For many people, getting a mortgage feels out of reach. The level of detail required by lenders and the strict criteria that must be met can make it feel like a gruelling process but it does not have to be. Sound advice and getting mortgage-ready well in advance of submitting your application can help make the process less stressful so that you can focus on the excitement of owning your dream home. 

When it comes to getting mortgage-ready, we recommend that you consider the following helpful tips: 

 

1.      Build your savings

The number one tip for anyone who is getting mortgage-ready is “save as much money as you can!” If you work out a monthly budget and stick to it, you will see that a little saving goes a long way. Think of a reasonable savings goal and set up a direct debit for that amount to be debited from your current account every month. Regular saving will help you accumulate a decent deposit and it will also demonstrate to a lender that you have a handle on your finances and have the ability to make repayments.

 

2.      Don’t forget about mortgage fees

Besides your deposit, you will also have to save for the mortgage fees payable by you. These fees include your solicitor’s fees, stamp duty, fees for a surveyor’s report, land registry fees, and a valuation fee. This can all add up to quite a steep amount, that’s why saving as much as you can is key when you’re getting mortgage-ready.

 

3.      Reduce your debt

Prioritise paying off as much of your debt as possible before applying for your mortgage. Limit using credit cards or overdrafts on a regular basis because such behaviour indicates that you are spending more than you earn, which lenders will view negatively when assessing your affordability.

 

4.      Watch out for referral fees and unpaid items

When applying for your mortgage, lenders will scrutinise your bank statements for the 3 to 6 month period prior to submission of your application. This is done to assess how you manage your day-to-day spending and to look out for any referral fees or unpaid items on your account. Lenders view referral fees and unpaid items in a bad light because it indicates that you do not have sufficient funds to avoid missed payments, and therefore might not be able to afford mortgage repayments. If unpaid items appear on your account, it is best to identify why this occurred and explain it to us before we submit your mortgage application so that it can be explained to the lender.

 

5.      Avoid taking out new loans

The 6 – 12 months prior to submitting your mortgage application are crucial, so you have to do your best to avoid taking any big financial risks or indebting yourself during this period. It is not advisable to take out new loans during this time as this will have a negative impact on your credit score. If you urgently require funds, consider alternatives to a loan such as leaning on family or friends for assistance.

 

6.      Limit or avoid gambling

Although gambling will not automatically exclude you from successfully applying for a mortgage, it is best to limit or even stop the gambling transactions going through your account prior to applying for your mortgage. Many lenders view gambling as a red flag when they assess your affordability and see that there are many gambling transactions flowing through your account and that such activity is impacting your ability to pay all your regular expenses.

 

7.      Don’t change jobs

Seeking greener pastures and changing jobs is a reality for a lot of people, however, when getting mortgage-ready it’s best to avoid making this big change shortly before applying for your mortgage. Although you can start the application process during your probation, lenders will not approve your application until they have confirmation from your employer that you have passed your 6-month probationary period. Generally, if you can show that you have been in continuous and permanent employment for at least 12 months, lenders will look at your application more favourably.

 

8.      Get mortgage protection

Mortgage protection is a form of life insurance which pays off the outstanding balance on your mortgage in the unfortunate event that you die before the mortgage is fully repaid. It is generally compulsory for mortgage holders to have mortgage protection in place before drawing down the mortgage. Applying for mortgage protection is not a quick process so it should not be left to the last minute because if you do not have it in place, you could lose out on your dream home. 

The mortgage process begins long before we prepare and submit your application to the lender. There’s a lot to consider and it can feel overwhelming, that’s why when you partner with us, we demystify the process and offer expertise and support from mortgage-readiness until the day you pay off your mortgage.