If you’re applying for a mortgage, you need all of the finance advice you can get. This is going to be one of the biggest financial decisions of your life, so you shouldn’t take it lightly. The following advice will make sure that you’re financially prepared for this big step in your life:
Save More Money Than You Think You Need
You should know that to put a deposit down on a house, you need to save a certain percentage of your own money. For example, a £200,000 house would require you to put £20,000 down if you had to make a 20% deposit. This will depend on many things, so use that as an example. However, you’ll need more than just the deposit in order to get your mortgage secured. You’ll be paying for things like surveys and solicitors, so you need as much as possible behind you to get started.
Have an Extra Cash Cushion to Fall Back on
As well as the deposit and money for the extras, you’ll need a separate cash cushion to fall back on. Experts recommend that this should be the equivalent to 6 months mortgage payments, just to be safe. This makes you look more reliable to lenders, and you’ll be safe if anything should happen one month which means you can’t pay your mortgage. More money is always better!
Don’t Live on the Edge of Your Credit
Having credit is fine, and using it wisely can even be beneficial. However, living on the edge of your credit is a huge mistake, and will make it look as if you can’t handle your finances to lenders. Try not to use more than 20% of the credit available to you to be on the safe side.
Pay off all of Your Bills on Time
Paying off all of your bills on time will make you look like you have your finances under control. Just one missed payment could be the difference between securing a house and getting rejected, explain the estate agents in Lichfield. Make sure you always have cash to pay your bills.
Pay off Any Outstanding Debts
Do you have outstanding debts that you’ve been meaning to pay off? Before you start saving for your mortgage, pay off these debts. Saving for your mortgage first is backwards, as you’ll be paying more and more interest on your debts the longer you wait.
Check Your Credit Score for Mistakes
Check over your credit score to see what kind of condition it’s in before you apply for the mortgage. If there are any mistakes on your file, you could get rejected for a mortgage, which will further bring your score down, and none of it will be your fault! If there are any mistakes, make sure you get them rectified ASAP and pay off any other outstanding debts or bills that may be listed on there. Your credit score plays a big part in your mortgage application, so make sure it’s up to scratch.
I hope this post has been useful to you. Thanks for reading!