Whether you are looking at taking your first step on to the property ladder, or are jumping up it, shopping around for the best offer on your mortgage can save you thousands in the long term. The better position you and your finances are in will help you to access some of the best deals on the market. Here are our top tips to getting the best mortgage for you.
Check your credit report
Before you even start to apply for your mortgage, download your credit report and check that it is up to date with correct information. Incorrect data could affect your application. Experian and Equifax are two of the major credit scorers and they both offer a 30-day free trial so you can view a comprehensive report without having to pay for it (but do remember to unsubscribe before the 30-day trial is up).
Pay off credit cards
If you have a lot of credit card debt, try to bring the total down as much as you can. If you’re one of those people who regularly only makes the minimum payments on your card balances, stop and increase your monthly payments to show that you are good at managing your money and aren’t living beyond your means.
Stop using your overdraft
If you regularly dip into your overdraft now is the time to stop! The message this gives to lenders is that you struggle to live within your means and have to borrow every month. This will reflect badly in credit checks so try to stay away from your overdraft, especially in the months leading up to your mortgage application.
Speak to a Mortgage Advisor
A mortgage advisor will look at your income and assess your outgoings to provide you with a good idea of how much you are likely to be able to borrow based on how much you can afford to pay every month. Many moons ago, banks would lend you a certain amount based on your annual salary. However, lenders now have much stricter lending criteria which is based on what you can afford versus your other outgoings.
Be frugal
In the months leading up to your mortgage application, try to reduce your outgoings as much as possible. You want to show lenders that you can manage your money and afford to make the mortgage repayments.
Save, save, save
The bigger the deposit you are able to put down, the better chance you have to access the best rates on the market. If you a just short of tipping into a higher percentage bracket it is worth hanging on and saving for a bit longer (I.e. if you are looking at putting down a 20% deposit but are just a few grand short of hitting 25%, it is worth saving for a little longer as you will get a better interest rate with the higher deposit).
Bonus tip….Savvy saving
Make sure that you’re getting the most out of your savings by putting your money into accounts that pay a decent monthly interest. If you’re a first-time buyer it probably feels like you’ve been saving forever, but be aware that there are schemes out there to help you take your first step on the property ladder. It is worth opening a Help to Buy ISA if you haven’t already. This ISA is aimed specifically at first-time buyers and the government will top up what you save by 25%. So, for every £200 you put in, the government will put in a further £50!