Lenders Tough approach to Borrowing - How to increase your chance to get a Mortgage Offer
You know how it is. After saving hard for a deposit and hitting the various Estate Agents to find that perfect property within your price bracket you find the house of your dreams.
The Estate Agents will usually arrange for you to see their “in house” Financial Advisor as a matter of course to verify your ability to purchase. Once the Estate Agents are confident that you have sufficient funding they then make your offer to the Seller and – hurrah – it is accepted.
You then need to instruct Whitehead Monckton’s conveyancing team to act on your behalf with the transaction and notify the agents of your fee earner’s name to start the first part of the journey.
So far so good.
The next hurdle is to get your mortgage lending organised, a very topical subject at the moment.
Over the years the criteria for the many different types of mortgage available to prospective borrowers has altered, along with the various mortgage products available.
In general, the more money that you have available to put down on the property or equity from your existing purchase would usually result in a lower interest rate.
You now also have to contend with affordability rules introduced as a result of the Mortgage Market Review.
This review has resulted in greater scrutiny of borrowers finances and in particular outgoings, so be prepared for more detailed questions and a potential delay in receiving that initial mortgage offer. Not to mention perhaps only being able to borrow a reduced amount.
So it pays to be prepared. In the few months before you decide you have saved enough money for your deposit, we recommend you:
- Have a look at your own Credit Report – there are a number of on line credit checking sites which can help with this and get any corrections made to your details. All lenders will look at your credit history themselves to judge whether you have repaid bills and loans on time.
- Pay off as many bills and debts as you can before you apply for your mortgage, or at the very least make sure that all monthly payments are made on time for the few months before your application.
- Try not to add to your outgoings before your application to the lender, so that your bank statements show that your finances are in a settled pattern.
- Make sure that you are registered on the Electoral Roll at your current address. This will be amongst the first things that the lender will check when you apply for your loan.
- You will need to show a regular income for at least 6 months before you apply for your loan. You would be wise not to change jobs close to making your application, to be more successful.
Hopefully, by following these few tips you will receive a satisfactory Mortgage Offer from your chosen lender and your purchase can go ahead.
Once the finance is in place, Whitehead Monckton’s conveyancing team can complete all the legal transactions as quickly as possible and you can complete your move. Then you can relax and enjoy your new home, and all the decorating of course.