Mortgage eligibility
Straightforward answers to our customers most frequently asked mortgage & remortgage questions
If you've got more questions or you simply want some financial advice, please fill out our quick enquiry form or give us a call on 02382 353 001.
What affects my eligibility for a mortgage?
Lenders will assess many factors of your application before making a decision on whether to approve or decline your application.
The main factors that affect the lender’s decision are:
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Credit History
Your credit history must be at an acceptable level to pass a lender’s credit assessment.
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Income & Affordability
Your income must be enough to support both your mortgage repayments and your ongoing living expenses.
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Valuation
The property must be valued at an amount that means the mortgage borrowing falls within the loan to value limits of the lender.
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Property Type
The property must be considered acceptable security for mortgage purposes.
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Purpose of the remortgage
If you are raising additional funds on a remortgage, the funds must be used for a legal purpose that is acceptable to the lender.
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Future Changes
If you are aware of any future changes to your circumstances that will affect your income or your future affordability of the mortgage then this must be disclosed to the lender and may affect their decision to lend.
Each lender will have their own criteria relating to each section above which will vary from lender to lender. An independent adviser will be able to assess all of the above and let you know which lenders are most likely to accept your application.
What if you have a low credit score or have had adverse credit on your credit report?
Whilst it is true that all lenders will take into account your credit history when assessing your application, having a low credit score or adverse data on your credit report does not mean that you will not qualify for a mortgage.
For example you may have a low credit score because you have not had any credit in the past so although there is no history of your ability to maintain a credit agreement, the fact that you have never had to borrow money to purchase items can be seen as a good thing by some lenders.
If you have had adverse credit data recorded on your credit report then this is likely to restrict the lenders that will lend to you, however, there are many mainstream and specialist lenders have an appetite to lend in this area of the mortgage market. It will come down to exactly what has been recorded on your credit report and the date it was recorded as to who will lend to you.
Adverse Credit can mean anything from missed payments on personal loans and credit cards to Defaults, Mortgage Arrears, CCJ’s, Debt Management Plans, IVA’s and Bankruptcy.
A few historic missed payments on unsecured debts will be looked upon more favourably than anything else, however, any of the above could result in a decline decision from a mortgage lender.
If you know you have adverse data recorded on your credit file, or have been declined by a lender due to your credit score and you don’t know why, we suggest obtaining a copy of your own credit report so you can have a look through the report, or, you can let an independent adviser take a look at your report and they will be able to decipher the information for you and then use this to determine which lenders are most likely to lend to you.