Getting a mortgage is not always an easy thing – yet for most of us it is a necessity; without it, very few of us are able to make our dreams come true and climb up the property ladder. In order to understand how a mortgage application is evaluated, it pays to comprehend the reasoning of the lender.
So what do they look for? The mortgage lender wants to know you can afford to make the regular payments, on time and in full. Furthermore, they want to know you are not only able, but also willing to comply with their demands. So what if you are struggling at the moment? Here’s how to improve your chances of getting a mortgage if you have bad credit, a low income, and more.
Your history is important. The lender is sure to check out your credit rating, and they will do this by checking the following:
- Utility bills
- Credit card payments
- Missed payment of loans or debts
If your credit rating is bad, your chances become narrower. However, there are some things you can do to improve your credit rating. Here are some tips:
- Check for mistakes in your file. Have them corrected as soon as possible.
- Eliminate debts. If you have large debts, find a way to clear them as soon as possible.
- Don’t move. Lenders feel a lot more comfortable if they can see you have stayed at a certain residence for a long time, as attested to by a mortgage advisor Bristol from firms like Open Vision Finance.
The larger your deposit, the greater your chances of getting the loan approved, for several reasons. First of all, you are able to show you have your finances under control and are able to save, which is a big boost. Secondly, the more deposit you can show, the less the money has to come from the mortgage. Thirdly, chances are your interest rates will be more lenient with a high deposit. However, what if you have a small deposit? Here are some tips:
- Borrow from family or friends
- Check out government schemes – there are many to help you on your way.
Lenders will look at your income and your expenses and see if the difference is reasonable enough to account for a monthly mortgage payment. If your income is small, this may present a problem. However, there are government programmes that can help you with this – and they’re certainly worth the effort.
A mortgage is a serious thing, so be serious about it. If you’re struggling, remember that there are professionals out there who can help you and steer things in the right direction.
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