How to get a mortgage approved: 5 tips to ‘boost’ chances from an expert

Bank of England increases interest rate to 1.25%

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As interest rates increased from 0.1 percent in 2020 to a staggering 1.25 percent at the start of June – a measure the Bank of England introduced to tackle spiralling inflation rates – consumer confidence appears to have reduced dramatically, according to experts at money.co.uk. Recent data published by the Bank of England indicate approvals for new home loans totalled 65,974 in April, the lowest in almost two years.

With the economic outlook showing no signs of improving, as experts forecast inflation rates to reach double digits off the back of further energy price hikes expected in October, many first-time buyers are understandably feeling uncertain about their chances of securing a house.

But the good news is there are several techniques that Britons can exert to maximise their chances of getting approved for a mortgage, even in the current turbulent financial climate.

Claire Flynn, mortgage expert at money.co.uk told Express.co.uk: “The cost of living crisis has made things difficult for prospective buyers, along with rising inflation, which hit a new 40-year high of 9.1 percent last month.

“This has resulted in the value of pay packets diminishing and left some Brits digging into their savings to make ends meet, making it more difficult to save for a deposit on a house.

“However, there are certain things you can do to boost your chances and secure the best deal you can.”

Ms Flynn has provided five tips to boost your chances of approval when applying for a mortgage.

Cover all bases

Ms Flynn said: “If you’re applying for your first mortgage you should be aware of what lenders look out for when they consider your application.”

Some of the main factors to consider include:

  • Your credit score
  • Any current debts
  • The size of the loan you want to take out
  • The size of your deposit
  • Your employment status and income
  • Your outgoings

Ms Flynn continued: “When it comes to starting your application, beat lenders to the punch and take an in depth look at your finances yourself.

“This means making sure all your financial records are correct and up to date, old and inactive accounts are closed and you’re aware of any outstanding debts you may have.

“If you do spot any issues or red flags, hold off on applying until you’ve resolved them.”

Boost your credit score

Once you’re confident in your finances, a good way to increase your appeal to lenders is by boosting your credit score.

Ms Flynn said: “Your credit report works like a scorecard to show lenders how good you are at making debt and other payments – so the first thing you should do is make sure your personal details are correct.

“Errors on things like your address can have a big impact on your score, so contact your credit reference agency immediately to amend them and if a bank or similar still has your old address, contact them and get them to update it to your current one.”

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Get yourself on the electoral roll

Being on the electoral roll can make a big difference regarding your eligibility.

Ms Flynn said: “Lenders see that as a sign of reliability – so if you’re not signed up to vote, do that too. It’s difficult to have an excellent score if you’re not.”

Get a credit card

Once you’ve corrected any errors and all your details are correct, the next step is to start showing evidence to lenders that you can be trusted with their money.

Every payment you make on time, whether that’s a debt repayment or just your rent and bill payments, has a positive effect on your credit score.

Ms Flynn said: “Using a credit card and repaying it on time can help your credit score, as it shows you’re reliable when it comes to managing debt.

“A credit-building card, or service like Loqbox where you make regular payments to a savings account, is a good option when it comes to showing evidence of this. If you make small transactions each month then pay it off in full you can start building up your score.

She continued: “It’s not instant, but after a year the effect is considerable, and you should even see some benefits after only a few months.”

Don’t give up

Ms Flynn said: “The last thing to bear in mind is that different lenders will prioritise different factors in your application, so even if one lender rejects you, it doesn’t mean that you won’t be accepted by another.

That said, if you do get rejected, it’s worth holding off from automatically applying with a new lender.

Ms Flynn said: “Every time you apply, you undergo a credit check and too many checks in a short space of time can negatively affect your credit score.

“Applying for your first mortgage can be daunting, but by maintaining good financial habits and boosting your credit score you can maximise your chances of approval.

To compare the very best first-time buyer mortgages from the top providers, check out money.co.uk’s comparison tool here.

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