Buying a home is a complex process that requires time and patience as well as finances. In addition to the overall expense of purchasing a home, other issues can hinder the process and make it that much more challenging to obtain a mortgage. Some problems can relate directly to your lifestyle. Some can relate to your past and employment status. While credit and debt information are also taken into account when applying for any mortgage.
However, all is not lost and even with self-employment, debt issues, and a poor credit score obtaining a mortgage is still possible. All you need to do is inquire with various lenders and shop around when looking for your mortgage. In addition, real estate agents will also provide information about obtaining a mortgage if you schedule a meeting with them.
The construction materials used in the home you want to purchase can drastically affect whether you will qualify for a mortgage or not. Non-standard construction relates to the way your home was built. For example, a barn conversion mortgage is more difficult to obtain than a mortgage for a new build with bricks and mortar. Additionally, steel framed homes and cottages with thatched roofs also fall under this category, making obtaining a mortgage difficult.
Given that a mortgage is essentially a large loan, any current debts are also considered when applying. A history of debt is also taken into consideration when making a decision about whether to lend to you. 40% of UK adults have missed regular payments. So, it isn’t personal when they check, and any mortgage lender needs to consider your ability to repay your loan against any other debt you are currently paying. This includes credit card bills, court orders and student loans.
In addition to debt issues, your credit score is also used to get certainty about whether to lend. Having a good credit score is essential when trying to obtain any credit or loan these days. A history of missing payments on bills such as mobile phone contracts, credit based purchases, and cash loans will all directly affect your personal credit score. However, it might be possible for you to apply for and obtain a bad credit mortgage in certain situations.
Your employment status will also be taken into consideration when applying for a mortgage. While being self-employed can be rewarding, it is also risky for lenders. This is because self-employment is uncertain. Your income can vary significantly from month to month, depending on your business. While it can seem a little unfair, from a lender’s point of view, you need to consider your ability to consistently repay any mortgage or funds loaned to you.
A common issue with mortgage applications is accurate information. Every minor detail of your application will be scrutinised in depth by professional document readers who have access to almost every system of information available. Therefore, lying, providing false statements, or making a genuine mistake will be exposed upon application. So, it is recommended that you do all you can to provide the most accurate information available and ensure that any documentation is genuine and up-to-date to ensure your mortgage application is processed correctly.