In this two-part article, we'll look at what a lender is looking for and how you can improve your chances.
To get the best mortgage deals, you'll need to be as attractive as possible. Here are a few tips on how to improve your chances of getting the best deal and the deal that you want.
So are you fanciable?... Every lender is different and has its own methods of deciding whether they want to lend to you. Each lender has its own criteria and will score you against this. If you fit the criteria, you'll be accepted very quickly. If your scores aren't what they're looking for, they will probably reject you. There are some people who will score in the middle and will then have to flirt with the lender by proving their worthiness and increasing their score. A lender's scorecard will normally be based on factors, such as how much deposit you have saved, your employment status and income, the size of the loan you require, your credit rating, your outgoings and your existing debt.
How can you increase your score?.... Check your credit report before your lender does…before you apply for your mortgage get hold of your credit report. You can either pay for this or you can get the basic report free. Experian and Equifax can supply these. One of the first things a lender will do is to check your credit score. You'll need to convince lenders that you've got a good grip on your finances for them to be able to see that you have the discipline required to pay back the mortgage. Your credit report is a good indication of this as it will list past credit cards, loans, overdrafts, previous mortgages, mobile phones, and some utility payments for all accounts that have been open for the past six years.
Is your credit report correct?...Check your report and make sure that it all looks correct to you. If there are any errors, you do have the right to do something about it…you can either have the error corrected or have a note added to it with an explanation. If you are having difficulties with this, the Financial Ombudsman may be able to help you.
Are you on the Voters' Roll?...This really is a deal-breaker as it's almost impossible to get a mortgage without being on the electoral roll. This is regardless of whether you have a perfect credit score or not. Lenders will use the electoral roll data in identity checks to ensure that you are who you say and that you live where you say and that you're not money laundering. You can check this either with your local council or, if you have obtained your credit file, this will show if you're on the electoral roll or not. If you are not you can register for free on the Government site.
Part two coming to you next week.