BOOST YOUR MORTGAGE CHANCES!

1. Make sure you’re registered on the electoral roll

All lenders use electoral roll data to carry out identity checks, so if you’re not on the electoral roll, you’re chances of being approved for a mortgage plummet!

It’s free to register on the electoral roll, and usually takes around a month for you to be added from the date of your request, so make this a top priority before you even think about applying for a mortgage.

You can register to vote here

2. Get to grips with your credit report

Your credit report is a list of all your credit agreements (loans, mortgages, credit cards, mobile phone bills and overdrafts) for the past six years. Mortgage lenders use this information to find out if you’ve got a good repayment history to help them decide on whether to lend to you.

There are three main credit reference agencies (CRAs) in the UK:

It’s worthwhile getting a copy of your credit report from all three CRAs, as different mortgage lenders will use different agencies and you’ll want to make sure that the information held about you by all of them is correct.

If you find any errors on your credit report, you have the right to request that the lender removes the incorrect information.

3. Cut ties with your ex

Any time you apply for joint credit with another person, you become financially linked, and even when a loan has ended or an account had been closed, this link may still exist on your credit report. This means that if you’ve ever had a joint bank account for paying bills with an old flat-mate, or a joint loan with an ex-partner – if they make late payments on other debts, even after you’ve gone your separate ways, they could be affecting your ability to get a mortgage or other credit.

To make sure this doesn’t happen, you need to ask the CRAs for a notice of disassociation, which is a flag on your credit report that says you’re no longer associated with that person.

4. Sort out your paperwork

The exact paperwork that you’ll be asked to provide will vary from lender to lender, but it makes sense to have all your paperwork to hand as this can help to speed up your application. Here’s a list of the most common documents you’ll be asked for:

• Photographic ID (passport or driver’s licence)
• Your contract of employment
• Your last three months’ bank statements
• Your last three month’s payslips or self-assessment form SA302/accounts for self-employed
• Your most recent P60
• Details of any current loans/credit cards etc
• Proof of address (utility bill or bank statement dated within the last 3 months)
• Proof of extra income you would like to be considered (i.e. a guaranteed bonus)
• If you’re being gifted money towards your deposit – a gift letter to confirm that the funds are not a loan and the person giving the money will not own part of the home when purchased.

Copies of documents won’t do, so make sure you keep originals and take the time now to request hard copies of anything you don’t already have to hand.

5. Get your facts right

When you’re applying for a mortgage, it’s important to be honest and state the facts. Don’t round-up your salary, fib about how much you spend each month on going out, or try to hide that second credit card. The mortgage lender will find out the truth when they cross check your figures with your paperwork (payslips, bank statements and credit report). If things don’t add-up, then they may wonder what else you’re not telling the truth about!

Make sure you state your full name, including middle names on applications, and have a note of full address (including postcode and flat positions) for where you’ve lived over the past 3 years. Incorrect little details might not derail your application completely, but they can slow the process.

6. Manage your other credit

The most obvious way of doing this is to make sure you pay your bills on time. It’s not rocket science, but if you’ve got defaults listed against you, they can blow up your chances of getting a mortgage.

The relationship between you and your current credit providers is important to how other lenders see you when looking at your credit report. A stable relationship with a long payment history is positive. However, if you’ve got old, inactive accounts, such as credit cards you’ve cleared and no longer use, you may want to close them as they can be a fraud risk.

Around 6 months before you apply for a mortgage, try to avoid applying for credit elsewhere. Every time you apply for a credit card, loan, mobile phone contract or overdraft, a search is recorded on your credit file. Mortgage lenders will look at these searches, and if there are a lot in a short period of time they may surmise that you’re financial circumstances are less than perfect.

And steer clear of payday loans at all costs as many mortgage lender may automatically decline you if you’ve had even one recent payday loan.

7. Monitor and clean-up your day to day spending

Saturday night take-aways, mid-week online bets, and Friday after work drinks all add up, and more importantly show-up on your bank statements. You don’t need to stop enjoying yourself completely but reviewing your day to day spending and cutting back where possible can be good for your in more ways than one:

1. It’ll help you save for all the added costs that come with house buying (moving vans, new furniture etc)
2. Mortgage lenders will look at your bank statements to get a picture of your spending habits – if you’re always living close to the red, or in your overdraft then this could look bad when they ‘stress test’ you (this is when a lender checks your ability to continue to repay a mortgage if rates were to increase).
3. Any extra you can save towards your deposit is a good thing as it means that the amount you’re borrowing, and therefore paying interests on, is reduced. Over the term of a mortgage, this could save you £££s in interest.