Purchasing a property is a big decision and not something to enter into lightly. Whether it’s your first home, you’re upsizing, downsizing, or buying to let, a lot of thought will go into the process. There are so many factors to consider, from the size of your next home to your budget, requirements, and whether or not you’ll need a mortgage.
For all except a rare few, the likelihood is you won’t be buying the property outright. Instead, you’ll need to apply to a mortgage lender, who’ll supply you with additional funds to ensure your house sale can go through.
But mortgage applications are not easy. Nor are they fun. They’re not guaranteed to be successful either, which is why it’s important to read up on how it works and make sure you’re as prepared as possible. That’s what this article is designed to do. Below, we’ve compiled three handy tips to make your mortgage application simpler and hopefully ensure a successful outcome.
Tip #1: Sit down and work out your spending
If you’re intending to purchase a property soon, now is the time to lay the groundwork. You should expect to be asked detailed questions about your budget and spending, so have your answers prepared well in advance.
Remember, the aim is not to catch you out but to get an accurate idea of how much will be affordable for you. This means it’s important to be transparent and honest, as you don’t want to find yourself in a situation where rates rise and you can no longer afford your monthly repayments.
Mortgage providers are likely to ask questions about both your income and expenditure. This goes beyond your existing credit commitments, such as personal loans or credit card repayments, and includes everything from childcare to travel costs.
It’s a good idea to sit down and write it out. Start by creating two columns. The first should detail incomings: your wage, maintenance payments, dividends, and so on. The second should list everything you spend in an average month, from grocery shops to utilities, pet insurance, and pension contributions.
Supply this already-collated information to your mortgage lender to speed up your application and make the process simpler. Make sure any documents that might be required are ready to go when you are.
Tip #2: Put your career plans on hold
Pre-purchase might seem like the ideal time to go for a promotion, but if you’re seriously considering buying, put your career plans on hold. That’s because most mortgage lenders like to see that you’ve been in your existing job for at least three (if not six) months before they extend funds to you.
The reason for this is simple: it implies you have career stability and your employers are happy enough with your performance that they’re not planning on letting you go. This puts you at a lower risk of being fired and defaulting on your loan.
You thus have two options: either go for the job of your dreams and wait three to six months before applying for a mortgage or get the house and put your career plans temporarily on hold.
Tip #3: Use a broker/comparison service
If you decide to apply for a mortgage, you’ll find there are an infinite number of lenders out there. With so much choice, it’s hard to narrow down the best option. Rather than wasting time trying to whittle it down, you might be wise to contact a mortgage broker like Trussle. They can talk you through the best deals, walk you through the process, and ensure you get a decision quickly.
Unlike lenders, comparison services have the advantage of being able to share multiple options and offers with you. Because they don’t provide products themselves, they’re a great tool for helping you shop around and explore as many different deals as possible. They’re also adept at simplifying and streamlining the process and increasing your chances of making a successful match.
Isn’t it time you followed these three simple tips to make your dream home purchase a real possibility?