Common mortgage mistakes to avoid

1. Not checking your credit report before applying

Your credit report is an important factor that mortgage lenders consider when reviewing your application. It helps them understand your credit history, and a lower score might impact your chances. By checking your credit report early, you can catch any mistakes or areas that might need attention, like missed payments, so you can address them before applying.

What to do: You could regularly check your credit report with one of the three big agencies, these are Experian, Equifax, and Trans Union UK and dispute any errors you find. If your score needs a boost, try and pay back any outstanding borrowing before applying. For more information, visit our guide on how to improve your credit score.

2. Overstretching your budget

It’s natural to be excited about a home you love, but it's important to keep your budget in mind to avoid financial strain later on. While lenders do their own affordability checks, it's also helpful to take a moment to review your own finances and make sure you're comfortable with the mortgage payments, alongside your other expenses. This way, you can feel confident in your decision for the long term.

What to do: Use mortgage affordability calculators to get a clear picture of how much you can borrow without stretching your budget too thin. Factor in future changes, such as potential interest rate increases. Check out our mortgage calculators for help.

3. Ignoring the deposit

While it’s possible to get a mortgage with a small deposit, a bigger deposit reduces your loan-to-value (LTV) ratio, making you more attractive to lenders. The higher your deposit, the lower your interest rate, meaning you’ll pay back less over time.

What to do: Try and save as much as you can each year to maximise your deposit If you’re struggling to save, consider ways to cut back on spending or look into government schemes that can help first-time buyers. Learn more about how much mortgage deposit you need.

4. Failing to shop around

Different lenders offer various deals, compare rates, fees, and terms to find the best fit for your circumstances. Some deals may seem appealing at first, but they could come with hidden fees or higher interest rates over time.

What to do: Take the time to compare different mortgage products from a range of lenders. Don t be afraid to ask questions and seek advice from a Mortgage Adviser if you re unsure. Remember, the more informed you are, the better decision you can make. You can start your journey by exploring our mortgage eligibility criteria.

You can also make an appointment with us via video or telephone. You can find out more about ways to bank over on our website.

5. Applying for multiple mortgages at once

When you apply for a mortgage, the lender will do a credit check, which may have a small impact on your credit score. If you apply to multiple lenders in a short period, it could result in several checks, which may slightly affect your score and could make you appear as a higher risk borrower. To avoid this, it s a good idea to limit applications and take your time to find the right fit.

What to do: We always recommend that customers get a Mortgage in Principle, Agreement in Principle, or Decision in Principle different lenders may use different terms but this process involves a soft credit check and gives an idea of how much you could borrow.

6. Not understanding the mortgage product

Mortgages come in all shapes and sizes, there are fixed rate, variable rate, interest only, and more. It's crucial to understand how each product works and which one suits your financial situation best. For example, a fixed rate mortgage offers predictability, while a variable rate mortgage may come with lower initial payments.

A fixed rate means you'll pay the same interest rate for the life of the mortgage product (though your first payment may be slightly higher), after which you'll move onto the standard variable rate, giving you the opportunity to explore other mortgage rates.

What to do: Take the time to research the different types of mortgages. If you're unsure which one suits you, dont hesitate to ask a Mortgage Adviser for guidance. You can check our mortgage guides for more detailed information.

7. Ignoring extra costs 

Beyond the monthly mortgage payments, there are some additional costs associated with buying a home, such as stamp duty, legal fees, surveys, and home insurance. Failing to account for these can lead to financial strain when they crop up unexpectedly.

What to do: Budget for all additional costs before applying. If you're unsure about the total costs involved, seek advice from a Mortgage Adviser to ensure you're fully prepared. For help with understanding these costs, visit our guide on practical steps for buying your first home.

8. Underestimating the importance of timing 

The timing of your mortgage application can affect your success. Applying at the wrong time, such as when interest rates are high or before you have all your documentation in order, can lead to unnecessary complications.

What to do: Ensure you have all the necessary documents prepared before applying, such as proof of income, bank statements, and ID. Also, stay informed about the current economic climate and mortgage rate trends. You can start by checking the mortgage eligibility criteria to ensure you're on the right track.

How TSB can support your application

At TSB, we’re here to help you through every step of your mortgage journey. Whether you're a first-time buyer or a seasoned homeowner, our Mortgage Advisers are on hand to guide you through the process with clear advice, practical tools, and the support you need. For help, feel free to visit our Help & Support page.

Key takeaways

• Check your credit report early to avoid surprises.
• Don’t overborrow - stick to a budget you can afford.
• Save a bigger deposit to increase your chances of a lower rate.
• Start with a mortgage in principle to limit multiple applications to protect your credit score.
• Understand your mortgage product before signing anything.
• Account for extra costs involved in buying a home.

By being proactive and informed, you can avoid common mortgage mistakes and feel more confident throughout the process. And if you need guidance along the way, we're here to help. You can find more information on mortgages and apply online at TSB Mortgages.

18+ and UK resident only. Subject to status and lending criteria.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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