Applying for mortgage approval is such an exciting time, you’re one step closer to buying your dream home. At The Levels Financial, we want to help you every step of the way, from applying for your mortgage in principle to signing the final paperwork and unlocking the door of your new home. This is why we have put together five steps to help increase your chance of mortgage approval.
Whether you’re a first-time buyer or a seasoned pro looking to remortgage or purchase a buy to let property, waiting for your mortgage approval can be a scary moment. Our top tips, outlined below, should help you in getting your mortgage approved.
- Step 1: Ensure You Have A Good Credit Score
- Step 2: Reduce Your Monthly Outgoings
- Step 3: Don’t Take On New Debts Before Mortgage Completion
- Step 4: Avoid Going Into Unarranged Overdrafts
- Step 5: Work With Local Mortgage Advisors
- Start Your Mortgage Approval Process Today
Step 1: Ensure You Have A Good Credit Score
Your credit score is a numerical rating which tells potential lenders how good you are at paying bills or loans on time. Ensuring you have a good credit rating will help you find a mortgage rate that best suits you. While having a poor credit score may not automatically rule you out for mortgage approval, it can impact the number of lenders and rates that are available to you.
Your credit score is determined by several factors, including:
- Payment history – if you’ve had any missed or late payments
- Credit history length – how long you’ve had bank accounts or credit cards open
- Credit diversity – having a mixture of loans, credit cards and other bills you’re having to pay off
- The current amount owed – how many loans you are currently paying off or into
- New credit – the number of credit accounts you have opened recently
Find out more about your credit score in our latest blog posts, ‘What can affect your credit score?’ and ‘5 ways to boost your credit score with our Yeovil mortgage advisors’
Step 2: Reduce Your Monthly Outgoings
Have a look at your monthly outgoings, are there any subscriptions, or regular spends that you could pause for the short term? Reducing your monthly outgoings frees up cash that you can then put towards deposit or solicitor fees. Having more saving to contribute to a down payment on a deposit, is a great way to increase your chances on getting on the property ladder.
Here are some common outgoings that individuals look at when trying to save for a mortgage:
- Food shopping
- Individual spending i.e clothes, hobbies, social events
- Pet supplies
- Music platform subscriptions
- Travel or fuel costs
By cutting down on your monthly outgoings, you can also improve your credit score, which as we have seen above, can help increase your mortgage approval chances. Find out more about applying for a mortgage in our blog post, ‘a guide first-time buyer mortgage advice.’
Step 3: Don’t Take On New Debts Before Mortgage Completion
While it may be tempting to purchase a new car on a finance plan, set up a new mobile phone contract or purchase some clothes using Klarna, it’s not the best idea when applying for a mortgage. Taking on new debts whilst you’re waiting for your mortgage to complete, or even to be approved, can flag you as a risky investment for your lender.
Regardless of what the debt is for, taking something of monetary value out on credit, whilst waiting for potentially the biggest loan you will apply for, can cause lenders to reject your application.
When your lender first receives your application, they will run a credit check on you, your partner or whoever you’re purchasing the house with and figure out the maximum amount they are willing to loan you. However, the lender can run a new credit check on you at any moment until your purchase is complete.
Step 4: Avoid Going Into Unarranged Overdrafts
In general, it is a good rule of thumb to not live beyond your means. When you’re applying for a mortgage or waiting for your mortgage approval, this is more important, especially if you don’t already have an overdraft arranged.
Using a pre-arranged overdraft, periodically, shouldn’t affect your mortgage application. However, if you’re constantly using an overdraft, or regularly falling into it, then this may be something you need to consider and address before applying for a mortgage.
At The Levels Financial, we understand that times can be tough and it’s not always easy to live within your means, especially during the current financial climate, which is why we have created a guide about saving, read more here: ‘How to save for a mortgage in the cost of living crisis’.
Step 5: Work With Local Mortgage Advisors
Navigating your way through the mortgage application process can be a minefield of form-filling, jargon and information overload, which is why it is always recommended to speak to your local mortgage advisors, (and we aren’t just saying that, promise!)
At The Levels Financial, we promise to always work with you to find the right mortgage rate for the best chance of mortgage completion. Not only this but when you choose The Levels Financial, you will benefit from:
- Jargon-free advice
- Meetings tailored around you, with evenings and weekend slots available
- Friendly and experienced team
- Local offices with face-to-face meeting spaces
- Award-winning mortgage advisors
- Insurance services are available too
Start Your Mortgage Approval Process Today
Have you been wanting to buy or move house, but unsure about mortgages, rates and fees? At The Levels Fincancial, we are with you every step of the way and can help with any questions or queries you may have. Get in touch with our team today and get the process started. Contact us at admin@thelevelsfinancial.co.uk or call us on 01458 772 040.
Important information:
If you do not keep up with your mortgage repayments your home may be repossessed.
A fee may be included for mortgage advice. The actual mortgage amount you pay will differ depending on your circumstances.
Fees can be up to 1%, but typically a fee is 0.3% of the borrowed amount.
