People tend to assume that getting a mortgage as a first-time buyer will be really straightforward and, for the most part, this is true. However, some will find it much more difficult to get mortgage offers from lenders. If you’re looking to buy your first home and you’re wondering what can potentially stop you from getting a good mortgage deal, we have looked into some of the most common factors to be aware of.
It is worth noting from the outset though that it isn’t necessarily impossible to get a mortgage should you relate to any of the below and the right mortgage advisor can still help you to get on the property ladder.
Bad credit history or a low credit score
You probably won’t be surprised to hear that if you have bad credit history then you may struggle to get a mortgage. There are a number of different things that can negatively affect your credit score and ultimately, every time you make a late payment on financial commitments, such as electricity bills and mobile phone contracts, it can count against your credit score. Thankfully, there are ways that you can improve this score and specialist mortgage advisers can help you get a mortgage on competitive terms with a bad credit history too.
Zero hours working contracts
Due to the unpredictability of zero hours contracts, they can sometimes make it more difficult for you to get a mortgage offer. Lenders like to have peace of mind that you will make all repayments on your mortgage, but there is a higher risk that you will fall behind on mortgage payments when you’re not guaranteed a set number of hours at work each week/month. You may find that if you have worked for the same employer for a long period of time and your Loan To Value is not too high, you may still be able to get a competitive mortgage.
Asking to borrow too much
Simply put, Loan to Value is the amount that a lender will consider loaning you as a percentage of the property’s value and if you’re asking to borrow too much, then they won’t provide you with a mortgage. Generally speaking, the larger your deposit, the better when applying for a mortgage as this will reduce the amount that you need to borrow. Typically, most lenders require a deposit of 10%, however, some lenders allow mortgages with as little as a 5% deposit, which can be reduced further when taking advantage of the Government’s Help to Buy Scheme.
The term of a mortgage
The term of a mortgage can vary from 5 years up to 40 years. Lenders will take your age into consideration when deciding how long a term they’re willing to offer you and typically, most lenders won’t extend a loan past your retirement age. Unfortunately, this means the older you are, the harder it will be to get a mortgage with a long term on a standard mortgage, although there are more and more mortgages for older applicants coming to market as people are tending to live and work longer. You do of course have the option to accept a mortgage with a shorter term which will mean your monthly payments will increase.
Monthly spending habits
When deciding whether or not they’re happy to give you a mortgage, there are lots of different aspects of your lifestyle and financial situation that lenders will consider. One of these factors is your monthly outgoings and if you spend too much, you might not get the mortgage you were hoping for. Again, this is due to the fact that lenders like to know you can afford your mortgage payments and they prefer their customers to be sensible. So, simply cutting down your outgoings and living within your means can improve your chances of getting a mortgage.
Looking for a Mortgage Advisor in Chelmsford?
Should you require the assistance of an experienced mortgage advisor in Bracknell, don’t hesitate to contact us here at BlueQ. We provide a whole of market mortgage service to our customers and our expert mortgage advisors will gladly answer any questions that you may have. We are proud to be our customer’s first choice for all of their mortgage planning needs and we can assure you that you will be in the very best hands when you turn to our team for hassle-free mortgage advice.
To discuss your mortgage requirements in more detail, book a free consultation with a qualified mortgage adviser today. Simply use the booking calendar on our website to select an appointment type and time that is convenient for you, it couldn’t be easier to get the tailored advice and guidance that you need.