Considering that most people cannot afford to buy property such as a house or apartment in cash alone, the obvious answer is to take out a mortgage and borrow the money to fund their property purchase.
However, in 2014, lenders are scrutinising mortgage applications more than ever. It has got to the stage where mortgage lenders are only happy issuing home loans to people with excellent credit scores. And if you want a sub-prime mortgage, you might as well give up hope now!
If you are keen to take out a mortgage, is there any point if lenders aren’t willing to lend? The good news is that, despite the tougher conditions for borrowing money to buy a property, it is still entirely possible to get a mortgage.
Can you secure a good interest rate and not end up buying a house or flat that will cost you a fortune in monthly repayments? It is essential that you improve your chances for getting a great deal on your mortgage; today’s handy guide will show you how!
Earn as much as possible
These days, the main emphasis on meeting lending requirements is affordability. You might have a squeaky-clean credit file, but if you only have a few bucks left over each month after you’ve paid your other bills, you can kiss goodbye to the prospect of anyone approving you for a mortgage!
One of the best ways of improving your chances of being accepted for a mortgage is to be in a well-paying job.
Mortgage lenders are only interested in people that have plenty of disposable income left over each month after paying their bills. So if your job pays you peanuts, it’s time to abandon ship and get a better paying job!
Pay off your debts
Do you have an array of credit cards, charge cards and loans to your name? Everyone owes debt to some degree, but if your debt is in the thousands rather than hundreds, your priority should be to pay off your debts first.
You might want to consider a debt management plan of some description if you are finding it tough paying your bills on a regular basis, despite working all the hours that you can.
I would advise keeping a token amount of debt to your name, as a lack of borrowing can be just as bad as borrowing too much money!
Fix your credit file
Sometimes there can be errors in your credit file that are preventing you from obtaining credit. The only way you can find out is to apply for a statutory copy of your credit file from the main credit reporting agencies.
Before you head off to see some estate agents in Middlesbrough, it’s worth determining how good your credit file is before applying for mortgages through their brokers.
Save a big deposit
These days future homeowners are expected to front at least 15% to 25% of their property’s value as a cash deposit before applying for a mortgage!
It’s still possible to get mortgages that only require a 10% or 5% deposit, but these will be harder to obtain.