Ask any mortgage adviser and they will tell you that the mortgage market is a lot tougher than it was a decade or so ago. Back then, you could get zero deposit mortgages that cost nearly all of your wages and the lender would just hope that you could manage. Today, lenders are a lot more cautious and consider the individual in a lot more ways than back then. So, what are the most common reasons people struggle to get a mortgage and what can you do about them?
Poor credit record
Probably the top reason that mortgage brokers hear of people being refused a mortgage is due to their credit rating or credit record. Let’s face it, we all hear talk of our credit score but don’t give it much thought. Which is fine, until you come to get a mortgage or a loan of some kind – that’s when it makes a big difference.
Your credit record is influenced by a number of factors such as your debt levels, your repayment history on debts, any defaulted payments and also any County Court Judgements (CCJs) or having been declared bankrupt in the past.
Talk to an independent financial advisor (IFA) about your credit score before you begin the mortgage application process and see if they can spot issues that will mean you might struggle. It might mean postponing your plans but a better score will mean a better mortgage.
Trying to borrow too much
There are so many gorgeous houses around Cheltenham but not everyone is going to be within your reach for a mortgage. If you try to borrow too much, then the banks or building societies will simply turn you down. You need to go through some independent mortgage advice to see what you can afford and this, in turn, will give you an idea about how much you can borrow.
The modern mortgage assessment process means that lenders will look at your outgoings, living costs and your income before deciding how much they will lend you or if they will approve the amount you have asked for. So, doing some preparation to see what is realistic can save you a lot of time and heartbreak down the line.
Not having consistent employment records
Mortgage lenders want reassurance that you are going to be able to pay the mortgage they are giving you and this means you need income. People who have variable income or gaps in their recent employment history may struggle to get a good mortgage because companies will be uncertain that they will be able to make payments.
In fact, some mortgage companies prefer you to have been in your current role for at least six months before they consider you. Also, while applying for a mortgage, don’t consider changing jobs or making other alterations that affect your income as this might stall the process. Show consistency and the mortgage company are more likely to reward you with the mortgage you want for the house of your dreams.