Mortgage blog: Three mistakes you should avoid if you want a new mortgage

Posted 26 March 2014

Even though mortgage lending is at its highest level since the global financial crisis, getting a home loan can still be tough. As The Observer recently reported, "banks and building societies are still unwilling to lend to all but the safest borrowers, while a new wave of regulations at the end of April means customers will be placed under more scrutiny than ever."

It's no longer possible to simply walk into your local bank and walk out with a mortgage approval. Preparation can be crucial and so here are three mistakes you should avoid if you to maximise your chances of being agreed for a new home loan.

Taking out a payday loan

As well as charging high interest rates, payday loans could also scupper your chances of getting a new mortgage. The Principality Building Society has become the first lender to officially change its criteria to bar those who have taken out a short-term loan in the past 12 months, but other lenders, too, may not accept you if they find evidence of a payday loan.

Keith Osborne, editor of, says: "A payday loan indicates that you have been desperate for cash and that you are unable to afford your monthly outgoings. With lenders having to prove affordability like never before, this type of borrowing can be a huge black mark."

Not being on the electoral roll

Lenders use the electoral roll to verify your identity and to ensure that they have the correct credit reference information. Many lenders will refuse your application if they can't find you on the voter's roll and it may also result in additional ID checks.

The Observer advises that you call your local council, or check its website to see if you can sign up online.

Applying for a mortgage too many times

It is possible to for your mortgage application to be declined simply because you have applied too many times. That is because a ‘footprint' is left on your credit file each time a credit check takes place. If you are rejected this will leave a record on your file and damage your credit score.

Osborne adds: "The more times you apply for a loan the more ‘footprints' will be left on your credit file. When lenders come to assess your application it looks as if you have been desperate to secure the loan you need and lenders treat this suspiciously."

If you have been rejected for a mortgage, it can often pay to use a broker rather than making another direct application to a lender.

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