available.

1 week before

As your application day finally approaches, it’s all about tying up any loose ends which could hold back your progress at the last minute:

  • Seek out the right mortgage.
    Instead of jumping into a deal, it’s vital that you carefully consider the mortgage product which is right for your personal needs. Think about the term of a mortgage, along with its interest rate and any charges that apply.

  • Get financial advice if you need it.
    If you find any aspects of the mortgage application process confusing, don’t be shy about coming forward with questions. Speak to an independent financial adviser, or address queries directly to a lender.

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