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    • Bank of England January 2020 base rate meeting
    • Lender Dual pricing: what it means to the mortgage seeker
    • Direct rates offered through lender portals can be costly?
    • Bank of England cuts the base rate to almost zero
    • Buying, selling and moving home during the pandemic
    • Tightening credit conditions in the mortgage market
    • One in seven takes mortgage payment holiday
    • The property market reopens for business
    • Lenders reintroduce 90% mortgage deals
    • Turbulent times for lenders
    • Easing out of lockdown
    • First-time buyer demand surges but options are limited
    • Stamp duty scrapped on homes under 500k
    • Competition watchdog investigates developers over mis-selling claims
    • UK economy may need further stimulus says the Bank of England
    • Your guide to mortgage valuations
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    • A quick guide to interest rates
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    • What to look for in the 2021 property market
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    • Introduction
    • 1st Time Buyers Mortgage Guide
    • 1st Time Buyer & Help to Buy
    • What is a Buy to Let Mortgage?
    • Buy to Let Mortgage Advice
    • Flexible Mortgages
    • Interest Only
    • Remortgaging
    • Repayment
  • Protection
    • Introduction
    • Do I need Income Protection Insurance?
    • Income Protection Advice
    • Why do you need Life or Critical Illness Insurance?
    • Critical Illness & Serious Illness Cover
    • ASU / Redundancy
  • Life Insurance
    • Introduction
    • Term Insurance Policies
    • Endowment Policies
    • Family Income Benefit
    • Guaranteed 50 Plus Life Cover
    • Whole of Life
  • Conveyancing & Solicitors
  • Surveys and Valuations
  • General Insurance
    • Introduction
    • Buildings & Contents Insurance
    • Compare & Buy Online Now!
    • Landlord Cover
    • Rent Guarantee
    • Home Buyers' Protection
    • Home Emergency Cover
    • Commercial Insurance
    • Professional Indemnity
    • Public & Employers' Liability Insurance
  • Will Writing & Estate Planning
  • Other Loans & Services
  • Articles
    • Bank of England Rate Rise
    • Fee Free Mortgage Advice
    • Negotiating the best price for your new home
    • Freehold versus Leasehold
    • Why you need advice on mortgages
    • Ten terms first time buyers will want to know
    • Buying process and dealing with estate agents
    • Selling property and marketing options
    • Help to Buy or not Help to Buy: that is the question
    • New home or pre-loved?
    • Interested in interest only?
    • Are lifetime mortgages on the rise?
    • General Data Protection Regulation (GDPR)
    • Solicitors and conveyancers
    • Joint Borrower Sole Proprietor Mortgages
    • The 3% stamp duty
    • First-time buyer stamp duty relief
    • Offset mortgages: how they work and who they work for
    • Self-employed mortgages versus mortgages for those employed by others
    • Mortgages: debts versus deposits
    • House prices increase swiftest in North West compared to rest of UK
    • Transfer of Equity
    • 10 Pitfall Mortgages
    • Remortgages versus product transfers
    • Limited Company Buy-to-Let Mortgages
    • Retirement Interest Only (RIO) mortgages and the new residential option between normal Interest Only and Equity Release
    • 2019 and our rate of interest predictions
    • Brexit and the property market 2019
    • Potential benefits of using a broker
    • The mortgage market: lenders and their existing clients
    • Mortgages and Relationships
    • Robo Advice: is it right for you?
    • Cheaper rates versus cheaper fees
    • Why online mortgage comparisons can be so vastly different
    • Affordability Calculators
    • Cashback Mortgages
    • Government Rent a Room Scheme
    • Government Marriage Allowance
    • The property market continues to move; and the North West is looking good
    • England letting fees banned and how this may affect you
    • Top credit file definitions
    • Understanding your credit rating
    • BTL, LTB, HMO & holiday let terms explained
    • Offset mortgages: term and payment reduction options
    • November 2019 Bank of England base rate
    • The general election candidates for the Chorley Constituency
    • 2019 year-end mortgage lending market
    • 2019 year-end house prices
    • Can we expect sub 1% mortgagee deals?
    • How is Brexit likely to affect 2020 mortgages and house prices?
    • Interest rates in the UK, Europe and beyond
    • How the Great British Pound is faring against Euro and US Dollar
    • Help to Debt (HTD) – the importance of good advice when it comes to making borrowing decisions
    • Bank of England January 2020 base rate meeting
    • Lender Dual pricing: what it means to the mortgage seeker
    • Direct rates offered through lender portals can be costly?
    • Bank of England cuts the base rate to almost zero
    • Buying, selling and moving home during the pandemic
    • Tightening credit conditions in the mortgage market
    • One in seven takes mortgage payment holiday
    • The property market reopens for business
    • Lenders reintroduce 90% mortgage deals
    • Turbulent times for lenders
    • Easing out of lockdown
    • First-time buyer demand surges but options are limited
    • Stamp duty scrapped on homes under 500k
    • Competition watchdog investigates developers over mis-selling claims
    • UK economy may need further stimulus says the Bank of England
    • Your guide to mortgage valuations
    • Your guide to mortgage surveys
    • A quick guide to interest rates
    • A quick guide to inflation
    • The state of the housing market at the end Of 2020
    • What to look for in the 2021 property market
    • Price caps revealed for Help To Buy Scheme
    • Are 95% mortgages coming back?
  • Enquiry Forms
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  • Home
  • 10 pitfall mortgages

10 pitfall mortgages

When securing a mortgage might prove a little trickier

Getting a mortgage these days is totally different than it was just a few years ago. In 2014, the ‘Mortgage Market Review’ regulations tightened; it is now more important than ever to have your financial affairs in order. Here are the main factors that could make you a higher risk to lenders – all of which you can mitigate, if you plan ahead.

Self-employed

Very few lenders will help if you have only one year’s worth of formal accounts – none if you’ve not completed a year. Importantly, the income they use is your net income, for example, what you have declared to HMRC. Some lenders work off the most recent year but most take an average of the last two or three years.

Credit issues

If you have missed repayments on loans, credit cards or even a previous or current mortgage, then you may struggle; it depends on how often and how recent the issues are. The fewer and longer ago the better.

If the creditor had to take further action, like register a default or a county court judgement, this must be cleared; and your chances of a high street competitive lender are minimal. Even if you haven’t missed any payments, if you have little or no credit, the lender may not have enough information to make a lending decision and they will air on the side of caution. And if you have a lot of credit close to limits and/or have taken payday loans, this demonstrates cashflow may be tight which means it may not be the right time to be making a mortgage commitment.

Voters roll

If you are not registered on the electoral roll, a lender may not be able to trace your credit history or address history; if you have no track record, it’s hard for them to assess you.

Spending and debt

Mortgage lending is based on affordability these days and significant spending from loan repayments, even for things such as childcare, can dramatically affect the amount a mortgage lender will offer you. The days of a blanket four or five times income are over. Lenders will want to see bank statements showing your income and outgoings, so be aware that they will analyse it. They don’t have an issue with people enjoying their lives however, regular outgoings to betting companies, for example, could turn a lender off completely. Keep an eye on overdrafts too and make sure you stay within limits.

Too many enquiries

Make sure if you want to shop around that you don’t get too many credit scores done. An agent, lender or adviser could refer to them as a ‘mortgage certificate’ or ‘agreement in principle’. Each time a credit score is carried out, it can affect your credit score. Some lenders offer a ‘soft footprint’ to avoid this issue. Remember that if you apply for any form of credit, mobile phone contract, store card, loan, credit card etc. a credit score will be carried out. If you have too many credit scores – more than two, as a guide – over just a few weeks, not only does it reduce your credit score, it can demonstrate to a lender that you have cashflow issues so it’s important to remain vigilant.

 

Company address: Euxton Mortgage Market, Hearle House, 5 East Terrace Business Park, Euxton Lane, Chorley, Lancashire, PR7 6TB
T: 01257208946 F: 01257208947 Email: info@euxtonmortgagemarket.co.uk

Euxton Mortgage Market are independent mortgage advisers covering Euxton and the surrounding areas, including: Leyland, Bamber Bridge, Farrington, Lostock Hall, Longton, Adlington, Charnock Richard, Croston and Rivington.

Adrian John Wood, trading as Euxton Mortgage Market, is an appointed representative of HL Partnership Limited, which is authorised and regulated by the Financial Conduct Authority.

*Some of these products are not regulated by the Financial Conduct Authority.

Adrian John Wood is entered on the Financial Services Register (www.fca.org.uk/register) under reference 682490.

H L Partnership Limited is entered on the Financial Services Register (www.fca.org.uk/register) under reference 303397.

The information contained in this website is subject to UK regulatory regime and is therefore intended for consumers based in the UK.

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