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How can I guarantee that my mortgage will be approved?

approved for a mortgage

More than 780,000 new mortgages were approved in 2018 [BSA, Jan 2019).

This may sound like a lot but this is just a percentage of actual applications. There are a number of reasons why mortgages may be declined and in times of economic uncertainty, lenders are likely to be increasingly stringent on their affordability checks.  So how can you increase your chances of being one of the few that are approved to the next stage?

Check your credit rating

If you only do one thing on this list, then it’d be wise to start with your credit rating, making sure it’s as good as it can be. Lenders want to know that you are a worthwhile credit risk before they agree to lend you large sums of cash.

Your credit score can be impacted by a number of things – get yourself on the electoral roll, make sure you are keeping up to date with any debt payments and if you don’t already have any credit, then get some! If you’ve never had any credit before, then your lender will have no prior information on which to make a judgement so a small amount of borrowing on a low-interest credit card may be helpful.

Pay off your outstanding debts

If you have any large debts, try and clear them before you apply for a mortgage. Even if you are paying them off regularly to keep your credit rating in check, having debts could still affect whether you are able to get a mortgage or not.

Lenders will take any monthly financial commitments into consideration and could reduce the amount they are willing to lend you, which could make your dream home unreachable.

Save, save, save!

You’ll need at least 10% of the purchase price of your property as a deposit before any lender will consider letting you have a mortgage. The more money you can offer up front, will typically open up better interest rates, but it could also help with getting your mortgage approved – lenders tend to be quite prudent if you are only offering up the minimum deposit.

Keep your mum and dad on side

If you are struggling to save for a large deposit on your own, then try calling in the help of your parents. Whilst lenders may not be so keen on a loan from your parents which you need to pay back (this will count as one of your financial commitments in the affordability check) they are generally happy if your mum and dad have gifted you the money instead.

If your parents aren’t able to stump up the cash for your deposit up-front, they may be able to help you out by offering to be a guarantor on your mortgage – meaning they agree liability if you fail to make your mortgage payments.

Use the services of a mortgage broker

The property market is heaving with all kinds of mortgages from a huge variety of lenders so if you can try and narrow the field, you can maximise your chances of having your mortgage approved. It can be a minefield to try and do the research yourself, but this is where a mortgage broker can prove invaluable. A good broker will be aware of the sort of criteria that different banks and building societies have so they’ll know the mortgages that you are likely to be accepted for given your circumstances – cutting out a lot of heartache along the way.

Speak to SoSmart Money today to discuss your mortgage.

The above post does not constitute advice – financial, legal or otherwise. The information within this article is the author’s own opinion and do not necessarily reflect the views of SO Media or So Smart Money.


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