Budding buyers beware
If you're in the market for a mortgage, there are certain common things that could actually stop you from getting approved. According to the Bank of England's Money and Credit report, the number of mortgages approved to home buyers in September fell to the lowest level since January. With this slump in approvals, it's crucial to be aware of anything that could affect your chances before applying.
Using buy now, pay later
If you use a buy now, pay later service, be aware that some lenders may want to know more about why you're using it. They'll want to see if you're using it because you lack the funds to pay in one go, which could be a red flag for your application. Lenders will scrutinize your credit history and any new findings during the application process, so be prepared.
Playing bingo or the lottery
Believe it or not, playing bingo or the lottery could raise concerns with mortgage lenders. While occasional play for fun is usually fine, a regular habit with larger sums may be seen as gambling, which lenders are cautious of. The same goes for regular payments to gambling sites or online casinos, which could be seen as risky spending behavior.
Multiple store cards
Store cards can be convenient, but if you're struggling to clear the balance every month, it could be a warning sign to lenders. Interest rates on store cards are often higher than those on credit cards, and failing to repay in full could raise concerns about your financial stability.
Paperwork problems
The mortgage application process involves a lot of paperwork, and errors can easily slip through. Something as simple as a spelling mistake could cause issues. Lenders will also be on the lookout for any signs of fraud or dishonesty in your application, so be diligent and accurate when filling out paperwork.
Money from friends and family
While lenders generally accept personal savings or gifts from parents as part of your deposit, there are other sources that are less preferable. If a lender discovers that your deposit comes from sources like loans, gambling, overseas savings, or untraceable cash funds, your mortgage could be declined.
Changes in income
If you've recently experienced a lifestyle change that has affected your income, it could impact your mortgage application. Lenders consider both your income and outgoings, so significant changes could raise concerns. This is especially true if you've had multiple recent employment changes or if your income is less certain.
Cash-in-hand work
Getting paid in cash may be common for some, but it could have consequences for your mortgage application. Some lenders may decline your application if cash is your primary source of income. While many Brits still get paid this way, lenders may not see it as a stable income.
Remember, being aware of these common factors that can affect your mortgage application is key to increasing your chances of approval. Take the time to consider your financial situation and address any potential red flags before applying for a mortgage.
Did you miss our previous article…
https://hellofaread.com/money/how-jenna-sangwin-earned-an-extra-5400-for-her-first-home-deposit/
