By Bright Advice
Buying your home will most likely be the biggest financial purchase you will ever make. It is an exciting time but can also be rather stressful, regardless of whether you’re a first-time buyer or not. It has always been an amazing achievement but perhaps now more than ever due to the changes that have taken place within the lending market in recent times.
It is important to be aware that the process takes time. It’s full of paperwork and admin, and there can be some bumps in the road. There’s no doubt that it’s all worth it in the end though!
To begin the journey to buying a house, you need to make sure you can secure a mortgage, and one that’s right for you. This can be easier said than done, but we have some handy tips that will give you the best chances of making your house dreams come true.
GET ORGANISED (IN ADVANCE)
This sounds obvious, but it is so important. Getting yourself organised with all your documents and paperwork will create a lot less stress in the long run. When applying for a mortgage, you will have to provide a substantial amount of information to prove not only your identity, but that you’ll be able to repay the monthly mortgage payments too.
Ensure all your details are up to date on things like your passport, driving license, banking and utility bills. Taking the time to get these things in order early on will assist in making the mortgage process as smooth as possible.
Just a few things your lender may want to see:
• Proof of identity (passport/driving license)
• Proof of address (utility/credit card bills)
• Three months of bank statements
• Three months of payslips
• Proof of any work bonus/commission
• Proof of deposits for the house (savings statement)
Mini Tip – Many mortgage lenders refuse printed internet bank statements, so it’s always worth reaching out to your registered bank and asking them to provide you with original copies.
CHECK YOUR CREDIT REPORT (BEFORE THE LENDERS DO!)
Buying a house may be the first time that you consider your credit score and what it says about you, but the sooner you look at it, the sooner you can correct any mistakes or make the changes you need to.
Mortgage lenders need to know that you’re in the financial position to pay back the money you’ve borrowed, and your credit score is a window in for the lenders to confirm this. So, you could say that having a good one is an essential step to owning your first home. There are many things that can help and hinder your score such as loans and credit cards, along with your repayment history.
The good news is, since the GDPR rules were introduced in 2018, you can now access your credit report for free and as many times as you want to.
Mini Tip – Correct any errors that show up as soon as possible, as it can take weeks for them to be changed. Websites you can use for your credit score include www.experian.co.uk and www.clearscore.com
CUT BACK ON SPENDING
As we’ve mentioned previously, it is likely that you’ll have to provide multiple bank statements as proof of your spending. Showing the lender that you have good financial control and you are capable of saving money each month is likely to increase your chances of approval with the lender.
Not only does it look good, saving as much money as you can may enable you to put down a larger deposit. Mortgage providers will reserve the best rates for the clients with the larger deposits, so the less money you put down initially, the higher the interest rate will be.
Mini Tip – Using a budgeting app such as Mint or Pocketguard can help you to control your finances, and small changes such as making your lunch instead of buying it every day can have such a huge impact too.
SEEK FINANCIAL ADVICE
If you are a first-time buyer, you may have the most to gain out of a financial advisor. They can assist in breaking things down for you in a way that you’ll understand, whilst ensuring you are aware of every option available to you.
There are so many mortgages, from so many providers and it can be difficult to muddle through and make the most suitable choice for you and your needs. Financial Advisors may also have access to exclusive deals that aren’t available on the high street.
Mini Tip – The invaluable guidance and advice on what steps to take and what you can realistically afford will potentially save you money in the long run.