Rightmove property price index: Experian response
Tuesday, 16 June 2015
In light of the recent Rightmove property price index, James Jones, Head
of Consumer Affairs at Experian Consumer Services, says:
“The 3% rise in house prices outlined by Rightmove as well as stricter lending criteria following the Mortgage Market Review (MMR), which came into play last year, mean it’s more important than ever for prospective buyers to be prepared when buying a property.
“Our recent research The Mortgage Muddle – One Year After the MMR shows that almost half of people (45%) have not been able to buy a property in the last year. Further to this, one in four feel that the MMR has directly impacted their ability to buy a house, and 63% understand that the MMR has made lenders more careful on whether buyers can afford repayments.”
“There is still a lot of confusion around the MMR’s terms though. This paired with rising property prices is only going to intensify the process for perspective buyers in the near future. We know that navigating the property market can be tricky but starting preparations as soon as you make the decision to buy can make a huge difference. Taking steps such as scrutinising your spending and working to get your credit rating in the best shape possible, will give people the best chance of being approved for the mortgage they can afford at the best possible rate.”
Here are some simple tips from Experian CreditExpert to help people prepare for a mortgage application:
1. Know what you have to spend: Consider what funds you can draw together to form your deposit. The size of your deposit will often dictate how much you face in terms of interest rates and lender fees.
2. Do your research: Use mortgage calculators and comparison websites or speak to a mortgage adviser to find out where the best deals are and what type of mortgage will suit your circumstances. Work out what you can afford to borrow and repay, both now and if rates rise by 1%, 2% or more.
3. Scrutinise your spending: Scrutinising your last few months’ outgoings carefully will help you understand exactly where your money is going. Prepare now by building good habits like increasing the amount you save, clearing overdrafts and cutting back on discretionary spending to ensure you close out the month with even a small surplus..
4. Check your credit report: As soon as you make the decision to buy, check your credit report with all three credit reference agencies. Ensure everything is accurate and up to date and reflects your current circumstances – e.g. that all of your open credit accounts are recorded and that any old accounts have been marked as “settled”. If you spot anything you believe to be inaccurate, contact the relevant credit reference agency and ask them to investigate the entry with the lender.
5. Room for improvement: If your credit report has areas for improvement, make a plan to get it into shape well before making your mortgage application. There are a number of steps you can take, including: ensuring you’re registered on the Electoral Roll; paying down outstanding balances to less than 50% of your limit; paying off more than the minimum repayments on your accounts each month and making sure never to miss a repayment.
6. Don’t fall at the last hurdle: Right before you make your application, take time to do some last-minute checks. Check your credit report again to make sure nothing has changed and everything is accurate right before you apply. Check the exact way your address and other personal details appear on your credit report. Small inaccuracies could see your application turned down, so don’t overlook the details.
(Source - Experian Response)