Home buyers in today’s market need to be up to speed on the mortgage lending process, but what about before you apply? Below are just five things you should do prior to sending off your application, if you want to boost your chances of getting the go-ahead for the house of your dreams.
1) Boost your credit score
The better your credit score, the more options that will be available to you and the better the rate you’ll receive, meaning your monthly repayments will be less (click here for more information). There are plenty of simple ways to improve your credit score in the run up to the mortgage application though.
You can run a credit check on yourself some time in advance of needing one, and if there are any problems you can start to put them right. Make sure any overdrafts or credit cards are fully paid off, and be sure not to make any large payments on credit either.
2) Keep your finances in order
Aside from needing to protect your credit score once you have solved any issues, you will want to make everything as clear as possible for the mortgage lender when they assess you based on affordability criteria.
Make sure every bill is paid on time, keep spending sprees to a minimum, and be sure not to close any accounts that are at zero. This can actually affect your credit in a negative way, as your score is based on a ratio across your accounts.
3) Open a separate account for your deposit
Using a wholly separate account for your down-payment will help to make the process of approval much smoother. By making sure that you have no unrelated transactions, it will help you to avoid delays in the application process or potential declines.
Have all payments into that account final 60 days before you want to start your application too. Banks usually consider the two most recent months of statements, so if there are no transactions you won’t need any additional documentation.
4) Use online tools
There are plenty of online tools that help you to figure out the details of your mortgage. By doing some research in advance, using savings projections and mortgage calculators, it can give you an estimate of how much you can afford and what your monthly payments are likely to be.
5) Get pre-approval
It can be difficult to go on house viewings when in the back of your mind you’re still concerned that you might not qualify for a mortgage. To give you peace of mind when viewing potential homes, why not apply for pre-approval? After all the research and hard work you’ve put in, a mortgage lender can assess you and pre-approve a specific amount, so you can have total confidence when viewing properties.
I hope these top five considerations will help you to prepare for your mortgage application. Do you have any tips of your own? Let us know in the comments section.