Member Article

Be prepared and win the mortgage battle

In the battle of the banks and building societies, the winner could be the person prepared to prove they are a responsible borrower says financial expert Daniel Bailey.

Interest rates are currently at an all time low and lenders are currently competing with each other to find new business.

But that change in bankers’ attitude comes just at a time when interest in property is finally showing signs of recovery, making it the perfect time to look for a favourable mortgage deal, says Daniel Bailey, the founder and owner of Derbyshire-based Middleton Finance, recently nominated in the Mortgage Adviser of the Year category of the prestigious unbiased.co.uk Media Awards.

Latest figures from the Bank of England show that the cost of two- and five-year fixed-rate loans has fallen since the autumn.

In January, borrowers with a 25 per cent deposit to put down were typically being offered loans around 0.2 percentage points cheaper than in October, while those with just a five per cent deposit have seen bigger falls – the cost of a five-year fixed-rate deal at 95 per cent fell by half a percentage point.

To get the best deal from the banks, though, Daniel says the secret is to be fully prepared with all the information lenders need to see.

“The first and simplest step is to make sure you can provide an up-to-date credit report,” Daniel explains.

“This is very easy to achieve as you can do it online for free and it will give you as well as the lender a better idea of your financial status.

“The second thing is to make sure that your name is on the electoral roll because it is one of those things that lenders look at when they are investigating your reliability – and if you are looking at a 90 per cent mortgage and are not registered you’ll almost certainly be rejected!”

Similarly, Daniel says, it is advisable to have a stable address history – changing residence five times in 12 months immediately provides a red flag to potential lenders.

“Fourthly, you must be able to show that you can service and manage debt responsibly, either through proof such as credit card bills or a general loan,” he says.

“And in addition to that, do make sure you have a well conducted bank account.

“Throughout the whole process it’s all about being able to prove that you are a person who can be trusted with a mortgage, that you are not a bad risk.

“The banks and building societies may be keen to have your business but the days of the easy mortgage are long gone so be prepared to demonstrate that you are somebody they want to do business with.”

For further information visit www.middletonfinance.co.uk or follow Daniel on Twitter @mortgagedanny

This was posted in Bdaily's Members' News section by John Highfield .