Following on from our last article, which set out to unmask some of the more common mortgage myths out there, this piece covers the common mortgage mistakes to avoid. As a Guildford mortgage broker, we’ve seen them all. However, these are the most prevalent – and the easiest to address.
So, if you’re thinking about applying for a mortgage any time soon, read on to get some mortgage application shortcuts.
1. Not caring about credit
We’ve covered this again and again over the years, but for good reason, too. It’s quite common for people to overlook their own credit report when it comes to their mortgage application on the assumption that it’s not theirs to access. However, this is not true. By using Equifax or Experian, you can check your own credit rating in minutes. By doing this before you begin the mortgage application process, you could be saving yourself a lot of time and get the opportunity to fix any issues before your case is assessed by the lender.
2. Getting the numbers wrong
The income you receive is hard to get wrong, as most people tend to know what they earn. However, it can be very easy to overlook total costs – particularly if you have a lot of them. The thing is, overlooking a £100 utility bill here or a £15 monthly subscription there quickly adds up, and the missed costs can mean the difference between getting a mortgage and not getting a mortgage. Our advice would be to speak with a mortgage broker on the basis that it’s their job to go through your spending with a fine toothcomb to ensure that everything is accounted for before your application goes to the lender. It goes without saying that our team of mortgage brokers in Guildford would be very happy to help you do this.
3. Last minute purchases
One of the yardsticks a lender uses to determine a mortgage applicant’s affordability is the debt-to-income ratio – a calculation that works out how much income goes into servicing debt. The lower the ratio, the better. So, before you decide to buy a new car, fulfil that lifelong dream of buying a campervan or simply kit your living room out with new furniture, think twice. Buying high value items before you apply for a mortgage is likely to increase your debt-to-income score, which, in turn, can reduce your chances of getting a mortgage. Our advice would be to put any major purchases on hold until you’ve secured the mortgage.
4. Additional costs
There’s no denying the fact that moving can be expensive. Aside from the largest outgoing – the house – there are other major expenses that you’ll need to build into your overall budget. After all, if you can’t afford to cover these, even if you can afford the property, then you won’t be able to move. Things like Stamp Duty Land Tax (the second largest cost) and conveyancing are all costs that need to be accounted for. Overlook them at your peril. Again, a good mortgage broker will ensure that you’re aware of every cost so that you have a clear and accurate understanding of what you can afford before you ask for the loan.
5. Decision in principle
People tend to think they should find a property before getting a decision in principle, which highlights a lender’s willingness to lend. However, getting a decision in principle before finding a property is the better approach. Why? Because not only will you be ahead of the game when it’s time to actually apply for a mortgage, but you’ll also have a more accurate picture of what you can afford. As a result, you won’t waste any of your time (or that of the estate agents) by viewing properties that fall outside of your budget.
As a team of Surrey mortgage brokers, we can ensure that you don’t make these five mortgage mistakes – and many more – in the space of a single meeting. So, if you want to sidestep these common pitfalls, get in touch.
To discuss any aspect of applying for a mortgage, and to access the UK’s best mortgage deals, contact Complete Mortgages’ team of Guildford mortgage brokers on 01483 238280 or e-mail info@complete-mortgages.co.uk.
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