Securing a mortgage is likely to be one of the most substantial financial decisions you’ll ever take. Everyone wants to secure their dream home on the best possible terms. The great thing is, you have the opportunity to outpace other buyers by preparing in advance to boost your chances of mortgage approval – One such tactic is securing a Agreement in Principle ahead of beginning your property search.

In some cases, it may be challenging to prepare for a mortgage, for instance, if you and your partner decide to separate. It’s distressing when this occurs, but if it does, you may need to transfer from a joint mortgage to a single one.

Why Planning for a Mortgage is Important

We advise all our new clients to start planning their mortgage process six months ahead of their planned move in Newcastle. Your mortgage application will be better positioned to navigate all potential hurdles if you prepare systematically in advance. If you encounter any issue, you ideally should be prepared to resolve it.

Leveraging more than 20 years of industry experience has enabled us to troubleshoot various mortgage-related issues, and help any first time buyerd and home movers in Newcastle. When in the final phase of the mortgage process, if any obstacles appear, our team of Mortgage advisers in Newcastle can rectify these if you’ve prepared adequately. Here are some common challenges our clients often face:

  • You haven’t saved enough deposit for your mortgage.
  • Failing to maintain a good credit score because you thought it wasn’t necessary.
  • Being too relaxed with the way you manage your bank account.
  • You are a self employed applicant, and you don’t have a sturdy income at the moment.

With up to six months of preparation and planning, you may be able to avoid some of these problems.

Deposit

The precise amount needed for a ‘5% down payment’ may vary since you can’t determine the exact amount till you find a suitable property. For clients who struggle with the initial down payment, it’s relatively common to receive support from parents via a gifted deposit.

This lump sum, provided with the understanding that it need not be repaid, can facilitate the property purchase. If eligible, another viable option would be one of the schemes, designed explicitly for individuals who need assistance to buy a newly constructed home. This could be particularly helpful for first time buyers in Newcastle, seeking support on their way to becoming homeowners.

Credit Score

Credit Ratings Your credit rating is crucial in the mortgage application process. A poor credit rating can hamper your ability to secure approval for a mortgage. The reason for your low credit rating could influence this. A history of CCJ or bankruptcy would further lower your chances of approval, depending on how recent these issues were.

We suggest referring to Check my File to review your credit score. This site enables you to access your credit report to identify any potential obstacles to securing a mortgage. Once you’ve sourced this information, feel free to share it with us; we’ll be glad to examine it at no cost.

Bank Accounts

In the run-up to your mortgage application, be mindful of how you’re managing your finances. Lenders will closely inspect your bank statements and notice all transactions. Two potentially contentious issues to look out for are:

  • Yyour gambling transactions, if any. Frequent and arbitrary gambling transactions can discourage lenders, who may see them as signs of financial instability.
  • Large sums of funds transferred into your account. If you’re fortunate enough to receive a gifted deposit, we recommend keeping it in the donor’s account to avoid raising questions.

Self Employment

Securing a mortgage can be slightly more challenging for self-employed applicants, as they may be required to provide more comprehensive evidence than their regularly-employed peers. You’ll need to present at least a year’s accounts and three months’ bank statements to verify your income and affordability. Depending on the lender, you may be asked for additional documents if they have doubts about your financial health.

Other Mortgage Hurdles

For any unanticipated scenarios, remember that a Newcastle-based Mortgage Broker like us is here to assist. Every individual may encounter different mortgage hurdles, and we’re here to guide you through the process. We’ve helped numerous clients who have had to navigate complicated and specialist scenarios to secure their mortgage. We provide support and guidance throughout the process, ensuring you never have to go it alone.

Date Last Edited: February 19, 2024