Getting your first mortgage is an exciting yet daunting journey; many people discover that the road to home ownership is more like climbing a mountain than taking a gentle stroll. With obstacles such as large deposits and rising house prices (to name but a few), we’ve compiled some handy advice on how to make yourself, and your situation, more attractive to lenders.
Check your credit
Your credit report is your financial history; the better your score, the more likely your lender will be to give you a mortgage. Improve your chances by checking your credit rating before you apply. Have you missed any payments in the past? Have you gone into your overdraft recently?
Another issue you need to be aware of is your partner’s or ex-partner’s credit score as this can greatly impact your mortgage application.
You can discuss your credit score with your bank or you can use popular websites such as Credit Expert, which will give you a free credit report if you sign up for a trial.
Register to vote
If you’re not already on the electoral role, get on it! Lenders often check it to ensure that you are being truthful about where you currently live and their decisions can be greatly impacted if you have yet to register. To sign on to the electoral role, or for more information, simply go to Gov UK.
How is your income?
How much you earn is extremely crucial to lenders as they use multiples of your total income (and joint income) to decide on the maximum that they will lend. It isn’t just about having a higher salary; you also need to ensure that you keep all important documents such as benefits letters or payslips (lenders usually ask for at least three to six months’ worth), as these will be analysed during the decision making process. Self-employed? You will need to provide three years’ worth of accounts instead. Have a lower income? There are plenty of schemes that may help you get on the ladder such as the new Help to Buy ISAs.
Stick with your work
Have you had several jobs for the past few years, or are you dreaming or a new career? While going through the mortgage process it’s best to put those plans on hold and stick with your current job (even if you hate it!). Not only do lenders need a regular amount of payslips, it is important for them to see that you are consistent with your income.
Clear your debts
Essentially, with a mortgage, you are about to commit to one of the largest debts of your life. Therefore, it is sensible to try and lose any outstanding debts that you may have. Lenders use any current debts, along with income and outgoings, to provide you with the maximum total that they can offer you. Although this might mean your dream of home ownership has to be pushed back a year or two, it will definitely benefit you in the long term.
Have you found that you have struggled to be accepted for a mortgage? Let us know any other tips you found were useful for making the process a lot easier.
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