Getting a mortgage can be the most stressful part of buying a home, but there are ways of making the process as simple as possible.
There are some things you can do to give yourself the best chance of being accepted for a mortgage, which we discuss below:
1.Get on the electoral roll and update your address
Many companies use the electoral roll to verify your identity, so your mortgage application may well be refused if you are not registered on the electoral roll at your current address.
This is easily remedied, though. Just contact your Local Authority and ask for a registration form or sign up online.
To avoid any issues, it also makes sense to ensure the address the credit agencies have for you is up-to-date.
2.Check your credit report.
Before making an application for a mortgage make sure you check your credit report. Many companies offer a free report when you sign-up online.
Make sure the report is accurate and there are no errors. If there are any issues report them to the credit reference agency and the provider.
At Mortgage Solutions Belfast, we offer a free service to all our clients to identify and remove erroneous information from your report, which in turn will improve your credit score.
If your credit file info's wrong, you have a right to do something about it - either having the error corrected or, at the very least, having your say.
3.Be prepared with all documents
You can speed up the application process and improve your chances of getting the mortgage you want by digging out all the necessary paperwork sooner rather than later.
No mortgage lender will take you on as a customer unless you can prove who you are, so make sure you have up-to-date identification.
Other documents you will need to provide include a recent letter – from a bank or utility company – that proves your address.
Typically, a bank will ask for the following documents:
- Proof of identity – a passport is the best option
- Proof of address – utility or credit card bills are often sufficient
- Bank statements for the last 3 months (at least)
- Pay slips for the last 3 months (at least)
- Proof of any bonuses or additional payments on top of your usual salary
- Proof of any additional income – this includes Child Benefit payments
- Proof of self-employed income – your latest 2 years’ tax calculations with accompanying Tax Overview for each.
4.Pay ALL your bills on time
All missed payments count against you on your credit file, so it's vital to keep up all repayments on ALL your outgoings.
Defaults count against you for at least a year, and they'll stay on your file for the next six years. Miss just one mobile phone payment and it could be the difference between getting a mortgage and not.
Set up a direct debit on all accounts to make sure payments are made on time.
5.Don't apply for credit shortly before a mortgage
Try to avoid applying for credit in the three months before getting a mortgage - it could hinder your score and lead to rejection. Some recommend at least a six-month gap, to be absolutely safe.
This is because lenders will search your credit file every time you apply for a loan, credit card, overdraft, or even a mobile phone or utility contract. This search is registered on your file even if you don't take out the contract.
The more searches you have in a short time, the less likely you are to be granted credit, as you could be viewed as desperately seeking borrowing.
6.Avoid payday loans
Mortgage providers can be particularly strict when assessing your affordability, and a payday loan could suggest that you’re in financial difficulty or that you’re not good at budgeting.
7.A regular job and income
Essentially, you’re more likely to be approved a mortgage if you’re in long-term employment. It’s not the end of the world if you’ve recently moved to a new position – especially if this means your annual income has improved. If you can hold off applying for a mortgage until you’ve been working in the same company for at least six months, this may give you a better chance of getting approved.
8.Be realistic about what mortgage you can afford
This sounds like basic advice but there are so many people out there who fall into this trap. Can you comfortably afford the loan repayments you’re looking to commit to?
To be sure, at Mortgage Solutions Belfast we do all the work for you, by carrying out a full budget of your income and outgoings to weigh up exactly how you’ll be able to afford monthly repayments.
9.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, that’s where we come in.
We work to improve your credit file in order to maximise the chances of getting the right mortgage for you. We’re aware that everybody’s situation is unique, therefore each case is taken on its own merits.
Give us a call today and let us get you mortgage ready for 2020!