Are you looking for a new mortgage? How organised are you? Let’s go through some of the key criteria and get your chances looking nice and healthy! From first-time buyers to those remortgaging, and everything in between.
Every lender has its own method to decide whether it wants to lend to you. If you fit a lender's criteria, you might be accepted quickly. The lender's decision comes down to a couple of factors, such as:
- The size of the loan you want to take out. How much can you afford?
- Your deposit savings: the bigger your deposit, the less of a risk you'll likely be seen as.
- How does your income and spending look? Lenders will look closely at this.
- Your employment status. Permanent employees may find it easier to obtain a mortgage than the self-employed, freelancers, and contractors. (But that’s not a problem for us! We can source out specialist lenders just for you.)
- Your credit rating and history.
- Your existing debt. From credit card debt, loans, overdraft, buy now, pay later balances etc, but student loans can look a little different.
Okay, first things first, check your credit report before the mortgage lender does. You are convincing mortgage lenders that you have the financial discipline required to repay your mortgage. One way they investigate this is by searching your credit report(s) to find out if you've a good repayment history.
It will include:
- Credit cards
- Loans
- Overdrafts
- Mortgages
- Some utilities
- Buy now, pay later payments
It's free for you to check your reports with companies such as Experian, Equifax and TransUnion.
Now, are you wondering if you can get a mortgage with a poor credit report? It doesn’t automatically rule you out, but it comes with risks. So if you can, get your credit report looking as good as possible.
Also, did you know that you may need to be registered to vote to qualify for a mortgage? Lenders use electoral roll data in identity checks (to ensure you are who you say you are, and live where you say you live). If you're not on it, you can register on the electoral roll for free.
Not a UK, Irish or EU national (or a Commonwealth citizen with permission to stay in the UK)? Ask us how you can get around this requirement.
This one might seem obvious, but always pay your bills on time and try to avoid your overdrafts. All missed payments are recorded on your credit file and will stay on file for six years. Consider setting up a direct debit to make sure all payments are made on time.
Mortgage lenders review everything, so organise your paperwork to speed up the process. We can go through all of this in detail with you, but here is a rough list of things to get in order:
- Your last three months' bank statements
- Your last three months' payslips
- Proof of bonuses/commission
- Your latest P60 tax form (showing income and tax paid from each tax year)
- Your last three years' accounts or tax returns
- Proof of deposits (savings account statements)
- ID documents (usually a passport)
- Proof of address (utility bills or credit card bills, for example)
- A gift letter. If you're getting deposit help, the lender needs to know it is a gift (not a loan), and that the giver won't part own the home.
Hopefully all of this information has helped you feel organised and in control. Remember, we are here to help with years of experience – we’ve seen it all! Get in touch today to secure your mortgage.
SPEAK TO AN ADVISER
Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. A fee may be charged for mortgage advice. The exact amount will depend on your circumstances.