Already with a heavy word ‘mortgage’ in your mind, the fear of rejection gets intense if you are doing it for the first time. No experience, no knowledge, no grip on the procedures and consequences, taking mortgage for the first time can be so stressful. Although you are ready to stay unshakably firm and do all the formalities BUT what if you get rejected. This is the stress that makes you and keeps you restless. After all, it can be so painful to see your dreams shattered before realisation.
However, there are ways that can always help in qualifying for the mortgage for first time buyers in the United Kingdom (UK). Nothing in this concern gets complicated if you follow the right procedure and prove your financial aspects on the required aspect.
Eligibility criteria – The first gatekeeper
This is the very basic, very simple but very important step. You do not need to worry much about this but caution is also required.
- UK residence proof
- A bank account
- Mobile number
- Verified address
- Age at least 21 years
THEN The actual procedure
Once you get a ‘yes’ on the eligibility part, the proper procedure starts with the following things as the vital part.
- The deposit game is the first thing you come across. More you deposit, easier is to get approval on the loan. The minimum deposit expected by the lending company is 5%. However, if you can manage, it is better to deposit as much as possible. After all, that helps to decrease your loan amount and lessen the burden of mortgage as an obligation.
- Things start from your income status. After all, this is the actual mirror of your future affordability on the aspect of repayments. A loan amount, which you cannot repay, cannot be approved by the lender. Anything that relates to your repayment capacity is included on this aspect. For instance – salary slips, bank statement, additional income (if any) from rent, part-time job, freelance etc. Credit score too becomes the major concern for the lender. Having an excellent or good credit score is always a promising thing to get mortgage without any compromises on loan amount and interest rate.
- Income-outgoing ratio is the second thing to come in notice. After gathering all your sources of income, the lender pays an intense heed on how much you earn in totality and how much goes as the expenses. Your outgoings should not dominate your income and the ratio between the two should leave sufficient space for a new instalment of mortgage. Usually 70:30 ratio is considered as idol for it, however 60:40 is also fine. This aspect always remains affected by the deposit part. If you have done a good deposit, some flexibility can be expected on this.
Some other ways to get approved for the desired amount
As a first time borrower, you may not qualify for the desired amount. There can be many reasons for that. In that case, some ways can help calm down your anxiety and uncertainty.
- Bring a co-borrower – Increased repay capacity can easily bring you the approval on actual amount you want. In case, your income makes you eligible for a smaller figure of Pounds than your required need, make someone your co-borrower. Friend, family, partner anyone can do that. Two sources of income are sure to make the lender feel more promising about your repayment capacity.
- Shared ownership – In this case, you borrow mortgage for a specific percentage and rest of the part will be taken by the government or property owner. Choice is yours.
- Guarantor mortgage – Bring a guarantor to back your loan application and you can get a bigger amount of mortgage. Anyone in your family and friends can become the guarantor.
The above information can bring you the pleasant message of approval. But the final struggle is left which demands a cautious selection of lender. To select a genuine lender you may need to do a deep research. To help you a little, some names like Shine Mortgages, Halifax, Natwest etc. can be some of the promising options in the UK. Rest is on your skill to search and find out the best.