Not every mortgage provider is going to approve your mortgage – and that’s okay. Some will have very specific requirements that you may not meet. And these requirements may vary depending on the type of mortgage. The important thing is improving your position so that more lenders will consider your application. Here’s our straightforward mortgage advice, with easy ways to help you get your loan approved.
Improve your credit score
A crucial part of your mortgage application is your credit score: lenders want to see proof that you’re responsible with your money, and can pay off debts. Using a credit card purely for small purchases and paying off the costs promptly at the end of the month is an easy way to boost your credit score.
If you’ve been around a bit longer, you can use a ‘credit monitoring’ service to check your report. Many offer 30-day free trials, which you can cancel after receiving your free credit report. Correct any problems you can spot, and close any old accounts that might be dragging it down.
Increase your down payment
One way to make your mortgage application more successful is to offer a higher down payment. If you want to buy a £200,000 house, a 20% down payment sets you back £40,000 and leaves the rest in a mortgage. Increasing the amount you can pay up-front can make lenders more amenable – even if it’s only an extra £100 to nudge you into the next band.
Saving up the extra money may put a strain on your finances, but it’s important to make sure you don’t take out a mortgage that’s more than you can afford. If it’s going to be 40% or more of your net monthly income, you’re stretching yourself too far.
Have your documents ready
Mortgage lenders ask for a lot of information about your situation, which allows them to know exactly how much you make and how likely it is that you can keep up repayments. Streamline the process by having your paperwork fully in order.
Before applying, make sure you have your three months’ payslips, your last three months’ bank statements, proof of your address, and any statements relating to a previous mortgage. Self-employed home buyers may also need additional proof of their finances.
Hopefully our mortgage advice can help you find and fund the house of your dreams.
One Response
Interesting articles and some great points! The only problem is house prices are so high for most people, that putting down 20% mortgages is just not feasible.