Today is National Financial Awareness Day (14th August), the perfect time to take a closer look at your finances, especially if you’re planning to buy a new home.
We know that securing your dream property isn’t just about finding the right house, it’s about making sure you’re in the best possible financial position when it’s time to apply for a mortgage.
We spoke to one of our trusted independent financial advisers, Josh Cardwell from the Mortgage Advice Bureau, who has kindly shared his top tips for getting mortgage ready.
1. Minimise Your Overdraft Use
Regularly dipping into your overdraft can signal to lenders that you may be living beyond your means. Where possible, keep your balance in the black to show you can manage your day-to-day spending.
2. Always Pay Direct Debits on Time
Missed or late payments can negatively impact your credit score. Setting up alerts or checking your account regularly can help ensure all your payments go through as scheduled.
3. Avoid Short-Term Loans
Payday loans and other short-term borrowing options can harm your mortgage application. Lenders see these as high-risk behaviour, even if they’re repaid on time.
4. Keep Credit Card Spending Below 25% of Your Limit
Using a small proportion of your available credit shows lenders you can manage borrowing responsibly. For example, if your limit is £2,000, aim to keep your balance under £500.
5. Limit Klarna and PayPal Credit Usage
While these buy-now-pay-later options may be convenient, regular use can indicate to lenders that you rely on borrowing to manage everyday expenses.
6. Keep Gambling Transactions to a Minimum
Frequent gambling activity on your bank statements may raise concerns for lenders, so it’s best to keep it occasional.
7. Avoid Taking Out New Credit During the Application Process
Once you’ve started the mortgage application, avoid opening new accounts, credit cards, or finance agreements, as these can affect your affordability assessment.
Why Financial Readiness Matters
Being financially prepared can help you secure a better mortgage rate, increase your chances of approval, and ensure your home-buying process runs smoothly. As Josh explains, "Mortgage lenders want to see that you can manage your finances consistently and responsibly. By taking these simple steps, you can make a big difference to your mortgage application success."
Ready to take the next step?
If you’re thinking about buying a new home, our sales team can introduce you to one of our recommended independent financial advisers for tailored guidance. In the meantime, why not view our available homes here