Tips to survive the Mortgage Market Review
The Mortgage Market Review has impacted the way lenders now assess mortgage applications. Lending has reduced and high numbers of borrowers are being turned away by their bank or building society. Maximise your chances of borrowing by following the steps below:
- Check your credit file. Most lenders use Experian or Equifax to assess your financial history.
- Ensure your credit file is up to date and not showing any mistakes. Should you spot a mistake, contact the credit reference agency immediately. Ensure you are on the electoral roll at your present address. This seemingly small detail has a huge impact on your chances of being accepted by a mortgage lender.
- Don’t make too many credit applications in a short space of time. Lenders shy away from those who seem to be chasing credit and a high number of searches will reduce your credit score.
- Take control of your bank statements before you apply. Lenders have moved away from the traditional income multiples used to assess how much you can borrow. They now want to know how you manage your money and are likely to request bank statements. Try not to exceed any agreed overdraft limit. If you can, stay out of your overdraft.
- Pay off as much debt as you can before your application. Some lenders would previously ignore debt that was to be repaid before completion. The majority of lenders now take all outstanding debt into account on application reducing the amount you can borrow.
- Don’t leave it too late. Applications are taking longer, start the process earlier to avoid moving on to a lender’s standard variable rate.