Getting mortgage approval is a major step on your journey to finding your home to buy. So, we’ve put together a checklist of things you can do to get your mortgage application approved and help to make your dream home a reality.
Get your paperwork in order
To show proof of your income you’ll need to show pay slips and bank statements, or, if you’re self-employed, tax returns and business accounts prepared by an accountant. You’ll also need proof of ID, your address etc. so start to collate all this relevant information.
A steady income
When considering taking out your first mortgage, it’s best to have been in a permanent role for at least two years or if you are self-employed you will need audited financial accounts for the two most recent financial years amongst other criteria that your provider may request. This shows you’ve have a steady income and financial security and will help determine how much you can actually borrow.
Your mortgage providers will want to see track of regular savings so as soon as you can, start saving on a regular basis. Mortgage providers like to see a pattern of good financial habits.
Check your credit score
Make sure all your bank accounts and credit cards are showing and they have all the correct information. This is a key barometer of your financial health for the providers assessing your suitability for a mortgage.
Sort out your finances
Your spending habits and direct debits will be reviewed over a minimum of six months, so make sure you are demonstrating a steady level of spending within your means and not rollercoaster spending on your account. Clear your credit card balances and sort out any existing loans and credit cards bills. Remember, existing loans will reduce your disposable income potential for mortgage calculation. Set up regular payments for monthly outgoings like rent, car loans and telephone bills. Avoid using online gambling sites as it’s not a good behavioural spend to demonstrate.
Speak to the experts
consider speaking to an independent broker, who will look at your finances and help you determine the right kind of mortgage to look at for your personal circumstances.
Think forward to how a change in your future personal circumstances might affect your mortgage affordability. If you are thinking of starting a family if your income levels were to change, or if interest rates were to change what level of repayments could you still comfortably afford? Make sure to take only take out a mortgage you felt you could still handle if circumstances were to alter your financial capacity.