Seeing Mortgage applicants on a daily basis, we get to see a lot of things that are easily solvable but can prevent you getting a mortgage so here we discuss ‘8 Tips before applying for a mortgage’.
We were talking in the office about common issues and problems that arise when applying for a Mortgage.
For that reason, we thought it could be useful to have a list of hints and tips that can help when applying for a Mortgage to make the process easier when the time comes.
Having had a think about it in the office we drew up a list of 8 tips that we thought might come in useful if you are thinking about applying for a Mortgage in the not so distant future.
Obtain a copy of your Credit Report
This is the first thing we ask for when speaking to customers.
You would probably be surprised at how many times we speak to people who say they have no bad credit and do, or they underestimate what is on their credit file.
You can obtain a copy of your credit report from Equifax or Experian but our personal favourite is CheckMyFile as it contains records from all credit reports.
You may even find it interesting to see what is displayed on your credit report.
Correct any mistakes on your credit report
If you get a copy of your credit report in enough time and there are errors on there, you can get in touch with the companies involved to correct the mistakes. Many lenders are quick to rectify mistakes but they can only correct a credit report mistake if they are made aware of it and the time to do this is before you make your mortgage application, not after.
Credit Report Errors can include incorrect dates, wrongly listed missed or late payments and so on.
Correcting errors can take up to a month and potentially longer, checking your report in plenty of time and fixing any inaccuracies can help significantly when applying for a Mortgage.
We want the truth, the whole truth and nothing but…
We work for you. We want you to get your Mortgage as much as you want to get it. In order to do that, we need you to be completely open and honest with us.
We ask questions and request paperwork but we will never be able to ask every possible question so we are relying on you to provide information even where we do not necessarily ask for it.
If you provide us information, we can make the decision as to whether the lender needs to know or not. But if you keep it from us, it may come back to bite us down the line. Mortgage lenders have access to so much more information that we do – some have tie-ins with HMRC, Companies house, bank accounts etc etc. By being open with us, we can help to reduce wasted credit checks on you, save time and money.
So another ‘tip before applying for a mortgage’ is that if you yourself suspect there maybe an issue with your application, let us be the judge of that before you submit an application as once its on the radar it is understandably harder to deal with.
Get in touch, the sooner the better
If you plan on speaking to a broker, do it before you make an offer.
Whilst there is a general set of documents all applicants will need (bank statements, payslips, ID etc), there may also be specific documents to your situation that may need to be ordered – If you have been Bankrupt we may need a Bankruptcy Discharge certificate for example. Discussing your situation with a broker upfront can mean they can try to pre-empt any potential requirements outside the norm.
You need to be careful until you have the keys
This is an important one as it crops up more often than we expect, so much so we now tell all of our customers… once you obtain your Mortgage Offer, that is not you home and dry.
The legal work still needs to be done and right up until completion the lender will reserve the right to credit check you again. That means you need to keep on top of your payments up until completion (and beyond) and it also means no new applications for credit, unless they were disclosed on your application form.
Unless you are in a rush or being pushed to, do not instruct your solicitors until you have your Mortgage offer. No matter how straight forward your situation, problems can arise. We would always suggest holding off starting the legal work until you have your Mortgage offer in hand. If your Mortgage is not offered for some reason – valuation, something on your credit file etc, then you do not want to be on the hook for £300 worth of searches on a property you can not purchase.
Remember who the Estate Agent works for
They work for the vendor, the person you are buying from. You need to be careful how much you tell them. If you can easily afford the purchase price, they may be less inclined to negotiate on the purchase price. If you are bouncing off the walls with excitement on the viewing, it may affect the valuation. If you use their Mortgage Broker and they know what you can afford… it may affect the negotiation. Think of it like a game of poker.
Your Mortgage Broker should work for you
Remember, we work for you and only you. We do not want to waste your time or ours. Be open and honest with us and we will bend over backwards to get your Mortgage agreed.
If you use a Mortgage Broker from the Estate Agents, they either work directly for the estate agents or they receive a certain amount of business from those agents. You need to be confident they are working in your best interests – especially when negotiating a purchase price if buying through the Estate Agents they work for. If the agents know how much you can afford, they may push you higher knowing you can go higher.
If we think of anymore than ‘8 tips before applying for a mortgage’ we will add to the list.
Every borrower is different and whilst we deal with normal lending applications from employed applicants with no credit issues, we also deal with every type of Adverse Credit Mortgages from bankruptcy, IVA, CCJ or even just a few missed payments to Complex Loans for self-employed or fixed employment contracts.
If you would like to discuss your simple or complex situation with no obligations, please get in touch as 5 minutes of our time giving you some pointers could help you a lot when the time comes for you to apply.