There are few things more exciting than buying and owning your first home and while it is a life milestone to be proud of it is not a simple or easy process. In the overwhelming majority of cases first time buyers will be unable to buy their home without a mortgage, so ensuring you qualify for and are able to obtain a mortgage is a crucial step in getting on the property ladder. To help you achieve your goals, be approved for a mortgage and buy your first home here are some tips to consider.
Be mindful of your credit score
When it comes to taking out a mortgage you will need to have a good credit score. It is a good idea to get a copy of your credit report before you apply for your mortgage so that you can see all the information the lenders will look at when deciding whether to give you a mortgage or not. If your score isn’t strong then there are things you can do to improve it, such as ensuring you are on the electoral roll, have paid all bills and credit cards and have no outstanding finance. A bad credit score will not always mean you will be unable to qualify for finance as there are lenders who offer bad credit mortgages if you do a little more research.
Look at your employment
Most lenders will prefer their applicants to have been in the same job for a significant period of time. Applicants who have commonly switched jobs or not held down the same position for a length of time, usually around 6 months, will be considered less desirable applicants. If you know you will be applying for a mortgage in the coming twelve months consider any employment moves carefully. What is more, your mortgage provider will want to see proof of income and this will usually be by way of 3 months wages slips and a P60. If you are self-employed they will want to see three years accounts.
The bigger the deposit the better
While many mortgages providers will grant a 90% mortgage your application will be stronger with a higher deposit. Lenders typically reserve the best rates for applicants with the highest deposits and in turn, these applicants will benefit from lower monthly repayments. A mortgage company will also look favourably on applicants with higher deposits as it presents a less financial risk to their institution.
Double down on your debt
A mortgage is essentially a debt owed to the lender, so when applying for a mortgage a lender will not want to see that you already have multiple outstanding debts and financial commitments. Debts that are considered are car finances, credit cards, loans, etc. If you have any outstanding debts, credits or finance make every effort to reduce these or pay them off. Not only will this make your application desirable it will help improve your credit rating also.
Disclosure: This is a featured post.