House prices are on the rise and that means so are mortgages. If you want to be eligible for a bigger mortgage, there are a few things you need to consider. The first is that you can actually afford a bigger mortgage and won’t have any problems meeting your monthly repayments.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Then you’ll need to qualify which is dependent on your income, credit score, and other financial factors. Here are a few steps to take to ensure you can get a bigger mortgage.
Improve your credit rating
One of the first things you can do is pay off any outstanding debts. While it might not be easy, paying off your debts shows mortgage providers that you’re a responsible borrower and likely to pay off your loan with them as well, which will improve your chances of getting approved for a high loan-to-value mortgage.
Next, consider closing any old credit accounts that are no longer in use. Closing accounts is great for improving your credit score since there’s one less open account on your report. Try to keep the balances low on the accounts you keep open, too.
Your credit score is one of the most important factors that lenders take into consideration during the mortgage application process. A great credit score usually correlates to a lower interest rate so it’s worth it, in the long run, to pay your bills on time and be responsible with your finances from the start.
Lenders look for responsible financial habits so use your credit cards responsibly, don’t max out limits, pay off debts, and don’t open new lines of credit before applying for a mortgage to help improve your chances of getting a bigger mortgage.
Organise your accounts
This step is especially important if you’re self-employed. When you apply for a mortgage, you’ll need to have all your financial paperwork in order, and for someone who is self-employed, you’ll need your documentation to prove that you’re generating a regular, stable income. Being able to provide current and accurate financial records and accounts is proof that you’re a responsible borrower and that you can afford monthly payments.
Reduce spending
When applying for a mortgage, you want to put your best foot forward, and cutting your spending not only lowers your outgoings and improves your chance at a low interest rate, it is one way to improve your debt-to-income ratio — one of the criterion lenders use when evaluating your application. A high debt-to-income ratio may make it difficult to get approved for the mortgage you need. A lower rate could end up saving you thousands of pounds over the life of your loan.
Work with a professional mortgage advisor
No matter how big of a mortgage you’re trying to obtain, it’s always a good idea to seek professional mortgage advice. Experts can help you find the right mortgage product for your specific circumstances and let you know how you can improve your chances of a bigger mortgage.
We help make the process as smooth as possible from beginning to end, so if you’re in the market for a mortgage, don’t hesitate to contact us for assistance.