Credit rat­ings and how lenders look at them

Harefield Gazette - - UXBRIDGE PROPERTY -

PLAN AHEAD:

Be­fore ap­ply­ing for a mort­gage, try to en­sure your credit re­port is as pos­i­tive as pos­si­ble by re­duc­ing any debt.

OB­TAIN­ING a mort­gage can seem like a very daunt­ing task, but it doesn’t need to be, as there are a num­ber of small things you can do that could greatly in­crease your chances of get­ting your dream home.

The main point to re­mem­ber is that ev­ery lender has a dif­fer­ent view of its ‘per­fect can­di­date’ to lend to. Just be­cause you don’t fit one lender’s cri­te­ria doesn’t mean you won’t fit an­other’s. There are many fac­tors that go into a lender de­cid­ing whether it can lend to you or not.These may range from the size of the loan you want to take out and your out­go­ing costs, to your credit rat­ing and em­ploy­ment sta­tus. Your credit score en­ables lenders to see that you have the fi­nan­cial means and dis­ci­pline that will be re­quired to pay back your mort­gage.

Key ar­eas lenders will check in­clude your his­tory of re­pay­ments, so if you have any ‘black marks’ where you have missed pay­ments on credit cards, cat­a­logues or any other ex­ist­ing debts within the last three months, this may hin­der your chances. Un­for­tu­nately, re­la­tion­ships break up, so if you have fi­nan­cial links to some­one else, such as a joint bank ac­count from a pre­vi­ous re­la­tion­ship, you should sever that tie. If your ex-part­ner, or who­ever the ac­count is linked to, makes a late pay­ment or any other credit mishap, it will re­flect on your own re­port. It sounds ob­vi­ous, but man­ag­ing your credit avail­abil­ity is im­per­a­tive when you are look­ing to se­cure the deal that you want. Your ‘credit’ isn’t just your credit card limit. It’s also your debit bal­ances on your bank ac­counts and over­draft lim­its. When ap­ply­ing for a mort­gage, your last three months’ ac­count state­ments will come un­der scru­tiny. Be­cause of this, it’s a good idea to avoid ap­ply­ing for credit at this time as it could lead to re­jec­tion, putting a dent in your chances.

Man­ag­ing your credit is just one ap­sect of en­sur­ing that you give your­self the great­est chance of get­ting the right deal for your cir­cum­stances.

Ap­ply­ing for a mort­gage can be a scary prospect, but, with the help of a pro­fes­sional mort­gage ad­viser, it doesn’t need to be. For fur­ther in­for­ma­tion con­tact Ro­mans Mort­gage Ser­vices on 0118 3219 536, or visit: ro­mans.co.uk/ mort­gages.There will be a fee for mort­gage ad­vice. The amount you pay will de­pend upon your cir­cum­stances. The fee is up to 1%, but a typ­i­cal fee is 0.3% of the amount bor­rowed.

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