Applying for a mortgage can be nerve-wracking! It’s helpful to have an idea of exactly what sort of information lenders will look at when deciding whether you can borrow from them. Here, we look at some of the factors that will affect your application.
Whether you’re on the electoral roll
If you’re not registered to vote, your mortgage application will almost certainly be refused as lenders use information from the electoral roll to check your identity. This can often come as a surprise to many first time buyers. Contact your local council to see if you’re on the electoral register, if you aren’t, you can register online.
Your credit history
Lenders will want to check you’ve managed debts responsibly in the past, so they’ll look at your credit record to see if you’ve missed any repayments on loans or credit cards. Read our guide on how to improve your credit score.
Lenders will want to be certain that you’ll be able to afford your monthly mortgage payments, so will look carefully at your income. Typically, you’ll be able to borrow four to five times your income if you’re buying a property on your own, or your combined income if you’re taking out a mortgage with someone else. Read our blog on ‘how much can I borrow for a mortgage‘
As well as looking at your income, lenders will also scrutinise your spending habits. It’s a good idea to write down all your monthly costs before applying for a mortgage so that you can answer their questions accurately. It may also help you to identify areas where you can reduce your outgoings. Read our blog 13 unexpected things that can hold up your mortgage application.
There are several bits of paperwork you need to gather together to support your application. Without them, your application won’t be accepted. Read our blog 13 unexpected things that can hold up your mortgage application.
Many lenders are reluctant to offer mortgages to older borrowers because often people’s incomes fall in retirement, making it more of a struggle to meet monthly mortgage payments. However, some will allow you to borrow beyond retirement age, usually up to around 70 or 75, as long as you can provide evidence that the mortgage will remain affordable. Check your state pension age.
The size of your deposit
The amount you’ve managed to save as a deposit is another factor that will affect your mortgage application. Try to borrow a bit less than the maximum loan-to-value allowed as this may make lenders look more favorably on you. If, for example, you’re applying for a mortgage which allows you to borrow 85% of the property value, try to put down a bit more so that perhaps you’re borrowing 84% instead. Try our borrowing calculator.