Britons looking to remortgage now pay £1,000 more – 5 application tips to ensure you get the best deal

The increased borrowing costs have heaped pressure on Chancellor Rachel Reeves in recent days, as around a quarter raised from tax increases will go on interest payments.

The biggest financial commitment that most people will make during their lifetimes is applying for a mortgage and it’s understandable that applicants will want to get the best deal possible.

An expert shared tips on making the process easier

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Here are my five top tips for making an application to ensure you get the best deal.

Manage your credit score

It is pretty vital that you get a copy of your credit report before applying for a mortgage. It can be obtained from credit reference agencies such as Experian, TransUnion, and Equifax, but if your score is a disappointment, there’s a lot you can do to boost that.

You can check that you are on the Electoral Roll, which is essential, and close down credit card accounts that you don’t use. It’s important to consider your history of repaying debts, as lenders will look back over the past six years as a way of considering if you manage your finances responsibly.

A poor credit score will not necessarily rule out the chances of being successful though it will reduce them. Also, errors do happen and it is highly recommended that you check your report and get any corrected.

Work out a budget

You will almost certainly be turned down if you cannot afford the payments on a mortgage, so it will pay to take a bit of time out and look at your income and expenses. Also, make sure you have enough spare to cover the associated costs and fees that go with buying a home.

There are online guides for first-time buyers that you can use to estimate those costs, as well as mortgage calculators to help you do the maths to work out your monthly budget.

You might also think of saving up for a deposit, as the bigger the deposit you can offer, the wider the range of options will be. Decent deposits result in better interest rates and lower monthly payments.

You might consider buying jointly with someone else if your credit score is a concern, as you will boost your chances if they have a better credit score.

Stay in your job

Lenders like to see that you’ve been in employment for a decent length of time and this forms part of the considerations when approving a mortgage. If you have been thinking you might need a change, maybe hold on to that thought and consider hanging on in there until you get the green light.

It’s ideal if you have been in your job for three to six months before applying. It’s not going to be a deal-breaker if it’s less but it’s best to check if your lender is happy if you are in a probationary period.

Try to reduce debt

If you have large amounts owing on credit cards or loans, prospective lenders will want to know. If you are able, it’s a good idea to plan ahead and pay off some of those to reduce your outgoings and this will improve your position before you apply.

You will also need to strike a balance between having too much credit available and being too close to your limits. Lenders prefer those who are using less than half of the credit available to them, but too much credit is a risk for them as you might spend it all after securing a mortgage.

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A good balance tells lenders that you can manage the money you borrow responsibly, and they may even be able to offer you more than you planned to ask for. Also, avoid applying for other credit before you apply for a mortgage and stay out of your overdraft.

Prepare proof of income

A lender will want assurance on how much you earn, so you will need to fish out the P60 form that your employer gives you each year. You’ll also likely be asked to provide three months’ worth of bank statements and payslips, or accounts if you’re self-employed.

Lenders will usually want to see your SA302 form for the last three years from HMRC or full accounts. You’re unlikely to be accepted if you don’t have those.

Get your figures straight before applying, as lenders may want to re-assess an offer if these change further down the line. If you are rejected, avoid re-applying right away as this will adversely affect your credit score.

Take care of how you appear on social media as well, as lenders are increasingly looking online when checking applications.

Property expert Jonathan Rolande is the founder of House Buy Fast