You'll face some stringent checks when you apply for a mortgage, but there are plenty of things you can do to improve the chances of your application being accepted.
Here are seven ways you can maximise your chances of getting a mortgage:
Check Your Credit File
Lenders will look at your credit history to see how you've managed debts in the past. The better your credit score, the lower risk you will be considered, and the more likely your mortgage will be accepted.
It's easy to check your score online, and doing so not only gives you some insight into what a lender will see, but can also reveal whether there are any potential errors, or if you've been a victim of financial fraud. Remember that even something as simple as not being registered to vote at your current address can damage your credit score, so make sure you are on the electoral roll.
Look at Your Outgoings and Your Income
Mortgage lenders will want to establish not only that you can afford your mortgage, but also that you'd still be able to make your monthly payments if the rate were to increase. They'll therefore want to see how much you spend on things such as food, utilities, travel, holidays and childcare, and how much money you have spare at the end of every month once you've covered these costs. Try to cut back on unnecessary expenditure where possible, as this could help when you submit your application.
Work out Your Budget
When buying a property, remember that it's not just a deposit you'll need. You'll also need to factor in stamp duty, legal bills, survey and valuation fees, the cost of furnishing the property, and, where applicable, any mortgage arrangement fees. Lenders will want to know that you've taken all these into account when you make your application.
Don't Miss Debt Repayments
Prior to submitting your mortgage application, make a concerted effort to pay any bills when they are due. Any missed payments, particularly if they are for credit cards or any other type of borrowing, will count against your mortgage application. The best way to ensure you always make payments on time is to set up a direct debit every month for the amount you owe.
Get Your Paperwork Together
Not having all the information your lender will need to see can really slow your mortgage application down, so prepare everything in advance. Lenders will want to see:
- Proof of income, so either payslips and your P60 from your employer, or your accounts if you are self-employed.
- ID, such as your passport or driving licence, and proof of your current address from utility or council tax bills.
- Bank statements showing your outgoings and income.
- Proof of your deposit.
Choose the Right Lender and Mortgage Deal
Don't just plump for a mortgage from your bank or building society because you're familiar with them. Always get advice from across the market rather than only from one or two lenders. This will maximise your chances of getting the best rate, and also of finding a lender who might look favourably on your individual circumstances.
Get a Mortgage Agreement in Principle
Provided you've followed the steps above, you should be able to get a mortgage agreement in principle, which is a conditional offer from a lender saying your mortgage application may be accepted. Having one of these agreed in advance can improve the odds of you having an offer on a property accepted. Bear in mind, however, that lenders will do a credit check before they'll give you an agreement in principle - having too many checks could harm your credit rating.
We've teamed up with L & C Mortgages to offer you fee free mortgage advice, head to their website
or telephone (0800 923 2045) one of their expert mortgage advisers today to look into your mortgage options.