Written by Simon Gilvey.
The hot topic that seems to be reoccurring in the financial press is the actual availability of mortgages for first-time buyers and up to the experienced landlord who owns multiple properties.
Primarily, we’re all focused on what interest rates are currently available from the mortgage lenders – but this, in many cases, is not the whole story when applying for a mortgage.
We regularly find that clients apply for a mortgage over the phone directly with a bank or building society, but then are declined many weeks later, delaying the whole process of buying a property.
This is often because the people capturing the information over the phone from the customer are purely taking the customer details and completing a basic credit score, but not fully assessing whether they fully meet the lender’s criteria.
Unfortunately, when this situation results in a mortgage decline, it only enforces the current public perception that mortgages are hard to get approved.
Lenders have their own rules and regulations about how they treat each mortgage application. By way of an example, here are some basic examples of items that may have a bearing on a mortgage being approved:
If you are self employed, the way in which you pay your income from the business .
If you own a second home or buy to let investment property, this can have a bearing on the affordability of a mortgage and whether it is approved or not.
The source of your deposit when purchasing a new home.
If you are declined, then ask the lender on what grounds the decision has been made, and also if there is any further information you can supply to help change this decision.
Often mortgage lenders will only assess the standard set of information requested by them. In reality, further information could help them feel more comfortable about approving the mortgage. However, in some cases, this is not considered or asked for and the mortgage is unnecessarily declined.
So there is value in seeking independent mortgage advice, from somebody who understands each lender’s criteria. It helps refine your choice of lender across the market, and can offer the best chance of being approved, when considering your personal circumstances against that lender’s criteria.
Simon Gilvey is director of Broadland Consultant Ltd, independent mortgage and financial advisors.