When you apply for a mortgage, the lender looks at all aspects of your circumstances before making a decision – and there are things you can do to swing it in your favour.
We’ve already looked at the things that can scupper your application and now we’re going to show you boost your chances of approval.
Here are four strategies that can help you secure a mortgage.
1. Rein in your outgoings
Subscriptions and other regular payments suck up your buying power. Before you apply, try to cut down on as many debts as possible, leaving only the most essential behind.
Try to minimise things like magazines subscriptions, streaming services and mobile phone contracts. Outstanding credit cards and other loans should also be paid off in full, if possible.
2. Go beyond the bare minimum
The smallest deposit you’re likely to get a mortgage with is 5% of the property’s value. So, if the house is selling for £207,000, you’d need to contribute £10,350 and borrow the remaining £196,650.
This would give you a Loan to Value (LTV) ratio of 95%, which makes you a higher-risker borrower than someone with a 90% LTV, or an 80% LTV, and so on.
The larger a deposit you can fork out, the lower your LTV ratio will be and the less risk you’ll pose as a borrower.
3. Get to grips with your credit score
Everyone with a bank account has a credit score. Your score represents how responsible a borrower you are, and so lenders check it whenever you apply for credit – including a mortgage.
Your credit score grows when you consistently pay back your credit on time and suffers when you miss payments. You can use a credit reference agency like Experian or Equifax to check your credit score and history. If you find errors, you can file a notice of correction to get it fixed and boost your score.
4. Use a broker who knows their stuff
A mortgage broker will ask you questions about your circumstances and recommend a mortgage that would best suit you. They’ll then do the lion’s share of the mortgage application for you.
Since they’re regulated, you can rest assured that the advice and recommendations you get from a broker is sound.
Mojo Mortgages is a digital broker you can use online for free. We’ll ask you some questions and recommend a mortgage for you in under 15 minutes. – and there’s no obligation to buy anything. Click here to give it a try.