With a variety of schemes on offer to first-time buyers, new homes being constructed, and house prices within the reach of many people, now is a good time to look at buying a property in Essex. The Chancellor recently made a pledge to build 400,000 new properties in Essex, with many of them being included as affordable homes. The Help to Buy scheme and the Starter Home scheme are also good news for first-time buyers in the county. But it still remains a challenge for some people to get on the property ladder in Essex, particularly in popular towns that attract a lot of commuters. Take a look at our top tips for being successful in the mortgage application game.
1. Manage Available Credit Effectively
Your available credit on credit cards and overdrafts is the difference between your balance and your credit limit – the amount of money you have available to spend. In order to have the best chances of succeeding with a mortgage application you need to set a balance between having too little left which implies that you are living at the limit, and too much, which suggests that you could spend it all and end up with a huge debt. As a rule of thumb, when you have a credit card you should spend no more than 50 percent of the available credit.
2. Close Off Old Accounts
If you no longer use a credit card or bank account you should think about closing it as you are at greater risk of fraud – and a poor credit rating through no fault of your own – and it could cause unnecessary time taken to check your details. But some credit card accounts, when they have been open a long time, actually help your credit score. Check the advice of one of the mortgage brokers Essex provides in order to find out how best to manage old accounts. If you are looking for a mortgage broker Essex provides a good choice of independent advisers.
3. Pay Bills On Time
Missing just one payment, which stays on your credit report for six years, could be the difference between a mortgage deal and a fail. Make sure that you pay all bills on time by setting up direct debits and having the money taken automatically from your account.
4. Cut Back on Spending
A mortgage lender will check your outgoings before accepting your mortgage application in order to see that you are living within your means and that you would be able to make repayments on the mortgage in the event of a rate rise. You will need to show your previous three months’ bank statements so it helps if you cut back on unnecessary spending prior to an application. This will also help you save for the costs of moving, which can quickly mount up.
5. Don’t Use an Overdraft
If you are always slipping into your overdraft then a lender is not likely to see you as a great candidate for a mortgage as it suggest you are not managing your money.