While the property market remains so buoyant, securing a good mortgage in as quick a time frame as possible is vital to ensure you get the house you really want.
In this article, we’ve created some useful advice for those wanting to improve their chances of securing the mortgage they need.
- Keep an eye on your credit score. If you’re applying for a mortgage with a low credit score, you will find it harder to get an offer, as it could be seen by lenders as an indication that you may miss mortgage payments. You can check your credit score on a free trial via Check My File. If you are struggling with a low credit score, it may be worth waiting a few months and seeing if you can improve it.
- Too little debt can be an issue. You can have a low credit score because you do not have any credit history. If that is the case, start building one up to prove you can manage credit with no risk e.g. take out a credit card to pay for your weekly supermarket shop and pay it off in full at the end of every month. Just make sure you do pay it off! If you can’t improve your score, speak to a mortgage broker to help find a specialist lender which is more likely to approve you.
- Make sure you don’t have too much debt. A large amount of outstanding debt, even if you never miss a payment, can be worrying for a lender. Recent credit applications (in the last six months) may also count against you as a red flag.
- Maximise your income, minimise your outgoings. Lending criteria is no longer as specific as ‘four times your salary’ – a lender will look at all your outgoings and income to make a decision on how much they’ll lend. So ideally you want to minimise your outgoings – e.g. if you have a loan that will soon finish, you may be better waiting until it is paid off before trying to get a mortgage offer.
- Hey big spender – don’t be. Be wary of things like spending money on gambling sites or other big splurges which might ring alarm bells in the mind of a lender. In the months leading up to a mortgage application, be mindful of what you’re spending on!
- Get on the electoral roll. It is very important to register on the electoral roll, as this helps to build up your credit score – and it is more difficult to get a mortgage if you are not on it. It’s simple so make sure it’s done.
- Joint finance can have an impact. If you have applied for joint finance at any point, such as a previous mortgage or joint bank account, you will be financially linked to the other party. If they have missed payments or have financial issues, this will show up negatively on your credit file too. If those links are now not applicable, you should write to credit agencies requesting a notice of disassociation. Simply having closed the account will not automatically de-link you.
- Boost your deposit. The bigger the deposit you have the better the interest rate you will get on your mortgage. So, if you are close to having a 15% deposit, for example, you may be best waiting until you have the full 15% to access those better deals.
- Self-employed need specialist help. Those who are self-employed will generally find it more difficult to get a mortgage, so it’s worth speaking to an experienced mortgage broker. Lenders tend to request the last two years of Tax Calculation and Tax Year Overview documents and most lenders will average the self-employed income figures declared on your Tax Calculation documents for the last two years.
- Speak to a broker. Using a reputable, whole of market mortgage broker will give you the best possible chance of securing a good mortgage as quickly as possible. However, be careful what you pay for as some mortgage brokers charge unnecessary fees. By working with a fee-free mortgage broker, you could save money – all brokers receive a procuration fee from the lender so they shouldn’t need to charge you a fee on top.
- If you’re declined don’t panic. Every lender has a different set of criteria, so even if you have been declined by one, it does not necessarily mean you will not be able to get a mortgage. Having multiple declined mortgages will have a big impact on your credit file though, so speak to a broker to help you to find a mortgage lender that is more likely to approve your application.
