Mortgage Mistakes to Avoid

Written on 30 May 2023 by Nicholas Mendes

Mortgage Mistakes to Avoid

Whether you’re a first-time buyer or seasoned property owner, moving home can be a stressful experience. Finding the right property, putting your home on the market, getting the mortgage agreed with the lender, organising surveyors and speaking with conveyancers – you go through all these steps months before the big day itself is upon you and it’s finally time for exchange and completion. Obviously, without any help, this can all be a bit much.

Typically, the average Brit moves home 4 times in their lifetime - and it never gets easier how much of a pro you are.

L&G polls highlighted:

  • Moving house is considered the most stressful thing you can do – topping the poll with 57% of respondents, followed by 32% who chose “having a child”, and 30% who said a divorce or breakup was the most stressful
  • Almost 1 in 2 movers (47%) said they experienced increased stress levels due to moving
  • Money worries are a big deal for buyers – 40% said what they dread most about moving is not having enough money to cover unexpected expenses
  • More than 1 in 4 (27%) of people aged 18 - 24 said they would not consider moving again – the highest of any age group

You may not be able to control or prevent issues occurring at every single stage considering all the pressures that come with moving home but there are certainly steps you can take to make your life easier when it comes to getting your mortgage approved.

Here are some mistakes you can avoid to help your moving home journey much easier.

Not Getting an Agreement in Principle

There are typically 2 types of clients when it comes to getting a mortgage. Those that ensure they do their due diligence and those that do not. Although there isn’t a requirement to get an agreement in principle with a lender before having an offer accepted on a property, getting this done first will avoid a heart-breaking moment where you find out you cannot borrow enough for the property you’ve set your sights on. Getting an agreement in principle will ensure you know how much you can borrow, what it will cost and what properties are within your budget. This is very important, especially since we have seen average mortgage rates increase in recent months which has reduced how much clients can afford to borrow.

Not Seeking Mortgage Advice

Speaking with a broker is vital to ensure you’re getting the best deal on the market. Some lenders only offer mortgages through intermediaries and, with rates slowly reducing, it’s essential to ensure you have a qualified experienced broker or mortgage adviser that can help you get avoid any delay, increase the chances of success when it comes to getting a mortgage, and also keep you informed if rates reduce during the application process so you don’t miss out on benefitting from any rate reductions.

Not Checking Your Credit Score

As an applicant applying for credit it’s important to make sure that your credit score and history are in the best shape possible to ensure a lender will look favourably on your application. This is not to say that those with adverse credit or recent missed payments won’t be successful when applying for a mortgage, but that, by having a healthy clean credit file (or improving your score since any bad credit events), you will benefit from getting the best rates available for your situation - meaning cheaper monthly payments overall. Checking your file across the main 3 credit reference agencies – Experian, TransUnion and Equifax - will ensure you have nothing registered against you. You also want to ensure you continue to pay your bills on time, are on the electoral register and avoid any unnecessary hard searches on your credit file.

Taking on Debt

Applying for loans or finances prior to a mortgage application or during an application is not advisable. Lenders assess your affordability and sustainability by considering both your income and expenditure. By taking on additional debt this will have an adverse effect on how a lender assess your affordability and as a result reduce your maximum borrowing. Applying for loans or finance during an application can cause a lender to make changes to their assessment and even reduce or decline the mortgage. It’s best to avoid taking on new debt if you can when you’re looking to submit a mortgage application!

Changing Your Circumstances

When lenders assess your income, they also look at sustainability. Changing jobs regularly or worse, changing your job before an application can have a detrimental effect even if you’re going to receive a pay increase. Lenders want to ensure that the mortgage remains affordable – and some lenders can take a negative view on probation periods because there’s an element of uncertainty. Likewise, going from employed to self-employed despite being in a similar position financially can impact your mortgage options, especially as lenders assess income differently for employed and self-employed applicants.

Withholding Information

When you apply for a mortgage, it’s important that you’re truthful and honest to the mortgage adviser and the lender. Withholding information or not disclosing information can result in a lender pulling the mortgage at the last moment. For example, if you have recently gone on maternity leave and do not disclose this to the lender, it will likely be picked up on payslips and bank statements which could negatively impact your application. Being honest with the lender will help them to understand your circumstances and lend responsibly, which benefit you in the long run. For example, you should disclose if you’ll be working reduced hours as this would affect your income, or if you have a dependent as the additional cost would need to be factored in.

How Can John Charcol Make Moving Home Easy for Me?

At John Charcol, your mortgage for your future home is in the safest hands. Our experienced advisers are with you at each step of your mortgage journey. Not only do we find you the best mortgage for your situation and manage the whole application – we can even find you a suitable conveyancer, arrange protection and home insurance, as well as help you move in and set up your bills.

Our partner Just Move In are experts in moving home and will manage the entire moving ordeal; from the move itself to setting up your broadband, they’ll organise it for you, completely free of charge. Most people will save around £300 a year and up to 8 hours of hassle by using their service. Together, John Charcol and Just Move In can guide you through the whole process – from the very beginning of your mortgage application to the day you move into your new home. We take care of it all for you.

Moving home really doesn’t need to be terrible. It can actually be very exciting! You just need the right help. Get in touch today on 0330 433 2927 we’ll make sure you get the most out of moving home.

Category: Nicholas Mendes