First mortgage application accompanies excitement as well as anxiety. As a newcomer in the mortgage industry, you are unaware of the formalities and procedures. A battle occurs on varied fronts, suddenly all your financial conditions, including your financial behaviour, come under the scrutiny of the money world.
Every second you are worried that if you will get the approval or not. Some ways can help to strengthen you as an applicant and ensure approval on the mortgage application.
- Work on personal finances
Your financial condition is the most critical pillar to construct strong chances of approval. From your daily bill payments, debt-to-income ratio to spending habits, you need to work on everything.
Anything that happens in the name of loan procedures depends totally on your circumstances.
From a broker to a lender to the property agent and even solicitor, they all depend on your conditions. Better you do the money management, faster and smoother will be the process.
- Keep your transactions detectable through auto-debit –
Lenders always want to see the type of financial transactions you make. It helps them understand your repayment capacity in totality, which in turn becomes the base of their approval decision.
Payments done through cash are not easy to prove while the auto-debit creates a clear picture of your personal finances. For example – paying your monthly instalment of personal loans through auto-debit and on time leaves a good impression on not only the lenders but also on credit reference agency and it improves your credit score. Similarly, other payments done through direct debit method helps the money world know you better.
- Apply for a joint mortgage if you have a smaller credit history
Short credit history is considered as the sign of good financial health. This is because the lenders have mortgage providers does not have sufficient duration to calculate your financial strength. The mortgage is a long term loan and for that lenders usually prefer an applicant that owns a long history of credit but if you have a shorter one. You think that approval chances can adversely affect the approval chances then apply for a joint mortgage. Your partner or any of your family members can accompany in your application. Repay capacity of two people will show you more substantial on the part of eligibility.
- Attain a pre-approval on a mortgage
The lender gives a pre-approval on the mortgage to the applicant based on necessary financial information. It is valid up to 3 months, and during that time you can find a property that suits to the loan amount that is approved to you.
However, don’t forget that you need to keep your expenses in control because after you accept the initial offer, the mortgage company again goes through your financial details to check the latest status. If there is any flaw like delayed payments, big purchases, etc., then it may cancel or reject your loan application.
- Show employment stability
Your mortgage approval entirely depends on your financial stability, which in turn depends on your employment stability. Lenders always prefer the applicants that have a good job history. Staying in the same job for a long, very long time is hugely beneficial to borrow money smoothly.
Before applying for a mortgage, it is not advisable to change your job. At least, 2 years of experience in your latest job company is an ideal situation to win the trust of the lender also if you can attend appropriate increments through an excellent performance you can get funds without any compromise in the loan amount limit.
All the above factors can act supportive to ensure a smooth approval on your mortgage application. However, the most important thing is to choose an appropriate lender, for this purpose, either you can take help of a friend or family member who is aware of the mortgage industry or can hire a broker.There are broking companies that offer free services, for example, you can take help from the experts at Shine mortgages, an online mortgage broker. It has a broad panel of 90 + lenders with a higher approval rate. You can even attain 100% LTV as a first time mortgage applicant. Wherever you are in the UK, the broking services are available 24×7.