A house is one of the biggest purchases you will ever make, and for most people, this means applying for a mortgage through a mortgage broker or lender.

A mortgage loan is a specific type of loan that pays for the cost of a property upfront but on the legal condition that if the buyer cannot or does not abide by the terms of the loan the provider can take ownership of the property instead.

Because of the stakes involved, many providers will have certain qualifying factors in place to ensure that you can afford the repayment schedule over the next few decades.

Different mortgage types exist for different types of homes, different financial situations and to help people who would otherwise struggle to get a mortgage onto the property ladder, and these will themselves have different criteria in place.

Here are the most critical factors affecting mortgage approval:


Credit Rating

A credit rating, or credit score, is a singular score that is calculated by a person’s history of making payments, how much they apply for credit, how much they owe and other miscellaneous factors such as being on the electoral roll.

Whilst it is not the be-all and end-all of any mortgage application, it is commonly the first statistic lenders will look at, and often can dictate particular interest rate terms.

Thankfully, a credit rating can be easily improved by paying down debt, repaying on time and not applying for new credit.


Deposit Size

How much you can pay immediately for a home will have an effect on the size of repayments and how long the mortgage will last.

Typically, this is expressed through the loan-to-value percentage (LTV), which is the percentage of the price of the property you would still need to pay for.

Ideally, you would want to have a deposit that is around 20-25 per cent of the home’s value, although schemes exist that have widened the availability of 95 per cent LTV mortgage.


Employment History

Lenders want to know where your money is coming from and whether you have a consistent source of income. For most lenders, the ideal is to have worked steadily for at least two years, or have income from another source.

However, this has historically led to issues for people who work in fields with less consistent income, such as authors and freelance workers, who may need to provide further information regarding their revenue.


Home Appraisal

Finally, there is the value of the house being bought that many lenders will consider. Lenders do not want to be left with a home they cannot sell in the case of a repossession, and so they will ask for an appraisal and an inspection of the home, as well as other wider conveyancing checks.

If the inspection price is lower than the price you have agreed to pay, many lenders will only lend the LTV percentage of the appraised value and you will need to find the rest of the money if you wish to continue the purchase.

However, in that case, ‘caveat emptor’ takes full effect. If a house is worth significantly less than the asking price, that should be a red flag with regards to whether you want to continue your purchase.

For more information about any of our services, or if you have any questions about the factors affecting your mortgage approval, get in touch by calling us on 0203 3939 222.

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Hannah D
Hannah D
07:42 09 Sep 19
I would fully recommend Greg and Greenacre Financial Services. As a first time buyer I was daunted by the process of... finding the right mortgage for me however Greg made the process really simple, clear and quick. He was always available to answer any questions and happy to explain everything. I wouldn’t hesitate in recommending Greenacre FS to my friends and family.read more
Jessica Cohen
Jessica Cohen
19:33 26 Aug 19
We first met with Greg in May for advice as we had adverse credit and irregular pay and didn't think a mortgage was in... our reach. Less than two weeks later Greg had fully arranged a great deal for us on our first mortgage. He was available whenever we needed him, 7 days a week and in the evenings. We cannot thank Greg enough for helping us buy our first home!read more
Seren Fletcher
Seren Fletcher
08:56 24 Aug 19
Would highly recommend Greg and Greenacre Financial Services. Was extremely professional and helpful. Our mortgage... wasn’t straight forward due to my husband being self employed but Greg was very knowledgable and managed to find us a really good mortgage. Looking forward to working with him again in the futureread more
13:24 23 Aug 19
Graham at Greenacre was excellent in helping me get a mortgage for my house purchase. He was always available when... needed, provided an efficient service and was very knowledgeable. Highly recommended!read more
Ian Hatter
Ian Hatter
11:07 16 Aug 19
What can I say, Greg has been absolutely amazing in sorting out a mortgage for me I never thought was possible. It has... meant I have been able to buy a house, a few months ago, I would never have dreamed of being able to buy after talking to high street lenders. He worked exceptionally hard and always kept me updated with every step of the process. Buying a house is extremely stressful, but Greg took all that stress away from me. I cannot recommend Greg enough to anyone looking to buy a property. Thank you so much for your help Greg, it's greatly appreciated.read more
Sean Kelly
Sean Kelly
15:27 30 Jul 19
10/10 EXCEPTIONAL service and result. Highly recommend. Greg and the Greenacre Financial Services team were fast,... knowledgeable, and honest. All the qualities you want and need. Very pleased I was recommended to Greenacre. Customer for life!read more
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