Research reveals many people in the UK are not confident about getting a mortgage

Almost 13 million people in the UK who want to buy a home believe that they would not be able to get a mortgage, new research has found.

They survey also shows that almost half of those whose mortgage applications were rejected say their credit score was negatively affected yet many do not take the necessary steps required to boost their eligibility.

Indeed, the poll from Comparethemarket found that 62% of respondents have never checked how much they could borrow via a soft check before applying. Soft checks do not impact a credit rating, which is a key measure for lenders.

Overall some 74% said that they have not made any attempt to improve their credit rating in order to improve their chances of securing a mortgage.

The firm says that steps such as taking out a credit card, paying off an existing card or overdraft debt, making sure you are on the electoral role or increasing household income can all lead to a better credit rating.

When asked to predict how much money they could borrow via a mortgage, some 58% were not confident in their ability to respond correctly. However, respondents who did predict were not optimistic, as 16% do not believe that they could borrow more than £50,000.

With the average UK house price estimated at £225,621, these pessimistic predictions indicate a lack of consumer confidence, with only 12% of respondents able to envisage themselves securing a mortgage large enough to cover a house at the average national price.

Mortgage seekers whose applications were declined say that they have suffered the consequences and 45% who were turned down say that their credit score was negatively impacted as a result.

When questioned on their providers’ reasons for declining their application, 33% said that their income was deemed too low. Other major factors included having too much debt, carrying out too many credit applications or having a generally poor credit history.

Comparethemarket has launched a new mortgage eligibility checker so that people are calculate how much they might be able to borrow and whether they are eligible for a mortgage.

‘Buying a home is one of the biggest financial commitments and it is crucial that borrowers are fully equipped with the necessary knowledge before they apply. Borrowers should be aware that even small changes, such as registering on the electoral roll, taking out a credit card, paying off debt or simply saving more regularly can significantly increase their chances of securing a mortgage,’ said Shakila Hashmi, head of money at Comparethemarket.

‘Our mortgage eligibility checker allows customers to check whether and how much they can borrow, before making an application. In some cases people may find they are not eligible for a mortgage at the time of checking, but a soft check does not impact your credit rating and allows you to make the changes necessary to help secure a mortgage at a later date. This is particularly beneficial to first time buyers who have not been through the home buying process before, but equally beneficial to remortgagers who may be looking to take out some funds for home improvement or get on to a better rate,’ Hashmi added.