As mortgage approvals drop to their lowest level for two years, many would-be borrowers
want to know just what hoops they have to jump through to find a home loan.

Only 39,905 mortgages were approved in January, 6.2% down from December, and a
reduction of 17.4% from January 2010, according to the e.surv mortgage monitor,

The Council of Mortgage Lenders, the industry voice of all the UK’s major banks and building
societies, has already stated lending is not expected to increase in the near future.

So here are some tips for making a mortgage application:

Pay your bills

Don’t miss a payment on any credit – and that includes mobile phone bills and
catalogues as well as the more obvious credit cards and personal loans.

One mortgage lender rejected an otherwise perfect application because the
prospective borrower was a few days late paying a monthly directly debit for a mobile
phone almost two years before applying for a mortgage.

Address where you live

Register to vote at the address where you live, make sure your official ID like a
driving licence or passport are listed at the same address and that bank or credit card
statements are listed at the same place as well.

Don’t apply for credit you don’t want

Credit searches are listed on your profile for up to two years. Although the reason for not proceeding is not recorded, lenders might want to know why you did not go ahead with taking the money

Save a deposit

Stash your cash for a deposit in the bank or building society in your name or a joint
account with your partner. The money does not belong to you if it’s not in your name.
Don’t shop for a loan to raise a deposit – the lender will check.

Work in progress

A good job history with no lengthy, unexplained gaps goes down well with lenders.
They are less likely to lend if you have not held the post for at least six months or if you are on probation or in a contract.

Contract work does not automatically mean no mortgage, but the lender might reduce any offer.

Don’t forget you only have one chance of a mortgage offer – if you are turned down, few other lenders will consider your application, so make sure your financial affairs are in order well in
advance of looking for your home loan.

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