Get mortgage fit with Barratt in 2015
As 2015 gets underway attention moves to a new home for the new year, five star housebuilder Barratt, which has a number of developments in Exeter, is urging homebuyers to get mortgage fit now to secure the best mortgage deals available.
Changes brought in in 2014 under the Mortgage Market Review have caught some buyers unaware but by being proactive and following a series of simple practical steps, potential housebuyers can make themselves more attractive to mortgage providers and that means not only getting a mortgage but getting a cheaper rate as well.
Barratt managing director Paul Moran said that it wants to help buyers make themselves as attractive as possible to a mortgage provider and has compiled its top tips to making yourself mortgage fit.
“We are urging homebuyers, whether first time buyers or those further up the chain, to take a series of practical steps to make themselves more attractive to lenders,’’ he said. “Being mortgage fit not only means winning the race to buy the home they really want, it also means getting the very best interest rates.’’
He said there are a series of practical tips homebuyers can take to improve their credit score – the key factors that mortgage lenders will look at when deciding whether to offer a mortgage.
“Our top tips give customers the inside track on how these decisions are made and what action homebuyers need to take. Credit scoring can be affected by things that many people simply wouldn’t consider, such as missed payments to not being registered on the electoral roll.”
Paul said that lending criteria now also means that potential buyers need to provide a clear picture of their finances, something which will put them in the best position for a swift mortgage assessment and offer.
Barratt Homes top mortgage tips:
Check your credit score
First of all, check your score. You can do this easily online with the two main credit reference agencies; Experian and Equifax. Ensure all information is correct and if it isn’t, write to the agency and request that they change it. If you have a poor score, you will be able to start making changes to improve it.
Understand your limits
If you have existing credit such as credit cards and loans, you must ensure that you keep up with the minimum repayments. If you are really struggling to pay, speak to your lender as this may show favourably on your credit score. Similarly try not to get too close to your credit limit, if you do, lenders may view this as ‘excessive’ debt.
Missed payments, County Court Judgements (CCJs) and defaulting on credit can be why up to a third of applicants are rejected for mortgage finance. A growing percentage of applicants are also being rejected for taking payday loans and betting patterns being evident on bank statements.
Be honest about your spending
Be open and honest about what you really spend or are expecting to spend, this includes travel, pension, gym etc. On any mortgage application provide a clear picture of your finances so the most accurate picture can be presented to a lender.
The family connection
Details of your family’s credit score are not kept on your file, so long as you don’t have any joint finances. If you do, you are likely to be co-scored and this could stop you securing a mortgage. So if a family member, partner or housemate has a poor credit score, keep your finances rigidly separate. This includes joint accounts and bills under both names.
It’s all in your history
You may not realise, but as many as 1 in 10 house hunters looking to buy a home - have no credit history. They are often viewed as less credible as lenders have no information to base their decision on.
Although you should never get in debt to build up a credit history, by taking out a credit card and using it regularly (ensuring you pay off the bill at the end of the month with a direct debit) you will begin to build a credit history. Another good way to build your score is by taking out a mobile phone contract.
Get on the electoral roll
You should try to show lenders that you have a ‘stable’ lifestyle, for example you are in full-time employment and live at a fixed address. If you aren’t already, register for the electoral roll as you’re unlikely to get credit without it. Also if you can, provide information such as a landline number rather than a mobile number.
Be consistent and double check
It sounds simple, but one slip up on the application form could scupper your chances for securing a mortgage. This could be from a simple mistake, such as putting a salary of £3,000 instead of £30,000 but it could also be from inconsistent information (even on other mortgage application forms) as this can flag up possible cases of fraud and could slow down or stop your application altogether.
Also bear in mind that submitting numerous applications in a short space of time could have a negative effect as lenders will worry about why you have been rejected before.
