Applying for a mortgage can be a bit of a scary situation as it is, without anything slowing the whole process down and making it harder than it needs to be. Unfortunately there are some things that can really affect whether homeowners will be able to secure a mortgage or not.
With schemes in place like “Help to Buy”, mortgage lending rates are higher than ever, but banks are still very particular about who they lend money to and applicants are being scrutinized more than ever.
Here are some things that can really slow down your mortgage application:
Over Ambitious Loans
When you are applying for a mortgage, it’s important to know how much you will actually be able to get. Although you may think that due to current low interest rates you can borrow more, it is crucial to remember that at some point interest rates will rise again and the price you will have to pay back will increase.
Don’t be over ambitious when it comes to applying for a mortgage, be realistic about how much you can afford and don’t try and stretch your finances, the last thing you want is to be struggling with repayments at a later date.
One of the key factors taken into consideration when applying for a mortgage is if you have a steady job and income. Any underwriter will want to know for sure that you have a regular amount of money coming in each month that will give you security when it comes to your mortgage repayments.
If you job-hop a lot, then your situation will look more risky, especially if you decide to change careers completely. If moving jobs is something you have in mind, it may be best just waiting until your mortgage is secure.
Having a Child
Mortgage lenders will assess your current life situation and base their decision on how stable it is. Huge life changes such as having a child can lead to a lot more scrutiny and slow the whole mortgage process down.
Couples with children will usually receive a smaller amount than those without children, and those who have not recently experienced big life changes will appear to be more financially stable.
Not on the Electoral Roll
Lenders will use the electoral roll to confirm the identity of a potential borrower when they are applying for a mortgage. If you are not on the electoral roll, you will face further ID checks, which will then slow down the whole process.
If you are not registered, then give your local council a ring or go online to sign up. It will give lenders a way to easily check your credit history in a fast and efficient manner.
Quite an obvious one, but if you have a large amount of outstanding debt, then the amount you will be able to borrow will be significantly reduced. If your debt is too big, you may not be accepted for a mortgage at all.
Lenders will also take into account how much available credit you have – if you don’t have too much showing, then you will be seen as a more suitable applicant and be more likely to secure a mortgage.
Before you apply for a mortgage make sure you think about all these things and see whether there is anything you can do to give yourself the best chance of securing a good mortgage deal. Remember though, you need to take out a realistic amount that you will be able to pay back regardless of how interest rates change in the future.
Hunters have over 100 offices nationwide including Selby