Top tips: How to apply for a joint mortgage
Planning and preparation is key when applying for a mortgage and remember the fact that mortgage lenders can choose who they lend to is important. You could apply to two mortgage lenders doing exactly the same thing, however one mortgage lender may turn you down whereas the other may accept you.
When applying for a joint mortgage, here are some tips to maximise your chances of success:
Get your ducks in a row
Planning and preparation is fundamental when applying for a mortgage. A lender needs to assess your worthiness based on lots of different criteria, however the main points are:
• your loan to value
• your affordability
• your credit score
Lower loan to value
The larger the deposit you have, the easier it will be to get a mortgage. Your risk profile drops if you invest more money into a property and this is why mortgage sharers should calculate a realistic figure for how much they can afford so they can team up with other mortgage sharers and amass the optimum deposit.
Cancel any unnecessary expenditure – and be brutal!
Having a membership to the best gym in town is great, but this sort of thing is now taken into consideration when applying for a mortgage. Make sure you cancel any memberships or subscriptions you don’t need until you are settled into your new home and can demonstrate you can afford the extra expense.
Check your credit score before a lender does
You have a credit file registered with credit agencies such as Experian that lists credit cards, overdrafts, loans, mortgages, mobile and utility payments for accounts open going back 6 years.
Even if you have a good credit score, read the following to make sure it is the best that it can be.
Improve your credit score
• Update all your credit records to reflect your current address
• Register on the electoral role
• Stay living and registered at one address for longer than a year (stability is a key factor in credit scoring)
Remember that your mortgage sharers’ credit can affect yours
Don’t just think about your own score, you need to make sure that the person you are sharing with also has a good credit rating.
Your credit score can also be affected by links to previous partners you’ve shared a bank account with. Make sure you unlink yourself from shared accounts with anyone you don’t need to be linked to.
Spend and clear
Pay off in full any loans, credit or store cards each month. Any debt that is outstanding when you apply for a mortgage is taken into consideration by the mortgage lender. Although regular use of a credit or store card helps your credit score, you need to pay off what you spend each month to benefit.
Close any old credit or store cards and bank accounts
Reduce the amount of your available credit by closing down any accounts that you do not use. It can be tempting to leave them there for a rainy day, however, available credit is a high risk factor which goes against your mortgage application.
Don’t apply for any credit
Don’t apply for any credit in the run up to getting a mortgage as it is reported to the lender when they do their credit check. A lot of credit checks from credit providers can be a sign of someone who is credit hungry and a higher risk to lend to.
Don’t get down if the computer says no
Believe it or not, there are a lot of mortgage lenders who use computers to assess mortgage applications. The computer has a cap on the number of applications to allow based on different factors and assessed on risk. If your application fits into a category in which the mortgage lender has set a particular limit, your application may be rejected simply because of this criterion.
If you get turned down don’t approach every mortgage lender out there as they will make a note on your credit file for each application you make. Mortgage lenders won’t like seeing that you have been turned down a lot of times so leave it 3 months between applications and use that time to keep improving your credit score and save more money!
Andrew Boast is conveyancing director at Share a Mortgage.