How to prepare for a mortgage application
The right preparation can improve your chances of mortgage approval. Here’s 8 steps to get mortgage ready, from getting your finances in order to checking your credit record.
As a first time buyer, the mortgage application process can seem daunting. You’ll need to gather lots of financial information, and there are so many new terms it can seem like learning a new language.
Get prepped for your mortgage application with these 7 steps, and increase your chance of success.
1. Save for a deposit
If you’re a first time buyer, you’ll need to start saving for a deposit. If you own a home already, find out how much equity the property has and whether you’ll have enough deposit for the house you want to move to.
Our guide: How do mortgage deposits in Ireland work? includes how much deposit you’ll need and tips to reduce your spending.
Set up a standing order to save an affordable amount each month. Keep the money in a separate account so you’re not tempted to spend it.
2. Check your credit record
Your credit record affects what you can borrow, so you should check your report before the lender does. Here’s how to check your credit record for free and what it means.
If you’ve got arrears on your report, you may need to wait until your finances are more stable before taking on a financial commitment like a mortgage.
Our guide How to get a mortgage if you have bad credit, explains how a poor credit history can affect your mortgage application, with tips on how to improve your credit rating.
If you’re self employed, chase any outstanding invoices and keep your accounts up to date. Here’s how to get a mortgage if you’re self-employed.
You’ll be required to produce bank statements and credit card statements for review. Keeping your general spending to a minimum will help increase your borrowing potential.
What happens next?
Once you’ve found a mortgage deal, you can start the mortgage application with your chosen lender.
Start your mortgage application
The first stage of your application is often to get a mortgage Approval in Principle (AIP) which is an indication of what the lender will give you, but not a guarantee. If you get AIP, you’re a step closer to full mortgage approval.
The interest rate used for the AIP isn’t necessarily the final rate you’ll get, as the property price may change by the time you drawdown the mortgage.