Top tips: How to get a mortgage post-MMR
In April the Financial Conduct Authority imposed tougher affordability checks on mortgage lenders in an effort to”put common sense at the heart of the mortgage market” and prevent borrowers “ending up with a mortgage they cannot afford”.
Ian Ramsden, mortgages director at TSB, said: “Though the MMR is usually recognised as a positive change by people who understand it, many still have worries as it remains shrouded in mystery. However, there’s no need to worry as TSB is here to provide practical advice for those who need it.”
According to TSB potential homeowners can improve their odds of getting a mortgage by doing the following:
– Check with your bank of building society how much you can borrow before searching for properties.
– Have realistic expectations about what you will be able to repay. Work out how much you can earn, spend and what you spend it on.
– Check your credit report.
– Save as much as possible. The bigger your deposit, the lower the cost of your mortgage is likely to be.
– Ensure you are on the electoral roll.
– If you’ve never had any borrowing, take out some form of credit such as an agreed overdraft or a credit card, but ensure you pay it back regularly to build your credit rating.
– Ensure you have a plan in place to repay any existing debt before you borrow more.
– Improve your understanding of mortgages. Check out the Money Advice Service or speak to a mortgage adviser.
Ramsden said: “Don’t panic, but do preparte for your mortgage application with some straightforward, simple steps: break down your finances, work out how much you can afford and aim to future-proof your mortgage as far as possible by discussing plans with your mortgage adviser.”