15 step guide to improving your chances of mortgage acceptance.

Tougher mortgage lending criteria and affordability rules are making it more difficult to secure a loan. 

With lenders looking into the minutia of your spending habits, from meals out to childcare costs, what can you do to improve your chances of acceptance?

You’re advised to start planning in advance by following a few simple steps.

1. Avoid taking out a payday loan – they can be the kiss of death.
2. If you have a credit card put all expenditure, with the exception of things that costs more when paid by credit card, on to your card then pay it in off in full every month.
3. Put all credit cards on a direct debit as that way you won’t risk missing a payment which could affect your credit rating.
4. Reduce borrowing by as much as possible.
5. Don’t exceed your agreed over draft limit or go over drawn if you don’t have an agreement, a badly managed account could cause your application to be rejected.
6. If parents or grandparents are helping you out with a deposit, make sure you have a letter stating the money is a gift and not a loan.
7. Managing your bank account correctly is very important. Set up a savings account so if you are going to go overdrawn your lender can automatically transfer money into your current account.
8. Pay off your loans and credit cards from savings so it reduces your committed expenditure.
9. Self-employed borrowers should speak to their accountant to discuss maximising verifiable income. This should be done a year prior to making an application.
10. Keep your paperwork up to date. Keep a file with 12 months' bank statements and 3 to 6 months' payslip. For the self-employed 3 years of accounts or SA302s or tax returns will be needed.
11. For 3 months before applying for a mortgage avoid excessive spending, don’t spend on betting and cut unnecessary subscriptions and memberships.
12. If you work on commission make sure that 3 months prior to your application, levels are steady rather than up and down.
13. Self-employed borrowers should make sure their latest possible accounts have been prepared and submitted to HMRC.
14. Don’t disappear on holiday after making an application, being away can slow things down dramatically as your lender may need more information.
15. Get yourself a good mortgage broker, estate agent and solicitor because together they can ensure things run as smoothly as possible.

For impartial advice on increasing your chances of mortgage acceptance,

call us at Deal Direct on 0800 048 8828.