Boosting your mortgage chances

Banks and building societies don’t advertise in the lonely hearts. Mortgage lenders are not looking at your GSOH, caring side, bubbly personality and fondness for long country walks. They have very definite ideas about what types of customer they are looking to attract when it comes to mortgages – their perfect match, if you like.

The more of their boxes you can tick, the better your chances of getting coupled up with a competitive mortgage. So how do you sell yourself as Mr or Mrs Right?

1. You don’t have to be loaded
Lenders like people on reasonable salaries. You’ve obviously got to be able to afford the mortgage. But being in a stable job with a regular income is more important than how much you earn. Lenders like stability. Not all mortgage lenders will offer you a mortgage if you have a zero-hours contract job.

2. It helps to have a past
Believe it or not, lenders don’t like thin credit files, they prefer people who have a history of buying things on credit – providing the bills are paid on time. That shows them you’re good at managing your money and can meet regular repayment schedules. Lenders will be less keen on seeing lots of current debt in your name. Debt is bad because it means less money to pay your mortgage. Try to pay off credit cards and hire-purchase agreements – as well as reducing your so-called “non-committed” expenditure – things like TV subscriptions and gym memberships – before applying for a mortgage.

3. Be open and honest
If you have missed credit card payments in the past, don’t “forget” to mention it. The lender will probably find out when a credit score check is run against your name. Some lenders will be relatively relaxed about the odd unpaid mobile bill or other unauthorised dip into the red. Other lenders will use it to decide you’re not for them. It helps to know where you stand before getting too deeply involved.

4. Lenders love boring
Steady, safe, reliable, dull. These words are music to a lender’s ears. Dramatic lifestyle changes can affect finances. If you’re a couple thinking of having a baby (with one of you giving up work) or making another major commitment, it could count against you. You really should tell your mortgage adviser if you’re planning anything life-changing in the next few years. They’ll be able to talk you through the implications and find a mortgage that remains affordable as your circumstances change.

5. Woo them with a sizeable commitment
The more money you can put down as a deposit, the better. Lenders love to see a commitment they can count on. The bigger your deposit, the lower the loan-to-value (LTV) ratio will be on a mortgage. That will enable you to access more deals, over longer terms, at better rates. If you can scrape it together, a 15% deposit really helps.

6. Be a solid and reliable homeowner
Lenders definitely go ga-ga over solid, reliable types – particularly homeowners. Why? Because they consider such borrowers less of a risk. If you have a property, lots of equity and a consistent mortgage repayment record then you are a lender’s dream date. They will be falling over themselves to offer you good deals. What if you don’t have a home or a sack of cash for a large deposit? Don’t worry; someone out there will want you. In mortgages, as in love, there are always plenty more pebbles on the beach.


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