happy customer

How to get mortgage ready

Preparing to buy a home is such an exciting time, so getting mortgage ready and having an understanding of the financial side of things probably seems like the boring part! However, when you apply for a mortgage your income and expenditure will be examined to make sure that you can afford the home you want to purchase, therefore it’s crucial that you get things in order in the lead up to reserving your new home. Being mortgage ready also means that you’re more likely to get a good mortgage rate, meaning you’ll pay back less interest on your borrowed amount. To help you out, here are our top tips on how to boost your chances of getting a mortgage.

1. Start saving for a deposit

We all love to treat ourselves to new clothes and meals out, and you don’t have to give up that when getting mortgage ready, but it’s important to start saving money. Whether you’re an excel whiz or a note scribbler, recording your expenditure will help massively. Think about your monthly outgoings and the things that are essential, nice to have, and the things that are unnecessary. Then with any spare disposable income, put this away as your savings. For first time buyers, you need just a 5% deposit to achieve home ownership when using the Help to Buy: Equity Loan, this means many of our 2 bedroom homes require less than a £5,000 deposit. Setting up a direct debit the day after your payday and depositing the money you can afford to put aside into a savings account is a simple way to save and will make it much easier to curb your spending.  Also try and not dip into your overdraft whilst getting mortgage ready, lenders have a beady eye on all of these things!

2. Register to vote

To get a mortgage it helps to be on the electoral register. This is because lenders use it to check your identity, making sure you are who you say you are. Do this as early as possible as it improves your credit score. Additionally, if you are registered to vote but at a previous address, make sure you rectify this, all your voting details should be up to date for the best chance of getting a mortgage.

3. Check your credit score

Checking your borrowing history and your credit score before applying for a mortgage is a good idea. That way you can check for any inaccuracies and settle any debts. Your credit score can be checked by using tools like Experian and Equifax. These tools give you a rating from poor to excellent, based on your financial history, essentially how well you’ve managed your bank accounts in the past. Things that can affect your credit score range from your phone contract to credit card repayments.  Lenders use your score to decide whether or not to lend you money for your mortgage and checking your score gives you a clearer picture on how lenders will view you, helping you to avoid any disappointment if your credit score isn’t good and putting you in a position where you can improve it, so you can work to getting a mortgage on your dream home.

4. Pay off your credit card and keep your financed items to a minimum

If you have any outstanding loans or finance deals, do your best to try to pay these off before applying for your mortgage. Make sure you are at least paying off the minimum monthly requirement on your credit card and don’t take out any new finance deals in the run up to applying for your mortgage. All of these things are taken into account when you apply for a mortgage and if you have a large loan to pay back or have racked up a sizeable credit card bill, the odds are your mortgage is more likely to be declined. Plus, the items you have on finance will be calculated into the amount you can borrow, if you have high outgoings, it’s likely the amount you can borrow will be lower. That means no getting sofas on finance until you’ve moved into your new Gleeson home.

5. Pay your bills on time

You may have paid all your bills but if you’ve not paid them on time then this may be a red flag on your mortgage application. Paying your bills on time is a good habit to get into as keeping up to date with payments positively impacts your credit score and proves to a lender that they can trust you to keep up your mortgage repayments every month. So, if you’re thinking about not paying your Netflix direct debit, think again!

6. Stable employment

To evidence that you have a stable monthly income when applying for a mortgage it’s good to show that you have been in employment for at least six months. This is because you will be asked to provide pay slips for up to six months, so that the lender who will potentially make you a mortgage offer can see that you will be able to afford to pay back what you’re hoping to borrow.

7. Get your paperwork in order

As we mentioned, a potential lender is going to want to see your pay slips. But that’s not the only paperwork they will want to see. Documentation commonly asked for includes your passport or driving license, proof of your deposit, your current address, your P60, or if you’re self-employed ideally three years of your accounts and SA302 tax documents. Start collecting the documents you’ll need to apply you’re your mortgage and pop them in a folder ready for when you’re asked for them, it’ll save you scrambling around for your P60 at the last minute.

8. Speak to a mortgage broker

When you’ve done all of the above and your finances are tip top, it’s a good idea to speak to a mortgage broker. Our recommended new build mortgage experts, Meridian Mortgages, can help you explore what mortgages are available to you and what you can borrow. Mortgage brokers specialise in finding lenders who suit your mortgage requirements, providing you with advice and subsequently managing your mortgage application for you. Meridian also have a handy mortgage calculator here, helping you quickly work out what you can borrow.

It may seem like there’s a lot to do to get mortgage ready but buying a new home is a lot easier than you may think and we're here every step of the way to offer you support and advice. We have some great schemes available to get you onto the property ladder, including the Government backed Help to Buy: Equity Loan and Home Reach, part buy – part rent.

Always keep in mind, lenders use a range of factors to assess whether to give you a mortgage or not and what kind of mortgage deal you’ll receive, securing a mortgage can seem a little scary but by following our tips you’ll be one step closer.

Ready to begin your home buying journey? Find your Gleeson home today, we have over 70 stunning developments to choose from, with prices from £98,995 and homes located across the North and the Midlands, what are you waiting for? Own it in 2021.