When you’re ready to begin the process of applying for a mortgage, it’s important to have a clear understanding of what’s required. This checklist will help ensure that you have all the necessary documentation and preparations to make the process as smooth as possible.
Starting with the Basics
Be ready to answer detailed questions from lenders regarding your work, earnings, expenses, and other financial obligations. That said, see how many of these questions you can positively answer.
- Have you prepared your three recent pay slips or bank statements to present?
- Have you cut back on or gotten rid of other obligations, such as debts and unnecessary expenses?
- Have you examined your spending habits to determine whether anything (such as gambling, pricey vacations, or luxuries) would worry lenders and reduce it, if possible?
- Is your deposit as substantial as it possibly may be? You can obtain a smaller mortgage and a cheaper interest rate with a higher down payment, ultimately paying less overall.
- Have you tallied up your typical monthly spending to see how much more you can afford to pay?
Are You Confident with Your Current Credit Score?
Mortgage lenders will perform a credit check on you to learn more about your history of on-time debt repayment. The more proof you have of responsible borrowing and repayment, the higher your chances are of acquiring a mortgage.
Here are some essential components of a high credit score:
- Are you listed as a registered voter at your current residence?
- Do you also receive your bills directly at this address?
- Do you have a track record of responsibly borrowing and repaying money? (If you don’t already, start using a credit card and paying the debt in full to establish a strong credit history.)
- Have any unused credit card or shop card accounts been closed?
- Have you severed any unneeded financial relationships with somebody who might have a bad credit report, such as joint bank accounts?
Remember that there are three main credit reference agencies (CRAs) that you may check out. Each has a unique method for determining your creditworthiness and allocating a credit score. They also employ various scoring systems. While some mortgage lenders might employ all three, others might only use one or two of the CRAs.
Additionally, the way that various lenders evaluate lending risk may vary. In conclusion, even if you receive one credit denial, you shouldn’t give up because you might receive better treatment from other lenders.
Finding the Right Mortgage
Consider all fees and other factors when discussing the finest deals with your mortgage adviser to make sure you can afford your mortgage both now and in the future.
First, Consider the Length of Your Mortgage
What period of time do you want your mortgage to last? An average mortgage lasts 25 years. In contrast to a lengthier mortgage, which has lower monthly costs but costs more altogether, a shorter mortgage has higher monthly payments due to the additional interest over a longer term.
Next, Consider the Kind of Mortgage Deal You Prefer
The three most crucial factors in a mortgage contract are the amount of interest charged, whether or not this interest rate will fluctuate, and how long the loan will be outstanding.
For instance, a fixed-rate mortgage will guarantee that you pay the same interest for the duration of the agreement, regardless of how much the base rate climbs. There are also agreements (like tracker mortgages) where the interest rate varies if the base rate does.
Keep in mind that mortgage agreements often last for two, three, or five years, not the entire duration of the mortgage. The interest rate then returns to the lender’s usual variable rate (SVR).
Conclusion
Indeed, a mortgage application checklist can help you keep track of the items you need to provide your lender and the steps you need to take in order to get approved for a mortgage.
By following the checklist closely, you can ensure that your application is complete and accurate, which can help you avoid delays and ensure quick approval.
If you are looking for one of the best mortgage brokers in Brighton, look no further than our services here at Everest Mortgage Services. As leading experts, we are committed to delivering tailored advice that fits your personal circumstances. Call us today, and let us discuss all your viable mortgage options.
