Getting a mortgage these days can seem like a monumental task. However, despite the complexity of mortgage applications, it isn’t impossible; you just need to know exactly what lenders are looking for to be able to meet the criteria and boost your chances of being accepted the first time.
While the number of first-time buyers was down in the UK in 2023 (around 290,000 mortgages were taken out by first-time property owners), these tips can help you avoid any setbacks and implications.
CHECK YOUR CREDIT RECORD
While not the only influencing factor in whether or not you get approved for a mortgage, it’s a pretty important aspect of whether or not you will get a mortgage. Your credit score is essentially a record of your past behaviours regarding credit and details any money you owe. Checking your record thoroughly can help you identify any issues, such as missed payments, that can affect your eligibility. While one missed payment might not make too much of a difference, other factors, such as defaults and CCJs and the severity of the credit issue can impact your application. So, the more you know, the better. It allows you to fix errors if there are any.
HAVE A LARGER DEPOSIT
A deposit of just 5% can sometimes be enough to secure a mortgage; however, the more money you can put down, the better your chances of being accepted will be. The reason is the more you are able to put down, the smaller your mortgage will be. Let’s say you are looking at a mortgage for £200,000 based on your income. A 5% deposit would be £10,000, but a 10% deposit would be £20,000, meaning you only need to borrow £180,000, not £190,000.
A bigger deposit can also lead to lower interest rates and more deals for you to consider.
REDUCE YOUR OUTGOINGS & DEBT
Lenders don’t like to see huge outgoings or high debt levels. In the run-up to submitting your application, it can be a good idea to pay down as much debt as possible, i.e., loans and credit cards, avoid taking on any new credit, i.e., car finance or credit cards, and generally reduce how much you spend daily, too.
Cut down on frivolous spending, online gaming, frequent expensive meals out or purchases, and so on. This will prove that you can keep your spending to a minimum and handle your finances properly.
USE A MORTGAGE BROKER
A mortgage broker can be a valuable asset when it comes to applying for your first mortgage. Their knowledge and experience can help you to ascertain your viability before you apply for a mortgage and let you know what you need to address to improve your chances of being accepted and what deals there are or what you should be accepting. Chances are they will have access to more information and better rates at times, and working with them to get your application ready can help you avoid any mistakes or setbacks by ensuring everything is in order.
Applying for a first-time mortgage is a huge decision; however, being strategic about it and knowing what will boost your chances of being accepted the first time will serve you well.
Thank you so much for reading! – xo N
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this is a contributed post.
New Lune 