Getting a mortgage has become even more difficult now thanks to a lot of new tougher and more detailed application measures. Financial institutions are demanding so much that getting a mortgage is impossible. For starters, they demand large deposits, which will be at least 10% of the value of your potential house. In the current economy, where decent properties may go for £300,000, getting a deposit that large is a challenge.
If you think being able to afford a mortgage is the only problem, the requirements for eligibility will stun you. Getting a mortgage is so much tougher now. Here are some tips to help increase the chances that you will get a mortgage.
The most important thing you should know about mortgage applications is that any failed application is recorded, and may influence your ability to get a mortgage in future. You should make careful consideration before applying for any mortgage to make sure that you are eligible and actually have a chance of getting the mortgage. Your application should be up to par so that it does not risk affecting all other applications you may consider making in future.
Your credit score is a big deal to lenders. They will want to know how you may have been keeping up with your debt in the past, in order to find out whether you may be a viable candidate for any additional debt. Lenders will usually demand a minimum credit score, which you can research beforehand. If you do not meet this requirement, you should not make any mortgage application attempts.
Lenders will also investigate your debt in relation to your income. They will try to analyse your monthly payments, your remaining student loans and your credit card history to see how much you may be spending from your earnings in terms of clearing debts. They are unlikely to increase the debt factor, which means you must reduce any debt items before applying for a mortgage. Ideally, you should do away with as many of these items as possible. If you have no debt items, lenders will feel more comfortable giving you a mortgage because it will not compete with other debts for your income.
You should not make any large purchases on your credit cards before or within the period of your mortgage application. Lenders will review your credit history and flag any such purchases that are appearing in your reports. They will flag the larger purchases and consider you to be too frivolous in your spending to award you a mortgage.
You should also increase the size of your deposit. A larger deposit showcases propensity to save, which lenders will be interested in. They are more likely to consider the mortgage application of someone with a greater deposit than that of a lesser value because of the reduced debt levels.
You should research thoroughly before making your mortgage application, as well as make all your paperwork available. The lenders will research into your financial history to find reasons why they should not give you a mortgage. Going before them will help guide you on whether you should make the application now, or wait until you are more eligible for it