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How to Get a Mortgage

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If buying a property is on your horizon and you’re wondering how to get a mortgage, we’ve got some top tips to help you boost your chances. This process can feel like you’re climbing a mountain, so let’s break it down.

Top tips how to get a mortgage

Here are some tips to give you a leg-up onto that first rung.

#1 – Understand what mortgage to get

Let’s break the process of buying a house down. The first step on your pilgrimage to the mortgage application form is to understand exactly what it is you’re looking for. This might sound a little obvious at times but let’s drill down a little deeper.

There are numerous different types of mortgages available to lenders and your chances of getting approved may depend on going after the right mortgage based on your circumstances.

For instance, an interest-only mortgage may seem like a cheaper or more convenient option, but lenders are stricter on approving this type of mortgage due to the uncertainty of whether you can pay the lump sum after your mortgage period is over.

Mortgage Quotes

Your home may be repossessed if you do not keep up repayments on your mortgage.

#2 – Get your head around mortgage provider criteria

Not every lender has the same priorities. They will each have a set of criteria that they care about the most. Generally, the most common priorities for a lender are:

  • How much you want to borrow – the mortgage loan itself
  • The amount you can pay as a deposit – this is best worked out as a percentage
  • Your employment and finances
  • Your credit score
  • How do you manage your current month-to-month outgoings
  • Any existing credit or debt you may have

If any of these aspects reflect less than favourably on you, there’s a chance you’ll have your mortgage declined. Having said this, there’s certainly a lot that could be done to improve on this list. Our tips for getting a mortgage could see you on your way to a successful application.

#3 – Do you have a regular job and income?

It’s important to demonstrate to potential lenders that you’re the epitome of stability. Essentially, you’re more likely to be approved for a mortgage if you’re in long-term employment. It’s not the end of the world if you’ve recently moved to a new position – especially if this means your annual income has improved. If you can hold off applying for a mortgage until you’ve been working in the same company for at least six months, this may give you a better chance of getting approved.

If you are thinking about changing jobs in the near future, consider the impact it may have if done during the mortgage approval process. It could not only hinder your chances of approval but also boost your stress levels! Moving house has been cited as one of the most stressful things you can do, starting a new job at the same time would likely add to that personal pressure.

#4 – Be realistic about what mortgage you can afford

Again, this sounds like basic advice but there are so many people out there who fall into this trap. Can you comfortably afford the loan repayments you’re looking to commit to?

To be sure, you need to do a full budget of your income and outgoings to weigh up exactly how you’ll be able to afford monthly repayments. If there’s even a slither of doubt in your mind regarding affordability, it’s almost certain the lenders will spot this too. Just about managing to make repayments each month isn’t acceptable, you need to already be living a lifestyle where you could manage to pay the additional monthly outgoings you’re looking to commit to.

How Much Could You Borrow?

#5 – Check your credit score

You’ll want to see where you stand before lenders do, so make sure you check your credit score

Check Your Credit Score

When you apply for a mortgage, one of the first things your lender will look at is your credit history. They’re in the business to lend money and assess risk, and your report will play a role in whether you’re a risky candidate for a loan or not. So, it’s vital you know where you stand so you can take measures to improve it (if necessary). 

What will a lender see?

A lender will need to determine what would happen if you fell back on mortgage repayments – and how likely that is to happen. A good repayment history is key. A credit report will show details from the past 6 years, including:

  1. Overdrafts
  2. Mortgage applications/mortgages
  3. Loans
  4. Unpaid bills (e.g. certain utilities)

#6 – Improve your credit score

There are many things you need to get a mortgage, and a good credit score is often one of them. It can take some time to improve your credit rating. Any previously missed payments of debt issues for the last six years will be highlighted on the report for six years. County Court Judgements give a significant blow to your score. You can get a mortgage with bad credit, but it may cause problems.

Don’t panic, this isn’t the end. Here are some ways to improve your credit rating over time:

  • Pay all bills on time
  • Check to see whether you’re linked to another person (spouse or family member) with poor credit
  • Check for any fraud (credit applications made in your name)
  • Pay off your existing debts
  • Apply for (and use) a credit building card
  • Regularly pay credit card balances off in full every month
  • See if you can get an instant score boost by proving you can manage payments reliably

This is a slow burner and it’s not something you can fix overnight. If you have a poor credit history, it may be worth taking some time before applying for a mortgage. This extra time can be used to improve your credit rating while also saving for a larger deposit.

Should there be any incorrect information on your credit file, you can do something about it. In some cases, a simple address update is all that’s needed.

#7 – Assess yourself

Try to be objective and see yourself through a lender’s eyes. Are you a good candidate for a loan? Here are some things they’ll consider:

  • Credit checks
  • Any debts (e.g. credit card)
  • Deposit size
  • Loan size
  • Income
  • Ingoings vs. outgoings

Nothing is guaranteed when it comes to buying a home. But, you can give yourself the best chance of appealing to a mortgage lender by coming across well on paper.

#8 – Is now the time?

When working out if you can afford a mortgage and how likely you are to be accepted, you need to decide if the timing is right. 

For example, if currently furloughed, your chances of being approved are lessened. So, it might be better to wait until a later date.

While mortgage applications don’t damage your credit score directly, if future lenders see you’ve been rejected multiple times, it can make them less likely to lend to you. So, ensure the timing is right before going any further. 

It’s pretty rare for someone to have enough cash stored away to be able to buy a property outright. This means getting a mortgage is often a critical step in the home buying process. Mortgage debt can be a significant commitment for anyone.

Find Your Mortgage

Your home may be repossessed if you do not keep up repayments on your mortgage.

#9 – Register to vote

The importance of this point cannot be underestimated. Irrelevant of whether you have a strong credit history or not, not being on the electoral roll will be a hammer blow to your chances of mortgage approval.

This is because banks and lenders will look to the electoral roll to verify your identity. There’s no reason why you wouldn’t do this, it’s free and will usually take about a month to implement. We recommend registering to vote sooner rather than later.

It’s worth double-checking that your address is up to date too, even if you know you’re on the electoral roll. The last thing you want is for a mortgage application to be rejected because your contact details aren’t accurate.

#10 – Manage your existing credit

Mortgage lenders won’t just consider your monthly outgoings and the credit you’re applying for, they’ll also consider the amount of credit you currently have available.

Managing your available credit is a fine balance. It’s also a good idea not to have an exuberant amount of available credit unused. This is because banks or lenders will see the potential for you to easily find yourself in financial difficulty after your mortgage has been approved.

Your credit utilisation is the percentage you use of your credit limit. For example, if you have a limit of £2,000 and you’ve used £1,000, your credit utilisation is 50%. Most of the time, a lower percentage will be seen positively by lenders. You don’t want to seem like you’re at the edge of your finances. 

Here’s where it gets interesting. If you don’t use any of your credit, there’s less evidence to lenders that you can manage credit responsibly. However, if you were to use most of your available credit and were close to your credit limit, it’ll appear as if you’ve not got a solid grasp of your finances.

If possible, try and keep your credit utilisation at 25%.

#11 – Consider the financial position

If you’re weighing up your options and struggling to determine how to manage your current credit, consider your financial position through the eyes of your lender:

  • What do your current borrowing/spending habits say about you?
  • Could you afford your mortgage repayments if you were to use all your available credit?
  • Are you living comfortably within your means?
  • With mortgage repayments added to your monthly outgoings, will you still be able to live comfortably within your means?

Further to this, it’s always ideal to have repaid any long term debts you may have, as this will stand you in good stead moving forward. If you’re looking to get your credit card spending habits on the straight and narrow, consider using less than half of your credit each month and pay this off in full (or a large percentage of this) each month.

#12 – Close any old or inactive accounts

It’s not unusual to have old accounts hanging around that you barely use. These could play a detrimental role in your mortgage application for a number of reasons.

First of all, your details may not be up to date, which could hinder the reliability of your application. Plus, it could be an extra cloud of unused credit hanging over your head that lenders will see as available to you.

Think about it this way, in a lender’s eyes, what’s stopping you from going out and spending your extra £5,000 available credit one weekend and potentially finding yourself in financial difficulty. Just remember that if you do close any credit account, you may need to change current spending habits on other accounts to stay within the lower half of your available limit.

Nothing in the mortgage application world is straightforward, so here’s another point to consider before you grab the nearest phone and close down that 7-year-old credit card account. A long and happy relationship with credit companies is welcomed by lenders. It’s a sign that you’re financially stable. So, if you have a number of credit accounts but only use one, close down the most recent and use your older account more regularly.

Be aware, that being inactive is not closing an account – you need to pick up the phone and follow all formal steps required to close your account. It may seem like an unnecessary hassle but it’ll be worth it if your mortgage application is approved.

#13 – Pay your bills on time

If you want to be approved for a mortgage, you need to maintain a solid record of paying your bills on time.

It sounds obvious, but you need to ensure you’re managing your finances wisely. Any missed or late payments will count against you, so keep a tight grip on your outgoings. This includes everything from utility bills to your mobile phone.

Tip: setting up direct debits can help ensure you don’t miss anything.

If you were to default on a payment prior to your mortgage application, you’re making it easy for a lender to refuse you. It doesn’t matter whether you pay everything else on time or have a strong history of making payments.

Remember: defaulted payments stay on your credit report for six years! That’s a long time to wait for a mortgage if you think you’re ready now.

#14 – Pay off long-term debts before applying

You would have saved a significant amount of money if you were considering your chances of getting a mortgage. It may be worth taking a little more time saving and using some of that deposit cash to pay off your existing long-term debts. This includes loan payments, overdrafts or anything else you may have attached to your name.

Credit card debt is fine if it’s consistently used and paid off. It’s the long term arrangements that you should consider putting to rest. This will prove to lenders that you can deal with debt in a responsible manner while also making your application more attractive because you haven’t got any other debts that need to be considered.

It’s always worth reading the small print of any loan agreement you may have. There could be early repayment fees that need to be factored into the equation. If you’re unsure, don’t be afraid to pick up the phone and speak to your lender.

#15 – Don’t apply for any other credit

It’s not a good idea to apply for credit in the three months leading up to your mortgage application. Every time you apply for credit, there will be a search on your credit file recorded – this will be tracked and will be noticed by the lender you’re applying to.

If you have a number of searches over a short period of time, it can make you look desperate for credit. This isn’t a major cause for rejection (especially if you’re approved) but is far from desirable. Make sure you keep away from any form of payday loan though – this is a big warning flag for lenders.

#16 – Avoid using your overdraft

Overdrafts are a touchy subject with some lenders. Being trusted with the credit and using it wisely can often be a good thing. However, being consistent in your overdraft demonstrates that you’re not fully in control of your finances.

As a rule of thumb, it’s recommended to keep out of your overdraft for about six months before applying for a mortgage. This time frame may be longer if you’ve been consistently living in an overdraft for years.

Above all, your mortgage will only be approved if a lender sees you as financially stable. Extended periods of overdraft usage might give the impression that this isn’t necessarily the case.

#17 – Understand what your spending habits say about you

It’s time to scroll through your bank statements and scrutinise your spending habits. When you apply for a mortgage, lenders will want to see an accurate and detailed look at your outgoings. This will usually include bank statements too. This is to check that your application is accurate, but also that you could afford a mortgage if rates were to increase over your loan period.

Usually, you’ll need to submit about three months of bank statements to your potential lender. This means it’s probably a good idea to be a little less frivolous with your spending. Try to keep a regular routine of spending without any erratic behaviour.

Generally, spending less in the lead up to a mortgage application is commonplace. You’re going to be saving for moving costs, fees and extra expenses.

#18 – Look for external factors which could harm your application

There are a number of external factors which could work against your application.

For instance, if you opened any form of joint credit with a former partner, your credit report may still be linked with them. If they have a lower credit rating through defaulted payments or CCJs, this could have a detrimental impact on your score.

Don’t panic though, there’s a simple way to resolve this. Get in touch with the credit agencies and put forward a notice of disassociation with your former partner.

Your exes aren’t the only people who could be bringing down your credit score. You may be linked with old flatmates who you split bills with or even some family members.

#19 – Upgrade to an ‘Advantage’ or ‘Premium’ account from your bank

We recommend taking this point with a pinch of salt. Having an ‘Advantage’ or ‘Premium’ account with a bank isn’t likely to be the deciding factor in getting a mortgage or not. Nor are you likely to be refused a mortgage because you haven’t got an upgraded account.

If however, you are an ‘Advantage’ or ‘Premium’ member of a bank, there’s a chance your application is going to be looked upon slightly more favourably by that lender. This could give the lender an appreciation for your reliability and financial management.

#20 – Improve your credit score by paying rent

Paying rent on time doesn’t currently have an impact on your credit score. If you’re reliable with rent payments, there’s a way to have this tracked and therefore added to your credit report.

You could sign up to Canopy Rent and make your rent payments as usual. Canopy will verify your payments and this will then be used to help build your Experian credit rating. This in turn could help your chances of approval and your access to better interest rates.

#21 – Save a large deposit

Mortgage lenders prefer homebuyers who pay a larger deposit. The more money you can offer up-front, the more attractive you will become. Generally, the very best interest rates and deals are offered to those who have a low LTV.

LTV stands for loan-to-value and refers to the percentage of money you’re borrowing compared to the property value. For instance, if you have a 90% LTV ratio it means you’ve paid a 10% deposit and your interest will be worked out based on the other 90%.

By paying a higher deposit, you’ll own a larger percentage of the property and will therefore (most likely) have lower monthly repayments and lower interest rates. This helps make you seem more attractive for a number of reasons.

Initially, it shows that you can manage your finances well enough to save a large cash sum. Also, the lower monthly repayments are likely to be more affordable than a high LTV mortgage loan. The lender will also see the higher deposit as a greater level of security for potential non-payment issues.

We understand that not everyone is capable of saving up large deposits, particularly if you’re looking to buy your first home. Having said this, we’d recommend offering something a little greater than the minimum, even if it is only by a few hundred pounds. Some tips include budgeting, cutting back on certain luxuries

#22 – Provide evidence of earnings if you’re self-employed

Getting approved for a mortgage when you’re self-employed can appear tricky at first. Like any mortgage application, you’ll need to provide full evidence of your earnings to demonstrate that you take home a reliable and steady income.

Applying for a mortgage when self-employed will usually require an SA302 form for details of the last two to three years from HMRC. Alternatively, full account details for this time period may also be requested.

Provide as much information as you can. Essentially, you need to offer evidence of affordability and income. If your accounts demonstrate any dramatic spikes or fluctuations in earnings, some lenders may shy away from offering a mortgage.

Don’t panic though, you’re not the first person to apply for a mortgage when self-employed. Get yourself a good mortgage advisor, help the lender with any questions or evidence they need and be entirely transparent about your earnings history.

#23 – Avoid quirky or unusual properties

Unusual or quirky properties can come in many different forms. This ranges from distinctive restorations or conversions to properties situated above busy bars or shops. These types of properties can often be harder to sell and therefore can prove tricky for those looking to improve their chances of getting a mortgage.

It’s possible that these types of properties could be looked upon less favourably and result in lenders being less inclined to offer a mortgage. This is because if you were to miss a payment, a lender wants to be sure they’ll get their money back when selling the house again. Therefore, they may be more comfortable with conventional properties which won’t cause too many problems if put back on the market.

You could better your chances of getting a mortgage by keeping things simple and sticking to the norm.

#24 – Find the right lender for you

A mortgage is usually the largest sum of money you’ll ever borrow; it’s vital to get the best possible deal. The differences from one mortgage deal to another can save you thousands of pounds in the long run.

Speaking to a mortgage adviser can be for peace of mind – especially if you’re a first-time buyer. Get a no-obligation mortgage quote from someone who actually wants to support you and see you succeed with your application. In this case, there’s a strong chance they’ll be able to offer a few helpful comments or pointers to ensure you tick the boxes needed to be approved.

Mortgage Quotes

Your home may be repossessed if you do not keep up repayments on your mortgage.

#25 – Deal with people, not call centres

Applying for a mortgage is a very personal thing to do. You essentially list the full details of how you live your life, your finances and hopes for a new home to a lender who will judge you and deem whether you’re worthy of their money. This can make the process feel pretty stressful and anxiety-inducing.

This is why, for some people, it’s important to deal with dedicated individuals and not just call centres or online search engines. Actually talking on a one-to-one basis with a broker who will see your case through from beginning to end, to discuss your circumstances and application, can help enormously.

#26 – Prepare your documents and paperwork thoroughly

There’s a lot of information lenders need to see before they can even consider approving your mortgage. Make sure there are no last-minute rushes to get everything in order. Throughout the process of looking for a mortgage, get all your information organised into a single folder that you can offer the lender when they need it.

Here’s a little checklist to help you start your organisation of documents. Your lender may ask to see some of the following:

  • Proof of identity – a passport is the best option
  • Proof of address – utility or credit card bills are often sufficient
  • Bank statements for the last 3 months (at least)
  • Tax returns or accounts for the last 3 years
  • Payslips for the last 3 months (at least)
  • Proof of any bonuses or additional payments on top of your usual salary
  • Proof of any additional income – this includes Child Benefit payments
  • The two most recent P60 tax forms – will show your income and tax payments

This is not an exhaustive list, there may be other important documents that may be required from you when applying. It’s usually recommended to send all of these documents together to speed up the process and improve your chances of getting approved for a mortgage.

If you’ve received help raising your deposit from a friend or relative, it’s important to include a letter that explains this is a gift and not a loan. This is important for lenders to determine that you will be the sole owner of a home and your friend or relative cannot stake any claim to part ownership of the property.

#27 – Be accurate and clear in your application

The way you apply for your mortgage will determine the way you fill in or provide your details. Whether you apply in person, via a form, online or through a broker, it’s absolutely crucial to ensure everything is accurate.

Be sure your income information is clear and truthful. Use exact amounts and have proof of any information you provide the lender/broker.

Be thorough with your details. Double, triple and quadruple checking your information is a necessary step. The slightest inaccuracy or mistake could come back to hurt you.

Be clear about your current debts. Declare these fully and list agreed repayments, outstanding balances and payment history. Transparency is the key.

When you’re asked about your spending habits, be honest. There’s no point in lying or bending the truth here, you’ll either be caught out by the lender or struggle with repayments if approved.

#28 – Apply for a mortgage agreement in principle

A mortgage agreement in principle is essentially a quick check that will tell you whether you’re likely to get approved and how much a lender will loan you. This will give you an initial indication of whether you’re likely to be approved or not.

This is a great way for first-time buyers to test the waters and see whether they’re seen as attractive borrowers by their chosen lender. It’s important to note that a mortgage agreement in principle is NOT final. This can be rescinded by the lender when you submit your formal application which is when you have negotiated and agreed on a property you want to buy. It only really looks at the top-level information without delving into the nitty-gritty. There’s always the potential that something under the surface could put a lender off.

The wider benefits

Finalising the mortgage details will also take your chosen property into account, this is another potential avenue for problems to arise. This could be due to a number of reasons, including the locating of subsidence during a survey or even the mortgage lender’s valuation of the property.

The benefit of this goes beyond simply giving yourself a better understanding of how lenders view you. If you’re a first-time buyer, a mortgage in principle will give estate agents and sellers an extra level of confidence in your ability to complete a sale. This can help the offer you’ve submitted on a property to be looked upon more favourably. Be aware, that a mortgage agreement in principle does have a shelf life, often they will only remain valid for between 60 and 90 days (it’s recommended to check this with your lender before applying).

You’re not tied into a mortgage if you’ve been approved an agreement in principle, you can still apply to a different lender if you’d like. It’s worth flagging that it’s not advisable to go through too many of these checks if you can help it. Regular credit checks can harm your credit rating and impact your chances of approval. If you get the opportunity, take a lender’s soft search option which won’t be visible on your credit file. Unfortunately, not all lenders offer this.

#29 – Don’t change your mortgage application once it’s submitted

Once you’ve submitted your mortgage application, leave it be. Don’t be tempted to ask for more money or change your application in any way. This could cause some real problems for your application and could result in lenders not accepting your application.

You should have budgeted and planned how much you can afford long before submitting an application. Making last-minute changes to the finances can give the impression that you’re a spontaneous borrower. This is a big warning flag for lenders.

What if you’re rejected?

If your mortgage is declined, it doesn’t mean you should bounce to another lender just yet.

Finding yourself in a situation where you’ve been rejected can tempt you to apply immediately to another lender. Be mindful that this could reflect negatively on your credit file. Any new lender will see that you’ve been rejected and will start to ask why. This could lead them to uncover the same problems as the previous lender. Not only this but applying for lots of credit in a short space of time looks desperate and is recorded on your credit file.

What to do instead

The best thing to do if you’ve been rejected is to take stock and do a little digging. Scrutinise your application, investigate your finances and go through every stage of this article again. Try to uncover what’s holding you back. Once you’ve found the weak spot, do whatever you can to put it right again.

Can’t find a weak spot? It might mean that you’ll have to pay a higher deposit or consider buying a cheaper property. This may not be what you want but sometimes you have to be objective about your borrowing. What may seem affordable to you, may not seem affordable to your lender.

You’re perfectly entitled to ask your lender why your mortgage application wasn’t approved, although often they’ll cite the main reason in their rejection communication with you.

Once you’ve resolved any issues, you can reapply to another lender. It may be a good idea to wait a few months before reapplying which can be difficult if you’ve got your heart set on a property in particular.

Our recommended mortgage adviser have access to 12,000 mortgage deals from 90 lenders!

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Your home may be repossessed if you do not keep up repayments on your mortgage.

Last Updated: January 19th, 2024