How do I improve my chances of getting a mortgage
When you are considering a new mortgage or you are a first-time buyer, there are a number of things you can do to improve your chances of success. If you want to know more about what types of mortgages there are, click here. So, how do I improve my chances of getting a mortgage?
Maximise Your Credit Score
A credit score or credit report is an indication to your lender as to whether you’re a reliable candidate for repaying your mortgage. Your credit report provides information about your repayments on credit cards, mortgages, loans and overdrafts to see if you have a good repayment history. The better your credit history, the better chance you have of being accepted by the lender. Before applying for a mortgage, it’s beneficial to check that all your repayments are up to date.
If you apply for a mortgage and your credit score is low, there are a few options available to you. Such as, applying for a credit report to find out if there’s any problems or errors recorded on your credit file. If there are any discrepancies, you should contact the credit provider as they may be able to offer a solution.
Repay Your Debts
As well as looking up the amount of credit available to you, the lender will also look at how much you owe.
A few things you can do:
- Go through your debts, write them down with the amount owed for each debt.
- Reduce as much of your debt as possible and close any accounts that you no longer use.
- Go through your expenses and work out how much you can live on each month, using any surplus to reduce your debts.
Save Up a Deposit
The amount you need to save for your deposit depends on the value and location of your property. Having a larger deposit may increase your chances of being successful. You’ll also be offered better mortgage deals with lower interest rates.
The lower your deposit, the higher your interest rate is likely to be. So, it is better to save that little bit extra towards your deposit.
Have Stable Employment
If you’re considering changing jobs, it’s advised that you should have at least one year of employment history in a company before re-mortgaging. This is because you’re likely to still be within your probation period of employment.
Overpaying on Your Current Mortgage
Most lenders allow you to make overpayments on your mortgage by as much as 10% each year. If you’re able to overpay your current mortgage it can have an impact on the mortgage term and show the lender you’re reliable with regards to paying back loans.
Get on the Electoral Roll
Many lenders will use the electoral roll to verify your identity, so if you’re not registered at your current address your mortgage could be refused. You can register on the electoral roll for free through your Local Authority or click here for guidance on how to do it.
Ask Your Family for Financial Help with Your Deposit
It’s becoming more frequent with young people who are trying to get onto the property ladder, to ask for family help towards the deposit. If a family member gifts some or all of the deposit and they require the money to be paid back, this could have an impact on how much a lender would be willing to lend.