How can you improve your chances of getting the mortgage you want?
There is a lot of uncertainty in today’s mortgage market, and there’s no point pretending that it’s not trickier to obtain a mortgage in 2017 than it was ten years ago.
However, there are a number of things you can do to increase your chances of securing the loan you need to buy the house of your dreams.
1. Learn how to budget
This is a skill that everyone should have in principle, but in reality, it’s down to a lot of factors.
However, if you want to secure a mortgage, then this should be top of your list of good habits to get into. Remember, mortgage lenders want to be secure that you have the means to keep up with the payments. As a result, you’re likely to get asked a lot of questions about your monthly income and expenditure.
Firstly, you need to try and repay any forms of debt, including credit cards, bank loans or overdrafts. If you can demonstrate that you’ve got no existing debt and that you’ve had the fiscal responsibility to repay any former debt – you’re going to look more impressive to your lender.
Secondly, you should be aware that a lender will take a close look at your monthly outgoings and your typical expenses. You shouldn’t lie about these, but if you can cut a few costs – such as the bi-weekly takeaway or the massive slap-up payday meal – you’ll seem more responsible.
2. Be honest about what you can afford
One of the biggest reasons people get rejected for a mortgage is that they simply don’t have a realistic view of what they can afford. If you’re taking your first step onto the housing market, the chances are you might not be able to afford the beautiful five-bed home in the country.
If you’re unsure of what your rough price range is, then consider the following: would your monthly repayments be more than 35 percent of your monthly income? If so, you might be aiming a little bit high. There are a number of mortgage calculators online if you’d like a more concrete answer as to what you’ll be able to afford.
3. Ensure your credit rating is up to date
It’s easy to lose track of your credit rating, and many people still aren’t sure exactly how to even check what it is. If you want a mortgage, you need to be very aware of how much debt you have, and what sort of credit score you’ve got.
Remember, mortgage lenders will be very stringent in checking your credit score: it’s one of the best indicators of how responsible you are in repaying any debt. If you’re unsure, then head to Experian: they’re the major source of credit information in the UK and will be able to issue you a detailed report.
4. Demonstrate good debt
We’ve half-covered this in the ‘budget’ section, but it’s worth re-iterating: you want to demonstrate that you’re fiscally responsible with regards to debt.
So, if you’ve never had any form of credit before, it might be worth taking out a credit card and demonstrating that you can comfortably repay small amounts of debt. We’re obviously not suggesting racking up unnecessary debt: simply paying for a weekly shop every now and again using the card and then repaying the card on payday will be more than sufficient.
It may be, of course, that you’ve built up a credit rating already through things like a mobile phone or broadband contracts. Again, take a look at Experian if you’re unsure.
Get in touch
Remember that if you’re at all unsure about making a mortgage application and you’d like to know more, you can always give us a call. We’re an independent mortgage broker and we’re always ready to offer advice on how you can give yourself the best chance of securing the perfect home.