You've saved a deposit, found the perfect house, and now need a mortgage: what could go wrong? Don't make these 11 mistakes that could ruin your plans.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
You can only get some mortgages if you:
Have a large deposit
Have a clean credit record
Are not older than its maximum age
Meet other requirements, e.g. earning more than its minimum income
Applying for a mortgage you can't get delays the purchase and could mean it falls through. If you paid a fee to apply, you usually won't get this back.
Getting turned down for a mortgage can also harm your credit record, which makes it harder for you to get accepted next time you try.
Avoid white lies when you apply, even if you think it will help your chances. This includes claiming you:
Have a larger deposit than you really do
Earn more than you really do
Have a full time job if you don't
Will live in the house yourself, but you intend to rent it out
Lenders check the information in application forms and need evidence for some of it. They will decline your application if they find out you lied, and you could even be prosecuted for fraud.
When you fill in details of what you earn, get it right because:
Saying you earn more could mean your application is rejected when the lender checks your salary
Saying you earn less could mean your lender thinks you can't afford the property you want
Find out exactly what you earn before you apply. If you get bonuses or commission, enter these separately instead of adding them to your basic salary.
Check if you need to enter your annual or monthly salary to avoid claiming you earn £2,000 a year if this is actually your monthly pay.
Looking after children is expensive, so lenders consider this as well as how much you earn when they calculate if you can afford a mortgage. If it looks like you several children, your income would need to be extremely high to get a mortgage.
Fill in your mortgage application carefully, especially if you complete it online because your browser's autocomplete feature could get the information wrong.
If you miss anything off your application form, this could delay your house purchase or even mean you get rejected. Don't forget to include:
If you have a second job, because the extra income could help your chances
If you moved house in the last three years as they'll need your old address too
If you have to make regular childcare payments
Where your deposit came from, e.g. you saved it yourself or it was a gift
Ask a friend, family member or your solicitor to check your application form for mistakes or missing information before you submit it.
If you apply through a mortgage broker they should check your application for you to make sure everything is correct.
Many of the mortgages with the lowest interest rates have application fees.
These fees can cost thousands of pounds but could save you money if they mean you get a much cheaper mortgage.
Work out how much each mortgage costs long term by adding up the monthly payments and the fees to get the total amount. This means you won't accidentally apply for a mortgage that's more expensive than you realised.
There are several fees and costs you have to pay when you buy a house, including:
If you don't have enough money saved to pay for these, your purchase could fall through or you could get into debt if you borrow money to pay for them.
Here is how to work out how much buying a house costs in total so you can make sure you can afford them all.
Mortgage offers are only valid for a limited amount of time, so check the expiry date on:
Your mortgage in principle, which lets you know how much you can borrow and usually lasts 30 days to six months. Make sure it gives you long enough to find a property, put in an offer and agree a final price.
Your full mortgage offer, which can last for around six months. Check it gives you long enough to complete the full process of buying the house.
Make a note of when the offers end, and add them to your email, phone or Cliff Richard calendar. If the purchase hasn't gone through in time, ask your lender to renew or extend their offer.
Changing your name or address while you buy a house is possible. But it can slow down the application process because your lender will need to update your details.
However, getting a new job can cause problems, especially if you earn less in your new role. Here is what happens to your mortgage application if you change your job.
Applying to borrow money with a credit card, overdraft or loan can also scupper your chances.
This shows on your credit record. Borrowing extra money when you get a mortgage could make your lender worry about if you can afford a mortgage.
The wrong mortgage broker could be:
Expensive if they charge high fees for their service
Not whole of market, meaning there are some mortgages they can't offer you
This means you might not get the cheapest deal or have to pay hundreds of pounds more for the broker's advice.
There are dozens of lenders and hundreds of mortgages available in the UK. Just choosing one from your usual bank or building society means you are very unlikely to get the best deal.
Our mortgage comparison tables include every deal you can get in the UK directly from lenders. Use them to find the cheapest mortgage that accepts you.
Alternatively, you can contact a mortgage broker here for advice and help finding the right mortgage.