Member Article

Top tips for first time buyer mortgage success

Buying a house can be very stressful and changes made to mortgage lending criteria following the Mortgage Market Review, only adds to the stress.

The Mortgage Adviser, LEBC Group’s independent mortgage service is offering those entering the market for the first time some top tips for making the mortgage interview process easier.

• Establish a good credit rating at least six months prior to applying for the first mortgage. This means being on the electoral register, ensuring that you have no late payments or arrears on existing credit cards or loans and making a special effort to live within your means and not going overdrawn accidentally.

• If you have not had any previous loans and do not have a credit card, this will ironically count against you, so getting a credit card and ensuring that you pay off the balance each month will give you a better credit score than not having one at all.

• You also need to show that you can budget and have a good handle on your outgoings and any future planned expenditure. Lenders will want to see that you are capable of paying the mortgage off on top of your other bills.

• Check your pay slips to ensure that your tax code is correct; HMRC admits that over 25% of tax codes will be incorrect at any one time. If you are not paying enough tax you could have a sudden liability that will throw your finances out. If you are paying too much tax, then claiming a refund and getting the right code, will help to improve your net income.

• Have answers ready to questions regarding future plans, eg to start a family and the cost of childcare.

Kay Ingram, director of LEBC Group, warns: “Buying a house can be very stressful, especially when it is the first time you have experienced it. Changes made to mortgage lending criteria, following the Mortgage Market Review, puts more onus on lenders and advisers to ensure that a mortgage is affordable not just now but in the future too. This has meant that many lenders have both tightened their lending criteria and lengthened the mortgage application process. It is not unusual for a mortgage interview with a lender to take up to two hours. Using a mortgage broker who can access the whole mortgage market will help your application.”

This was posted in Bdaily's Members' News section by LEBC Group Ltd .