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The Responsible lender: Are you ready to apply for a Mortgage or Loan?

While there may be the suggestion of a global recession at some point in the next 18 months (according to the World Central Bank, at least), the British economy seems to be thriving on the back of continued property market growth. While the number of mortgage approvals may have dropped slightly in September, overall lending in this sector has risen at the fastest rate since December 2008. This is empowering first-time buyers to enter the market, and creating an active property sector that facilitates growth, expansion and prosperity.Dollarphotoclub_52641677-1024x682The need for Caution: How to ensure you are Ready to apply for a Mortgage

The presence of a favourable market does not mean that everyone should suddenly apply for a mortgage, as there is also an onus on the individual borrower to organise their finances and meet any subsequent repayment plans. The same principle can be applied to any type of secured or unsecured loan, so consider the following steps before applying for a line of credit: –

Check your Credit Record

Whether you apply for a mortgage or some form of unsecured credit, you will need to have a relatively strong and positive credit history. Ideally, you will have no defaulted accounts on your credit files, while the presence of settled agreements also contributes to a good score. Even seemingly small details such as having an address that is registered on the electoral role will increase your score, so it is important that you access, review and amend your credit file before applying for a loan. If you fail to achieve this, no lender will be able to extend an offer of funding.home2-1Review all available types of Loan and make an informed choice

If you are in the market for an unsecured, generic loan rather than a mortgage, you should be aware of the diverse range of options available in the current market. Short-term, pay-day loans are available to cover unexpected bills, for example, while longer-term credit agreements can be secured for remodelling purposes. Each of these loan types have alternative terms and interest rates, so it is crucial that you choose a lending solution to suit your outlook, needs and financial circumstances.

Ensure that you can meet your repayments

Once you have appraised your own circumstances and the market as a whole, you can begin to negotiate with lenders and gain an insight into how much you can borrow. Lenders will also breakdown your debt into a manageable repayment plan, and this will dictate how much you are forced to repay on a monthly basis. Before you make a final commitment and select a specific loan or service provider, be sure to review the prospective repayment plan and take steps to ensure that this is within your budget. You should also strive to ensure that you have some contingency funds within your budget, as this will make repayments easier and help to account for any unexpected financial costs.