Mortgage Applications: Improving Your Chances

Applying for a mortgage is an exciting yet nerve-racking time, and whether you are accepted or rejected makes a big difference to the course your life follows. But how much can you do to improve your chances of having your application approved? There are several steps you can take to help sway things in that direction.

Shape up Your Credit Score

Despite a number of very real differences in the way we treat and think about them, at heart mortgages are just another kind of loan. As with any other credit product, your borrowing history will play a big role in the lender’s decision. Before you make your application, look at ways you may be able to give your credit score a boost such as cancelling old credit cards or expanding your history of responsible borrowing. While you’re at it, make sure you take a look at your credit report in order to identify how much room you have for improvement and potentially even spot mistakes that should be removed.

Be Extremely Frugal (at Least for a While)

The strict affordability checks that mortgage applications are now subject to have made their fair share of headlines, and they are very strict indeed. A lender is now likely to make a deep and detailed analysis of your finances, looking over recent bank statements and considering pretty much all of your incoming and outgoing funds, in order to decide whether you can really afford the mortgage. The fewer outgoings they see on your past several months’ statements, the more likely they will find in your favour. For a few months before your application, even if only temporarily, you should cut out as many expenses as you can. Cancel subscriptions,  memberships and even regular commitments to savings accounts, and try to shift any other debts you currently have, to make sure your outgoings are as small as they can be and persuade the lender you are a safe bet for regular repayments.

Give the Biggest Deposit you Can

“Every little helps” is a cliché that can prove very true when it comes to the deposit. Sometimes, when you are located right on one of the lender’s threshold, even a little extra like £100 can either improve your chances of acceptance or, failing that, make the process a little smoother by requiring fewer documents. Offer the biggest deposit you can afford to in order to maximise your chances of acceptance. As far as those thresholds go, when lenders use arbitrary figures to accept judgements they are usually a nice round figure. If your deposit is something nice and neat like 75% of the property’s value, adding just a little extra could potentially push you into a different band and classify you as a member of a more attractive group.

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