Get Mortgage Fit

If your new year’s resolution is to get mortgage fit, then read on to check out our top tips on how to maximise your chances of getting a mortgage approved. Getting a mortgage for the first time can feel both daunting and exciting – mostly due to all the serious amounts of paperwork that lies ahead, so it’s best to do all these checks beforehand to give you peace of mind and feel more organised.

1. Check your credit report before the mortgage lender does

A mortgage lender will be checking your credit report to see how eligible you are for credit, so it’s best for you to check your score before they do. The 3 main credit reference agencies in the UK are Experian, Equifax and TransUnion. A credit report will show you any active credit cards, loans, overdrafts, mortgages and some utilities from the last 6 years. Here you can check that all your addresses linked to you are up to date and correct, and if they’re not, then a simple visit to the bank with your ID can update that straight away.

2. Register to vote

This is potentially a deal breaker and easily missed if you’re renting and haven’t registered to vote every time you’ve moved. Lenders use electoral roll data to check you are who you say you are, have lived where you say you’ve lived and to check that you’re not laundering money.

If you’re not on the electoral roll, it’s easy to get registered and it’s free. However do it as soon as possible, it can take at least a month to process and even longer at certain times of year.

3. Always pay your bills on time

Your credit file will show if you have had any late payments and these will stay on your file for 1 to 6 years. Where possible set up a direct debit to make sure payments are made on time.

4. Don’t apply for credit just before applying for a mortgage

Every time you apply for credit – whether that’s a loan, credit card, overdraft or mobile phone contract and utility contracts too, you will get a ‘hard search’ on your credit file. Too many hard searches have a negative impact on your ability to be granted credit.

5. Close inactive accounts

If you have old bank accounts that you no longer use, or credit cards and store cards that you have in your wallet and haven’t ever gotten around to closing, close them. If they contain out of date details, it can be a fraud risk which is a big no for lenders.

6. Sort your paperwork in advance

Lenders require a lot of paperwork as proof of various funds, addresses and identity, so it’s worth getting these sorted in advance to avoid creating any delays. Lenders will likely ask for:

• Last 3 months’ worth of bank statements
• Last 3 months’ payslips
• Proof of bonuses/commission
• Your latest P60 tax form (showing income tax paid from each year)
• Your last three years’ accounts or tax returns if you’re self employed
• Proof of deposits (savings account statements)
• ID documents
• Proof of address
• A gift letter. If you’re receiving help with the deposit, the lender needs to know it’s a gift and not a loan, ie the person gifting you the money won’t own part of the home)

We recommend getting advice from a Mortgage Advisor before considering buying a property. You must always remember that you need to be confident and comfortable that you can keep up the repayments on your mortgage. Your home could be repossessed if in the unfortunate event that you cannot keep up repayments on your home.