Buying a property is an exciting time, marking a new chapter in your life. However, it can also be overwhelming and confusing, especially when it comes to mortgages.
A mortgage is a loan used to buy a property – often borrowed from a bank, credit union, or mortgage provider. The amount you can borrow depends on factors such as your credit score, debt, and affordability.
When applying for a mortgage, your provider will consider factors like your outgoing costs, dependants, and financial stability before offering you a mortgage-in-principal. But there are some things you can do to give yourself a better chance of an increased offer.
A lender will initially issue you with a mortgage-in-principal, to estimate how much they will lend to you based on your circumstances. Although a mortgage-in-principle is not a guarantee of a mortgage, it will give you an indication of your affordability and how much you can fork out on your new pad. It will also show estate agents that you are a serious buyer and that any offers you make are realistic.
Once you have secured a mortgage-in-principal and have made an offer on your dream home – Oakwood Property Solicitors can help you with the next steps to complete the purchase. Read our complete guide to buying a property to find out more about the next steps and how we can help.
We have rounded-up some steps you should take before applying for a mortgage, and to get things rolling as quickly as possible:
- Get your finances in order
Understanding your finances before applying for your mortgage is crucial. Break down your monthly outgoings and consider ways to increase your disposable income. For example, cancel unused subscriptions like Netflix or gym memberships. Every penny counts, so cutting down on unnecessary spending is a great start.
- Build your credit score
Lenders will look at your credit score to determine your reliability in repaying debts. Here are some ways to improve your credit score:
- Make payments on time (e.g., utility, phone, and credit cards).
- Keep credit utilisation low.
- Set up standing orders and direct debits to avoid missed payments.
- Avoid unarranged overdrafts.
- Check your credit report for errors and dispute them if incorrect.
- Minimise hard credit checks.
- Keep track of your savings
Saving for a deposit and monthly repayments is essential, but also consider additional costs like renovations, furnishings, or unexpected expenses. Setting up a savings account for these costs can prevent you from dipping into essential funds. Use a budget planner or sign up for monthly bank statements to identify unnecessary purchases and boost your savings.
- Book your mortgage appointment in advance
Mortgage approval can take weeks, so it’s best to book your appointment as soon as possible to avoid delays. Having a mortgage-in-principal can also be beneficial when viewing properties and making offers.
- Get your documents ready
Ensure you have all necessary documents ready for your mortgage appointment. You’ll need proof of identity, income, and address, among other things. Being prepared can speed up the process significantly.
- Think ahead
Consider your future circumstances when applying for a mortgage. Think about how long you plan to stay in the property and how you want to budget for the mortgage. Decide whether a fixed or variable rate suits you better, and over what period. Also, consider the option to overpay your mortgage if you anticipate additional funds in the future.
Mortgage appointment checklist
When you go for your mortgage appointment, bring the following documents:
Proof of identity
- Passport or driving licence
Proof of income
- Employers’ details for the last 3 years (name, address, telephone number, and employment dates)
- 13 weeks or 3 months’ payslips
- Latest P60 (usually issued by your employer in April/May)
- Last 2 years’ copies of SA302s/audited accounts (if self-employed)
- Bank statements (latest 3 months)
- Latest annual mortgage statement
- Details of existing outgoings, including other loan commitments
Proof of address
- Full address history (covering at least the last 3 years)
- Proof of residency (e.g., utility bill or bank statement dated within the last 3 months)
Additional information
- Proof of deposit
- Details of all existing personal and mortgage-related insurance
- Employment benefits (e.g., sick pay, pensions)
- New property details
By following these tips, you’ll be well-prepared for your mortgage appointment, making the process smoother and increasing your chances of securing the mortgage you need for your dream home.
Further reading
Purchases – Oakwood Property Solicitors
WHAT TO DO NEXT
To make a start on the next step in your property journey, get in touch today to book a consultation with a member of our team. Call us on 0113 218 5727 to find out how we can help you.
