Frugality Matters When Applying For A Mortgage
If you want to enhance your chances of arranging an affordable mortgage, you need to improve your finances. There is a lot to be said for making sizable changes which help you apply for a mortgage, but you should also consider the smaller steps which make a massive difference when applying for a mortgage.
John Ellmore is the Director of KnowYourMoney.co.uk and he spoke to the Express on the importance of frugality when applying for a mortgage.
John said; “Within recessions, consumers who have fears over their income or finances ought to be strict with themselves and get into the habit of making sensible financial choices. A good starting point is to review bank statements to understand incomings and outgoings – and many will be surprised by just how much they are spending. Throughout the lockdown period, many consumers attempted to overcome boredom with online shopping, for example.“
Life is moving forward
There is no denying lockdown transformed the way many people live and engage with others. Even though the economy and life is moving forward, things aren’t exactly returning to their old ways. Buying habits have been transformed.
Research by KnowYourMoney indicates 23% of adults in the UK felt they spent too much money on online shopping during lockdown. This is understandable, but it is not sustainable. There is a need for people to review their finances, and if it is possible to make savings, they should do so as effectively as they can.
John Ellmore also spoke on this matter, saying; “So, a thorough audit of one’s finances will enable consumers to identify and eliminate needless or excessive spending. Additionally, a financial audit will allow consumers to review their larger expenses and see where savings could be made. After all, UK households spend an average of £34.40 a week – or £1,788.80 a year – on utilities (gas, electricity, water etc.), according to the Office for National Statistics. It underlines the importance of shopping round for the best deals – comparison websites are a great place to start with this, as they do the legwork for consumers.“
Do you need help reviewing your finances?
There is a lot of help available to ensure people manage their finances better. When it comes to the stage of applying for a mortgage, there are skilled and experienced brokers on hand to offer effective guidance.
However, applicants can enhance their chances of arranging a suitable mortgage by being proactive. Rather than waiting to speak with a mortgage broker and making changes, would-be buyers should review their finances now and make suitable changes.
John Ellmore also said; “Making the most of savings tools provided by some banks can also make a big difference to one’s financial health. For example, some banks give consumers the option to ’round-up’ on every purchases; this means that every time a consumer makes a purchase – such as a cup of coffee costing £2.70 – the consumer is able to round up the price to the nearest pound and put the difference into a savings account. Over time, these little contributions really add up.“
While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.