Home-builder Barratt Homes North Midlands is urging potential home-buyers to get ‘mortgage fit’, in response to changes brought about by the recent Mortgage Market Review (MMR), for the best chance of getting the new home they want.
This new national system was set up in April to ensure mortgage lenders conduct a full affordability check on applicants, including ‘stress tests’, which could have implications for people wanting to buy a property, for example the amount they can borrow and the length of time the process can take.
Independent Mortgage, Adviser Derry Walton, of Meridian Mortgages, explains: “A mortgage is often the biggest purchase a person will make in their life, so it’s quite right that they should be certain they can afford one both now, and in the future.”
“We would urge all homebuyers, whether first-time buyers or those further up the chain, to take a series of practical steps to make the application process as swift as possible, and to increase their chances of being approved for a mortgage.”
Top mortgage tips:
1. Check your credit score – First of all, check your score. You can do this easily online with the two main credit reference agencies; Experian and Equifax. Ensure all your information is correct – if it isn’t, write to the agency and request that they change it. If you have a poor score, start making changes to improve it. Once your credit file is ready, bring it with you for the mortgage adviser to go through as it will make you seem better prepared.
2. Keep up-to-date with payments – If you have existing credit such as credit cards and loans, you must ensure that you keep up with the minimum repayments. If you are struggling to pay, speak to your provider as this may show favourably on your credit score. Also, try not to get too close to your credit limit or use overdrafts, as lenders may view this as ‘excessive’ debt. Up to a third of applicants are rejected for mortgage finance because of missed payments and defaulting on credit. Applicants may also be rejected for taking payday loans and for betting patterns being evident on bank statements.
3. Try to save instead of spend – Mortgage lenders will notice regular excessive spending on non-essential items. Applicants should strike a sensible balance on their disposable income and show a savings habit if they want to increase their chances of getting a mortgage.
4. Be consistent and double check. It sounds simple, but one slip-up on the application form could scupper your chances for securing a mortgage. This could be from a simple mistake, but it could also be from inconsistent information, which can flag-up possible cases of fraud and could slow down or stop your application altogether. Also bear in mind that submitting numerous applications in a short space of time could have a negative effect, as lenders will worry why you have been rejected before.
5. If in doubt, speak to an expert. Potential homebuyers tend to do a lot of research into mortgages, and many sources of information, especially online, don’t always provide all of the necessary/relevant information. The best thing to do is to seek professional advice from a qualified mortgage adviser.
Jan Ruston, Sales Director for Barratt Homes North Midlands, said: “The new MMR may seem daunting, but by following tips such as these from qualified mortgage advisers, potential homebuyers should find they are in a better position for securing a mortgage when they find the right new home for them.”
Barratt Homes North Midlands currently has a superb range of new homes development across developments in Leicestershire, including Glenfield Park in Glenfield, Waterside Gardens in Wigston and Barratt at Hastings Park in Ashby de la Zouch.