When you apply for a mortgage, the lender looks at all aspects of your circumstances before making a decision.
While there may be some factors you can’t change, there could be others which could improve your position.
Here, Richard Hayes, chief executive and co-founder of Mojo Mortgages in the UK, highlights five tips for potential first-time buyers:
1. Rein in your outgoings
Subscriptions and other regular payments suck up your buying power. Before you apply, try to cut down on as many debts as possible, leaving only the most essential behind.
Try to minimise outgoings like magazines subscriptions, streaming services and mobile phone contracts. Outstanding credit cards and other loans should also be paid off in full, if possible.
2. Go beyond the bare minimum
The larger a deposit you can fork out, the lower your LTV (loan-to-value) ratio will be and the less risk you’ll pose as a borrower.
3. Get to grips with your credit score
Your score represents how responsible a borrower you are, and so lenders check it whenever you apply for credit – including a mortgage.
Your credit score improves when you consistently pay back your credit on time and suffers when you miss payments. You can use a credit reference agency to check your credit score and history. If you find errors, you can file a ‘notice of correction’ to get it fixed.
4. Use a broker who knows their stuff
A mortgage broker will ask you questions about your circumstances and recommend a mortgage that would best suit you.
5. Register on the electoral roll
As a final tip, a simple but effective step to take is to register on the electoral roll. Also, make sure any bills you have are registered to your current address, so everything is easy to trace.
Being registered on the electoral roll may help improve your credit score is because it allows any interested party to confirm that you are who you say you are and that the details you have provided are accurate. It is very important that lenders are able to confirm your identity to avoid problems with fraud and identity theft – the more security that lenders have in terms of information, the more confident they are in lending money.