Getting Mortgage Ready

Streamlining the process and ensuring your finances are in order with tips and advice from the experts at New Home Finder

Mortgage. The word alone is enough to send prospective buyers into a frenzy of panic and dread.

Fear not, here at New Home Finder, we are all about helping you get your foot on the shiny new property ladder. So before the dreaded trip to the bank or building society– take a look at our best practice advice to getting your finances mortgage ready. 

1.    Check your credit history score. There are loads of sites (Equifax, Experian, Noodle to name a few) which can generate a report for you. It will give you a breakdown of any ‘debt’ you have ever had and your experience paying it back. This is usually a lenders first port of call when assessing your affordability as it gives them an insight into how you have handled any debt in the past – this is not a critique on how much you have borrowed before – simply how you have approached paying the debt back to the lender. Any missed or late payments will harm your score so beware. 

2.    Once you have your breakdown of outstanding debt, it would be a good idea to try clear off as much of this as possible. This can include credit cards, car loans and furniture loans – if you can afford to pay it off then do – it could be the difference between a successful and unsuccessful application. Being in your overdraft is also considered a debt so make sure that for a minimum of three months prior to application you do not go into your overdraft. 

3.    Cancel unnecessary direct debits -  gym memberships, TV subscriptions, club memberships etc can all be viewed as luxury items and if you are struggling in the affordability category, it may be a good idea to clear off some these direct debits before applying.  

4.    Deposit – if you are applying for a mortgage you will need to prove to the lender that you have your deposit together. Don’t forget you will also need to have money put aside for stamp duty, legal costs and mortgage application fees. 

5.    Large expenditure – If you are saving for a home it only makes sense to hold back on the expenditure – holidays, large shopping sprees and eating out every night can put lenders off. Proving you can be responsible with money is at the forefront of lending credibility if you are applying for a mortgage so be prepared for lenders to dig deep into your outgoings. You will need at least 3 months bank statements to verify your salary and spending habits so it’s a good idea to tighten spending in the three months leading to your application. 

6.    Get on the electoral roll – registering to vote is a must if you are thinking of applying for a mortgage. Your lender will use the information to validate your address and not being registered can be detrimental to your application. 

7.    Get your paperwork in order – lenders will ask for plenty of proof to demonstrate not only your monthly income, but evidence of any outstanding loans, proof of employment etc. Here a list of some of the things you will need before applying: 
  • Proof of ID – usually a passport
  • Proof of current address (utility bill, bank statements) – if you have lived at the property for less than three years, then you will need to provide details of other addresses lived at during that time. 
  • Your last three months bank statements 
  • Your last three months pay slips 
  • P60 
  • Proof of deposit 
8.    Check your affordability – using an affordability calculator input your incomings and outgoings to ensure you will be able to afford the monthly repayments on your mortgage. 

Please note that all lenders work to different suitability criteria - so you may find variations in requests upon application. However, following the above steps will give you the best head start at your application. Speak to your financial advisor or mortgage broker for any further guidance. 

Publish date: 13/10/2017