Whether you’re looking to take your first step onto the property ladder, or you need to remortgage, it’s important to ensure your finances are in good shape ahead of making your application.
Before deciding whether to offer you a mortgage and at what rate of interest, lenders will examine your finances in detail to assess whether you can afford to take on the loan.
Additionally, they will ‘stress test’ your finances to establish whether you’d be able to keep up with your monthly repayments should interest rates rise.
The following steps should help ensure you’re fully prepared:
Save a large deposit – In the height of lockdown, many lenders withdrew hundreds of mortgages designed for buyers with small deposits. Fortunately, lenders are now starting to reintroduce ‘high loan-to-value’ (LTV) products, and the government has also promised a scheme to allow first-time buyers to take out a mortgage with a deposit of only 5%.
However, to increase the chances of being offered a mortgage on favourable terms, it pays to save as much as you can for a deposit before you apply. Open a dedicated savings account with a competitive interest rate to help you.
Check your credit score – The higher your credit score, the more likely you are to be offered a competitive mortgage deal. Tips to improve your credit score include checking you’re registered on the electoral roll, paying your bills on time, and paying off your credit card balance in full each month.
Get budgeting – Go through your bank statements to see how much you have coming in each month and how much you’re spending on bills and essentials such as food. Close or cancel any accounts, subscriptions or memberships you no longer need.
Repay your debts – Lenders will look at how much debt you have, including whether your current account is in credit. They will also look at whether you are only making the minimum repayments each month as this can indicate you’re living outside your means.
To help pay off what you owe on loans, credit cards and overdrafts, it’s worth using any savings, but leave enough saved to cover emergencies.
Be prepared – Before applying for a mortgage, it’s important to have all the correct documentation to hand.
This can include utility bills, your passport or driving licence, P60 from your employer, the last three months’ payslips, three to six months’ worth of bank statements or, if you’re self-employed, a statement of two to three years’ accounts from an accountant and tax return form SA302.
Get advice – Choosing the right mortgage deal can be a challenge, which is why we’re here to advise and support you throughout the mortgage process and help you find the right deal for your circumstances.
Your home may be repossessed if you do not keep up repayments on your mortgage
Catch up on our other blog posts:
Are you protected from canine chaos?
If you have a dog, you’ll know that they can be cute, loving… and a whole heap of trouble! Aviva1 recently backed this up when it revealed some of the company’s more noteworthy pet-related claims. From the pooch who turned on a tap and flooded his owners’...
Save by living just outside hotspots
By choosing to live just outside highly sought-after locations, analysis has shown that homebuyers could benefit from savings of up to 55%1, without forsaking their preferred location. Average savings come in at around 34% when locating five or ten minutes from a...
The money taboo – it’s good to talk it out
Are you worried about your finances? If so, you’re certainly not alone. According to a recent survey, 90% of households are worried about rising prices1. Financial worries can cause a great deal of stress and anxiety. In fact, nearly one in five people say they have...
Wellbeing benefits of income protection
Income protection insurance can be a cost-effective way of protecting yourself financially if you are unable to work due to illness or injury. What many people don’t realise is that taking out an income protection policy can have benefits beyond the financial....
Plan to avoid home buying stress
Job interview, driving test, family life… the list of life’s stresses is, unfortunately, long and varied. New research has revealed, however, that buying a home comes out on top. Can’t Buy Me Stress 37% of recent UK homebuyers said that buying a house was one...
Seeing protection in a new light
Nobody wants to think something bad happening to them. Perhaps it’s why so many people shy away from protection insurance – after all, it’s all too easy to think ‘it’ll never happen to me’. Unfortunately, ‘it’ can and does happen, whether ‘it’ be injury,...
Back to normal? Property update
Amid the backdrop of war in Ukraine and the spiralling cost of living, unpredictability is at the forefront of many people’s lives right now. The outlook for the housing and mortgage markets is no less uncertain. Taking a step back, however, it is possible to...
Sandbanks dream home
This month we were pleased to help clients buy their dream home in beautiful Sandbanks. With one eye on retirement they wanted to live in style, and we were able to use their company profits in order to maximise their mortgage borrowing potential. This enabled them to...
Equity Release for home improvements in Redditch
We were so pleased to receive a mortgage offer for an equity release client this month. She came to us asking for help in obtaining funds because her boiler had packed in, leaving her with no hot water or heating in the middle of winter. Not ideal for anyone, let...
Rental market boom likely
Historically, a decline in property sales has also led to a boost in private rental market stock. This is based on research1 looking at both sales and rental markets during the 2008-09 financial crisis and recent pandemic downturn. In 2008 property sales volumes...
(Your home may be repossessed if you do not keep up repayments on your mortgage)
We charge a fee for arranging and advising you on the mortgage. The fee will be dependent on your circumstances but will not exceed £499. (Our typical fee is £299.)
For Lifetime Mortgages/Equity Release the fee will be £799.

Our mission is to provide honest mortgage advice, whilst helping you save money.
Get in contact
Flexible appointments
Or call —02380224925