5 Things to do before Applying for a Mortgage

Ensuring your bank accounts are in good order can significantly improve the likelihood of a smooth mortgage transaction. It will also increase likelihood of your application becoming approved by the lender. Below are tips to assist on ensuring your bank statements are kept in good order.

Access:
Very simple, but make sure you have access to ALL of your bank accounts and credit cards. The mortgage lender will require transactional history so they can review them, the vast majority will require 6 months statements. Ensuring you have access to all will ensure you are ready to go when the time is right. For the self-employed who are seeking a mortgage facility, then ensure you have 3 years business audited accounts ready to show the lender.

Settle any delinquent accounts:
It is often we may have many bank accounts with balances under £100 which haven’t been used for years. If you do not require the account and do not intend on using it in the near future, close the account. When you do however make sure you obtain a closing statement which confirms your account has been closed, including the last 6 months’ time frame (as most lenders will require this). The same applies for credit cards if you have more than 2.

Cancel unnecessary subscriptions:
If you are buying a property with somebody, potentially you lived separately beforehand. This can mean for many that they have 2 ‘Prime’ Accounts, 2 Live Streaming Accounts and so on. If you don’t require 2, cancel 1. This will save money and also reduce your ‘total expenses’ on your mortgage application. 

Overdrafts:
Using an overdraft can be a great convenience, however don’t make a habit of using it as it can sometimes display poor financial management. This is especially the case if you don’t have an approved overdraft with your bank, so avoid using it.

Prioritise:
Sometimes this can be stating the obvious, but prioritise your optional expenditure. A lender who is prepared to lend you thousands to buy your dream home wants to be lending to a responsible applicant, which is displayed and evidenced through your bank statements. Limit unnecessary optional expenditure such as excessive eating out, takeaways and purchases within technology and clothing. This is not to say do not have a social life.

A financial adviser can help you prepare for a mortgage application. If you’re ready to talk to an adviser to help you achieve your financial goals, get started now and book your appointment with HBFS, on T. 01534 754444 or speak to us via Chat at www.hbfs.co.je

HBFS Independent Financial Advisers is a trading name of Homebuyer Financial Services Limited who are regulated by the Jersey Financial Services Commission under the Financial Services (Jersey) Law 1998 for the conduct of investment business. Reg 72030

Author: HBFS