I would like to buy my first house, but was previously refused for a mortgage.
I have heard that too frequent an application can look back on your proof of credit.
My credit rating is already bad and I'm afraid if I cut it off, it will only get worse.
What options do I have?
If you have a bad credit history or are in a lot of debt, your mortgage options may seem limited
Will Kirkman from This is Money answers: There are many horror stories from mortgage lenders who reject applications for ridiculous reasons, such as: B. because they see a bad word on a bank statement.
In reality, this is not very often the case, but if you have a bad credit history, have used payday loans or have debts, your options may be limited.
This is a real concern for many who are trying to reach the homeowners – Compare The Market research has recently found that nearly a third of the population does not think they would qualify for a mortgage.
But seven out of ten admit they have never tried to improve their credit rating in order to increase their chances of gaining admission.
If you make small changes, eg. For example, removing a credit card, spending a bit on a regular basis, paying off your debts every month, registering on the electoral rolls, paying off debts, or saving more regularly can increase your chances of success.
We asked two mortgage brokers for advice on what to do next.
Nicholas Morrey from broker John Charcol replies: It is disturbing that so much of the population thinks that they can not mortgage without talking to a broker.
Many are unaware that the decrease in the amount they wish to borrow and the rejection of a loan are not the same.
They may also be unaware that a lender's rejection does not mean automatic denials by all lenders.
A rejected request from a lender does not mean that you will automatically be rejected by all lenders
Here are some ways to improve your chances of acceptance:
Log in to the electoral directories – preferably with a three-year address history. Consult your advice and ask him to update the records. If you move during this time, you must inform the Council about the changes.
Nicholas Morrey by broker John Charcol
Get all your bills, credits and credit cards by direct debit for at least the minimum payments. This will prevent a loan commitment from being made one day late, which is often noted as missing in your loan file, even if it is delayed by 24 hours.
Do not collect your outstanding balance on cards in full. Lenders look at the amount of outstanding loans and the amount of loans available to see how much you are availing of short-term loan financing.
Ask the lenders if their systems make a "policy decision" that performs a "soft credit search". If not, leave a hard credit on your dossier for other companies, and too many of them can affect future credit decisions.
Do not be discouraged if the first lender you try says no what you want. Would they lend you money – just not the amount? Lenders, with minor exceptions, will only earn four and a half times the income, so that the demand for eight-fold income is easily rejected.
A good broker You should be able to look at your overall scenario and say why you may have been rejected. You should also know which lenders with an automated system do not get a credit rating, which can help.
Finally, they can give hints and tips on how to improve a credit file so that an application is more acceptable in the future. Before many applications have been rejected, talk to a broker.
Tell them everything that has happened and make copies of your credit reports from Experian and Equifax, as these are almost all lenders.
Andrew Montlake of mortgage broker Coreco adds: While there is a lot of coverage of the difficulties that some people have for a mortgage, this mainly applies to the lenders of the high street. There is a whole world of specialized lenders and small home savings accounts that want to be given out to those who may not quite match the tick-box mentality of banks and building societies.
Andrew Montlake from Mortgage Broker Coreco
There are now a variety of options for those who are self-employed, have a mild credit problem, or have complex income or real estate needs.
It's true that affordability tests have made things more difficult, but people should not weigh their chances until they talk to a professional adviser who can talk about the broader market.
The options are there for many, you just have to know where to look.
Will Kirkman of it's money answers: When applying for a mortgage, it usually pays to look at a few different mortgage lenders to make sure you get the best deal.
You can do this yourself by either going directly to any lender or using This is Money's Mortgage Finder tool to search for lenders that offer help buying Remortgages.
It is always a good idea to talk to an independent consultant for major financial decisions.