If you are worried that your personal circumstances could prevent you from securing a mortgage, you might still have options to explore. Specialist lenders often accept applicants with more complex situations, such as credit issues or people who have recently moved to the UK and do not have an established UK credit history.
Credit not perfect? Still think you can’t buy?
While perfect credit generally means more mortgage options and access to lower interest rates, if your credit is not perfect, you may still qualify for a mortgage with a competitive rate.
Lenders have different approaches to credit, and some lenders will accept applicants with old defaults, CCJs or missed payments. Even with a previous bankruptcy or IVA, this does not mean that all lenders will reject your application. Using a mortgage broker will help you find mortgage options you are more likely to be approved for, based on your specific credit situation.
Many lenders look further than your past credit history if you have improved your credit or your financial situation has changed, for example, if you are on a higher salary or have paid off debts since the issues occurred.
New to the UK and unsure where to start?
You might be wondering whether you can secure a mortgage if you have only recently moved to the UK. A common misconception is that lenders will only accept borrowers with an established credit history in the UK, but this is not always true.
There are some mortgage options even if you have very recently moved to the UK, as some lenders will accept credit history that has been built up in your previous country of residence.
You can improve your chances of a mortgage approval by starting up UK credit as soon as possible, with a mobile phone contract, for example. Even a small amount of UK credit history can help strengthen your application.
New UK residents may be approved for mortgages starting with as low as a 5% deposit, especially if you can prove you have a stable UK income and if you have Indefinite Leave to Remain status, Settled or Pre-settled status.
Think you’ve hit your limit? You might be surprised
If you have used a mortgage calculator or have a Mortgage in Principle for a specified amount, and it does not cover the amount you are looking to borrow, you may not have reached your borrowing limit with all available lenders.
Some mortgage applicants qualify for up to seven times their income through enhanced affordability criteria that some lenders apply. Just because you have been set a certain limit with one lender, it does not mean you will not be approved for a higher amount with an alternative lender, and brokers can review the whole of market for you.
Another way you might be able to maximise your borrowing is to restructure existing debt or other financial commitments to reduce your monthly outgoings.
You could also consider extending your mortgage term or taking out a longer fixed term to potentially boost your borrowing potential.
