As the holiday season approaches, surviving Christmas is difficult enough without having to think about the New Year, too. However, if your eyes are on the prize and you plan to make your resolution to buy a new home, we have some tips to improve your shot at securing a mortgage.
1. Deal with Debt
If there’s a good time to pay down your debt and avoid new debt it’s New Year. As tempting as the sales might be, it’s time to think again. You have a new priority and it’s buying a home. Pay your bills on time because every lender will review your credit file closely. They must see you are capable of making loan repayments, which means you have to make the rest of your repayments on time.
2. Check Your Credit
Soft credit checks don’t impact your score. A hard check, which is what lenders do, does affect your score. You are entitled to check your credit for free and you should do so to ensure it is accurate.
- Ensure your name and date of birth are accurate
- Ensure your address is listed correctly
- Check if any debt has been listed incorrectly or more than once
- Check whether you have missing repayments against your name
- Check to ensure your identity hasn’t been stolen to secure credit
3. Secure Your Documents
The more documentation and information that you provide when you apply for a loan, the greater your chances are to be approved. Keep your loan and credit card statements, savings record, payslips, and tax returns.
4. The Options
There are a plethora of mortgage options available, from fixed and variable to interest-only or principal and interest. It’s important that you know which features work for you and what each loan costs in fees.
5. No Sudden Moves
Don’t leave your job, apply for credit cards, start a business or make any sudden moves when you begin the buying process. Or, in the run-up to it. You might think it’s time for an exciting change, but to a lender, it looks like a high-risk borrower. Don’t worry if you’re already a business owner or self-employed, as long as you have plenty of paperwork. With non-bank lenders like Seek Mortgages, you can secure a low doc loan.
6. Genuine Savings
For lenders, it’s important to know borrowers are capable of saving. You must have separate savings account to show your ability to do this. If you are capable of socking away more than 5% deposit in a separate savings account, then you are a likely candidate to repay your home loan. That’s what genuine savings is viewed as, along with regular contributions.
If you have already received a no from a bank, don’t give up. There are still non-bank lenders who may have your back. They don’t rely on preset lists of rules and look at your circumstances and situation as a whole.
If you would like to learn more about how we can help you secure a home loan, then contact us to discuss your options today.