Five ways to improve your chances of getting a mortgage
Posted 11 September 2015 by Keith Osborne
The difficulties faced by borrowers looking to secure a mortgage – especially first-time buyers – are often in the news.
Banks and building societies tend to be most cautious when considering lending to would-be homeowners and some of the lending criteria can be very strict indeed.
But if you follow our top five tips, a mortgage could be well within your grasp.
1. Pay off all your debts
Do you owe any money? Lenders will take your debts into account when they’re calculating how much they’re willing to lend to you. Getting rid of any debt you have before applying for a mortgage will help you to secure one. Cancel any dormant credit cards you have too, to make sure the cards aren’t recorded as being ‘live’ on your credit record.
2. Take independent advice
Speaking to a mortgage broker is key to ensuring you secure the best mortgage deal, including those not generally advertised to homebuyers. A good broker will be able to offer advice on how much money you can borrow, as well as tips on the market overall. Contact a mortgage advisors today, and have to hand information on your income, your outgoings, any savings you have and your credit history so they can get a fuller picture of how much you might be entitled to borrow.
3. Save, save, save
The more money you have in the bank as a property deposit, the more attractive you’ll be to lenders. Note that the best mortgage rates are available to buyers who can put down at least 15% of the purchase price (even better if you can muster 40%) and this will also save you money each month on mortgage payments. After all, cutting down on going out in the short term will seem a worthy sacrifice when you get the keys to your first home.
4. Consult the ‘Bank of Mum and Dad’
It’s well worth asking your parents if they can help you get a house deposit together. Even if they don’t have any cash to part with, there are a number of mortgage deals available where the equity in your family home can be used to ‘guarantee’ your own mortgage.
5. Check your credit rating
Before you apply for a mortgage, get a copy of your credit file from Experian, Equifax or CallCredit. Are your details correct? If not, make sure you correct any mistakes. Getting registered on the electoral roll is an additional easy win in the mortgage application process – not being on it could damage your chances of acceptance.