Five ways to improve your chances of getting your first mortgage

A mortgage is probably the most significant financial commitment you’ll make in your life.

Whilst in the mid-2000s people could self-certify to borrow money, since the financial crash of 2008, lenders have been far more cautious. Which means when applying for a mortgage, you’ll need to show them you’re able to pay your debt back. Something that for many people can feel a bit daunting.

Like a job interview, the key is to present an image of competence and trustworthiness. This means looking at every aspect of your financial life and making sure it’s as spotless as possible.

Below, are five helpful tips which can help boost your chances of getting that mortgage and your first foot on the property ladder.

Register to vote

You have probably been told this already, but before you do anything else you should definitely sign up to the electoral roll. This lets lenders know you have an official permanent address and aren’t likely to disappear anywhere. You should also make sure that any active services – such as a mobile phone, bank or savings accounts – aren’t listed at a previous address. Something as seemingly insignificant as this can scupper your application.You can register to vote here:gov.uk/register-to-vote

Upgrade your credit rating (part 1)

Before a bank or building society lends you any money, they’ll check your credit rating to see if you’ve got a good track record of paying off your debts. One consequence of this is that people who’ve avoided borrowing money can have a poor rating. If that’s you, it might be worth applying for a credit card, using it sparingly and paying off the balance in full every month. Just don’t miss a payment or you’ll undo all your good work. Alternatively, if you’re a renter you might be interested in Experian’s service ‘The Rental Exchange’. It’s designed to boost your credit rating and also provide an ‘online’ proof of identity by monitoring and sharing data on rental payments.

Have a financial spring clean

A successful mortgage application requires sensible planning. An excellent place to start is by closing any bank accounts you no longer use. If you’ve had joint accounts with an ex-partner in the past, write to one of the credit agencies –Experian and Equifax are the main UK credit referencing agencies – to be ‘de-linked’ from their financial arrangements. You don’t want their money problems affecting you.

Upgrade your credit rating (part 2)

While you’re in the process of applying for a mortgage, try to hold off on applying for other contracted items – like a mobile phone or home insurance. Some companies will conduct a ‘search on your credit report, which will show up when lenders look at your credit status and can reduce your overall score in the short term. Another good plan is to make sure you pay all your bills via direct debit which not only reduces the chance of you missing a payment but also demonstrates your reliability to prospective lenders.

Save up for a decent deposit

Without a deposit of at least five per cent of the property’s value, you won’t be able to get a mortgage. In fact, the more money you have, the more likely you are to get a deal with favorable interest rates. If you don’t already have a sizable deposit saved and aren’t in the fortunate position to  borrow from the ‘bank of mum and dad’, you could try saving with a Lifetime ISA (a ‘LISA): the government will give you a 25 per cent bonus on top if you can show you’re using the money for a deposit on a mortgage. Another option that independent advisors, such as Charles Cameron, can help with is to look at family assistance schemes like the Family Springboard. It’s a great scheme which allows family members to offset their savings in place of a buyer’s 10% deposit – the family members then earn interest and get the money back in 5 years.