- Salli Anstey
There’s so much information out there about getting a mortgage that it can be incredibly overwhelming. At Private Wealth Mortgages, alongside our beloved children with their newly fitted shoes, we’re taking you ‘back to school’. Don’t worry – it’s not to re-learn algebra, but for a lesson in the key things you need to know about getting a mortgage that you maybe didn’t know.
When applying for a mortgage, it’s not only about borrowing based on your salary anymore. Lenders now need to be re-assured that you’re able to manage your finances effectively in order to meet a potential increase in the mortgage payments. Most lenders will now require a stress test so they can check to see you’d still be able to afford your mortgage if it increased by a certain %. Your bank statements may be assessed so it’s important to make sure you’re on top of your outgoings and incomings. It also gives you a chance to consider where savings can be made, and If possible, create a buffer of unused cash in your account every month.
Lenders will need to see proof of your income before offering you a mortgage, as well as other details that demonstrate you are financially stable. Pulling together your last 3 months’ pay slips or business accounts, your latest P60 tax form, bank statements, ID Documentation and proof of your address through utility bills is super important. At Private Wealth Mortgages, we can help advise you on what paperwork will be needed depending on your circumstances.
YOUR CREDIT SCORE
In most cases, having a good credit score means you’re more likely to get a mortgage. A poor score doesn’t mean you can’t get one, but it is likely to limit the options available to you. Your credit report is effectively your financial CV that provides the lender with all the information they need to confirm your identity and clarify whether you’re a reliable borrower. Making sure that you are on the electoral register, that all your accounts have the most up to date personal details and cancelling unused store cards can all increase the score. We can help you with how to check your credit score.
Reducing or paying off any debts you currently have can boost your chances of mortgage approval for the very simple reason that if you don’t have to pay back other loans, you’ll have more money each month to pay your mortgage. This includes reviewing your credit card balances, personal loans and your overdraft.
Cashback, Fixed, Tracker, Offset, Interest-Only – there’s so many different types, so it’s no surprise that for many homebuyers – in particular, first-time buyers, it’s difficult to know what mortgage product is best suited for their situation. Our experienced, impartial and friendly advisers at Private Wealth Mortgages can discuss and assess all the viable options available to you to find the type of mortgage that works for you.