Once you have made a start on your home buying journey and have been able to save up a suitable deposit, it’s time for you to take the next step, which is for you to get prepared for your mortgage!
Below we have put together a detailed list of some helpful tips and tricks that could help first time buyers in Liverpool to make sure that they are “mortgage ready”.
Before you get in touch with a mortgage broker in Liverpool, before you do anything else, we would recommend that you look to get yourself an up-to-date credit report.
We would definitely recommend that you pay off any outstanding payments that are in your name, even if you have reasons for not doing so, such as a mobile phone bill dispute. Whilst you might not like to do so, it will put you in a much better position credit wise.
With less going against you financially, the mortgage lender will see you more favourably. We also suggest checking to make sure that you are on the voters roll, or that your information is correct. It may not seem hugely important at first, but it can have a big impact on your credit score!
Another way to improve your credit score is to close down any old or unused credit cards, though conversely, having a couple of cards you still use and pay off fully can work in your favour as well.w
Your mortgage advisor in Liverpool will be able to go through your credit report with you early on in your mortgage journey. You’ll receive expert mortgage advice in Liverpool on any ways that they feel you could work on improving your credit score.
In the early days of your home buying process, your mortgage advisor in Liverpool will ask you to provide photo ID. We usually find that this is in the form of either a driving license or passport.
Your driving license is also usable when it comes to your proof of address as well, though if you use this for that purpose, it cannot be used for proof of ID. This means, if you are using this for proof of photo ID, you’ll need something else to show your address.
Any non-UK nationals now residing in the UK will also need to show us a copy of their Visa.
You will also need to provide your mortgage advisor with documents that can prove to a mortgage lender where you live. We normally find that customers send in utility bills or original bank statements that are dated within the last 3 months.
Alternatively, however, as we mentioned above, if you are using a passport for your photo ID, you are welcome to use a driving license instead as a proof of your address.
Your bank statements should be able to demonstrate both your income and your outgoings. We would definitely recommend that customers try to stay away from partaking in any gambling on the build up to this, as the mortgage lenders may potentially hold this against you during your mortgage application.
It is also very important to make sure that you don’t go past any overdraft limits and let any direct debits bounce that are in your name. You absolutely need to be prepared ahead of time for this.
You will find that most mortgage lenders will be wanting to see your bank statements, as they like to be certain that you will definitely be able to maintain your monthly mortgage repayments.
As a first time buyer in Liverpool, you will also be required to prove to the mortgage lender that you also do in fact have the means to afford an initial deposit, keep up all of your payments and be able to evidence that you can do this, for anti-money laundering purposes.
Audit trails can be a little difficult to prove, especially if money has been moved back and forth between different accounts. As such, we would definitely advise keeping this to a minimum, if you are able to, as not to confuse the trail.
In truth, mortgage lenders would likely much rather prefer to see you building up your savings over time. If you have any large amounts going in, make sure you are able to account for those with receipts to evidence where those funds came from.
In recent years, we have found that a large amount of our customers deposits are actually gifted by family members. This is especially a popular choice for first time buyers in Liverpool, as it helps them to take that primary step onto the property ladder.
Gifted deposits will also always need to be evidenced, with the donor, the person who is gifting you the deposit, having a requirement to fill in a form that confirms it is purely a gift, not a loan that they expect you to repay.
Staying on topic with proof, you will also be required to provide proof of income. If you’re a standard, employed applicant, then this will typically be shown your last 3 months of payslips, with a portion of mortgage lenders out there needing to see your most recent P60.
A mortgage lender may also factor in any regular overtime, shift allowance, bonuses and commission that you have. If you have multiple employers, perhaps you are working a part-time job or are self employed and have contracts, a mortgage lender will sometimes accept your earnings from those as well.
We tend to find that a large amount applicants who are self employed will enquire for expert mortgage advice in Liverpool. If you are self employed in Liverpool and looking to apply for a mortgage, you will need help from your accountant to request your last 2-3 years’ proof of earnings from the revenue.
Our team of dedicated and experienced mortgage advisors in Liverpool have the knowledge to sit and discuss this with you, instructing on how to navigate the online government gateway portal if required to do so.
It’s always within your best interests to make sure that you are always prepared ahead of time and write down an estimate of what you think your outgoings could look like once you factor in mortgage payments and general running costs.
This will help you work out costs such as council tax and utility bills, as well as anything you regularly spend your money on, such as your food and drinks shopping.
It will also help to give you a generalised estimate of how much disposable income you’ll have available, in order to cover the costs of your monthly mortgage payments.
As you can see from all of the points we have discussed, there can be a lot to think about when preparing for a mortgage, although with the help of a dedicated mortgage advice team in Liverpool, you’ll hopefully be in the best place for taking on the process.
Putting in the effort from the start, staying patient and being careful will hopefully increase the likelihood of you walking out of the mortgage process with your dream property to show for it.
Last edited 06/01/2023