How To Improve Your Mortgage Chances For Your Residential Property
A mortgage application can be a difficult process from start to finish.
There are many factors and variables that will influence the outcome for example the type of property, employment situation as well as your current commitments such as outstanding credit cards and loans.
Just to make things a bit more difficult each lender has their own criteria for assessing mortgage applications.
It is more likely for lenders to consider your application if you have been in a long duration of employment and usually its set at 3 months as a minimum or if self-employed have two years accounts history, showing net profit.
If you have recently started employment and you are in a probationary period, this may affect the use of some lenders.
Lenders will usually offer around four-and-a-half times your salary.
Electoral register & voters roll
Although obvious lenders will always carry out a check to see that you are registered to vote at your current correspondence address and is one of the main ways, they check your identity etc.
If you are not sure you are registered, you should contact your local council office.
Naturally, the better your credit history, the better chance you have of the lender accepting your application.
Lenders tend to use either Experian or Equifax when they carry out the credit check during the decision in principle.
It can be a good idea to check your credit report first for free with one of these agencies to make sure there are no errors which could hinder your application.
Any history of missed payments or bed debt will also affect the choice of lender and may increase the interest rate.
On one hand it is important to build up a credit profile but on the other hand you have to be cautious of your debt to income ratio, when these figures are run through a mortgage affordability calculator they will play a huge part in how much you can borrow and if your credit commitments such as loans and credit cards is high in comparison to your income, thy dramatically reduce the loan you may be eligible for.
The larger the deposit you have available the lower the loan you will need which would then help to increase the chance of the application becoming successful and will also open up lower interest rates for you.
For a residential purchase the minimum deposit needed is 5% and for a buy to let purchase it is 20% (with these lower deposits usually comes higher rates)
There is also the popular option of parents or grandparents raising capital from their homes to help with children or grandchildren's deposits.
When it comes to a mortgage application, always be ready to gather relevant documentation for the bank, building society or a mortgage broker as you will be asked for bank statements and payslips usually going back a minimum of three months as well as copies of ID and proof of address.
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Your home may be repossessed if you do not keep up repayments on your mortgage
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