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Improve your Chances of Securing a Mortgage

17th Jan 2024

Securing a mortgage can, at times, be challenging as lenders will refer to a borrower’s credit report to help determine how reliable a borrower you are and if you can afford to repay the money you borrow. Here are some steps you can consider to assist with improving your credit rating.

Check and improve your credit score: Obtain a copy of your credit report from checkmyfile. This provider checks data from Equifax, Experian, and TransUnion. Review your credit report for errors and dispute any inaccuracies. Pay off any outstanding debts and make sure all your bills are up to date. Establish a plan to improve your credit score over time by making timely payments.

Save for a larger down payment: A large down payment can help improve your chances of securing a mortgage. It shows the lender that you have a significant stake in the property and are less likely to default on the loan.

Shop around for lenders: Different lenders have different criteria for approving mortgages when taking your credit score into account, so it’s important to shop around and compare.

Shared ownership: The Shared Ownership scheme in the UK is a government initiative designed to help people, typically first-time buyers, get onto the property ladder. The scheme allows individuals to buy a share of a property (usually between 25% and 75%) and pay rent on the remaining share. Over time, individuals have the option to buy additional shares in the property, a process known as ‘staircasing’, until they eventually own the property outright.

Get a guarantor: A guarantor mortgage is for people who don’t have enough income to qualify for a mortgage on their own. The guarantor essentially acts as a co-signer for the mortgage, taking on the responsibility to repay the loan if the primary borrower defaults. It’s important to note that becoming a mortgage guarantor is a significant financial commitment, as the guarantor is legally obliged to repay the loan if the borrower fails to do so. Guarantors are typically required to have a strong credit history and financial stability to reassure the lender that they can fulfil the responsibility.

Provide a larger income and stable employment history: Demonstrating a stable income and employment history can make you a more attractive borrower and display to the lender financial stability.

Everyone’s financial situation is unique, and the success of these strategies may vary. It’s crucial to carefully evaluate your options and, if possible, seek professional guidance to navigate the mortgage application process.

At 3mc, we have a team of expert advisers who can discuss all your mortgage requirements. If you would like to discuss your options, give the 3mc team a call on 0161 962 7800.

All calls are recorded for training and monitoring purposes. 3mc for intermediaries only.

*Your home may be repossessed if you do not keep up repayments on your mortgage. 3mc (UK) Ltd is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register https://register.fca.org.uk/s/ under reference 302992. Please note: The FCA do not regulate Business Buy to Let Mortgages.