Buying a house is one of the most stressful things you can do, but one of the hardest aspects of it is securing the funding and mortgage. Essentially, you need to start the mortgage process before you even begin looking at potential homes.
This is because you need to understand what situation you are in with your deposit versus what a mortgage lender will give you. This determines your budget, which then affects your search criteria. However, no matter what stage you are at when looking for a new home, there are a few things to avoid ahead of time if you are applying for a mortgage in principle or the actual mortgage. Here are some of the things you should avoid in the months leading up to the application process.
Avoid using any overdraft facility
If you have an overdraft facility on your bank account, avoid being in it for at least three months leading up to your mortgage application. While an overdraft facility is handy, being in it each month suggests to a lender that you need to borrow money to pay your bills. Even if it isn’t necessarily the case, and you have savings in another account, clear the overdraft. It saves you money on the interest and overall paints you in a better light.
Avoid gambling websites
You also need to consider what picture your bank statements will present as you often need to provide three months worth to support an application. Even if you are in credit and not using your overdraft, gambling websites are still frowned upon. If you enjoy a little flutter now and again have a separate account that you transfer into each month. This can be a “spends” account. It shows that you are sensible and still meeting your bills while remaining in credit on your main bank account.
Avoid any reckless spending
Another thing to consider is any other reckless spending on your main bank account. You want to present the best possible scenario when it comes to your bank statement, so ensure that you can explain online purchases. Obviously, you will be spending money. It might be you need clothes, school uniforms etc. If you do need to spend on anything big try and wait until after your mortgage application is complete. For example, a new car or TV.
Avoid applying if any of the following apply
It is important that you don’t get declined for a mortgage based on the lender’s findings. There are a few things that may make you want to delay applying. While there is no definite answer that they could go against you, it can just help your case. Here are some of the things that may make you avoid applying:
- Have you been in employment less than six months? Sometimes it is best to wait until you get beyond the six months mark. They will always ask for a few years worth of employment history but if you have just made the move it could be seen as risky.
- Breaks in employment or bounced around from job to job. If you haven’t got much track record or have a break in employment, try and waiti until you can show conosstency with your job role. A year could be a great position to be in. It isn’t essential it might just help your case.
Hopefully, these tips will help you when it comes to applying for a mortgage.
