If you’re looking to apply for a mortgage, there’s a few things you’ll need to sort out first.
We call it getting mortgage ready. Bob Duncan shares some expert advice, hints and tips below to help get you started.
Watch Bob Duncan's tips for First Time Buyers here.
1. Find out how much you’re likely to borrow
One of the first steps in your mortgage journey is to set a lending goal for how much you’re hoping to borrow. This should be a realistic goal, that’s based on your income, your outgoings and the size of deposit you are able to put down. Ahead of speaking to our experienced mortgage & protection advisors you could pre-prepare for the detailed affordability assessment that we have to complete on your behalf. A good idea would be to review your bank statements to understand your income and outgoings, this will allow one of our advisors to give you an idea of the ballpark figure for the size of loan you might be able to get.
2. Check your credit record and keep it healthy
Before you apply for a mortgage, check your credit file with a credit reference agency e.g. Equifax, Experian and TransUnion (or all three if possible). This will make you aware of any credit issues that might lead to your being turned down or offered a less competitive mortgage rate. Once your report has been generated, make sure it is accurate and up-to-date, and challenge anything that you don’t agree with. It’s important to resolve any concerns before you apply for a home loan – you can use a notice of correction to explain legitimate reasons for previous arrears of defaults such as a spell of illness.
Keep your credit record up-to-date and in the run-up to applying for a mortgage try to avoid any additional borrowing, overdrafts, or buy now / pay later deals.
3. Review your bank statements
A mortgage lender will typically examine the last three months’ bank statements to make sure you’re financially healthy and will be able to afford the mortgage repayments. Ahead of this review it’s worthwhile reducing your spending and clearing any overdraft usage. Try to cut back on non-essential extras and limit or pause regular subscription payments if possible.
4. Increase your deposit
The higher the deposit percentage you can put down, the better mortgage you are likely to achieve, as this will provide a bigger choice of deals and lower interest rates. In January 2022, Halifax reported that the average UK first-time buyer deposit in 2021 was almost £54,000 representing 20% of the purchase price.
5. Open up a Lifetime Isa
The government can help you save for a first time home up to the cost of £450,000 if you are saving as a couple, or £225,000 as a sole applicant. You can save up to £4,000 each year until you are 50 in a Lifetime Isa and the government will add a 25% bonus to your savings (up to a maximum of £1,000 a year). To be eligible to open a Lifetime Isa account you must be aged between 18 and 39 years.
6. Register to vote
Make sure you are registered to vote on the electoral roll at your current address as Lenders will use this confirm your identity. If you are not on the electoral roll some lenders might turn you down for borrowing.
7. Register with Rettie Financial Services
Our team of mortgage and protection advisors can guide you through the mortgage process. We have access to over 90 lenders and over 12,000 mortgages and can help you to find a deal that’s right for you.
8. Get a decision in principle
Once you are mortgage ready and have met with our team of mortgage and protection advisors, the next stage of the process is to get a decision in principle which will tell you the size of loan you are able to borrow and all the relevant details including the size of deposit that you would require.
Rettie Financial Services have access to the wider market which means our team of advisors will be able to find you the mortgage that meets your personal and financial situation, they can establish quickly what you can afford and can look at the majority of rates and products to get the right one for you.
GET IN TOUCH TODAY with our Mortgage and Protection Team to organise a no obligation consultation.
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Rettie Financial Services Ltd is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the Financial Conduct Authority.
Rettie Financial Services Ltd. Registered Office Address: Deuchrie, Dunbar, East Lothian, United Kingdom, EH42 1TG. Registered in Scotland Number: SC711925.
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Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.