Like thousands of people across the country, you’re probably worried that your mortgage application won’t be accepted by your preferred lender.
Though it is definitely possible to secure a mortgage at the moment – trust us, we’ve achieved this for many of our clients recently! – the uncertain economic climate and confusion regarding interest rates isn’t helping matters. In fact, as of the end of October 2023, mortgage approvals fell to an eight-month low, matching the slump that occurred back in January.
Analysts and seasoned mortgage advisors will tell you that the mortgage market at the moment is reminiscent of the months and years that followed the financial crash in 2008. Just like back then, homebuyers are being charged an average of more than 5% to borrow the funds they need to complete on their purchase. (To put this into context, just two years ago the typical buyer paid just 1.78%. It was an unusually low rate, but we got used to it!)
While we can’t wave a magic wand, fix the financial landscape, and guarantee you’ll be given the go-ahead by your mortgage provider, we can help you make sure your mortgage application is as attractive as possible, so they are more inclined to say ‘yes’.
Obviously, there are a few things you’ll need to consider as a matter of course, such as saving as much for your deposit as possible and making sure you’ve paid off any significant debts. For the maximum chance of success, here are 5 lesser known but just as important pieces of advice to help you on your way.
1. Do your sums, and do them well
There’s no point approaching a lender for a significant amount of money if you can’t demonstrate you’ll be able to pay it back. Most lenders will have to follow strict affordability criteria when assessing your application, and if they weigh up your income vs your outgoings and determine you’re not an eligible candidate, the process will have been a waste of time for them AND you.
Plus, it’s not just your ability to meet the monthly repayments that’s in question – it’s whether you have the cash to cover all the extra costs that come with buying a home, including stamp duty, conveyancing and survey fees, and estate agent fees if you’re selling your existing property on.
An experienced mortgage advisor will be able to help you crunch the numbers. More on this later.
2. Check you’re registered to vote
You might not know this, but if you’re not registered on the electoral roll, you’ll struggle to get a mortgage full stop (even if you have a brilliant credit score). This is because it’s an easy and accurate way for lenders to verify your identity.
Check your credit file, and if you’re not on the list, contact your local council to get on it, pronto.
3. Don’t chop and change your application
Lenders don’t like to see applicants going back on themselves and changing the figures after they’ve approached them for a loan. Even if doing so doesn’t spell complete disaster for your chances, it will almost certainly delay the entire process, which will be frustrating for you and anybody else in the chain.
We say: make sure you are 100% confident in your application before submitting it.
4. Make sure the property is worth what you’re willing to pay for it
If you end up falling in love with a place, it’s easy to go with your heart, and not your head – and tell yourself you’re willing to pay over the odds for your perfect home, or at the very least overlook its faults.
However, if the house or flat you have in mind is of a more unusual construction, needs a lot of renovation work, or is simply not worth what you’re offering to pay for it in real terms, lenders won’t be queueing up to sign you up.
Why not? Because they will be concerned that they won’t be able to sell it on if you get into trouble and can’t keep up with your mortgage. And, as we know, more risk equals more chance of refusal.
5. Use a mortgage broker!
The points listed here represent the tip of the iceberg when it comes to crafting the perfect mortgage application. There’s so much to consider – so why not get assistance from someone who knows the industry and the application procedure inside out?
As well as helping you find the right deal on the best possible terms, your mortgage advisor can guide you through every step of the application process. They will be able to help you:
• Review your finances
• Ensure your calculations are realistic
• Bring together all the important documents, including proof of income (or proof of accounts, if you’re self-employed)
• Navigate the paperwork
• Chase up feedback and approvals
Don’t leave your successful mortgage application to chance. Speak with the team here at Jones Mortgages & Investments for support with all the above, and much more.