2016 looks set to be another year of record-low interest rates with economists predicting a maximum rise of as little as half a per cent.
These all time low rates mean that 2016 is a great time to secure your mortgage before rates potentially rise again over the next few years.
So if you are planning to make an attempt to break into the housing market in the coming year, make sure to heed our top tips to ensure the best possible chance of having your application approved.
Boost your credit score
One of the first things a lender will look at when contemplating approving your mortgage is your credit score.
Its just good practice in general really, but if you know you’re going to be applying for a mortgage you need to make sure any existing debt is managed correctly.
First things first you need to make sure all bills are paid on time, and make sure you pay off your existing debts, paying more than the minimum payments if possible.
You can check your current credit score for free using websites such as Noddle. It’s quick, free and can give you a great idea of where you stand before you apply.
Keep an eye out for any outstanding or late payments and stay on top of your credit report to put yourself in the best possible situation.
Do some market research
There are a whole host of lenders and different mortgages types available out there and it can all be a bit overwhelming, especially for a first time buyer.
All the different banks and building societies will try to tempt you with different fees and offers, as well as different types of loans such as fixed-rate or adjustable-rate.
While you can go out and try and research the market for yourself it can be very difficult to make sense of without extensive knowledge of the mortgage sector.
One of our mortgage experts can take a look at your individual case and help you decide which mortgage is right for you.
If you find yourself really struggling to secure a mortgage on your dream property, you may need to think about looking at a slightly cheaper option.
Although its not ideal sometimes you just have to realise that certain properties are going to be unachievable.
Compromising in a couple of areas could really help your chances with getting a mortgage and you may even be able to move on to the kind of property you have your heart set on in a couple of years’ time.
Also make sure that you take into account all the other costs that you’ll have when buying a home, things such as taxes, insurance and maintenance costs.
All of the above costs do add up and so make sure you know what you can and can’t afford before trying to secure your mortgage.
Save up a decent deposit
Lenders usually require a deposit of at least 5% of the property’s value before they agree to lend you the other 95%, but its best to try and put down a bigger deposit if you can.
Offering up a bigger upfront payment will obviously leave you with less to pay monthly, and also means you’re less likely to fall into negative equity.
While paying off half of your house in your deposit is going to be fairly unrealistic for most buyers, coming with a deposit of around 20% if your financial situation will allow it.
It’s important that you have as much information as possible before attempting to secure yourself a mortgage, whether that’s about your own credit history, the kind of property you want, or the type of mortgage that’s best for you.
That’s why we recommend getting in touch with one of our mortgage experts for simple, fast advice to suit your circumstances, with no broker fees.