Getting yourself in a great position to get accepted for a mortgage should be a priority way before you’re even seriously thinking about buying a home.
Many people believe if you earn enough getting a mortgage will be easy, but the reality is mortgages are becoming increasingly complicated.
Our top advice is to talk to a mortgage broker to make sure you don’t waste time or miss out on your dream home in the future.
If you really want to increase your chances of getting a mortgage then follow our top tips below:
Save a big deposit
The bigger the deposit, the better. Not only does it improve the likelihood of being approved for a mortgage, but it could help you save hundreds of pounds in monthly costs.
Improve your credit score
You will need a good credit score to qualify for the best deals. Think of it as a CV for your financial history. Lenders use your credit score to check whether you are a safe bet for a loan. . You can check your credit score for free with Money Saving Expert or Money Supermarket.
If you need to improve your credit score, you must take action sooner rather than later. Start by building your credit history, always make payments on time and try to keep your use of credit low. If you rent, you can also build up your credit score by having your rent payments tracked each month through the The Rental Exchange.
Payoff debts and close unused accounts
As well as looking at how much debt you have, mortgage lenders will look at how much credit is available to you. You don’t want to give them any reason to think that you won’t be able to keep up with your mortgage payments, so clear as much of your debt as you can and consider closing any accounts that you no longer use (including additional credit cards).
Check your address is correct
Your mortgage application could be refused if you are not registered on the electoral roll at your current address. Also, check your address is correct with all the credit agencies to avoid any issues.
Choose the right property
Mortgage lenders will only lend on properties that they know they will be able to sell easily if you don’t keep up your repayments. So, it’s a good idea to avoid unusual properties that could be difficult to sell, like flats above shops or houses built with non-standard materials.
Get your paperwork straight
When you make a mortgage application they will ask for you to provide all sorts of documents so, if you can, try and get them together in one place. Make sure your passport and driving licence are up to date – you will need to prove who you are. You will also need to provide the following:
- A recent letter from a bank or utility company to prove your address
- Bank statements from the last three months
- Payslips from the last three months (if you are employed)
- P60s for the past two years
- Evidence if you received a bonus
- Documents to prove any other sources of income.
Important: If you are self-employed, you will need at least two years full accounts or an SA302 form for the last two to three years from HMRC.
Don’t mess around
Once your application is made, try not to change your circumstances. You will put your application at risk if you start messing around and changing figures when the mortgage application has begun. That’s why doing your homework and using a broker is a good idea (especially first-time round); that way you can be sure that the application you make is the right one.
Do your homework and use a broker
One of the most important factors in mortgage approval is affordability. The lenders want to know your income is enough to cover the mortgage payments both now and in the future if interest rates rise.
Use our mortgage affordability calculator to see how much you could expect to borrow and research what types of mortgages are available to you. Once you have this, you’ll need to find the right mortgage deal for you, and that can be quite challenging.
Using a broker can simplify the whole process, as they will ‘shop around’ and use their expert knowledge of the mortgage market to find the deal that best suits your circumstances and which lenders will be most likely to accept your application (which is especially useful for self-employed borrowers!). Working with a broker is one of the best ways of improving your chances of getting a mortgage.
