For many people, getting a mortgage is essential to be able to buy a house. What’s more, after you’ve bought your house, you’re probably going to need to remortgage periodically. It, therefore, makes sense to think about how you can persuade a mortgage lender to say yes. Here are some tips to help.
Take care of your credit score
Your credit score plays a huge role in determining whether or not you will be offered a mortgage at all. It will also influence the terms you are offered. Having a high credit score will make it more likely that you will qualify for products with lower interest rates. This can save you a significant amount of money over the lifetime of the loan.
Credit scores take time to build and benefit from regular maintenance. This means that you should treat them as a work in progress.
If you already have a mortgage, then the payments you make towards it will help to nurture your credit score. If you’re renting, see if your landlord will report your rent payments to the credit agencies. If they won’t, see if you can self-report.
Use a mortgage broker
Mortgage brokers as intermediaries between potential borrowers and lenders. They are not, however, just “people in the middle”. They have extensive knowledge of the mortgage market and leverage this to find the best mortgage options for your unique financial situation.
Their market knowledge is complemented by expertise in negotiation. For example, a mortgage broker may be able to secure you more favourable terms and/or rates than you would have achieved on your own. Using a mortgage broker can therefore save you a lot of money.
It can also save you a lot of hassle. Working with a mortgage broker means that you have somebody to guide you through the application process. Even people who’ve had mortgages before can benefit from this. It can be invaluable for first-time buyers.
Be realistic about how much you can borrow
This point can actually be divided into three parts. Firstly, be aware of how much lenders are likely to be prepared to offer you regardless of what property you want to purchase.
Secondly, be aware of how much lenders are likely to be prepared to lend against any given property. If you’re buying rather than remortgaging, keep in mind that a mortgage pre-approval is a fairly high-level agreement. The lender will need to see the specifics of the property before making a final offer.
Thirdly, be aware of how much you can realistically afford without overstretching yourself. Lenders should check this but you should give this point serious consideration yourself.
Have all your documentation ready before you apply
Documents such as bank statements are usually quite easy to get quickly. In fact, you can probably just download them from your online account. Keep in mind, however, that you will probably have to show ID. Many forms of ID expire. If yours is coming close to its renewal date, then allow yourself plenty of time for the process.
Make sure you complete the application form correctly
This may sound like stating the obvious but it does matter (a lot). If you’re using a mortgage broker, they will usually guide you through the application process. If you’re not, however, then you’ll need to complete the form on your own. Give yourself plenty of time to do so.
Read the form thoroughly so you’re totally clear on what is being asked of you. If you have any doubts, stop, clear them up and then go back. If you’re filling in a paper form, you can just put it away somewhere safe until you get the answer you need. If you’re filling in a form online, you can usually save it. Just remember to keep a note of your login details.
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