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Can I get a mortgage? A mortgage eligibility FAQ

In recent years, securing a mortgage and getting a foot onto the property ladder has become much more of a challenge. There are a few factors that are now affecting our ability to save for a home deposit and afford mortgage repayments. Not only are we borrowing more — unsecured household debt hit a high of £11,000 in 2017 (PwC) — but UK house prices have hit an all-time high (Halifax).

With more financial pressures and uncertainty, you may be asking yourself whether you will be eligible to apply for a mortgage. Thankfully, the good news is that it’s often still possible to secure a deal on your property. To help you out, we’ve put together this guide to many of the frequently asked questions about mortgage eligibility.

We will cover:

Can I get a mortgage with bad credit?

Yes, it’s possible to get a mortgage with bad credit, but you may find it tougher than someone with a positive record. Your credit history can have a big impact on your mortgage application, especially with regular lenders like banks and building societies. This is because you will need to pass a strict credit check before your application can be approved, and you are likely to be accepted or rejected based on whether you pass or fail.

A poor credit score is more than likely to see you turned down. Even if you now have a good salary and already have a deposit in place, many lenders will still reject your application if you have a bad credit history. If you want to apply to a regular mortgage provider with bad credit, there isn’t an awful lot you can do in the short-term to improve your credit score. Improving your record is something that takes time, and even if you succeed, you’re still not guaranteed to be approved.

What mortgages can I apply for with bad credit?

If you have bad credit, there are lenders on the market who specialise in offering products to those who have a less-than-perfect history. Known as adverse-credit mortgages, these are tailored towards those who can’t secure a regular deal, but they work much in the same way.

Lenders protect themselves from potential loss by requiring a larger deposit and by charging more interest than other mortgages, which is something you will need to consider if you go down this route. Here at The Mortgage Genie, we can offer expert advice if you’re thinking about applying for a bad-credit mortgage, and we’ll be able to help you find the deal that’s right for your circumstances.

What credit score is needed for a mortgage?

Unfortunately, there isn’t a set score that can help you pass a mortgage provider’s credit check. Lenders have their own risk tolerance levels and criteria on which they judge your application, which means that their ‘acceptable’ minimum score might be different to another company. All that can really be said is that the better your credit, the more likely you are to pass a provider’s test.

It’s highly recommended that you check your credit score with a reputable agency before you begin applying for a mortgage — Noddle are such an agency that offer a free credit report service. If you apply for several mortgages that you’re not sure you will be accepted for, then get rejected, it can add to your credit report and lower it further. By checking beforehand, you will get a better idea of whether you need to work on improving your score. A report will also help you spot anything that is affecting your rating, while giving you a clearer picture of what type of mortgage product you should be applying for.

Can I get a mortgage with a CCJ?

If you have a County Court Judgement (CCJ) on your record, it can make getting a mortgage a lot more difficult. While many providers will reject you outright, the details of your CCJ can determine how it affects your application. For example, a CCJ for a small amount in the distant past will be viewed a lot less seriously than one for a large sum in more recent years.

You’ll have an even better chance of being accepted if you have demonstrated responsible credit since and can prove that you’re unlikely to encounter financial difficulties in the future. There are also adverse credit providers that offer specialist CCJ mortgages for those with one on their record. The Mortgage Genie team are well-versed in handling CCJs, and we’ll be able to help you find a good deal with advice about adverse credit mortgages.

Can I get a mortgage with an IVA?

An ongoing or recent Individual Voluntary Agreement (IVA) on your credit history can negatively affect your chances of being accepted by a mortgage provider. Because they are a legally binding agreement to pay back debts to your creditors, lenders will likely see this as evidence that you’ve taken on debt, and need assistance from a third party to pay it back. Ongoing IVAs are also viewed as a sign that you have extensive debts and you won’t be able to keep up with mortgage repayments.

IVAs remain on your credit record for six years after the date they were registered, and even one that has been resolved can have an impact on a mortgage application. In this case, you can choose to wait until your IVA has been wiped from your record and resume your application, or find a specialist mortgage provider who is willing to consider you. The Mortgage Genie team has extensive experience in this area, and we can provide specialist mortgage advice to suit your needs.

Can I get a mortgage with a default?

If you’ve defaulted on a debt in the past, many mortgage providers will view this as a red flag in your application. As they will be lending you a large amount of money, they want to be sure you will keep up with mortgage repayments, and any previous missed payments on debt can be seen as evidence that the same might happen again.

Some providers will be willing to consider your application based on the personal circumstances of the default. For example, if you missed a repayment once and it was a while back, they may look at your more recent history where you’ve been responsible and give you the benefit of the doubt. If you can show that this is the case, you may be able to secure a mortgage for your home. Find out more about our adverse credit mortgage advice to learn how we can help to match you with the right lender.

Can I get a mortgage after bankruptcy?

It can be very tough to get a mortgage from a regular lender in the years after bankruptcy. When you declare bankruptcy, it stays on your credit record for six years, so any check that a provider runs will bring it up. High-street banks and building societies are very reluctant to lend to people with this on their record. Many providers will even ask you whether you’ve ever been bankrupt as part of the application, and expect you to declare this even after six years.

However, this is not always the case, and there have been plenty of people who’ve been able to secure a mortgage after bankruptcy — it all comes down to your own circumstances. You can boost your chances of being accepted if you’re willing to offer a higher deposit and repayment rate. There are specialist bad-credit mortgage providers who work with people who’ve had money troubles like bankruptcy in the past. The Mortgage Genie’s bad credit mortgage advice team can listen to your needs and help you apply to the right lender.

Can I get a mortgage with debts?

Yes, you can still get a mortgage if you have debts. People in the UK collectively owe a total of £1.554 trillion (The Money Charity) as of 2017, and the reality is that most of us have one debt or another, whether it’s credit cards, student loans, car finance, or something else. You don’t need to look far to find people who are sensibly managing both personal debt and a mortgage.

With this in mind, applying for a mortgage with some debt should be possible, as long as the debt hasn’t caused you problems in the past and you can demonstrate you can afford the repayments. Having debt can even work in your favour, as responsibly keeping up with debts can boost your credit rating when a mortgage provider runs a check.

Use our mortgage repayment calculator to work out approximately what your monthly repayments will amount to, and determine whether getting a mortgage is an affordable option for you right now. It can also help you to plan how much you need to budget for in the future.

Can I get a mortgage on benefits?

Yes and no. If your income is solely based on benefits and maintenance, many mortgage providers will refuse to lend to you. On the other hand, if you have an income from a job, self-employment, or pension, some banks and building societies may be willing to count benefits like Child Tax Credits, Child Benefits, Working Tax Credit in your affordability assessment. Lenders will also consider various disability benefits, including Incapacity Benefit, Disability Living Allowance, Attendance Allowance and Employment and Support Allowance.

Can I get a mortgage with no deposit?

The majority of mortgage providers in the UK will require a minimum 5–10% deposit on a property to secure a deal with them. The days of being able to access a product without paying upfront are long gone, as most lenders learned their lesson from the financial crash of 2008. Now, 100% loan-to-value (LTV) mortgages are very rare, with only a few companies willing to offer them.

Instead of looking at the ways of avoiding a deposit, it’s well worth exploring the options available to help you afford them. Guarantor mortgages are often available, where a family member who owns their own home shares the mortgage and uses their savings or property as the deposit for you. As long as you keep up your repayments, the deposit is usually paid back to your relative with interest after a period of time. Our team can help find and set up these mortgages, as well as providing comprehensive advice on your best options.

There is also the government’s Help to Buy ISA, which is an initiative designed to boost your savings so that you can afford a deposit sooner rather than later. With one of these ISAs, the government will boost whatever you pay in by 25% up to a maximum of £3,000, adding to your deposit savings. There is also the Help to Buy Equity Loan, which will see the government lend you 20% of the asking price of a new build home to make buying one much more affordable. The Mortgage Genie has assisted many people with Help to Buy mortgage advice, so we can walk you through the process and help you find the right deal.

Can I get a mortgage without a job?

Possibly, but having a job can boost your chances of getting accepted by a mortgage provider. A source of regular income will help you to repay your mortgage, so they are looked on very favourably, sometimes even as a necessity, by lenders. If you don’t have a job but will be starting one soon, be sure to provide evidence of this to support your application.

Can I get a mortgage if I’m self-employed?

You can get a mortgage if you’re self-employed, but there are often more hoops to jump through. Most lenders will want to verify your income to assess your capacity to make repayments. They are typically happy to provide a mortgage if you’ve been trading for three years with two years of accounts or tax returns for them to review. This is not set in stone, however, and there may be lenders who are willing to consider someone who has been trading for less time.

Each provider has their own preferences and policies, so it’s worth looking around for someone who best suits your needs. Speaking to a broker, such as The Mortgage Genie, for mortgage advice is recommended as they will be able to guide you through your options, match you with the best lender, and ensure your application meets their requirements.

Can you get a mortgage as a student?

In theory, yes, you can get a mortgage as a student, but it depends on your financial situation. Lenders won’t disqualify you from applying for a mortgage if you’re at college or university, and you should be considered like anyone else if you can afford the deposit and can prove you have a regular income that allows you to make repayments.

If you are a part-time student who is also working, you should be able to get a mortgage like any other applicant. However, if you are studying full-time with only part-time work or no employment, it’s unlikely that you will be accepted. There is the possibility that a lender will consider a guarantor mortgage, where a relative can co-sign the deal, but you will still need to be able to make the repayments each month.

Can I get a mortgage at 50?

It is possible to get a mortgage at 50, but it’s more difficult. This is because lenders are aware you’re nearing retirement age, so they are reluctant to offer a deal just in case you aren’t able to carry on affording the monthly payments. This has been compounded by stricter lender laws in recent years, which require mortgage providers to scrutinise borrowers more to ensure they can afford any deal.

You can improve your chances of being accepted by opting for a short-term mortgage that runs up to the year that you intend to retire. The downside of this is that repayments will be a lot higher than if you can spread it over a longer period. If you intend to get a mortgage that extends beyond when you stop working, you will need to provide sufficient evidence that you will have enough income to continue affording your repayments.

Can I get a mortgage at 60?

Like applying in your 50s, getting a mortgage at 60 or older can be tough. Many providers impose age limits, stating that you can’t be older than 65–70 by the time your mortgage is fully paid. If you need to apply at 60, your only real option is to get a short-term mortgage that is 5–10 years in duration. You will also need to prove your income if you plan to retire before your mortgage ends.

Here at The Mortgage Genie, we can work with you no matter your age to find a mortgage deal that suits your needs. Our team can help whether you want a short duration mortgage or if you need assistance in applying and proving your income beyond retirement.

Can I get a mortgage on my own?

Yes, you can get a mortgage on your own. Though signing with someone else allows you to pool resources, lenders are more than willing to consider solo applicants as long as you can pay a 5–10% deposit and can afford the repayments.

You can use our mortgage affordability calculator to work out how much you will be able to borrow based on your income. If you are a first-time buyer, we can offer you advice to guide you through the process from start to finish, and we can also offer specialist advice you if you’re looking to take advantage of the government’s Help to Buy scheme to make your home even more affordable.

Can I get a mortgage if I already have one?

Yes, it is possible to get a second mortgage if you already have one. These are known as second home mortgages, where your provider views your first mortgage as your main residence and an additional property as a second home.

It can be tougher to secure a second home mortgage as you need to prove that you can afford both sets of repayments you will need to make. Second home mortgages usually require higher deposits and come with higher interest rates than main residence mortgages, too. Lenders will carry out the same financial assessments, but they will be even more thorough and cautious before approving any deal.

Moving out of your main residence is a common reason for applying for a second mortgage, but many people also want to invest in a property to rent out or develop as an investment, or as a holiday home that they also rent out. The Mortgage Genie can offer essential buy-to-let mortgage advice, whether you are looking to buy a house abroad or acquire a property as part of your portfolio.

Can The Mortgage Genie help me get a mortgage?

Yes, we can help you secure a mortgage on your dream home. Our team are highly experienced in working with clients from all backgrounds, so they can guide you through the mortgage application process no matter what your circumstances.

Whether you are looking for advice about buying for the first time, moving home, Help to Buy and new builds, or adverse credit mortgages, we can make sure you’re in the best position to apply and that the terms of the deal are right for you. We also have a range of mortgage calculators to help you get an idea of what you should be looking for. Get in touch with us today to get started.

 

Please be aware that by clicking onto the above link you are leaving the Mortgage Genie. Please note that neither Mortgage Genie Ltd nor PRIMIS Mortgage Network are responsible for the accuracy of the information contained within the linked site accessible from this page.

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