Applying for a mortgage loan? Here are some top tips:

Applying for a mortgage loan? Here are some top tips:

Applying for a mortgage loan can be an exciting venture, and with the right financial help, there are many ways to get one. However, there are potential risks that could negatively affect your ability to secure a competitive mortgage deal. If you make a mistake or lodge a false claim then there could be delays, and there is often a penalty for lying on mortgage application UK. Therefore, here is our guide on what to do and what to avoid when applying for a large mortgage loan.

Avoid making an offer without pre-approval

One common mistake people make when submitting an offer is finding out later that they are unable to afford it. This can lead to hefty penalties if you have signed a contract of sale. By having your mortgage loan pre-approved a few weeks in advance, you’ll be in a better position to be able to afford any offers that come up. In addition, having pre-approval will show the seller and real estate agent that you are reliable.

Always check your credit history

One of the first things your mortgage lender will look at when securing a mortgage is your credit history. While it may still be possible to secure a deal with a poor credit history, many lenders will restrict the amount you can borrow or even outright refuse. Therefore, make sure you request a copy of your credit report ahead of time and consider ways to improve your credit score such as paying off debts and disputing inaccurate transactions. Lending can take place even with adverse credit however, you are best placed to discuss your options with a adviser to explore your options.

Report all income and expenses accurately

All lenders have highly sophisticated systems that will cross-check your financial records with your application to uncover any fraud or inconsistencies. If you have lied on your mortgage application about income in the UK, your application will not only be denied but you may face further penalties as well. To avoid any penalty for lying on mortgage application UK, always be diligent to ensure you accurately record your expenses and correct any errors immediately. Get advice from an adviser with experience in when looking at securing a loan at a favourable rate.

Let a mortgage adviser help you by researching different mortgage interest rates

While it might be tempting to go with the first mortgage you are offered, it pays to have an adviser shop around and find out what other options are available. Even a small difference in interest rates between loans could end up saving you a significant amount of money in the long term. By working with your adviser, they will help you can find a range of deals and pick the one that is most suitable for your needs. When working with a high-net worth broker, such as LDN Finance, this can open you up to off-market preferential interest rates to secure the best financial deal possible.

Make sure loan repayments are made on time

All lenders want to be sure that any debt is paid back on time. Missing even a few repayments could drastically decrease your chances of securing another mortgage loan in the future. While a payment that was missed years ago won’t likely be an issue, a history of missed payments – especially in a row – could affect your application. Therefore, stay up to date with all repayments and work with your mortgage adviser to handle any missed payments.

Try and reduce your credit card expenditure

Even if you only use your credit card occasionally, having a high credit limit may negatively affect your mortgage loan application. The mortgage lender may factor in a portion of the credit limit as liability on the loan, which could potentially reduce your borrowing capacity. Therefore, it is a good idea to contact your lender and reduce your credit limit as much as possible before applying for a loan to maximise your borrowing potential.

Avoid applying if your situation becomes unstable

It is important to demonstrate to your mortgage lender that your finances are stable and there are no unexpected changes on the horizon. Ideally, you must have steady employment and not be currently in a probationary period or have recently switched careers. In addition, you need to avoid any sudden high expenses or debts. Make sure you are at least six months into stable finances/career changes before making an application and avoid any big purchases to prove you are responsible with money.

However, if you don’t match the aforementioned criteria perfectly we still urge you to get in touch. Our advisers are proficient in finding solutions for all the complex scenarios thrown at them! Contact us via our online form for help today.