According to Zoopla's recent research, UK homeowners are expecting house prices to rise by 4.5 per cent over the next six months – a sign of significant confidence returning to the housing market.
Couple this with other research from Zoopla that reveals that the number of properties currently for sale that have been reduced in price since first coming onto the market has fallen to its lowest level in almost three years, and we have a positive picture emerging.
Despite this, buyers are in some instances struggling to secure a mortgage. Here are eight handy tips to get them on the right track:
1. Speak to a good independent mortgage broker about what is available and what you can afford, then get all of your financial documents in place. Said documents include pay slips, bank statements and contracts of employment.
2. We strongly recommend buyers – in particular first timers – to get their mortgage agreed in principle before they start looking for a house. Having this in place will mean that you know for certain how much money you can borrow and you can get the purchasing process moving quickly.
3. Perform a credit record MOT, by checking and cleaning up your credit record. Also, if you're not registered on the electoral roll, that can seriously hamper your chances of getting a home loan. When a lender does a search on an applicant and discovers they aren't on the electoral register, their immediate reaction is to wonder why and whether they might be hiding something.
4. Talk to your parents, known for the purposes of this blog as the bank of Mum and Dad. We don't need to tell you how insanely difficult it is to save for a deposit and if parents can't help with cold hard cash, they may be able to use the equity in their home (speak to your broker about this) or act as a guarantor.
5. Get a credit card! Having no credit history makes lenders twitchy – best to use a credit card and repay in full each month, so you can prove you can manage credit responsibility.
6. Don't go over your overdraft limit for your current account for at least three months if possible – show you're in control of your finances, which means no bounced cheques.
7. If you're self-employed, be prepared to be treated as a second-class citizen by the banks, who haven't yet caught on to the notion of freelance employment as being a viable model. It's likely you'll need to provide more paperwork and answer even more questions.
8. Don't get trigger happy and keep applying for mortgages. If you do this over a short space of time, these applications can impact your all-important credit rating.
If you make sure these all-important points are taken care of before you go looking for a mortgage, your chances of success will be increased considerably!