Tips for Applying for a Mortgage

Applying for a mortgage can be a stressful time in your life, even though it’s very exciting – especially if you are buying your first property! So make the process go smoothly by following these tips.

1. Know How Much You Can Afford

First, you should get a good idea about what you can afford. The lender will only lend you what they decide you can afford, so work this out in advance to avoid disappointment.

This means firstly working out the amount you can borrow with the deposit you have available, and secondly how much you will be able to afford paying back each month.

2. Order Credit Reports

The lender will carry out a credit check, so make sure you do this yourself before you apply so you know what to expect.

Contact the three major credit reference agencies and order a credit report from each, then check that the information is correct. If your credit score is bad, you may want to take steps to improve it.

3. Get Onto the Electoral Roll

Make sure you are on the Electoral Roll before you apply for a mortgage. Your lender will use this to verify your identity. Contact your Local Authority, and you can normally sign up online.

4. Look Around for the Best Mortgage

Always look around for the best mortgage for your situation before you apply because you could save thousands of pounds.

Use a mortgage broker such as the Mortgage Advice Bureau. This has thousands of mortgages from over 90 lenders, and their brokers can help to get you off on the right track and can find the best mortgage for your situation.

Also, do your best to save up a large deposit. The larger it is, the better, and you are more likely to get a lower interest rate.

5. Gather Evidence of Your Earnings

When you have found a suitable mortgage and you want to apply for it, you will need to start gathering information about your earnings. This will include three months of payslips and a P60 form if you are employed.

If you are self-employed, get an SA302 form from HMRC for the last few years, and consider gathering all your accounts together so you can prove your earnings.

6. Gather Together Your Documents

Lenders will use your household income including your salary and additional income, benefits and bonuses along with your outgoings including debts to work out how much you can afford to pay.

Before you apply, you will need to gather all the documents you need, including bills, bank statements, credit card bills, utility bills, childcare and anything else. You should also make sure your ID (e.g. your passport) is up to date.

7. Double Check the Application Form

Once you have filled out your application form, double check the details to make sure it is all accurate. Mistakes can lead to unnecessary delays.

Start Looking for a Mortgage Today

These are some of the main things you will need to do when you apply for a mortgage, but remember that every lender is different and they may have their own specific requirements.

Take your time over the process and don’t rush it. It may be exciting, but try to take it slowly. Then prepare your application carefully, follow the tips above, and boost your chances of being accepted by the lender.

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