So you may want to make some changes before you apply.
What is the “Lifestyle Test”?
In April 2014, the rules on mortgage lending changed. To stop people borrowing more than they can really afford to pay back, all mortgage companies now have to to carry out extra checks. These include looking in detail at your spending habits and financial commitments, as well as whether you’d be able to afford the repayments if interest rates went up. This affects people seeking a re-mortgage, as well as first time buyers.
Improve your chances of getting a mortgage
If you looking for a mortgage, you may want to do your own ‘lifestyle test’ and make some changes. Most of us can find ways to save here and there. Anything you can do to minimise your outgoings will help your application. And will help you save for all the things you’ll need in your new home too.
Here are 4 things you can do now to help make your mortgage application more likely to be accepted.
1. Know your finances
You’ll need to show where your money goes each month, and may have to justify some of your spending. Use the Post Office Budget Calculator to track your outgoings.
2. Pay off debts
If you have any credit card debts or outstanding loans, it’s best to clear these before you apply.
3. Cut down on non-essential spending
This includes going out, take-aways, beauty products, and new clothes.
4. Cancel subscriptions
If you rarely go to the gym, cancel your membership. Look at all your direct debits on your bank statement and cancel anything you don’t absolutely need.
How much can I borrow – mortgage calculator
Find out how much you might be able to borrow with our Mortgages Calculator.