A leading mortgage expert has identified four critical mistakes that could be costing UK households thousands of pounds when securing home loans.
James Mulvaney, Head of Digital at Clifton Private Finance, warns that financial oversights and common misconceptions are derailing applications and increasing costs for prospective buyers across the country.
The Hidden Costs Beyond Your Deposit
According to Mulvaney, one of the most frequent errors involves buyers focusing exclusively on their deposit while forgetting additional expenses.
"We generally recommend setting aside around 15 per cent of your new home's value to cover any additional buying costs," he advises.
While property portal Zoopla suggests average additional costs typically range between five to seven per cent, Mulvaney emphasises that a larger financial buffer ensures buyers are prepared for unexpected expenses that inevitably arise during the purchasing process.
Credit Score Oversights and Lender Loyalty
Another common pitfall involves neglecting credit report details that can significantly impact mortgage approval chances.
"Simple errors, like outdated addresses or missed payments, can be fixed, but only if you catch them early," Mulvaney explains.
He also cautions against automatically approaching your current bank for mortgage deals, even if they advertise loyalty rates. With thousands of mortgage products available, lenders' criteria vary widely, and better deals often exist elsewhere.
"Even a small difference can add up over time, leading to higher monthly repayments and potentially costing you thousands more over the course of your mortgage term," he warns.
Navigating Rejection and Complex Applications
Mulvaney identifies overconfidence as another issue, with some buyers assuming they can simply walk into their bank and secure the best deal.
He notes that property purchasing is financially complex, with details like debt-to-income ratios or valuation discrepancies capable of derailing applications.
For those facing rejection, Mulvaney strongly recommends consulting a mortgage broker. "If this happens, it's worth speaking to a broker to understand what went wrong and how to improve your chances next time," he advises.
By addressing these four common mistakes - underestimating costs, neglecting credit scores, limiting lender options, and giving up after rejection - UK households can significantly improve their mortgage application success and potentially save substantial amounts over their mortgage term.
