The new affordability rules that were introduced in 2014 have made it much more difficult for many potential buyers to obtain the necessary loan to buy their property. However, there are still some things that you can do to increase the chances of being granted your mortgage loan.
The new checks are looking at whether you can comfortably afford the mortgage repayments on a new home. Start with your bank account and make sure that you are only spending what is necessary so that you have a healthy balance. Avoid paying unnecessary subscriptions or excessive spending. Stay within your overdraft limit and don’t miss any payments of bills, as you want to demonstrate that you can manage your financial affairs responsibly. Setting up direct debits for all regular bills will help to maintain payment schedules.
Don’t apply for credit during the months before applying for a mortgage, unless it is necessary. Although a mortgage lender may consider your total debt to be reasonable, they will be considering your monthly payments and affordability.
If you are self-employed, make sure that you have submitted all self-assessment tax returns to HMRC in a timely manner. Make sure that all accounts are prepared and up to date. You should be able to provide the last three years of tax returns and accounts to a mortgage provider.
Taking some time before applying for a mortgage to get your financial affairs in order will make it easier for an advisor who has undergone a CeMAP training course to find you a suitable product.