Your mortgage is likely to be the biggest financial commitment you’re ever going to make – so it’s going to be important to make sure that you find the best deal for your circumstances.
There’s plenty you can do to improve your credit score, such as making sure payments on credit cards and loans are all up to date. Also, know your budget. As soon as you decide to look for a property, scrutinise your last few months’ outgoings carefully to understand your spending habits. Are there things you could do without to finish each month with cash in the bank?
And as well as checking your outgoings, you should check your credit report, which includes a record of all your borrowing over the last six years. Ensure everything is accurate and up-to-date. From now until your application, try to appear like an ideal mortgage borrower – and demonstrate you can comfortably manage any outstanding credit commitments you have.
Because lenders have different past experiences and expectations, they take different factors into consideration and may score things differently. The Experian Credit Score is a guide to help you understand how a lender might score your credit worthiness – generally speaking, the higher your credit score, the better your chances of getting your mortgage and the deal you want.
It’s worth thinking about how much you can afford to borrow and later repay in the future, as your deposit is only part of the equation. A smaller deposit can mean a larger loan – which means lenders taking a closer look at your ability to repay. You could use an online mortgage calculator to work out what your likely repayments would be – if you play with the interest rate settings, you might be able to see if you’re able to afford repayments if rates rise by 1%, 2% or more.
For more helpful information on mortgages, visit www.experian.co.uk/mortgages, with useful hints, tips and features.
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