How To Improve Your Chances Of Getting A Mortgage
Most of us dream of owning our own home some day, and while it would be great to be able to just go out and buy one, the reality is that most of us will need to get a home loan to be able to do this.
Banks and building societies don’t give out home loans to just anyone however, and there are a number of factors at play that determine the success of your application.
Here are some points you may wish to consider to greatly improve your chances in securing a mortgage and maximising the amount lenders will lend.
Using the services of a reputable independent mortgage adviser as opposed to going directly to the provider can make all the difference, as an advisor can look at the whole market and find a lender who is most likely to lend to you based on your circumstances.
In addition to finding a lender who will lend to you, mortgage advice can ensure you get the best deal available to you, which can greatly impact your monthly mortgage repayments.
Save for a larger deposit
One notable factor in securing a mortgage is the size of your deposit, which is the amount of funds you’re putting down as part of the purchase of a property. The more you are able to put down in ratio to the value of the property, the more likely you are to secure a mortgage.
Overall, this is probably one of the biggest challenges when looking to secure your first home.
As well as making it more likely that you will get a mortgage, a larger deposit relative to the property price will give you access to more competitive mortgage rates, which will reduce your monthly mortgage payments.
So it’s even worth considering possible financial support from your parents or relatives as either a gift or a loan, in order to get together a larger deposit, there is also a need to factor in the additional associated costs, such as stamp duty, moving costs and legal fees.
A number of providers, such as Lloyds Bank, offer schemes designed to help first time buyers, while initiatives like Help to Buy, together with the increase in 95% LTV products has given a substantial boost to the first time buyer market, making mortgages more affordable.
Consider seeing a mortgage advisor to discuss all possible options available to you.
Clear your debts
If you can repay any credit cards, loans or bank overdraft facilities, the greater the mortgage which will be available to you. Lenders take into consideration the amount of outstanding debt, as well as your monthly payments, when assessing affordability.
Check your credit report
It is important to do this before applying for a mortgage as you may have hidden surprises in store. Many mortgage applications fail over small historic debts that the applicant thought had been settled.
Taking care of such matters before you submit your mortgage application is a straightforward measure which will enhance your chances of getting a mortgage.
It is crucial to determine the size of deposit you can generate and the amount your lender will lend you before you begin the house hunting process. Your mortgage advisor will be able to get a Decision in Principle (or Agreement in Principle) from your chosen lender to confirm the amount they are willing to lend.
This will stand you in good stead as you’ll be able to look at properties within your budget and will also demonstrate to the vendor just how serious you are about purchasing.
With the growing number of first time buyer mortgages currently on offer, now could not be a better time to capitalise.
Not only is there such a wide variety of choice available, the deals on offer are some of the best seen since 2008.
If you have that all important deposit ready, then now is the time to make your move one step closer to becoming a proud homeowner.
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