Over the last ten years, house prices have risen astronomically. During this time, we’ve also faced a massive economic crisis, making banks much more reluctant to lend. Where once upon a time you needed a small 10% mortgage and could borrow three times your annual salary, now, that 10% can easily be a small fortune and banks take a lot more into account than simply your annual income. However, it is still possible to get a mortgage; you just need to be prepared.
Check Your Record
The first thing you need to do is check your records. Both criminal and credit. Lenders want to know that you are squeaky clean and knowing what you’ve got on file is the first step to doing something about it. If you’ve ever been in trouble with the law and unfairly charged, find a criminal defense law firm, who could help you to get your record expunged.
Build Your Credit Score
Now you’ve checked your credit score; it’s time to fix it. Simple changes like registering to vote and making sure all of your utility bills are paid on time can make a huge difference. Just like a criminal record, if there’s anything on there that shouldn’t be, it can be removed, so make sure you check thoroughly.
The bigger your deposit, the more chance you have of getting your application approved. So, get your finances in order and start saving!
To get a mortgage, you’ll need to prove your income for the last 3-6 months or up to 4 years if you are self-employed. But, you’ll also need records of your expenditure. Start putting things together before you apply to impress the lender. You need receipts for large purchases, bank statements and pay slips.
Pick the Right House
One reason many people get turned down is that they are aiming well above their price range. Set yourself a budget and only look at properties that you can afford.
Pay Off Debts
Having a massive deposit won’t help much if you’ve also got debts. First, use your savings to pay off as much debt as you can.
Stick to a Job
Lenders like to see consistency. They want to know that their money is safe. If you move jobs all the time or have regular periods of unemployment, you look like a risk. Try to keep the same job for at least a year before applying, but realistically, the longer, the better.
Applying for a mortgage is tough. It can be overwhelming and confusing. Even if you’ve done it before, the new restrictions can be alarming. So, if you need help, get it. A mortgage advisor can tell you more about what you need to do, and an accountant can help you to get all of your records in order while also confirming your income, beyond any doubt.
Getting a mortgage today is much harder than it used to be, of that there is no doubt. But, don’t lose hope. The mortgage business is huge, there are many options, and as long as you are organized and prepared, there is nothing to stop you.