How To Boost Your Chances To Get A Mortgage
To get the best mortgage deal is not easy at all but then you can improve your odds by following some tips. You really need to be impressive enough to convince a lender so that you can get a mortgage.
To get accepted or rejected for a mortgage absolutely depends on how the lender decides if he is willing to lend you. He has his own ideals and if you fit in his criteria then obviously you will be accepted but if you do not stand up to his expectations then you will face rejection. Mostly the deciding factors for a lender are:
- The size of the loan you are willing to take.
- The amount saved by you as a deposit.
- How much you earn and your current employment status.
- Information about your credit rating, outgoings and if you have any debt existing.
If you can clear all these criteria then there are chances for a lender to lend you a loan but it is not guaranteed.
Factors That Can Influence a Mortgage
- It is very important that lenders should be convinced that you are capable of paying back your mortgage since you have a financial discipline. Usually, to get that assurance, a lender can investigate your credit records to check for a good repayment history. These credit files usually have all details related to your past loans, overdrafts, credit cards, mortgages, mobile phone and other utility payments. So, it is better to check your credit ratings before the lender checks it. If your credit file shows some error then you can always rectify it.
- Register yourself for electoral roll without which it is not possible to get a mortgage since this data is used by a lender for verification of your identity and confirming that whatever details you have provided is correct and you are not trying to launder money. So, try to get registered at the earliest.
- You must manage your available credit carefully so that you have enough credit to spend on your credit cards and overdrafts. Try to use a decent proportion of the credit available and do not lower your limits because of which you will be suddenly close to the edge. Likewise, avoid having thousands of pounds of credit available which gives an impression to the lender that you could be more indebted in future. It is better to stay below 50 percent in all the cases.
- You must close all your old but inactive accounts which you have not used in past few years. If you leave it open, then it could be at a fraud risk. And for the mortgage, you need to update your details related to it. But if you hold a stable credit relationship then it can benefit you for seeking a mortgage. In case if you hold two credit cards then better not to close the older one prior to your application for the mortgage as you can lose the credit score boost.
- You should clear all your bills by making payments on time. If you miss any payment, it will get counted on your credit file. Hence, all repayments on all the outgoings should be updated. If you miss a single payment then it would reflect on your credit file. To avoid this, you can activate a direct debit on all accounts so that it will ensure that all your payments are done on time.
- Before initiating for a mortgage, it is better to cut down on your expenses since you will be asked for a lot of detail by the lenders related to your outgoings. You might need to show bank statements for verification. This is done to check if you can still afford your mortgage if there is a rise in the interest rates. It is also sensible to spend a little less as you will require money for setting up your new home. So, it is better to save every penny which could help you to have a bigger budget to meet all the costs which are unexpected.
- While applying, try to avoid delays and provide all the correct information while filling out the application form. You should state your exact income. You must declare clearly all your debts and do not withhold any such information.