It’s been two years since stricter tests around mortgage lending were introduced. Here, we explain five ways to improve the chances of your mortgage application getting accepted.
Getting a mortgage was already a complicated process, and since changes were implemented by the Mortgage Market Review (MMR) in 2014 it’s become an even more drawn-out affair.
The MMR was the government’s attempt to crack down on irresponsible lending, by requiring lenders to enforce tougher checks on mortgage applicants. These included asking for more details of day-to-day spending and placing more of a focus on whether borrowers would still be able to pay their mortgage if interest rates increased.
While it’s harder now than it was three years ago to get accepted for a mortgage, there are steps you can take to increase your likelihood of being accepted.
- For impartial advice on the best type of mortgage for your individual circumstances, and the lenders that are most likely to accept you, call a broker such as Which? Mortgage Advisers on 0808 252 7987
1. Choose the right time to apply
Lenders are more likely to look favourably on you if you’re in long-term employment and have stayed in your current job for at least a year.
If you’ve only recently started a new job and are still in your probationary period, it might be best to wait until you’ve completed that before considering a mortgage application.
If you’re self-employed, the more records you can show the better. While lenders typically require a minimum of two years of accounts signed off by an accountant, you can often boost your chances by having proof of several years of consistent or increasing income.
2. Check your credit report
It takes time to build up a good credit report, so if you have a poor credit history or no credit history at all, it can be tough to get a mortgage.
Whatever situation you’re in, checking your credit report well in advance of an application is a good idea.
Dormant accounts or incorrect information can have an effect on your mortgage application, so the sooner you check out your report and get any issues sorted out, the better.
Find out more: what is a credit report? – everything you need to know about credit scoring
3. Save a bigger deposit
Generally speaking, the bigger your deposit, the greater your chance of being accepted for a mortgage. You’ll also be able to benefit from lower interest rates.
While popular schemes such Help to Buy aid people who only have small deposits, it’s worth considering whether waiting a while and saving a bigger deposit might be the best option in the long run.
Many first-time buyers seek help from their family when purchasing their first home. This can often involve parents helping with the deposit or signing up for a guarantor mortgage.
Find out more: mortgage deposit explained – make the most of your savings
4. Get your finances in order
With lenders looking at your finances in forensic detail, you should get everything in order well in advance of applying for a mortgage.
In addition to avoiding any major expenditure in the months before you apply, try to pay off credit card balances in full each month and reduce any other borrowing.
Find out more: mortgage application: what you need – use our downloadable checklist
5. Speak to a mortgage broker
The most effective way to get the best mortgage deal is to speak to an independent, whole-of-market mortgage broker (also known as a mortgage adviser).
They will offer professional guidance and can search the market for the best deal, saving you both and time and money.
Your adviser should also speak to lenders on your behalf and deal with the paperwork, taking some of the stress out of applying for a mortgage.
- Which? Mortgage Advisers look at mortgages from every available lender and work for salaries, rather than commission, so you can rest assured that they’ll only ever recommend the best deal for you. Call them on 0808 252 7987 for expert, impartial advice.
- Improve your mortgage chances – check out our full guide
- How to get good mortgage advice – more tips on what to look for in a broker
- What a mortgage lender will lend you – find out how lenders calculate affordability
Your home may be repossessed if you do not keep up repayments on your mortgage.
Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.