Monday, 18 December 2017

Careful planning can help you grasp that first rung...

Careful planning can help you grasp that first rung...

You can increase the chances of securing your dream home with some careful financial planning, says GREG MAY, right, of Henley estate agents Romans

WITH an average of 10 buyers for every one property on the market, competition is stiff. This, coupled with the requirement for lenders to stress-test applicants, makes it all the more important for buyers to get their finances in order. I always use a checklist like the following:

1. Check your credit score

Everyone in the UK has a credit score — this score is used by lenders to determine whether you are likely to make repayments on time and in full. Before going through the mortgage application process it’s advisable to check your credit score yourself to avoid disappointment further down the line.

2. Avoid overdrafts and unpaid bills

Avoid going overdrawn or missing payments as this will damage your credit score, making you an unattractive option for lenders. While you can still use overdraft services and credit cards, we recommend repaying the balance to demonstrate your ability to repay debt.

3. Save up as big a deposit as is humanly possible

There is no right or wrong when it comes to how much to save towards a deposit. It all boils down to how much you want to borrow and how much you are willing to repay each month. The general rule of thumb is, the larger the deposit the lower the mortgage repayments. To access the lowest rates, I recommend offering a deposit of 10 per cent and upwards. Another option, which may lower the monthly repayments, is to take out a mortgage over a longer term. Speaking to an expert mortgage adviser will ensure you find the right deal for your circumstances.

4. Stop spending!

In the run-up to your mortgage application we advise keeping your spending to a minimum to maximise the amount of disposable income you have available. Lenders may go through your bank statements to examine what you spend each month when determining if you will be able to repay your mortgage. This also applies to credit cards. Avoid maxing them out in the months leading up to your mortgage application as this could have a negative effect on your credit score.

5. Get pre-approved

With more buyers than houses for sale, you can increase your chances of getting acceptance on your offer if you have been pre-approved for a mortgage. Not only will this demonstrate your ability to borrow a specific amount, it will also show that you are serious about buying a property and therefore less likely to pull out of the sale.

For expert advice, call Romans Mortgage Services on 0118 321 9536.

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