As new data from Moneyfacts suggests that banks have started raising mortgage rates at a rapid pace in the past few weeks, Equifax is reminding new and existing homeowners that their credit information can play a crucial role in their ability to make the most of the best offers. Lenders will typically look at an applicant’s credit history when determining whether they meet eligibility criteria and may also use credit information during affordability assessments.
“With more interest rate increases in July than at any point in the past year, according to Moneyfacts, homeowners could now be looking to protect themselves from potential increases in their mortgage payments in the coming months”, said Laura Barrett, Equifax Consumer Affairs. “Making sure they are ‘mortgage ready’ is an important part of that process and knowing what information is on their credit report is a key component.”
According to research amongst homeowners by Equifax earlier this year, nearly a third (32%) are planning to re-mortgage before the next interest rate rise. Recent activity by a number of lenders may well, therefore, be prompting them to start assessing their options. And getting the best fixed rate deal is likely to be a priority for many.
Some 53% of women responding to the research said they would move to a fixed rate mortgage, compared to 45% of men. For those choosing a variable rate, there were more men (10%) than women (six per cent).
A key factor for those considering applying for a mortgage is to be ‘mortgage ready’ and prepared to show evidence of all income and expenditure, as well as being realistic about what size of mortgage is affordable. Lenders want to see that an applicant will be able to repay their mortgage, not just now but in the future when and if circumstances change. Reviewing how repayments have been conducted with past and current agreements is one area mortgage providers will take into consideration. Lenders may view any missed payments as a sign that an individual is taking on too much debt.