Getting approved for a mortgage can be challenging, but there are steps you can take to boost your chances.
Here, we reveal 10 things that could affect the likelihood of you securing a mortgage, and offer tips on how to overcome them.
Lenders may be reluctant to grant you a mortgage, however, if you have large amounts of outstanding debt from personal loans and credit cards.
This is because having to pay off other loans will directly impact how much (and whether) you can afford your mortgage repayments each month.
For this reason, it's really important to pay down as much debt as possible before making a mortgage application.
While your student loan will not be considered the same as other forms of debt, your lender may take it into account when working out whether or not you can afford to take out a loan. Read to find out more.
This is because lenders use your credit history to judge your ability to stay on stop of debt.
Missing or making late payments on a previous mortgage, loan, credit card or even your mobile phone bill could potentially scupper your chances of being accepted for a mortgage.
Applying for a loan with limited or no credit history is a bit like applying for a job without a CV.
Since your credit score lets lenders know how reliable you are at making repayments and handling your debt, you'll need to have some form of history to be approved for such a large loan.
The electoral roll allows lenders to verify your identity quickly. Not being registered will make it difficult for a lender to confirm who you are.
This could slow down the mortgage application process, as your lender will probably request additional identification checks, and it could even result in your application being rejected altogether.
The type of property you're looking to buy could affect the success of your mortgage application.
Ex-local authority housing, for example, can be appealing as these types of home are often cheaper than others on the open market. Most lenders, however, are reluctant to grant mortgages on this type of property as they are considered more likely to lose value over time.
Similarly, you may find it difficult to get a mortgage for a flat above commercial premises like shops, pubs or restaurants, as they are at a greater risk of being affected by things like noises, smells, rubbish and security issues, which can also bring down the value of the property.
It's important to do the maths and be realistic about how much money you can afford to borrow.
Typically, mortgage lenders will only lend a maximum of four-and-a-half times the combined annual income of you and anyone else you're buying with. Asking for a loan above this threshold will likely result in your application be rejected - and you may well find that you're offered less than the maximum.
Mortgage providers can be reluctant to approve a loan to self-employed workers.
If you're self-employed and are hoping to buy a home, it's vital to compile documents proving your past income and future opportunities for payment. Most lenders will want to see at least two years' worth of accounts.
Going through major lifestyle changes that could affect your finances, such as starting a family or going through a divorce, could negatively affect your mortgage chances.
Similarly, if you are expecting a child and going on maternity leave at the time of applying for a mortgage, lenders may be wary of how much you'll be able to afford if you're expecting a decrease in income.Read our guide onfor more information.
And if you're hoping to get a mortgage after getting divorced, it's important to re-evaluate your financial circumstances, especially if you're buying alone. Our guide onshares everything you need to know about securing a new home.
Lenders scrutinise every mortgage application with a close lens, so it's really important to make sure all of the information you give your lender is correct and up-to-date.
Any discrepancies or inaccuracies on your application could not only slow down the loan process, it could also result in your loan being turned down altogether.
So your finances are in great order, your credit score is impeccable; everything should be smooth sailing, right? Not always.
Each lender will have its own affordability criteria and may place more weight on certain factors. For example, while some lenders may be more willing to accept applications from households with growing families or self-employed applicants, others may have more rigid criteria.
It's important to find the lender most likely to accept your financial and personal circumstances the way they are - and this is where the expertise of a mortgage broker can really help.
Whether you're a first-time buyer or home mover, applying for a mortgage can be a stressful and daunting prospect.