Four simple ways to access a mortgage

The way banks give out mortgages has changed since 2008, but all is not lost, access is possible.

10:29 20 February 2014

The UK government's Funding for Lending schemes have enabled banks and building societies to make funding available to more small businesses and people trying to buy a home. This means that getting a mortgage has become easier if a person meets the lending institution's criteria.

 

1) Increase your deposit

There are more mortgage deals available to people who have more than 5% deposit to put up against their mortgage than there were in 2008, but if you can find 20% or more the range of choice available is even greater. A bigger deposit also means a lower interest rate and lenders are more amenable to customers borrowing at a low loan-to-value ratio.

 

2) Reduce your credit card debt and pay off any personal loans

In the past, mortgage lending was based on your income but these days, the calculation takes into account everything else and bases the mortgage loan on affordability. This means that lenders will look at the amount of debt you have on your credit cards, store cards and personal loans that you have a monthly obligation to pay off. 

 

3) Ensure your credit record is healthy

Keep a tab on your credit history by checking with credit reference agencies to check what is being reported. Check that the information is correct and that it is updated on a regular basis. It is important to make sure that your credit history is not messed up by incorrect information. If there is something that is not right, take steps to put it right with the credit bureau.

 

4) Look for a non-traditional lender 

Consider non-traditional mortgage lenders rather than high street lending institutions who have a lot of red tape. Non-traditional lenders might not be suitable for first time homebuyers. Brokers at such institutions usually have relationships with private banks which means the mortgage can be as large as a million pounds.