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Climbing onto the property ladder has its challenges, not least getting approved for a mortgage. But fear not – there are things you can do to help make owning that dream home a reality.
Here are 6 tips that could help boost your chances of getting a mortgage.
Some lenders offer 95% mortgages, meaning you’ll only need a 5% deposit. For example, if the property price is £150,000, you’ll need a £7,500 deposit to borrow £142,500. However, putting down a slightly bigger deposit could improve your prospects of getting a mortgage.
Read our 5 tips that could help you save for a deposit.
A bigger deposit could mean you’ll need to borrow less money to buy the property, so you’ll have a lower loan-to-value (LTV) ratio. You may also get access to lower interest rates and, therefore, lower monthly payments.
Remember that you’ll also need to cover additional costs, such as survey costs, conveyancing fees, and Stamp Duty (if payable) when buying a home.
You may be able to get financial help from the government to help you get onto the property ladder. To find out more, visit GOV.UK: Affordable home ownership schemes.
Please note: first direct are not able to offer a mortgage on properties with government backed schemes.
Before starting a mortgage application, check your credit score and fix any mistakes. There are things you can do to help improve your credit score, such as joining the electoral roll and taking care not to miss or make any late repayments.
See how you can improve your credit score.
Lenders use your credit score, among other factors, when deciding whether to accept your mortgage application. It can show them how you manage debt and other financial commitments. A good credit score can help improve your prospects of getting a mortgage.
Getting on top of your finances before you make your mortgage application is important.
If you’re over-extending yourself or struggling with money, your application may not be approved.
Missed and late payments can hurt your credit score. You may also be charged late payment fees, so try setting up a Direct Debit on your accounts to make sure bills are paid on time.
Lenders need to be confident you can make your mortgage repayments so they’ll take any existing debt into account when reviewing your application.
Reducing existing debt you may have before you apply can be a good idea. Plan a budget to see where you can make changes to your spending and free up money. You can then decide on a plan to pay off the debt.
For example, you could start by:
You’ll still need to meet the minimum payments on all debts.
Organising what you need can help speed up the mortgage application process. Before you start:
Your application is very important. Take the time to make sure everything is accurate to help improve your chances of getting approved. Check and double-check (even triple-check if you’ve got time) before you submit.
And only apply for a mortgage you can afford, even if your circumstances change.
Think carefully before securing other debts against your home. Your home may be repossessed if you don't keep up repayments on your mortgage.
We have lots of different mortgage options, from Repayment and Offset, to Fixed, Tracker and Standard Variable Rate. If you’re not sure what any of this means, we can help.
We have a handy calculator to give you a rough idea of what you may be able to borrow – simply add a few details and get an indication in seconds.