Mortgage lenders will scrutinise your credit report to determine whether you can meet the monthly payments – the higher your score, the more likely it is that your application will be accepted. It’s free to check your records using TransUnion, Equifax and Experian. Lenders could use any of these agencies, so it is advisable to pull a report from each. By doing this now, you give yourself a chance to fix any issues if needed and boost your score before your purchase.
The last six years of your financial history is used to calculate if there is any future risk when it comes to borrowing. Your existing accounts will be inspected – for example, a lender will check if you have consistently paid any phone and utility bills. They will also be looking to see if you have ever gone into your overdraft or taken out loans, which may indicate that you struggle to manage your finances. So, if you’ve been staying out of debt and making all your regular payments, you will be considered to be a stronger applicant.
Any discrepancies in information could be a cause for concern in the eyes of a lender, so make sure all your old accounts have been updated with your current address. If you are no longer using some accounts, consider whether keeping them open would strengthen or weaken your mortgage application. For example, if you’ve had a credit card for a while time, the longstanding financial relationship could prove your reliability. However, an old joint account with someone you are no longer financially linked to could put your credit score in jeopardy.
In the months running up to your application, be conscious of how you spend your extra cash. Lenders are required to carry out a stress test to check borrowers could still make payments if mortgage rates were to increase. So, any money you are saving will help prove that you could still make ends meets. Gambling and other habits that are considered non-essential are likely to be a red flag.
The upcoming General Election is not the only reason you should be registering to vote. Lenders need evidence of your identity and address, so being on the electoral roll is key proof of this.
We can help you make your property dreams comes true. We’re able to access a range of mortgage products, advise on government schemes that could help and help you through the application process – just get in touch.
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