The origins of the word ‘qualify’ are interesting. Initially originating from the Latin word ‘Qualifico’, which loosely meant ‘I invest’. Later with the advent of the English language taking over, the word was coined Qualify along with it’s meaning of achieving something, getting better at something or better than the other.
When getting yourself a mortgage, there is the need to ‘qualify’ before getting your mortgage approved. In this blog post, we will take a look at what a borrower needs to provide or have with them in order to qualify for a mortgage in the UK.
Who is eligible for a mortgage in the UK?
Getting a mortgage approved in the UK means you will need to meet certain criteria. Most lenders have standard criteria in order for a mortgage to be approved, but in some instances these may vary. The criteria could vary from lender to lender, but some of the most common requirements are listed as follows and will determine if you are eligible to apply for a mortgage:
- A good credit score.
Being able to carry out your monthly repayments is an important detail a lender will want to look at. Your ability to allocate the required monies at the end will certainly determine the outcome of your mortgage getting approved. Lenders will also look at your history of making payments on time for your debts. You may have to produce proof of repayments. I.e: A loan that you had to pay off where the repayment instalments were carried out consistently.
- A steady income.
In the UK lenders will definitely want their borrowers to have a stable job which assures a steady income at the end of each month. This would obviously mean that you can afford to make the monthly mortgage payments. Type of employment may not matter (I.e: Permanent employment, part time employment, contractual, self-employed). What matters to a lender is that you have a steady income that translates into the ability to carry out the instalments that are due to him/her.
- A deposit.
Although this comes a little later in the process of mortgaging, it still is an important factor in successfully getting your mortgage through. Once your initial paperwork is done, lenders in the UK will usually require you to put down at least 5% of the purchase price of the property as a deposit. The minimum deposit can be 5%, however if you have the resources and are able to make a larger deposit, it will work as an advantage. What is the advantage? The larger the deposit amount, the lesser the monthly repayment instalment will be. When it’s a long term payment scheme, having a lesser instalment to pay each month will be seen as a significantly lesser burden.
Have you got a loan that needs to be paid up? When getting a mortgage, lenders usually will want to see that your monthly repayments are affordable, and take into account your other debts, commitments in the form of ongoing expenses.
For a mortgage to be approved, you need to meet these criteria before you can begin the process of applying for a mortgage. The application process of course will vary from lender to lender, but it will usually involve you providing the following information:
- Your personal details.
- Income and employment details.
- Credit history.
- How much are you willing to make as a deposit.
- The property you want to buy.
- And most importantly, how much you can afford to part with each month.
Once you have submitted your application, the lender will assess your application and compare your income levels before deciding whether you are able to afford the mortgage.
If you are unsure about how much you might be able to afford, speak to a mortgage adviser at BVS. Our professional team will be able to provide you with advice on the right mortgage for you.
Qualifying for a mortgage essentially means getting your finances in order. Before you apply for a mortgage, it is important to pay off any outstanding debts, reduce your spending, and save up for a deposit. While there are many different lenders offering mortgages in the UK. It is important to speak to professionals who are well versed in the subject or you could face the risk of your application being rejected at the onset.
Buying a home in London or the UK is a big decision, and getting a mortgage can be a complex process. However, by following these tips, you can increase your chances of qualifying for a mortgage and buying the home of your dreams.
|YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Approved by The Openwork Partnership on 03/07/2023