The struggle of getting your first mortgage approved is fascinating as well as full of challenges. Many things come to you collectively, and the critical fact is that none of these is known to you. A common person does not know much about the mortgage industry. He or she gets the first introduction from the property world only while making his big purchase. It is the reason that a need of guidance arises. Why not know about several useful tips that can help to get approval on the first mortgage?
Below are some workable tips, have a look –
Get familiar with all the don’ts of a first-time mortgage applicant
The most common thing among the first time applicants is the ignorance. Almost nothing is there in their excellent knowledge, and that makes them make mistakes which in turn brings rejection. If you know very less about the procedures and requirements, then read some crucial points. A first time applicant should never do these things.
• Don’t close credit accounts
• Don’t change job
• Don’t make large withdrawals
• Don’t make big purchases
• Don’t take any new loan
• Don’t apply to many lenders at the same time
When you avoid mistakes, your chances of mortgage approval naturally improve.
Apply for an amount that you can afford to repay
One of the biggest reasons for rejection is overconfidence of the applicant on the mortgage amount. Always apply for an amount that you can afford to repay. It needs consideration to the factors like debt-to-income ratio, employment stability, and recent financial behaviour. Also taking a rational decision with the help of calculators is the best way. Find a professional broker that deals in the mortgage for first-time borrowers in the UK. Make it do the calculations through repayment calculator. Your broker can always suggest ways of improving affordability. It knows which lending company in the market can provide you with funds with your current repayment capacity.
Do not buy properties with shared use of commercial purpose
The properties in a building that is partly used for commercial purpose are never in the good books of the lenders. They always act reluctant and try to refuse the application. Such home/constructions are not promising for the future.
Less number of buyers shows their interest in buying such properties. If you want to get a ‘yes’ of the mortgage provider, it is better to make sure that similar types of properties surround the property or home. It isn’t easy to borrow funds for a house that is accompanied by shops or other commercial activities.
Smartly improve your financial weaknesses
If unfortunately, you have any complication in your finances, it is necessary to deal with them beforehand. To avoid any chance of refusal, you need to work smarter. Here are some of the common complications that first-time applicants usually face. According to every condition solutions are available, take a look–
Lower- income – A small amount of monthly salary can be a big hurdle in attaining the desired amount for your significant purchase. For the solution, work on some workable methods. Try to increase your income by generating an additional source of earning may be any part-time work. Another indirect but effective way is, keep your debts low, which means if your debts are 20% of your income, you can expect to qualify for a larger amount.
Bad credit score – Poor credit situation is a prevalent issue that frightens first-time fund seekers. If you have a low credit rating, obviously it is better to attain a boost in your credit score by making timely repayments. Also, do not make ‘buy now pay later’ purchases, as the habit leaves a wrong impression in your financial records. Start investing your time in these efforts at least six months before applying for the mortgage.
Lenders hate bad credit situation. It is one of the most negative impressions on the decision of the finance companies that can spoil all your plans. Forget about a big loan like a mortgage. Even a small amount of loans is sometimes difficult to attain due to the less-than-stellar credit score performance. It is necessary to make things better on the part as soon as possible.
Living in the UK for less than 3 years – According to the lending rules in the UK, a mortgage applicant needs to have the proof of living in the UK from at least 3 years. If you haven’t completed this duration, then at least two-year proof is necessary. The lender will look at your bank account statement, earnings and the address details. However, it isn’t easy to convince the lender in such situations. A mortgage broker can help you by revealing which lender is available in the market that can consider you with less than three-year resident record in the UK. If still you don’t get success then last and the only option is to apply through a mortgage lender that has its roots in the country where you were living before moving to the UK.
Smaller deposit – it is a serious matter. More substantial the deposit amount, smoother is the approval. In case you do not have a sufficient amount to convince the mortgage provider, you need to work immediately on an action plan. Either you first gather a considerable amount for deposit and then apply for the mortgage, or you apply to a lender that is flexible on the deposit part. It should be ready to accept a down payment lower than the average requirement.
The conclusive thought is that…
The secret of easy mortgage approval resides in your financial conditions. Stronger and smarter you play on that part, better are the possibilities of attaining funds. Don’t worry. The situations are not that much difficult and complicated. Sometimes the fear of a problem is bigger than the actual issue. Just follow the right path, do not make mistakes, keep strong repayment capacity, and the game will be in your favour. Nothing is impossible in the mortgage world, even for the first time buyers if one follows the right way of doing things.