If you’re thinking about buying a home in the next 12 months, now is the perfect time to start preparing. Getting mortgage-ready isn’t just about finding the right property, it’s about making sure your finances, credit, and paperwork are all in order so that when the time comes, you’re in the best position to secure a great mortgage deal.
As mortgage brokers, we help clients every day who wish they’d started planning earlier - so here’s what you can do over the next 12 months to make buying a home as smooth and stress-free as possible.
1. Check & Improve Your Credit Report
Your credit report plays a big role in how much you can borrow and the interest rates you’ll be offered. It provides lenders with a detailed overview of your credit history, including your payment history, outstanding debts, credit utilisation, and any negative marks such as late payments, CCJs or bankruptcies.
Even minor blemishes on your credit report can significantly impact your mortgage application. They can lead to higher interest rates, lower loan amounts, or even outright rejection of your application. Therefore, it's crucial to take steps to improve your credit score before applying for a mortgage. This may include paying down existing debts, making timely payments on all bills, and correcting any errors on your credit report.
The good news is that small improvements in your credit score can translate into significant savings on your mortgage over the long term. By taking the time to review and improve your credit report, you'll be in a much stronger position when you apply for a mortgage.
- Check your credit report using a service like CheckMyFile - they compile a report from all credit reference agencies.
- Make sure you are on the electoral roll - it can help boost your credit score. To check you need to contact your local Electoral Registration Office.
- Pay bills and credit cards on time - this helps build a strong payment history. It’s sensible to pay by direct debit where possible so that you never miss a payment.
- Avoid taking out new credit, for example loans, car finance, Klarna, Credit cards.
- Reduce existing debt, where possible, as lower credit usage can improve your credit score, For example you could pay more than the minimum amount off your credit card bill each month, or divert some of your savings toward paying off loans.
2. Start Saving for Your Deposit & Costs
The bigger your deposit, the better mortgage deals you’ll have access to. Most lenders require at least 5-10% of the property price, but 15% or more can open up better interest rates.
- Work out your target deposit amount based on the house prices you are looking at. You can use our mortgage calculator to help you.
- Set up a dedicated savings account that you won’t dip into! If you don’t trust yourself, look for accounts that have restrictions such as “notice savings accounts” which require you to notify your bank or building society in advance of withdrawing any money. The notice period can be 30 to 180 days, but if you will be relying on the savings for your mortgage deposit, look at the lower end of the notice period options so that you can get hold of your money in enough time.
- Remember to factor in additional costs such as Land and Buildings Tax, Legal Fees, Moving Use our LBTT calculator to work out the tax implications, and start getting quotes for the other fees as early as possible.
- If someone is gifting you money, clarify how much they will be gifting you.
3. Understand How Much You Can Borrow
Most people think they know how much they can borrow - but lender affordability checks vary massively. One lender might offer you significantly more than another based on their specific criteria.
- Speak to a mortgage adviser, us, to get a realistic affordability check. You might be pleasantly surprised as we can use our market knowledge to look into lenders who have criteria that benefit your specific circumstances.
- Get a Decision in Principle (DIP/AIP/MIP) to get your provisional approval.
- Plan ahead of any job changes or income adjustments.
4. Reduce Your Monthly Outgoings
Lenders assess your disposable income, so trimming unnecessary expenses can increase how much you can borrow.
- Reduce subscriptions, memberships, and unused services. Go through your bank statements, Paypal account, and Apple subscriptions and cancel any that you don’t need.
- Try to pay off or reduce credit card balances and loans. Even paying a small amount over your minimum payment each month can make a difference.
- Avoid large, unnecessary purchases on credit before applying for a mortgage.
5. Get Your Documents Ready
Lenders will need proof of your income, identity, and financial stability. Having your paperwork ready in advance avoids delays.
- Last 3 months payslips (or 2 years accounts if self-employed).
- Bank statements to show regular income and responsible spending.
- Proof of deposit (savings statements or letters of gift).
- Proof of name and address.
6. Start Researching Areas & Property Prices
Even if you’re not ready to buy today, having a new home wish list will make the process easier later.
- Research house prices in different areas and compare them.
- Consider transport links, schools, local shops, and future developments.
- Keep an eye on the market to understand trends and pricing changes.
7. Speak to a Mortgage Broker Early!
Many buyers make the mistake of waiting too long before getting mortgage advice. Speaking to a broker early means:
- You know your true borrowing potential.
- You can fix any financial issues before applying.
- You get access to lenders you wouldn’t find on your own.
- You can secure better rates when the time is right.
Buying a home is one of the biggest financial decisions you’ll ever make, and preparing early can save you time, money, and stress. If you’re planning to buy within the next 12 months, now is the time to start getting mortgage-ready.
