Tips to budget and boost your mortgage chances in 2020
At Try Financial we know how daunting it can be when it’s time to apply for a mortgage or being overwhelmed when beginning your journey, which is why we’ve put together some tips to help your chances of being accepted.
Here, we reveal our tried and tested tips of improving your chances of getting a mortgage as we look to improve your credit score, budget your money better and make your dream of getting on the property ladder, a reality in 2020.
Improving your credit rating
We believe the first step to ensuring you have a better chance to boost your mortgage chances you should be to look at your credit score, making improvements and ensuring you do not have any incorrect information on your credit file.
Get on the electoral role
One of the main things that credit agencies do when looking at your credit rating, is to confirm your address. Not only can being on the electoral role improve your credit score, but it also shows that your information is correct when compared to what you have provided
Ensure that this is kept up to date regularly and if you move, make sure to revisit this information.
Here is a link for more information and to register for the electoral role.
Check your credit file
There are three main agencies in the UK that hold credit files on you – Equifax, Experian and TransUnion – which can all hold slightly different information meaning that it is important you check with all three agencies.
If your credit score is not great, these services will give you a heads up on how you can take steps to improve your credit score and also upon your review, you can take the time to ensure all the information on them is accurate.
It may seem like a small typo such as an incorrectly spelled address will not do much harm, but when applying for a mortgage, this can have a great impact on your credit score. You can also have the same headache with a payment, for example, if you know you had paid a payment on time but this does not correlate correctly on your credit score, you can have this adjusted which will improve your credit file.
You can adjust these through these credit file services and they usually have detailed guides for fixing them but these may take time to apply the update to your credit file, so its best to check regularly.
Pay bills by direct debit
We recommend that you setup a direct debit to help pay your bills with at least the minimum balance on things such as your credit card each month. This will ensure you do not miss any payments and helps mortgage lenders decide whether to give you finance or not by showing them that you are able to keep on top of payments and are sensible with your money, and that you can pay on time.
What about your employment situation?
If you are in a permanent job with a stable income, this will help improve your chances of getting a mortgage with mortgage lenders as it shows you will have the funds to make repayments each month.
We also know that you may be worried about being self-employed, as your income can show payments all over the place, but you will still be able to get mortgage deals providing you are able to provide one years full accounts.
Improve your credit score with a credit card and rent payments
You can likely improve your credit score by getting a credit card and making at least the minimum payment each month, although we would recommend the full balance if possible. This will prove to mortgage lenders that you are responsible with your finances and can make payments on time.
Note: Not everyone will be able to get a credit card, and in some cases, this may not be the best solution. We recommend you use a free soft check credit card checker, to not only find the right solution for you, but to ensure you are likely to be accepted beforehand.
If you are currently renting your home, you may also be able to use the free Rental Exchange Scheme to boost your credit score by paying your rent payments to CreditLadder, which will then pass it on to your landlord and make a report to Experian that you have made a payment.
If you are interested in pursuing this, we recommended discussing this with your landlord before trying it out.
Saving for a mortgage deposit
Work out how much you need to save
We feel that by having a savings goal in mind, planning this out and seeing where you are each month will have a greater benefit on not only your frame of mind, but also keep yourself on top of payments and savings.
You should first investigate how much properties in your area cost, and calculate from there how much you will need to save for a deposit. You will need at least 5% of the property price to be given a mortgage.
Cut back on bills and everyday spending
Taking charge of your monthly bills and expenditure each month will not only help you save for a mortgage, but leave you in an overall better position with money each month.
We recommend that you frequently check whether you could save on utility bills such as energy and broadband, seeing whether you could get a council tax discount if you live alone, or use an app such as Monzo which will help you see your spending habits with greater visibility and where you could cut back on costs.
Start earning cashback and cutting your costs
If you are an online shopper, we recommend cashback sites to help find better deals and give you a percentage back on your spending. We recommend cashback sites such as Quidco and Topcashback when you shop online.
You may feel this is not much, but if you frequently make purchases online, this could save you a lot of money in the long run.
Another great way to help with your spending costs would be to apply for a cashback credit card. Providing you can trust yourself to pay off the balance in full each month, they have an added benefit to helping you build your credit score, which is vital for when it comes to applying for a mortgage.
Preparing to apply for a mortgage
Research mortgage types
There are three main types of mortgages which are fixed-rate, tracker and discount deals.
We recommend that you take the time to research each mortgage type so that you have a better understanding of them when it comes time to start comparing mortgage deals.
A mortgage broker can also provide advice based on your circumstances and give you options or suggestions on the type of mortgage you are likely to get and which one you would be better off applying for.
Talk to a mortgage broker
Now, with the tips above and having done your own research, it’s time to contact a mortgage broker. A mortgage broker is someone who can look at your financial situation, and work with you to suggest a mortgage that is best recommended to your requirements and then apply on your behalf.
A mortgage broker can save you the headaches and a considerable amount of time, by providing you access to more deals that you would not be able to find by yourself. By choosing a company that has access to ‘whole-of-market’ deals, you will gain access to a wider range of mortgages on the market, than just a select few.
This is where Try Financial can help and really shine for you as we also have access to lenders exclusive mortgage products which a lot of other companies do not have access to.
We work with the customer to put their needs first, ensuring not only the best possible mortgage, but can help them from start to finish.
Give us a call today on 01473 462288 or email firstname.lastname@example.org if you would like to discuss your options and see how we can help boost your mortgage chances. Our friendly and fully qualified mortgage brokers are waiting for your call.