Barratt urges County Durham homebuyers to get mortgage fit
Housebuilder Barratt North East is urging first time buyers in County Durham to make sure they get ‘mortgage fit’ during this summer of sport, to avoid the disappointment of being beaten in the race to secure their first home.
Getting a mortgage remains the biggest issue for potential buyers, with many unaware of how the barriers can be overcome.
By following a series of simple steps they can make themselves more attractive to mortgage providers – which means not only getting a loan but getting a cheaper rate as well.
Adrian MacDiarmid, Barratt Group Head of Mortgage Lender Relations said: “Lately we’ve had a few signs that things are finally starting to ease up, including the introduction of the Government-backed NewBuy 95 per cent mortgage scheme.
“So we’re encouraging potential buyers to make themselves as attractive as possible to a mortgage provider and have released our top five tips to making yourself ‘mortgage fit’.
“A person’s credit score helps lenders to decide not only whether you are eligible for a mortgage, but also how good the interest rate is. It can be affected by a number of things, from missed bill payments to lack of information, which you might not even consider.”
1. Check your score
First of all, check your score. You can do this quite easily online with the two main credit reference agencies, Experian and Equifax. Ensure all information is correct and if it isn’t, write to the agency and request that they change it. If you have a poor score, you will be able to start making changes to improve it.
2. Understand your limits
If you have existing credit such as credit cards and loans, you must ensure that you keep up with the minimum repayments. If you are really struggling to pay, speak to your lender as this may show favourably on your credit score. Similarly try not to exceed 30 per cent of your credit limit, if you do, lenders may view this as ‘excessive’ debt.
3. The family connection
Details of your family’s credit score are not kept on your file, so long as you don’t have any joint finances. So if a family member, partner or housemate has a poor credit score, keep your finances rigidly separate. This includes joint accounts and bills under both names. If you do, you are likely to be co-scored and this could stop you securing a mortgage.
4. It’s all history
You may not realise, but those with no credit history are often viewed as less credible as lenders have no information to base their decision on. Although you should never get in debt to build up a credit history, by taking out a credit card and using it regularly (ensuring you pay off the bill at the end of the month with a direct debit) you will begin to build a credit history. Another good way to build your score is by taking out a mobile phone contract.
5. Get on the electoral roll
You should try to show lenders that you have a ‘stable’ lifestyle, for example you are in full-time employment and live at a fixed address. If you aren’t already, register for the electoral roll as you’re unlikely to get credit without it. Also, if you can, provide information such as a landline number rather than a mobile number.
Now you’re ready to apply for your loan.
Adrian added: “By following these steps now, purchasers should find that they are in good stead for securing a mortgage when the time comes to getting a foot onto the property ladder.”
Barratt North East has first time buyer properties available with a variety of helpful purchase schemes at Beechwood, Sacriston; Berry Edge, Consett; Burton Woods, Spennymoor; Teal Park Farm, Washington and The Limes, Coxhoe.
Prices start from £101,500 for a 2-bedroom home and £122,000 for a 3-bedroom home – for more information, visit barratthomes.co.uk.
