If you are planning to apply for a mortgage in the near future, there are steps you can take in advance to increase your chances of getting a YES from the bank.
It pays to start planning 3-6 months before submitting your mortgage application. That way your accounts will look as good as possible when it comes time to seek pre-approval.
In this article, professional mortgage adviser Jenny Cheevers shares her top tips for getting your mortgage application approved.
9 Tips for getting your mortgage application approved…
Practice good account conduct – avoid going into overdraft. Even though the bank doesn’t mind, it can still affect you later on.
Pay increases are worth more than bonuses/commissions from your employer (bank only counts 50% of a bonus if at all).
Avoid short term debt. Consumer goods. If you can’t afford it now, you shouldn’t be buying it. Things that are on deferred payment really do matter. Avoid deferred payment plans.
Income is everything, cash in the bank won’t save you.
Don’t go on holiday if it’s all going on the credit card.
Job stability helps. The longer you have been with your employer, the better. Keep that in mind if you are thinking of becoming a contractor.
For self-employed people – banks are looking at your income AFTER your expenses so keep that in mind when you are deciding what to claim.
Have a savings record. While it’s good to pay off debt, if you pay off all your debt and don’t have a savings record that may be a red flag for banks.
Sometimes you are better to pay off your student loan to free up cash-flow (especially if it’s a low amount).