5 Steps to Getting Mortgage Ready
Whether you’re a first-time home buyer, buying a buy-to-let or further up the housing ladder, buying a home or any property is always a big move and can feel a bit like a roller coaster ride at the best of times. With 60% of buyers reporting being put off moving because they find the idea overwhelming, here are some tips that can help you navigate the process as smoothly as possible.
Start and Keep Saving
You will need to have saved a deposit - in most cases the bigger the deposit you can put down, the lower your interest rate is likely to be. Open a dedicated savings or investment account and make sure it’s paying a competitive interest rate.
You can save for your first home using a Lifetime ISA. For every pound you save in a LISA, the UK government contributes an extra 25% towards your first home up to a maximum of £4000. So it you are between the ages of 18 and 39, saving some money in a LISA could help. It is important to know that money saved in a LISA with the 25% top up can only be used towards your first home or your retirement.
2. Check your credit score
Even if you’re re-mortgaging or moving up the housing ladder your credit history will be important. A good credit rating can help you secure a better mortgage deal, with a lower interest rate.
The general rule is the higher the score the better, and the more likely you’ll be accepted for a mortgage or other credit. If you’re looking to take out a mortgage or re-mortgage, check your credit score regularly. You can usually get a simple overview for free and it pays to check with several different sources. Transunion (Credit Karma provides free Trans Union) credit scoresprovides free equifax credit scores Equifax ( clear Score provides free equifax credit scores) and Experian (MSE Credit club) all offer a service to help you understand your rating.
If you find it is lower than expected there are ways to improve it:
Pay more than your minimum payments on credit cards
Bring your overdraft down
Close unused credit accounts
Register for the electoral roll
View your Experian Report for FREE forever - https://www.moneysavingexpert.com/creditclub/
3. Create a spending plan
It’s important to review your income and outgoings. If you have accounts, memberships or subscriptions that you no longer use, it makes sense to close them down. Cut back on unused subscriptions and watch how much you spend on things like eating out. Prospective lenders will also look at the debt you currently have, including whether your current account is in credit. If you have any savings, it makes sense to pay off loans and credit cards but be sure to leave yourself enough saved to cover emergencies.
4. Get good advice
Getting professional financial advice can save you time, money and stress. We know the industry and the most appropriate lenders, to be able to recommend the most suitable mortgage for you. We can also offer useful advice on all aspects of the house buying process. More now than ever, the value of professional advice is immeasurable. As the mortgage market changes, it’s our job to keep our finger on the pulse. We’ll be able to help you get a decision in principle from a lender, which will give a seller the confidence that you are a serious purchaser
NOTE: YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Send me an email at elizabeth@wealthfromlittle.com if you want support in getting mortgage ready. I have a wide network of financial professionals that I work with and endorse that I can connect you with if I can not help you.