Our 6 Step Guide to Getting Mortgage Ready
We believe you should prepare for your mortgage, whether this is a new mortgage on a new home or a remortgage on your existing home, our top tips will help ease the process;
1. Get your finances in order to prepare for a mortgage. If you are buying a new home, before putting in an offer you may want to know how much you can borrow and lenders will look at your income to ascertain this. Make sure your latest accounts and tax return are ready should your lenders need evidence of your income in advance. Lenders will request your SA302 or a tax computation so allow enough time for the tax return to be prepared for you. If you are employed, they will usually want to see three months payslips. If you run a business and need to maximise your borrowing, consider whether you really do need to incur any large business expenses in the year that you will use your accounts for mortgage purposes. Don’t forget to speak to your accountant to discuss any planning opportunities.
2. If your income is declining you may not be able to borrow as much as you thought, particularly when remortgaging, if an existing mortgage is based on previous income. Lenders will often look at your average income over three years, but in some cases they will just look at one or two years so be prepared is as it may limit the amount of lenders available to you if you have less than three years or your income has declined. You should always speak to a mortgage advisor about this first.
3. Always use an independent mortgage broker. An independent advisor will search the whole of the market for you to ensure you get the best deal and will work for you with your best interests at heart.
4. Clear any personal debts first if you can. Personal debt can have an impact on your lending ability and could influence the amount you can borrow and the rates available to you. Also check your credit score and improve it if you can, before applying.
5. Don’t always look for the lowest rate. You could find you are trapped and end up paying unnecessarily high early repayment charges if you intend to change or repay anything before the fixed period is up. Also consider up front charges as well as any broker fees.
6. Make sure you are prepared for the monthly repayments. You don’t want to lose your home or your hard earned cash if you cannot keep up the repayments.
We can help you along the way by putting you in touch with one of our preferred mortgage brokers, and if you are a client they will liaise with us behind the scenes so you don’t have to.
Remember, always speak to your accountant before you remortgage or take on a mortgage, to maximise your circumstances and get the best deal.