Mortgage lenders will always check your income and outgoings – to ensure that you can comfortably afford the repayments, including if there was an increase in interest rates or other outgoings. It’s therefore crucial that you give yourself the best chance possible of getting a mortgage, and one with the best deal possible. But how?
In the months leading up to applying for a mortgage it therefore makes sense to aim to keep your outgoings as low as possible compared to what you’re bringing in, and to put a hold on splashing the cash on anything but the essentials.
Mortgage lenders will scrutinise bank statements for signs that there is a struggle with existing debt. That means applicants should look to pay down balances on credit cards, store cards and unsecured loans, and avoid using overdrafts.
Additionally, you shouldn’t apply for anything that involves a ‘hard’ credit check – which is a thorough search of your credit report – for up to six months before a mortgage application, and includes loans, credit cards, current accounts, as well as switching broadband, energy or mobile phone providers, as a mortgage lender will consider multiple recent credit checks as a sign that you are in financial difficulties.
Lastly, whatever you do you should at all costs avoid payday loans, county court judgments and gambling transactions!
You may have to pay an early repayment charge to your existing lender if you remortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The fee is up to 1% but a typical fee is £650.