How Good Does Your Credit Rating Need To Be To Get A Mortgage
Can I get a mortgage in the UK with a poor credit rating? If you are a first time home buyer in the UK, you will find that the mortgage system differs from the systems in other parts of the world. Most of the time, you don’t need to have a minimum credit rating to buy a home in the UK. This is why many UK homeowners are younger than, for instance, US homeowners.
In the US, many college and university graduates are forced to work for several years to improve and boost their credit status. The conditions vary from state to state and lender to lender. But, in general, most young Americans have to work hard to establish a credit status.
UK lenders will not extend a mortgage to you if they don’t think that you can pay for it. A thorough credit check will be carried, however, your earnings situation is also taken into account. Lenders often ask for a couple of payslips, perhaps a P45 from a previous job, or annual tax return. If you are self-employed in the UK, you may find it harder to get a mortgage. That being said, there are specialist lenders such as NowLoan that may be able to help you compare here.
Traditional Lenders vs Independent Finance Companies
Is your local building society or bank always the best way to go? When you first start looking into getting a mortgage, it is tempting to stay within what you may call a comfort zone. Despite a varied UK financial services market, most borrowers go down the traditional route.
However, it is often worth your while casting your net a little further afield and explore your options. Financial advisers and independent lenders do a good job of helping to explore different mortgage options. No matter what your mom and dad say, it is best to get as many mortgage quotes as possible to find the right one for you.
Do I Risk Losing My Home If I Don’t Keep Up The Payments?
No matter who or what organisation you borrow the money from to buy a home, you risk losing it when you don’t keep up payments.
Before you start looking for a home, it is a good idea to get in touch with lenders to see if they can qualify you for a mortgage. That will give you an idea of what budget you need to set yourself.
Does it help if I have a deposit? Saving for a deposit is a good idea. Even though interest rates are low at the moment, there are ways of saving money which is effective when saving for a home purchase. Having a good size deposit available will also help when you approach a lender. It proves you know how to save money and handle your income.
Are you planning to buy your first home but are perhaps struggling with student debt? In that case, it is a good idea to contact independent financial services such as NowLoan. They are experts in helping first-time buyers no matter what background to find the right mortgage or loan for them.