How to maximise your chances of getting a mortgage!
There are many ways to maximise your chance of getting a mortgage, like reducing your personal debt, avoiding unusal properties and thinking about the type of mortgage you want.
1. Build up as big a deposit as you can. 100% LTV mortgages are very rare, and any that do exist will come with strings attached, such as a family member depositing a large amount, say 10% of the purchase price into a deposit account for a, specified minimum period of time.
2. Know your credit rating. On the face of it your credit score may look very healthy. However, you need to check that the detail within the credit report is correct, missed payments and arrears can significantly restrict whether you can get a mortgage at all. You should always get a full report, not just a score, as lenders will look at the whole report and any negative issues found may restrict which lenders would consider lending to you.
3. Reduce your personal debt. Most lenders will reduce the amount they are willing to lend if you have personal debt built up with loans, HP, credit cards etc..
4. Close any unused credit card accounts. If you have access to numerous lines of credit, even if not used, lenders can get very nervous when you then apply for a mortgage.
5. Make sure you are on the Electoral Role, and that your address is correct. Lenders will check this information, and not being on the Electoral Role could stop you from being accepted, and at the very least it will raise a query from the lender.
6. If self-employed, ensure you have the latest set of accounts and tax computations, and ideally the previous two years as well. These documents will be required by the lender as proof of self-employed income. Some lenders will only lend based on income paid out of the company, whilst others may take retained earnings into account.
7. Ensure all relevant documents are available. These documents would include: Relevant ID such as in date passport or driving licence; Proof of Address such as a recent utility bill (not mobile phone); the last three months of bank statements, for any live current accounts; the last three months of payslips; the last mortgage statement (if you already have a mortgage).
8. Avoid unusual properties. All lenders will evaluate the saleability of any property that they are asked to lend against. Unusual property construction, and or, location can restrict the number of lenders who may offer a mortgage. Flats over or adjacent to commercial premises can be difficult to get a mortgage for, particularly if the commercial premise is a food outlet, pub or dry cleaners.
9. Think about the type of mortgage you want. There are many different types of mortgage product available, base rate trackers, fixed rate, offset. And each of these can have different terms (time the mortgage product is active before it reverts back to the lenders standard variable rate).
10. Don’t chop and change your application. Changing the amount you want to borrow, or the mortgage product you want to have, after an application has already been submitted, will lead to extra time being required to secure a mortgage and quite possibly will cost you more in fees.
11. Consider using a mortgage broker. There are thousands of mortgage products available, some of which are only available through a mortgage broker. In addition, some of the high street lenders have been known to offer rates through mortgage brokers which are not available to them if they had applied directly through a branch.
A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.