Getting on the housing ladder can feel like it takes an eternity. Working out how to save for a house deposit is just one part of the problem. The other? The question of how to get a good mortgage deal.

There are many factors that can reduce how much lenders are willing to let you borrow for your home, from debt to low household income. But don’t panic just yet. If you need help preparing for your mortgage application, we’ve rounded up some of the best ways to improve your affordability!

How long does a mortgage application take?

The average mortgage application takes around 2 weeks to be approved - so don’t expect to hear anything within 24 hours! This gives your mortgage lenders enough time to assess your affordability and work out whether you can make your mortgage repayments on time.

Wondering why your mortgage application is taking so long? If you have a weak credit score, this could be a sign that your mortgage lender is doing a more intense check of your credit history. However, it could also be because of a busy housing market and a backup of mortgage applications after lockdown. Whatever happens, don’t panic and rush over to another lender!

Tips for getting a good mortgage plan

  • Clear your debts
  • Check your credit score
  • Use a mortgage broker
  • Cut back on spending to save for a deposit
  • Get your paperwork ready
  • Break any financial ties with bad housemates
  • Avoid making too many applications after a rejection
  • Get extra help with Help to Buy

Clear your debts

Dive into a mortgage application when you’re deep in debt, and the amount of mortgage you can qualify for will suffer. Focus on repaying that loan for your new car, or any outstanding credit card payments. In the meantime, cut back on the rampant shopping sprees so you never fall into debt again. The more you can clear your debts, the more money you will be trusted to borrow!

Check your credit score

You can’t get a good mortgage plan without a good credit score. This is the biggest sign to your mortgage lenders that you are a person they can trust with borrowing their money. Steer clear of anything that will make it difficult for you to repay your monthly bills. There are loads of easy ways that you can boost a weak credit score. Make sure to always pay your bills on time, and register to vote so that mortgage lenders know who you are and where you live.

To learn more about what you need to know about your credit score when buying a home, our panel mortgage advisor, SRC Mortgage Solutions gives us a breakdown of the facts around credit scoring and the importance of having 'good credit' when purchasing a home.

Organise your outgoings to better understand what mortgage you can realistically afford.

Organise your outgoings to better understand what mortgage you can realistically afford.

Use a mortgage broker

If you are buying a home for the first time, chances are you don’t have the first clue about how to secure your mortgage. Being uneducated is the biggest banana skin for anyone looking to apply for a mortgage. Overcome this hurdle by getting a mortgage broker to scour the market for the best mortgage plan for your circumstances. You may have to pay a fee, but the extra help could be worth it!

Before selecting a mortgage broker, it is worth finding out how to choose the best mortgage broker to pick up tips on what you should be looking for and the questions you need to ask brokers before selecting one to work with.

Cut back on spending to save for a deposit

The bigger the deposit, the easier your mortgage will be to repay. You will have to wait longer before buying your dream home, so this option won’t be for impatient homebuyers. However, the long-term results are arguably worth the wait. This is because paying more money up front will mean you will pay less monthly.

Saving money is never easy, but here are some great money saving tips that will help you hit your target house deposit amount. 

Get your paperwork ready

Avoid a last-minute scramble for paperwork by being organised in advance. From the time you start working, you should get into the habit of putting all your most important documents in a place you remember. You will need a valid form of ID, a payslip that shows you are a taxpayer, and bank statements going back for at least the last 3 months. This lets your mortgage lender know that you have a stable source of income, making you a perfect candidate for a mortgage loan.  

Still unsure about what you need for your mortgage application, then take check out this guide of what paperwork you will require for your mortgagee application

Break ties with bad housemates

You might be on great terms with your housemates. But if your housemate has a dodgy financial history, you need to make sure your credit score isn’t linked to theirs! This could very well turn into a problem if you ever had a joint bank account for bills. To avoid this potential problem, get in touch with your credit agencies and get them to remove your housemate from your credit report. Even if they have a good credit score now, their failure to pay a bill on time could impact you!

Avoid making too many applications after a rejection

Keep calm if your mortgage application gets rejected. If you apply for multiple mortgage applications on the bounce, this could do damage to your credit score! Instead, look at your credit file and assess what might have led to the rejection. You can also ask your mortgage lender why you got rejected - the answer could be fairly straightforward!

Get extra help with Help to Buy

Raising enough money for a mortgage deposit can take ages. Not so with the help of the government’s Help to Buy scheme. With a Help to Buy equity loan, the government can lend around 15-40% towards a new build property. The amount of the loan depends on where you live, but you could find yourself in a gorgeous new apartment before you know it!

You can take advantage of Help to Buy with a Peabody apartment, using schemes like Shared Ownership and Rent to Buy. There is no better way to get a home you like at a price you can afford!

With a lot of concepts to get your head around, preparing your mortgage application can be a confusing process. But if you buy a home with Peabody, our team will ensure you are never left in the dark! Check out our property search to get started!

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