Ian's top 3 things NOT TO DO when applying for a mortgage:
1. DON'T mismanage other financial commitments!
This may sound obvious to a lot of people but it's amazing how often we see clients who've had issues/problems with some of their other financial commitments (loans, credit cards, vehicle finance etc). This can often cause problems when applying for a mortgage – worst case scenario, it can prevent people being able to get a mortgage at all! One of the things clients often aren't aware of, is how long lenders will search back over their credit history to ensure prudent financial management of any previous credit arrangements. Lenders can often look over a 5 to 6 year period so it's always best practice to ensure you're on top of any credit arrangements you have & most importantly…. that payments are always made on time!
2. DON'T have poor bank account conduct.
I often have clients talk to me about their bank account conduct in advance of making a mortgage application (a lot of the time they're concerned about certain transactions and will try to explain them to me).The good news is that not all lenders will ask to see bank statements as part of the application process (although they will always reserve the right to do so).However, if they do need to see them, it's not going to look attractive to them if clients have things such as bounced direct debits or unauthorised overdraft charges on their accounts. In general, lenders are very understanding of clients' day to day spending (and they don't even mind the odd humorous reference on a money transfer!) but if they deem that the account conduct is being run poorly, this may lead them to turning down an application.
3. DON'T reduce the deposit pot available!
This is arguably one of the most important elements to being able to purchase a property. Having a deposit fund available is essential and I often advise clients 'the larger fund you have – the better! This can work in your favour in various ways, but it's essential that while you search for that dream home you don't dip into the pot you worked so hard to save up! It will be required when you find the right place!
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. SOME BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.