Today’s prospective homeowner faces an uphill battle. Property prices are high, and supply is short. On top of that lenders are wary about who they give finance to. More than ever it is necessary for borrowers to prove themselves to be a good risk. That means having that all important deposit in place. It also means having a good credit rating and score. Increasingly it means paying attention to the way you save and the way you earn. Take care of this and it is entirely possible that you will get that mortgage greenlight. Here are the best ways forward.
Establish a pattern of saving.
If you want to be considered for a mortgage, you will need a deposit of between ten and twenty percent. That is the financial reality. For many that means saving until you have reached your target. While lenders will look for that figure, they will also look at the pattern of your savings. That means they will want to know you are a regular and reliable saver with a history. You will want to demonstrate that you have the ability to plan and to look after your finances. This is all about being a good and safe risk. Establish a savings plan as soon as you can and stick to it.
Improve your credit rating
Enhancing and keeping a good credit score is vital if you want to be considered for a mortgage. A lender will want to know that you are not going to default on your payments. There are defined steps that you can take to improve your credit rating. These will include paying your bills on time, having a regular income and having a good credit history. Too many credit applications can increase your risk. If you get turned down, that also can affect your rating.
Establish a family loan or guarantor
Many younger prospective home buyers these days are seeking and getting help in the form of a guarantor. It can help your case enormously if you have someone willing to stand for you. That could be a family member who has existing equity in a home, or some savings put aside. This will be a legally binding arrangement, so it will pay to make sure that everybody is aware of the risks.
Shop around for the best deal
At the end of the day if you meet the criteria there are lenders out there who will be very happy arrange a mortgage for you. It can be difficult to know who the most approachable are. Getting in touch with a mortgage advisor such as SMBIA can give you a much better chance of finding the right deal. A broker will have access to a selection of lenders and be in the best position to advise you how to proceed.
Have a regular source of income
Make sure that you have a good and reliable source of income. This is another way of increasing your credit rating as well as your chances of being accepted for a mortgage. This is not a good time to throw it all up and develop that start up! Ideally, you should have been in your job for at least six months. If you are self-employed, you will have to provide ratified figures for a couple of years.
Tick these boxes and you could well be on the way to that dream home.