No one ever said “Applying for a mortgage is fun”. We don’t deny that it can be a frustrating and time-consuming process, but it doesn’t have to be. If you know what to expect and get your ducks in a row before applying, you’ll have a far better chance of getting a loan approval.
Here’s five factors to consider when applying for a loan:
1. Work on bettering your credit rating
Finance lenders need to know whether their money is in reliable hands, so they run a credit check to determine whether the person they are looking to lend money to will pay it back. A credit check reveals a record of all your credit transactions and details any negative financial history that would deem you as high risk. This could be previous bankruptcy or overdue accounts. A credit record is like a criminal record in that it follows you wherever you go, and tarnishes your profile as a responsible property owner.
2. Work out how much you can afford
Before the big property hunt, you’ll no doubt work out what price bracket to work within – and how far you can stretch your budget. Depending on how much you’ve saved up will indicate how much you’ll need to borrow for a mortgage. Keep it simple by using our mortgage calculator. It’s quick and easy to use and you’ll have a better idea of what you should expect to repay.
3. Clear your debts
When you apply, the loan lender will check to see if you have any outstanding debts. Having debt is damaging to your profile. It may indicate that you lack the funds; that you are poor at managing your finances; or that you’re a risk-taker if you previously had a loan that you haven’t yet paid off.
Lenders do not want to work with risky clients, they need to know that they’ll get paid back. By paying off or decreasing your debts, you’ll increase your borrowing capacity.
4. Organise your personal documents
Have your personal administration ready to go, unfortunately you won’t get very far without showing some paperwork. This includes details of your employment history; bank statements; address history; proof of salary (pay slips); credit card statements and your latest tax return.
New Property Specialists are experts in the sale of brand new and near new properties. We have identified the services that buyers need, and have tailored packages to suit the individual. We provide a personal and accessible service where every step of the process is supported by professional advice. Contact Us