“my neighbourhood” (CC BY 2.0) by woodleywonderworks
Common wisdom suggests that the best way to get a better mortgage offer and, in turn, secure your ideal home is to save lots of money, have no debt and generate a steady income. In practice, this is true. Without some savings and proof that you can cover the monthly repayments, getting some cash from a bank or building society is going to be virtually impossible. However, in today’s housing market where prices are high and lending conditions are strict, you need to be more proactive.
Work is the way to success
Put simply, you need to put the work in. However, it’s not simply a case of working hard in your job. To help improve your chances of getting a mortgage, you need to work that little bit harder and be smarter when it comes to making the right choices to secure your future, which includes finding the right financial product. With so many options out there, finding and applying for a mortgage has become a job in its own right.
Now, if we look at the data, mortgage approval rates for new commitments in June 2019 were 4.5% higher than they were in 2018. However, just 36.9% of mortgages had a loan-to-value (LTV) ratio of 75% or above. What these statistics suggest is that banks are slightly more willing to lend but, in many cases, they want borrowers to cover more than 25% of the property’s total value. While the facts certainly aren’t as bad as they were, it does suggest you need to analyse your options before making an application.
“working” (CC BY-SA 2.0) by sun dazed
Indeed, with the average house price in the UK standing at £229,431 according to the Land Registry, the right product could save you thousands. By finding a lender that offers the lowest rates or has lending conditions favourable to your circumstances, you may have a better chance at being accepted. Moreover, you could secure the best LTV and not be forced into a position where you have to cover more than 25% of a property’s value.
Improve your aim and target the right deal
Fortunately, as is often the case these days, the internet can be your saviour. Online brokers now provide more information on lenders than ever before. For example, Trussle offers comprehensive overviews of the UK’s top banks and building societies. When looking at the company’s breakdown of the Royal Bank of Scotland (RBS), the article highlights how the bank was responsible for £31 billion worth of lending in 2017. Additionally, you can find the current lowest RBS mortgage rates on Trussle’s site, along with the maximum amount you can borrow, customer service scores and more.
In tandem with doing your own research, mortgage calculators will analyse your circumstances and tell you how likely you are to get a yes from each lender. By using these resources and taking a look at the housing market in general, you can get a better insight into what’s available and what you can do to get it. The main message here is that knowledge is power when it comes to modern mortgages.
If you’re willing to put in the work and do some research, securing a deal and securing your dream home doesn’t have to be a chore. Yes, you still need to have your finances in order before you apply. However, in an industry where firing multiple shots is frowned upon, you want to make sure you target the right lenders and the best way to do that is through hard work.