What Do Mortgage Lenders Look For When You Apply?

When you apply for a mortgage you’ll want to do everything you can to boost your chances of being accepted so you may be wondering what do mortgage lenders look for when you apply? In this article we explain everything you need to know.

Mortgage Paperwork: What Documents You’ll Need

When it comes to the question of what do mortgage lenders look for when you apply, essentially before deciding to lend you any money they’ll want to be certain you’ll be able to repay it. As part of this process your lender will carry out an ‘affordability assessment’. This involves the lender assessing your financial situation; they look at your income and your outgoings such as how much you spend on utility bills and childcare costs.

You’ll need to give proof of your income. So if you’re employed, you’ll need to give copies of your payslips, your most recent P60 and bank statements, as well as proof of any other income. While self-employed applicants will need to provide copies of accounts and other paperwork.

One important part of this process is the ‘stress test’. This means the lender will check you would still be able to afford the mortgage should the interest rate increase or your circumstances change.

What Do Mortgage Lenders Look For When You Apply? Think Credit Checks

When you apply for a mortgage the lender will also look at your credit report. And as well as having a bearing on whether the lender will accept your application or not, the information contained in your report can also have an impact on how much they’ll offer to lend to you. And on the interest rate you’re offered too. So make sure you check your credit reports before you apply. You can check your credit reports online for free with the three main credit reference agencies – Experian, Equifax and TransUnion. Go through them carefully and make sure all the information is correct. And if you can boost your credit rating, such as by getting on the electoral role, then do it.

Can You Get a Mortgage With Debts?

Another important factor when it comes to what do mortgage lenders look for when you apply is your debt-to-income ratio. This indicates how much of your income goes on paying your debts each month.

However don’t assume having debts means your mortgage application won’t be accepted because this will depend on your circumstances.

And it’s important to note that each lender has a different lending criteria. So choosing the right lender for your circumstances is key. But don’t worry about doing the hard work yourself, if you speak to an expert mortgage adviser, they’ll go through your circumstances and use their expert knowledge to explain your options. It could be the case that your debts are unlikely to cause much of an issue when it comes to getting a mortgage. Or it may be that a specialist lender is the right option for you. Or you may find it’s a better idea to pay off your debts before applying. The key is to get expert advice so you can make an informed decision and start making plans for your future.

How Do I Get Started?

It might sound like a lot to think about but it really is a straight forward process – especially if you use an expert mortgage adviser. Our advisers are here to answer all your questions and to help you make the right choice for you. So get in touch today!