Guide to making a mortgage application

No matter what sort of mortgage you are looking for (whether you are a first time buyer; someone who already has a mortgage; or someone looking to remortgage), how you go about your mortgage application is very important. Some people may want to do their homework first and go direct to a lender, while others may want to use a mortgage broker.

So what is the difference?
Going direct will typically save you mortgage brokers’ fees, but unless you are 100% confident that your circumstances meet your potential mortgage provider’s lending criteria, then you may wish to bite the bullet and use a mortgage broker.

Mortgage brokers
Each bank / lending institution typically has its own criteria for approving a mortgage. As an example:

• some will be happy to lend to a self employed person while others may only want to lend to someone who is not self employed and who is full time employment with someone else;
• some lenders are sympathetic to those who may have a less than perfect credit history (this is your financial record that details all your financial goings on for the last six years including whether you have missed any payments) while others will only accept those people with an credit history;
• Young, first time buyers who may not have built up a credit history may also find that some lenders will not approve them for a mortgage.

A good, experienced and reputable mortgage broker may typically know which lender would be most likely to accept you for a mortgage. They may also sometimes have access to online deals not available on the High Street.

You may think: “So what? I’ll keep submitting a mortgage application to different lenders until I am accepted”.
The problem with this is that each time you apply for a mortgage, a credit history check is done and is recorded on your file. If you have several checks done by different organisations in a short period of time (which would typically happen if you applied to one lender after another), a potential lender may look at your file and think:”Why has this person been declined a mortgage by the X Bank? If they have declined them, what is wrong with them?” Plus, multiple or a quick succession of mortgage applications can often smack of financial desperation – again, another potential turn off for lenders.

Going with a broker may mean you can utilise their experience and that you may have a better chance of being accepted for a mortgage. A broker will also do all the chasing of the lender on your behalf, meaning a little less stress at a difficult time.

Of course, whether you decide to submit your own mortgage application yourself or via a broker is up to you. But if you go down the latter route, ask around among friends and family as to whether they can recommend a good mortgage broker. And before you sign up with a broker, check out what any broker fees may be in connection with your mortgage application.