Expert advice for your next mortgage
PUBLISHED: 16:51 11 September 2014 | UPDATED: 16:51 11 September 2014
What can you do to prepare for your next mortgage application? Greg May of Romans has some advice.
The Mortgage Market Review (MMR) reforms which came into effect in April involve lenders conducting thorough screening processes to double check borrowers can afford mortgage repayments, based on their specific incomings and outgoings.
Ask for advice early - The earlier you speak to a mortgage adviser the better, as not only can they guide you through the process but can provide an approximate idea of how much money you are able to borrow based on monthly income and outgoings. This will help on your initial house hunt, making sure you commit time to properties you can actually afford.
Stop unnecessary spending - If you’re starting to think about applying for a mortgage, or remortgaging, bear in mind that lenders will now be looking closely at your finances for the last six months. So try to avoid all unnecessary spending for at least six months.
Look at the whole market - When applying for a mortgage it’s always been important to look at the whole market. This is where an adviser can be invaluable as they have access to nearly all of the lenders’ rates and can advise on the most suitable to approach. Without this first-hand knowledge you risk wasting many hours with individual lenders, only to find your application is turned down.
Be aware of time constraints - Since the reforms there have been considerable delays across the market. Brokers recently told Mortgage Strategy (a mortgage trade publication) that delays from lenders, conveyancers and surveyors are pushing completion times back by several weeks or even months in some cases. Romans is recommending anyone looking to get a new mortgage, or change their current one, to start the process sooner rather than later.
Get the right advice, the first time - It’s more important than ever to apply for your mortgage with the right lender. Each failed application can affect your credit rating. See romans.co.uk/mortgages. Your home may be repossessed if you do not keep up repayments on your mortgage, and there will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.
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