Our 10 tips to get mortgage ready

Being concerned about how the Coronavirus (Covid-19) crisis could affect your chances of securing a mortgage is understandable, especially if your financial situation changes. With interest rates at record lows, we’ve ten tips to make sure you and your finances are in the best condition before applying.

1. Talk to our fee-free New Home Mortgage Advisers

In these uncertain times, knowing which is the best deal can seem overwhelming. Our New Home Mortgage Advisers are experts in new homes and will research the market for you. They have access to special rates you may not find through high street banks and can advise on the right mortgage with affordable repayments for you. Plus, it’s a fee-free service.

2. Consider the Help to Buy scheme

Whether you’re a first time buyer or existing homeowner, you may only need a 5% deposit to buy a new home. Many different lenders have competitive rates available through Help to Buy, including challenger banks and specialist lenders. Our handy calculator can show how the scheme could work for you.

3. Check your credit score

A strong credit score tends to make you more attractive to mortgage lenders. Don’t worry if you’ve recently taken a payment holiday – this won’t affect your credit score. It’s important to know your score so you can take steps to improve it, if needed. You can check it easily online with the two main credit reference agencies, Experian and Equifax. Make sure all the information they have for you is correct and, if it isn’t, ask them to change it.

Help for Homebuyers

4. Review your joint finances

Details of your family’s credit score are not kept on your file, as long as you don’t have any joint finances. If you do, you’re likely to be co-scored and this could affect your chances of securing a mortgage. If a family member, partner or housemate has a poor credit score, keep your finances rigidly separate. This includes joint accounts and bills under both names.

5. Stay positive and boost your credit score

You may still be able to qualify for a mortgage, even with a poor credit score. Being self-employed is also not the barrier it once was, and you may only need to show one year’s set of accounts. There are many ways you can build your score, (especially as 1 in 10* people have no credit history when they start house-hunting). Take out a credit card and use it regularly, just make sure you pay off the bill each month. You can also take out a mobile phone contract.

6. Manage your payments and spending

If you have an existing credit card or loan, it’s important you keep up with the minimum repayments and try not to get too close to your credit limit. Missing or defaulting on payments, County Court Judgements (CCJs), payday loans, and clear betting patterns on your bank statements can all lower your chances of securing a mortgage. If the current climate means you’re struggling with repayments, speak to your lender about a payment holiday. This won't affect your credit score.

7. Register on the electoral roll

You should try to show lenders that you have a ‘stable’ lifestyle, for example that you’re in full-time employment and live at a fixed address. Make sure you’re registered on the electoral roll as you’re unlikely to get credit without it and, if you can, provide a landline rather than mobile phone number.

8. Be consistent and double check

Take your time when filling out and cross-checking your application form. Simple slip ups like mistyping your postcode or inconsistent information (even on application forms for other lenders) can flag up as possible fraud, which could then slow down or stop your application altogether. Be mindful of submitting numerous applications in a short space of time, as lenders may worry about why you’ve been rejected before.

9. Get your paperwork organised

From bank statements to payslips, you’ll often need to provide a large amount of information when applying for a mortgage. Why not use the extra time at home to get your paperwork in order? Our New Home Mortgage Advisers can talk through what you’ll need.

10. Keep saving

If you can show that you save regular amounts and you’re actively trying to build up a deposit for a home, lenders will take notice of this. While it can seem hard at the start and with the current financial uncertainty, over time it will get easier. Take a look at government saving schemes like the Lifetime ISA, which gives you a 25% bonus on up to £4,000 each tax year.

 

There’s a lot to take in when starting out on your mortgage journey. Our New Home Mortgage Advisers are always here to help with expert and fee-free advice.

Your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured on it.

*Research carried out by OnePoll on behalf of Barratt Homes, April 2015, among UK 2,000 adults.