Buying a home can be an incredibly stressful process, but ensuring that you’ve got an adequate credit score can be the key being accepted for a mortgage. By the time you reach the completion stage, you’ll have tackled various obstacles and challenges – some expected, some unforeseen. Mortgage acceptance can be the toughest part of acquiring a home to call your own, and the wait to discover whether you’ve been given the green light can be extremely tense. A credit score is essential in any case. If you are worried about forgetting something, you should refer to this buying a property checklist from Experian.
There are many things that can hinder your progress even if you have a high salary and a good credit score. Some people have been turned down due to factors that may seem insignificant. This has meant that many budding homeowners have had to head to other mortgage companies instead – paying more as a result. Getting a copy of your credit report is essential if you are to apply for a mortgage as it will give you a detailed idea on where you stand and what the likelihood of acceptance is. If you find anything on it that is incorrect, you can ask for it to be amended by the relevant agency and put your application in better stead.
The risk of negative equity
Negative equity is a big risk. There are many reasons why your property’s value may slip to much less than the amount you borrow, but you should think carefully about whether there is a chance this might happen. Proximity to commercial properties like pubs and shops can be a big risk, especially if there is a chance that the local environment will become less desirable and your home will fall in value. If a mortgage lender suspects that there is a chance this might occur, they may well turn down your application.
For most mortgages you will need to have saved up 10% of the deposit. People with poor credit histories can benefit from things like sub-prime mortgages but generally have to pay a higher deposit and are faced with bigger interest rates. You may also wish to seek professional advice before completing an application form, as mistakes can also lead to rejection. You should get a solicitor on hand as soon as you start looking for properties, as you will come to rely on them the more things progress.
You will also need a surveyor to check the property you’re interested in for faults. Be aware that a lender may turn you down if the surveyor decides that property is worth less than the price tag attached to it. Your solicitor will communicate with you, the seller and their agent on your behalf. Once a deal is agreed and the bank has accepted your application, you can expect to pay 10% of the sum to the seller and the rest when the stage of completion is reached.