So what can I do to get myself mortgage ready?
When applying for a mortgage or when remortgaging, your lender will perform an affordability test on you, to see if your finances are in order and ultimately decide if you are trustworthy enough to lend money to.
The tests will include a look at your income vs your expenditure, so it’s important that you are able to show that you are capable of keeping your finances in order.
If you have any outstanding loans, try and pay these off before you apply for your mortgage, and avoid taking out any more loans in the meantime.
Keep on top of payments
Pay all your bills on time. This can be anything from a phone bill, to general household utility bills.This will prove you are reliable and financially independent.
A simple but effective thing to do is to register on the electoral role. Also, make sure any bills you have are registered to your current address, so everything is easy to trace.
It is advisable to remain in the same employment for at least six months. This will give evidence that you have a regular, stable income coming in every month, and there is less chance of your employment being terminated on the spot, like it would if you were still on a probation period. You will be asked to provide pay slips over the last 3-6 months, so it’s important you can provide these.
If regular savings can be traced on your bank statements, this can be good for a number of reasons. Not only can it show where the money for your deposit has come from, but it can also prove to your lender that if you are able to save £500 a month, for instance, then this is money that can then go towards paying off a mortgage.
Consider your credit rating
Using a credit card responsibly can help improve your credit score, showing that you are able to look after your own finances and pay off any outstanding debts within a certain timeframe. Just make sure you register the card to the address you are actually living at, and you could even hook it up to your direct debit card, so you don’t have to worry about forgetting to pay it off every month.
The main thing is to prove that your spending patterns are in line with how you see yourself when you have a mortgage. If there are any cutbacks you can make, then now is the time to make them. Perhaps if you have a gym membership that you don’t use regularly, or you have a subscription to Sky that you probably don’t need, then it would be a good idea to cancel them for now, just to save you that extra bit of money. Afterall, every penny counts!