Lots of people think that they can’t get a mortgage for lots of different reasons. Erin Gallacher, consultant mortgage adviser, dispels some of the more common myths and tells you how to improve your chances of getting a mortgage.
I can’t get a mortgage because I’m too old
This is incorrect. Most lenders will lend to age 70, quite a few will lend to age 80-85 and there are even some lenders that do not have a maximum age. If you are looking to take a term past your retirement most lenders will want to see evidence of pension income.
I can’t get a mortgage because I have bad credit such as a default or County Court Judgment
This is incorrect. Most lenders will allow the odd satisfied small CCJ or default. There are some lenders that will consider larger satisfied CCJs and defaults and there are a few that will consider unpaid CCJs and defaults irrespective of the amount. It’s always worth checking your credit profile. There are lots of providers out there and we recommend using one of the big two as these are the ones the lenders use – Experian and Equifax.
I can’t get an interest only mortgage because nobody offers them or I need to earn £100k + to get one
This is incorrect. Quite a lot of lenders offer interest only terms to residential mortgage borrowers. You may think that these are only available to those earning in excess of £100k each year but many lenders have now relaxed this rule making it much easier to refinance should you not be quite ready to sell your house and downsize.
I can’t get a mortgage because I’ve only just changed jobs and I’m in a probationary period
This is incorrect. Although a lot of lenders prefer you to be out of a probationary period or be in your role for three months before applying, there are still quite a few that will ignore probationary periods. As long as you can show them your new employment contract, some lenders will lend after one day in your new role.
I can’t get a mortgage because I am not a permanent employee
This is incorrect. Over the last few years the number of people being employed on zero-hours contracts or via agencies has risen dramatically. For example, agency work has become more popular in the manual trade sector. If you have been working like this for at least 12 months and can provide a P60 to demonstrate your earnings, some lenders will give you a mortgage.
I can’t get a mortgage because I was previously bankrupt
This is incorrect. Although it seems to be common knowledge that lenders will lend providing the bankrupt person waits six years from discharge, there are lenders that will consider lending sooner.
How much sooner depends on the lender; there is one that will lend from the very first day of discharge subject to incredibly strict criteria, high rates and fees. Three years from discharge, however, is much more realistic.
Achieving these mortgages will also depend upon the size of your deposit and your current credit profile. As you might expect, all of these elements will affect the type of rate you can expect to be offered. The same goes for borrowers who have had a debt relief order (DRO) or an individual voluntary arrangement (IVA).
I can’t get a mortgage because the house I want to buy has some commercial element to it
This is incorrect. Although a lot of residential mortgage lenders will not consider this type of lending because of the dual use, there are lenders which will take a common sense approach. In these cases, the residential element must be the greater proportion of the property. If most of the property is used for business purposes, a commercial mortgage might be more suitable.
How to improve your chances of getting a mortgage
It’s simple really; ask an independent mortgage broker to help you. For example, ask me or one of my colleagues at Mortgages for Business! We know the market and we have access to all of it. We know which lenders to approach for each of the above scenarios, and we have strong working relationships with many of them.
If you are better off going for a direct-to-customer deal, we’ll tell you. But often, particularly in more complicated circumstances like the ones above, the most suitable rates are only available from intermediaries like ourselves.
I can be contacted directly on 01625 416392 or call the main line on 0345 345 6788 and ask to speak to a qualified adviser on the Residential Mortgage Desk.
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