Buying a property is said to be one of the most stressful times in your life and with the added pressures of securing finance for a dream home, the process can prove a daunting task. Whether you are looking to purchase your first home or are considering investment options such as a buy-to-let, there are a variety of important factors that can affect your position to borrow.
For the best chance of being accepted for a mortgage, take a look at some of the ways that will help secure the perfect property.
It’s all in the details
Before you start applying for finance, it’s best to have all your personal admin in order so there are no nasty surprises in your credit history. Be sure to check your history first before applying, as unused accounts, inaccurate data and incorrect address records can affect your ability to borrow. As many lenders use the electoral roll to verify your identity, check you are registered at your current address as this could delay your progress.
Save as much as you can
The type of mortgage and rate you borrow at is different depending on how much deposit you have. Most of the good rates are reserved for those that have deposits of up to 40% of the property value, so anything lower will see the cost of lending increase. Although it can be a hard task, saving as much as possible is key to securing the best deal. Consider cutting out unnecessary expenses and monitoring your budget effectively and perhaps try the range of accounts specifically designed for deposit savings.
Evidence of earnings and identity
When you apply for finance, lending companies will need to see evidence of who you are and whether you can afford the mortgage you are applying for. They will need a host of recent documents to verify your details such as an up-to-date passport or driving license, proof of employment or self-employment earnings such as a P60 and recent payslips or SA302 and full accounts. They will also need several supporting documents such as bank statements, outstanding credit accounts and proof of any other income you receive.
Avoid unconventional properties
One of the key elements that lenders consider is whether they are likely to get their money back if the worst should happen. By selecting a property that is deemed unusual could scare of potential finance options due to its risk in selling on. This is particularly prevalent for help-to-buy investment, as the lender needs to be confident that the property will continue to provide a good return in the long term. Some properties that fall into this category include non-standard construction buildings such as steel and concrete, and flats above commercial properties.
As with all financial products, shopping around is the key to finding a good deal. If you know the type of mortgage you want, be sure to check out all avenues to see who is offering the best rates. If you are unsure where to start, using a broker is also an option. Whether you are a first-time buyer or looking for the best buy-to-let offer they will have access to tons of products on the market suitable to your needs.
Choosing and securing the right mortgage can be a stressful time but doing your research and getting your finances in order can make the process a simple and rewarding experience.