There are a number of factors in obtaining the best mortgage rate

1)      Make sure you are on the electoral role. It is essential that you appear on the voters role when the lenders performs a credit check on you. This option to register is open to to all citizens of the Irish republic or other European Union country as well. (EU citizens cannot vote in Westminster parliamentary elections), You can submit a separate application to vote in European parliamentary elections). Register to vote or confirm your details are correct at https://www.cardiff.gov.uk/ENG/Your-Council/Voting-and-elections/How-to-register/how-to-register-to-vote/Pages/default.aspx

2)      Ensure all credit commitments are paid on time. These include loans, credit card, catalogue and contract mobile phones. II have had a client declined because of one missed mobile phone payment.

3)      Reduce your personal commitments. If you already have an existing loan or credit card this will reduce how much a lenders will advance. A rule of thumb is that the monthly payment is multiplied by 12 to show the annual cost. This figure is then deducted off your annual salary Eg if you are paying £200 per month the annual figure of £2,400 is then deducted from your salary. 

£25,000 – £2,400 = £22,600 x 4.25 = £96,050 (compared to £106,250 if no credit commitment)

4)      Size of deposit. The choice of lenders and mortgage product increases if you can fund a larger deposit. Their a few lenders that only require a 5% deposit. As an example if you can increase your deposit to 10% the choice increases from 57 to 283. Another benefit is a more competitive rate. The most dramatic improvement in rate and additional choice is when you can fund a 15% deposit. The improvement in rate and choice is more marginal after this banding.

5)      Evidence of income. Lenders are now looking for last three pay slips and latest P60. If you want to include overtime or bonus income you will need to supply P60’s for previous years. The choice of lenders plummets if you are paid in cash. I would recommend this is changed to direct transfer. If this option is not available I would pay the full cash amount into your current account as an audit trail. For self-employed ask your tax office for last three years personal SA302’s. Lenders are now requesting these in addition to tax returns.

This is not an exhaustive guide but should help you get a better mortgage.

Why use Neil Soundy Financial Services for your mortgage advice.

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Neil Soundy Financial Services Ltd is an appointed representative of HL Partnership Ltd which is authorised and regulated by the Financial Services Authority.

The Financial Conduct Authority does not regulate some forms of buy-to-lets.

We do not give or imply legal or taxation advice. We recommend you contact a solicitor or accountant for advice in these areas.

Think carefully before securing other debts against your home/property. Your home/property may be repossessed if you do not keep up repayments on your mortgage.

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