For anyone wanting to buy a property, whether it’s a first-timer or a veteran at the process, it pays to make sure all your finances are in order before you start looking.
Not only will it save you time, it could also save you money not to mention reduce stress levels to do it right at the beginning of the process.
Firstly, and perhaps most importantly, register to vote. This may not seem an obvious thing to do but it is one of the main ways lenders can verify your identity. So, if you haven’t already done so, register your address with your local authority, get on the electoral roll and make sure you are not still registered at a previous address.
Next on the list is to save for that all important deposit and the sooner you start, the better. Not only will you have a bigger and healthier sum to put down, you will also have more choice when it comes to mortgage deals and perhaps even how much you can spend on a property.
One good way to start saving is to have a spreadsheet detailing all your monthly outgoings against your salary and see if you can trim some of the expenses down. Seeing it written down makes it easier to see where savings can be made.
Credit history and demonstrating your fiscal responsibility are important, so try and pay off any outstanding debts, make sure bills are paid on time, avoid using your overdraft and close any out of date, old or inactive accounts, especially if they are held jointly with someone else. You don’t want someone else’s poor record impacting negatively on yours.
Most importantly don’t take out a payday loan. Even if you have paid it off on time, these loans will be listed on your credit file and don’t make happy reading for mortgage lenders.
Allied to this is checking your credit record to ensure it’s in good shape and correct any errors that you find.
When you do apply for a mortgage try not to be in the midst of changing jobs. You will need three months’ worth of pay slips and most lenders will be more inclined to look favourably on you if you have been in your current job for a long period. If you are freelance, you will need your tax returns to show evidence of an ability to pay the mortgage.
Other documents you will need will be the last three months’ worth of bank statements, proof of your UK address, such as council tax or utility bill from the past three months, your latest P60 or the last three years’ accounts or tax returns if you are self employed, savings account statements and ID such as passport or driving license.
Finally, all mortgage lenders will want to have a chat to make sure you can afford to pay the mortgage and so will want to know you have an understanding about the bills and other essential expenses you will need to budget for. If you can show that you have done your homework, have a budget worked out and are confident you have all bases covered, you will be much more likely to be looked at favourably.
Once all that is done you are ready to find your property!