A quarter of adults have no idea if they are ‘mortgage ready’
According to a survey of 2,000 people by The Mortgage Lender (TML), 25% of UK adults admit they have no idea when they would be ready to apply for a mortgage.
Diving into the factors that impact mortgage readiness, 27% of consumers cited a steady income as the key element.
This was followed by 26% who thought being in full-time employment and 23% said saving enough for a deposit made them mortgage ready.
Around 18% pointed to credit score being good enough and 17% said not having any outstanding debt.
Only 11% said they knew they were mortgage ready because they had spoken to mortgage broker.
Mortgage readiness with a deposit
The research also asked those surveyed if they had managed to sort a deposit, how long it would then take them to ‘mortgage ready’ – defined as when someone knows their financial position, can commit to monthly payments, have all documentation to share with a broker or lender, are on the electoral roll and have outstanding and credit cards paid off.
Around 12% said it would take them over one year to be ‘mortgage ready’, while 10% said they would be mortgage ready right now.
However, 13% admitted they did not know how long it would take them to be mortgage ready and 17% of would-be borrowers said they have had a mortgage application rejected before.
Sara Palmer, distribution director at TML, said: “Buying a home is one of the biggest financial commitments a person can make and is not a decision to go into blindly.
“There are many steps to the mortgage process, both from a consumer and a lender perspective, and to help the process run as smoothly as possible it’s important all parties are confident they are fully ready when it comes to an application.”
She noted that that this was especially the case as it “becomes more challenging to get onto or move up or down the property ladder”.
“A mortgage broker or lender can play an important role in helping consumers understand what is needed to be mortgage ready, and there are benefits to reaching out to them early.
“This can subsequently help ensure an application progresses as efficiently as possible and in a timely manner. Specialist lenders also have a pivotal role in supporting prospective homeowners, particularly those who may think they can’t get on the property ladder.”