Many homeowners may be considering selling their home now that we’re well and truly into the new year. However, if you’re a first-time buyer, you might be aiming to buy your first home in 2020.
If you’re keen to apply for a mortgage and get on the property ladder, we wanted to go through some quick tips to help improve your chances of being accepted...
Save smart for a deposit
Saving up enough money for your deposit can seem like one of the toughest aspects of getting a mortgage. However, it doesn’t have to be a battle, because all you need to do is put a plan in place.
Working out how much you need to save and putting some concrete savings goals in place, will help make your homeownership plans feel more real. Do your research into how much the properties you’re after cost in the area you want to live in. Remember, you’ll need to have at least a 5% deposit to successfully get a mortgage.
You can use our quick and easy mortgage calculator to help work things out.
A few things you can do to help you save for that deposit quicker, include:
- Cutting back on everyday spending and bills - It’s worth switching up your energy providers and your broadband, as there are likely cheaper deals out there. Check to see if you’re eligible for a council tax discount - for example, if you live alone. Plus, there are plenty of apps that can help you categorise your spending habits and spot areas that you need to cut back on.>
- Opening up a lifetime ISA - These ISAS offer a 25% government top-up on your savings. It could be beneficial for you, as you can claim the bonus on up to £4,000 of your saving per year, meaning you could get up to £1,000 a year to put towards your deposit. There are terms and conditions of course, so ensure you check these first.
- Earning cashback - There are many cashback sites that allow you to earn some extra money when you shop online. For example, Quidco and Topcashback. You could also consider getting a cashback credit card, as long as you trust yourself to pay off the balance each month.
Improve your credit rating
Speaking of credit cards, as long as you use them responsibly, they can actually be really beneficial for building up your credit score. And having a good credit score is vital when applying for a mortgage. As it’s one of the biggest factors that mortgage lenders take into account.
You can check your current credit score easily, as there are 3 main agencies that hold credit files on you; Equifax, Experian and TransUnion. Keep in mind that they will each have slightly different information, so it’s helpful to check all of them.
Make sure you look out for any errors on your credit score, as even small mistakes like a misspelling of your address could affect your mortgage application. If you notice serious inaccuracies then contact the relevant company. If your score is lower than what you expected, this can give you the chance to start turning things around.
Get registered on the electoral roll
Even if there isn’t another general election for years, it really helps to get yourself registered to vote. As this will be one of the key things lenders will use to check your current address, which, in turn, impacts your credit score.
Pay by direct debit
Lenders will want to know that you can pay your debts on time. Setting up direct debits for your bills can help ensure you don’t miss any payments. Doing this will help mortgage lenders weigh up whether to give you what will probably be the largest loan you’ve ever had.
Consider your job situation
If you’ve been in a permanent job, with a stable income, lenders will look at you more favourably. As it’s more likely that you’ll be able to meet your repayments each month. Being self-employed will still give you options though, so don’t worry.
Seek the help and guidance of professionals
Another option is go to a professional mortgage broker, or independent financial adviser who specialises in mortgages. A mortgage broker will have regular dealings with a wide selection of lenders, and they’ll be able to do all the leg work for you. Plus, they’ll know what each lender looks for in terms of mortgage applications.
Remember, it’s recommended that you only apply for one mortgage at a time, and if you want to improve your chances of getting accepted - then please get in touch with our expert mortgage broker team at TaylorMade today.
