Buying a house is a huge financial commitment especially in the UK where property prices have been soaring. Since the coronavirus pandemic broke out, prospective homebuyers have been faced with a hot seller’s market and getting a mortgage approved may seem more difficult than climbing Mount Everest.
To boost your chances of acquiring a mortgage, you would need to appear a lot more attractive to lenders. While every lender has its own criteria when determining who to offer a mortgage to, there are common factors that influence their decision. From the amount of money you’re willing to offer as an initial deposit to the size of the mortgage you’re seeking and your level of income, these factors can be crucial in boosting your chances of getting the best mortgage deal.
Before approaching any lender, you would need to know what your credit rating and history are. Doing this would help convince the lender that you are financially disciplined enough to continue servicing your mortgage throughout its lifespan. Also, if you always pay your bills promptly it would go a long way in proving to the lender that you are capable of managing your mortgage repayments.
All missed payments are recorded against you on your credit file, so it’s important to ensure that you meet up with all your current repayments. A single missed payment would be counted against you for up to a year and would remain in your credit file for about five additional years. So, even you miss just one phone or light payment, it could make a huge difference in getting your mortgage application approved or declined.
Once you’re certain that your credit history is great, you can get printable amortisation schedules to give you a clear picture of the amount of principal and the amount of interest that would make up each mortgage payment.
Also, it is important to not constantly reach overdraft as it is seen as a red flag by most lenders. Veering into overdraft is mostly regarded as living too close to the edge and some lenders would dismiss mortgage applications from those who have been in overdraft within the last three to four months.
When seeking a mortgage, every financial decision you’ve made counts. Therefore, it is important to avoid taking on unnecessary debts and spending recklessly in the months leading up to your application, since this can make you less attractive to the lender.