Irrespective of your current stage in the property journey, the process of moving homes can often be overwhelming. From locating the perfect property to listing your current home on the market, obtaining a mortgage, coordinating with surveyors, and liaising with conveyancers, there are numerous steps to tackle well in advance of your moving day.
It is important to be aware of common mistakes people make when securing a mortgage for their new home, which you should avoid in 2024:
Not Checking Your Credit Score:
When considering purchasing a home, it is crucial to assess your credit status early in the process. Your credit history and scores significantly impact your ability to qualify for a mortgage, influencing the rates and terms you may receive. Failing to review your credit early on is a common error made by some prospective homebuyers. If your credit falls short of your expectations, take proactive measures to enhance your score before seeking a mortgage loan.
Not Obtaining an Agreement in Principle:
Before exploring properties, it is advisable to secure a mortgage agreement in principle (AiP) from a potential lender, commonly known as a “mortgage promise.” This document provides a preliminary indication of the amount lenders are likely to lend you and typically remains valid for a period ranging from one to three months. It is important to note that an AiP is not the same as an actual mortgage offer and does not guarantee the exact amount stated on the agreement. Its primary purpose is to provide an estimate of your borrowing capacity, guiding your property search within your financial means. Additionally, obtaining an AIP demonstrates to estate agents your seriousness about purchasing a property and your ability to afford it.
Withholding Information:
Transparency and honesty are crucial when providing information to your mortgage adviser and lender. Failing to disclose relevant details, such as changes in employment status or income, can result in complications or even the withdrawal of your mortgage offer. When applying for a mortgage, honesty is the best policy.
Skipping Advice from a Broker:
Mortgage brokers can offer invaluable assistance. They have wide-ranging access to lenders, possess a deep understanding of the industry, and can help you find the ideal mortgage for your specific needs. Additionally, they can facilitate pre-approval, giving you a competitive edge when making an offer on a property. Consider speaking to a broker for a more seamless mortgage experience.
Taking on Additional Debt:
Lastly, avoid applying for new loans or financing before or during the mortgage application process. The more debt you have, the less you will be able to borrow. Lenders evaluate both your income and expenditure, so any increase in debt could lead to a less favourable assessment or even a declined application.
At My Contractor Broker, we understand the challenges of moving home and strive to make the process as seamless as possible for our clients. Our experienced advisers are here to guide you through every step of the mortgage journey, ensuring you secure the best deal for your circumstances.