Top tips for being mortgage ready

As part of our How to Buy series, this blog looks at how to prepare yourself (and your finances) for buying a new home. Whilst nothing is guaranteed, here’s a few tips from the Mortgage Bureau to being mortgage ready…

1.    Sit down and look at your finances. What’s a necessity and what’s a luxury? Work out your budget based on your savings and how much you can afford to spend on a mortgage each month. Use the Mortgage Bureau calculator as a guide on how much you can borrow and what your monthly payments might be. 

2.    Check your credit score with Experian. A good credit score will increase your chance of getting a mortgage, and at a better rate, so it’s worth checking before you start the process of applying for a mortgage. Although checking it too much can also have an impact.

3.    Don’t apply for new credit, or use Pay Day loans or withdraw cash on your credit card if you’re preparing to buy a new home, these will all affect your credit score and could limit the amount you can borrow.

4.    Other financial commitments, such as existing loans and credit cards, can affect the amount you can borrow and the interest rates you’ll pay, so where possible pay off any debts in full and for those remaining remember to make your monthly repayments on time.

5.    Simple things, like making sure you’re registered on the electoral roll and updating your address can improve your credit score with minimum effort required. Register to vote online here.

6.    Make the most of government schemes and boost your savings by 25% with a Help to Buy ISA, and for every £200 you save, you can receive a government bonus of £50, up to a maximum of £3,000 (find out more about the Help to Buy ISA here).

7.    Do your homework and decide which kind of mortgage you want. To help you decide, Mortgage Bureau will waive their fee when you buy with St. Modwen Homes so you can use our expertise to find the best deal. They will even submit your mortgage application, liaise with your lender and conveyancer and be able to reassure you throughout the process, right up to completion.

8.    Get your paperwork in order and make sure all of your addresses match the proof of address given. You’ll also need your last P60 as well as up to a years’ worth of pay slips and bank statements to verify your income and expenditure.

9.    Talk to a Mortgage Broker that specialises in new build homes as well as your bank. The organisation you do your day-to-day banking with will only be able to provide information on their mortgages and whilst they may have a better overview of your spending habits, you might not fit their criteria and you could be missing out on getting a better deal elsewhere.

10.  Find the right home for you and arrange a mortgage in principle. Lenders won’t formally offer you a mortgage without a property in place, but if you’re still looking for the perfect home this will give you an idea of how much you can borrow. Proof of your deposit and a mortgage in principle can also be an advantage when you find the perfect home and want to reserve.