A Guide to Improving Your Mortgage Chances
Buying your first home is exciting, but getting a mortgage can feel like a daunting prospect. The good news? We’re here to help you make sense of it all.
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Buying your first home is exciting, but getting a mortgage can feel like a daunting prospect. The good news? We’re here to help you make sense of it all.
Sourcing a mortgage deal as a first time buyer can be tricky. Blame history, mostly.
Before 2007, lenders were handing out mortgages without significant checks - some even offered 100% loans, meaning no deposit was needed (yes, we know!). Then came the credit crunch. House prices fell, jobs were lost, and lenders ended up with a lot of unpaid loans and repossessed properties. Which they didn’t like.
To avoid a repeat performance, lenders tightened their criteria. A lot. They now steer clear of anything that looks remotely risky - which unfortunately includes many first-time buyers, who don't have a reliable track record to demonstrate they are a safe bet to a lender.
Lenders see first-time buyers as a higher risk. You haven’t had a mortgage before, and you might not have a long track record of managing money. Let’s face it, when you’re young and paying mum and dad a pittance to live with them, you have lots of spare cash, which naturally gets spent. So you borrow some more on a credit card or get an overdraft because you’re sure you can pay it back.
Whatever the reason for using them, lenders tend to see payday loans and credit card debts as a red flag. It suggests you’re struggling to meet your financial commitments from your own income. If you ever need short-term help, try an arranged overdraft or family loan first.
They also regard lots of online gambling payments on your bank statements, especially whilst you are running an overdraft, as reckless. Ask yourself: would you lend you money?
Lenders want to know your mortgage will stay affordable over time.
They’ll check your bank statements to see your income, spending habits, and any regular outgoings. They’ll also look for anything unusual - like large, unexplained deposits or erratic spending.
You’ll be asked to complete a monthly budget planner. If you’ve never run a household before, this is your crash course in grown-up expenses: utilities, insurance, repairs, and the occasional surprise (like the boiler deciding to retire early).
Still have some questions? Here are a selection of questions our clients often ask about Mortgages.
Get In TouchThat’s where proper advice comes in. Our job is to understand your plans, your finances and your priorities - then match you to the most suitable mortgage, not just the cheapest headline rate. We take the time to listen, assess and then make our recommendations.
There’s no single ‘pass mark.’ Lenders look at your full credit history - missed payments, defaults, CCJs and how you manage borrowing overall. They need to know whether lending to you will be a risk for them. We check this with you before we apply.
That depends on your attitude to risk, your plans and what’s happening in the market. Some prefer short fixes for flexibility, others prefer longer fixes for stability. We can guide you on both types.
Remortgaging means switching your existing mortgage to a new deal, either with your current lender or a new one. Many people do this when their fixed rate ends to avoid moving onto a higher standard variable rate. We will always compare deals from your current lender with those available across the mortgage market.
Yes. This is often done for home improvements, debt consolidation or large expenses. The extra borrowing is subject to affordability checks.
In 2014, the Financial Services Authority introduced the Mortgage Market Review. It requires lenders to run stricter affordability checks and apply ‘stress testing’ - essentially asking, ‘What happens if interest rates go up?’ It’s sensible, but it does make things harder for first-time buyers.
Here’s what you can do to make yourself more appealing to lenders:
We specialise in helping first-time buyers find the most suitable mortgage for their circumstances. If you’re not ready yet, we’ll tell you honestly - and help you get there. Better that than wasting hours trawling through lenders who’ll say no.
By the way, much of this page applies to those buying homes who aren’t doing it for the first time too.
You can contact us with questions or book a no-obligation meeting using the form below. The first meeting is on us - not you.
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