How to Improve Your Credit Score in Middlesbrough

It’s crucial to any first time buyers in Middlesbrough when applying for a mortgage. Having a high credit score is a helpful factor. It ideally means a higher chance of you getting accepted and being successful with your application.

Although this doesn’t mean you’ll be guaranteed acceptance, though, each lender has their internal scoring systems.

Each lender has their criteria that they have developed over the years. Suppose you’ve failed with one lender not to worry. Mortgage lenders may be inclined to be more lenient, and it is down to your Mortgage Advisor in Middlesbrough to match you with the lender that’s right for you.

There are multiple credit reference agencies in the UK; we recommend Experian and Equifax. It is a good idea to look into many of these agencies as possible in advance, to give you a more specific idea of your credit score.

Furthermore, it is also plausible that some of these agencies hold inaccurate information. So, by checking with multiple agencies, you can be sure that this information gets appropriately amended.

Keep Credit searches to a fair amount:

Multiple credit searches can have adverse effects on your credit score. Be on guard of using price comparison websites which are known to be significant credit culprits searching on individuals.

If you are applying for a mortgage soon, it may be wise to apply for additional credit afterward.  Whilst having some credit and paying it back is a good thing for your score in the long run.

Lenders prefer to see you leverage your borrowings right before setting up a mortgage application.

Are you registered on the Voter’s Roll:

Making sure you’re registered on the electoral roll increases your credit score. It indicates stability which lenders like. Ensure your name gets spelt correctly and that it’s your current address which is registered online.

If you aren’t registered, it’s simple and easy enough to do this online.

Know your Maximum Limit:

If you max out your card each month, your credit score will get lowered. Utilizing a credit card to keep on top of your payments each month is a preferred method. It’s a good indicator of your lender that you are good at managing your money.

The main red flag in a lender’s eyes is if you exceed an agreed card limit or overdraft. The reason lenders watch over this is because they want to know you’re able to take your finances responsibly.

Check your Address History gets keyed correctly:

Sometimes it can get perceived on your credit report that you are living in two places at the same time if providers have yet to get told that you have moved houses.

It is pivotal that the addresses which you’re updating get spelled correctly; If you have been residing in a flat, this can be a bit more complex as the address can get formatted in different ways.

Keep up to date with Credit Accounts:

If you no longer use individual store/credit cards, you should get into contact with the providers to close the account for extra security. In the short term.

This could get seen as having a brief impact on your score as the lender can’t tell who’s closing the account, e.g. you or the provider, but this will be for the better and an advantage to you in the long run.

It’s a great thing to do to reduce your chance of becoming a victim of fraud if you don’t notice you have a lost a card which you may use regularly.

Many consumers feel that credit scoring is an unfair way of applications getting assessed through lenders themselves are indifferent to this idea as it makes their overall job more manageable.

It is more cost-efficient for them to operate this way and computers give more consistent outcomes. On the other hand, some lenders do still do it the old-fashioned way but still apply the same rules about the number of defaults and CCJ’s they will allow.

When setting up your application, be sure your report is up to date to increase your chances of being accepted the first time. The more in-depth information which your specialist mortgage advisor in Middlesbrough has at hand, the better.

Can I buy a Home With a Small Deposit in Middlesbrough?

The happy days of 100% and even 125% mortgages seem a long time ago. Now the credit crunch is behind us, and lenders tend to be more confident again to offer 95% mortgages to first time buyers in Middlesbrough.

It’s reasonable that you should show you can save each month. It also gives lenders comfort that you have something to invest in the process showing you have something to lose should it start to become more challenging to keep up your mortgage repayments.

We know it’s challenging to save up a deposit for many people, and this is their primary barrier to entry into the property market. It is daunting if you have a family or are in rented accommodation.

Is it better to invest more than a 5% deposit for a mortgage?

The higher the deposit the lower interest rate you will receive and this usually is more cost-effective and helps you in the long-term. The reasons for this is that you appear more reliable to them. Bands differ in price depending on various factors such as your deposit.

The percentage of your mortgage provides lenders with an idea of how invested you are to your mortgage, although considering – the higher the interest rate, the more expensive. This means that the higher your deposit, the more secure you will be when it comes to purchasing your dream home meaning you will be happier in the long term.

Can I take out a personal loan for the deposit?

In a limited number of circumstances, it can be successfully achieved. The Lender will make the monthly payment as an additional credit commitment, therefore, grant you a smaller mortgage.

As a result, one will qualify if you hadn’t borrowed the deposit. Most lenders oppose this as you are essentially borrowing 100% of the purchase price.

Do Lenders accept gifted deposits for a Mortgage?

Yes, most accept gifted deposits from family members and friends can be acceptable too. The sender of the gift will need to confirm it’s a gift, rather than a loan, and need to produce ID and proof of funds for anti-money laundering purposes.

Others have turned to the Bank of Mum and Dad, gifting their children funds towards a deposit.

Evidencing the Deposit

For Anti-Money Laundering purposes, providing bank statements help to evidence funds. Lenders like to see how the money is being built up as this provides more of genuine insight.

If you have deposited a large amount into your account, you may need evidence to support this.

For example, if you have sold a car, then you’ll need a receipt and the amount you have sold the asset for would match the amount paid into your bank account. This will highlight reliable sources backing up your finances.

• Large cash deposits can be a considerable obstacle.
• The longer funds have been in your account, the easier this all gets.
• Proving the source of the deposit (audit trail) can be the trickiest part of the application sometimes.

If you are selling a property, then the Memorandum of Sale provided by the Estate Agent is your proof.

Buying as a Sitting Tenant / Buying from a Family Member

Usually. If it is a genuine discounted purchase, i.e. the house is worth £100,000, and you have been offered it, for example £90,000, then some Lenders will accept this as your guaranteed deposit.

This works well if you are eligible for a Right to Buy from the Local Authority or other Social Landlord, our mortgage advisors in Middlesbrough can help you find the most suitable right to buy mortgage in Middlesbrough.