Tips For Getting Your Finances In Shape

January 20, 2023

If you are thinking about applying for a mortgage in the near future, but are worried about the health of your finances, there are various steps you can take to help you get back on an even keel. With the economy in the doldrums and interest rates still rising, it’s more of a challenge than ever to balance the budget.

For those with serious financial woes, it’s best to seek advice from a professional organisation. However, even for those who are just about managing, it’s always helpful to make a personal financial reassessment before a mortgage application. This will help you secure the best rates and reduce the risk of a damaging rejection.

Consider transferring your credit cards

This post-Christmas time of year is when most people have the heaviest credit card debts. The BBC reports that a third of people who have borrowed money to pay for Christmas aren’t confident in their ability to repay the debt.

Furthermore, up to a quarter of people have borrowed money to pay for essentials such as food and energy bills, as the cost of living continues to rise. By looking for 0% balance transfer deals, it’s more beneficial than ever to help save potentially hundreds of pounds on credit card repayments. However, bear in mind that there may be a transfer fee.

Consolidate your debts

If you have multiple debts across different store and credit cards, then it can work out cheaper in the long run to consolidate them into one loan. This means that you will be making just one monthly repayment, and it makes it easier for you to keep track of your finances and reduce the risk of a damaging missed payment.

However, bear in mind that to be offered a good interest rate, your credit score needs to be reasonably healthy in the first place. If you have had issues in the past, such as missed payments, defaults, or more serious problems such as a County Court Judgement or bankruptcy, then you may be refused or have to pay higher interest rates.

Some debt consolidation loans can also include your mortgage. It’s still possible to find a suitable deal even if you do have a poor credit history. However, it’s a good idea to seek the assistance of an experienced bad credit mortgage broker, because they will know which lenders are most likely to offer you a deal.

A rejected loan application is not only discouraging and a waste of time, but it can also affect your creditworthiness even further, as lenders will want to know about any previous applications you have made for credit.

Deal with your most urgent debts first

If you feel as though your personal financial situation is really spiralling out of control, it’s important to act as soon as possible. Try and find a way to meet your most essential repayments first, such as mortgage, rent, council tax and energy bills. There are charities and organisations who can offer free advice if you really feel overwhelmed.

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