Guide: Getting ready to apply for a mortgage.

Worried about applying for a mortgage? Lots of people get nervous about the mortgage application process but if your finances are in check and you’ve got a solid credit rating, your new home could be just a hop, skip and a jump away. In this guide, we share tips on how to get your finances shipshape before exploring your mortgage options.

Register to vote

It might sound a bit random, but this could make or break your chances of getting a mortgage. Lenders look at the electoral roll when carrying out identity checks. This proves you are who you say you are and live where you say you live. If you’re not registered, you need to do this pronto! Register to vote on the UK government website.

Check your credit rating

This is absolutely vital. A poor credit history hugely reduces your chance of getting a good mortgage deal because it suggests to lenders that you’re not good at managing credit. In saying that, it’s not impossible to get a mortgage with a sketchy credit history, it’s just harder and your rates will be higher.

The best thing to do in advance of applying for a mortgage is to check your credit score on a  credit reference agency website. The agencies review all the accounts you’ve had open over the past 6 years, including credit cards, loans, overdrafts, mortgages, and some utilities, and give you a score based on this. The higher the credit score, the better your chances of being able to get credit, like a mortgage, in the future.

For more information on credit scores and how they work, read our guide about credit score. And, if your credit score is low there are things you can do to boost it. See the government’s general guidance on improving your credit score.

Avoid your overdraft

Lenders look for proof that you’re good at managing your money. This means they don’t just rely on your credit rating they look at your day-to-day spending too. Many lenders will ask to see your past 3 months’ bank statements, so ahead of applying for a mortgage it’s good to take the time to tidy up your finances. If you’re guilty of dropping into your arranged overdraft every month, now’s the time to stop. This might mean cutting back on your monthly outgoings, like fewer nights out or takeaways.

Don’t apply for credit

If you’re hoping to get a mortgage in the next few months, try to avoid applying for any other credit. By this we mean not signing up to new credit or store cards, not using buy now, pay later schemes, and not taking out any loans. This is because these things could negatively affect your credit score, which is the last thing you want if you’re going to apply for a mortgage.

If you do need to apply for credit, avoid payday loans as some lenders will decline you for a mortgage if you’ve had one in the past year. 

Cut previous financial links

If you’ve previously lived with another partner or had flatmates, there’s a chance you might be financially linked if you had a joint financial product – like a joint bank account, joint mortgage, joint loan, or even a joint utility bill. This means their financial history is linked with yours and will be considered by credit agencies when deciding your credit score. Bad news for you if they’ve got a poor credit history.

If the information on your credit file is no longer accurate and you no longer have a relationship with the people you were financially linked with, get those accounts closed and your name removed from any joint accounts. This should then update your credit score. You can also write to the credit agencies for a ‘notice of disassociation’. 

Stay on top of your finances

Whatever you can do to save money and manage your finances, now’s the time to do it. Pay off credit cards and loans, cut back on overspending on things like nights out and socialising, cancel unused gym memberships and other subscription services you no longer use, pay all your bills on time, save as much money as you can. It’s not rocket science; it’s just about changing your mindset and attitude to money. The more you can keep on top of your finances and save for your deposit, the closer to reality your new home will be. For help with this, check out the government’s handy online budget planner.

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Relax. We've got this.

We will seek out a mortgage deal that is right for you, so you can move home minus the stress.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Most Buy-to-Let mortgages are not regulated by the Financial Conduct Authority.

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