A mortgage expert has shared his advice on how first-time buyers can increase their chances of securing a mortgage and get that first foot on the housing ladder.
Property expert Sam Fox, Founder of the UK Mortgage Centre, told London Loves Property how ย increasing your mortgage affordability can make the difference between securing a loan for your first home or missing out.
His comments come as data reveals the average first-time home buyer loan has jumped a huge ยฃ10,000 between 2023 and 2024,
Sam said: โThe average first time mortgage was just over ยฃ200,000 last year but this varies significantly according to where you are looking to buy and the size of the property.
โMortgage lenders will assess your income and outgoings and typically base what you can borrow on a multiple of your income, usually about 4.5 times your annual salary.
โBut other factors, such as your credit history, job stability and type of employment and any outstanding debts also play an important role.
โThey also โstress testโ your finances to ensure you could still make repayments if interest rates went up.
โSo, the more financially secure and responsible you appear, the better your borrowing power.
โBut donโt worry. There are steps you can take to improve your chances of securing a higher mortgage offer and reaching that goal of owning your first property.
โImproving your mortgage affordability isnโt about shortcuts, itโs about showing lenders that youโre a low-risk, financially responsible applicant who can comfortably manage monthly repayments.
โBy tightening your budget, boosting your income, and improving your credit profile, youโll put yourself in the strongest possible position to borrow what you need for your first home.
Boost Your Income (Where Possible)
This may sound obvious, but a higher income increases the amount lenders are willing to let you borrow. You should consider applying for a pay rise if you have been in your job for a while or taking on extra hours or side work to boost your income. Even The latter should be regular and provable to be included in calculations, but even a side hustle can help if it means you can pay off any cards or other loans.
If your work includes being paid bonuses or commission on a regular basis, look for the lenders who take these into account. And make sure you include your partner or co-buyerโs income if youโre purchasing together.
Reduce Your Monthly Outgoings
Lenders look at your monthly spending just as closely as your income. Reducing regular expenses can show you have more disposable income for mortgage repayments.s meaning youโll be a more attractive prospective customer.
Look at subscriptions you donโt use. Weโve all got them and often we donโt notice theyโre going out of our account. Think about things like Netflix, gyms or apps, particularly any you may have signed up to for a free trial and have since forgotten about.ย You should also switch utility providers to get cheaper deals and cash back.
Lenders will look at the last few months of your spending habits and assume that is typical, so itโs worth while limiting the take-aways, dining out and shopping splurges in the run up to applying for a mortgage. Even small savings can tip the balance in your favour.
And of course, pay off debts, especially credit cards and loans which usually have higher interest rates.ย Outstanding debts reduce the amount you can borrow. The less debt you have, the more room you have to take on a mortgage.
If you canโt pay debts off entirely, reducing them will still improve your affordability profile.
Check and Improve Your Credit Score
Your credit history is crucial. A poor credit score could limit how much you can borrow or make getting a mortgage harder full stop. You can check your credit report through Experian, Equifax or TransUnion. Go through it to check it is accurate and correct any errors you spot.
You should also ensure you are on the electoral roll at your current address which you can easily do by contacting your local council.
Those few months in the run up to an application are crucial, so make all payments on time, even for phone bills and credit cards and avoid applying for anything new.
Lenders want to see that youโre a responsible borrower with a history of managing credit well.
Save a Bigger Deposit
While it doesnโt directly affect income multiples, a larger deposit can sometimes increase the amount a lender is comfortable offering or open upopen better interest rates. Saving more also reduces the loan-to-value (LTV) ratio, which means less risk for the lender.
You can set up a dedicated savings account for your deposit and use schemes like the Lifetime ISA to benefit from government bonuses.
Consider a temporary lifestyle change (e.g. moving in with family) to speed up savings: paying hundreds less in rent each month will quickly add up. Even an extra 5% deposit can improve your mortgage prospects.
Choose the Right Lender
Not all mortgage lenders have the same rules. Some are more generous with income multiples (e.g. offering 5x or even 6-7x income for certain applicants), while others are stricter on credit scores or spending habits.
Work with a mortgage broker who understands the market and can match you to the best lender. This is particularly useful if you are self-employed or have less regular income such as freelance or commission work and there are specialist lenders who may be more suitable.
Tailoring your application to the right lender can increase both your chances and your borrowing potential.
Add a Guarantor or Consider Joint Borrowing
If youโre struggling to borrow enough on your own, you could consider applying jointly with a partner to combine your income. But you can also look into guarantor mortgages which are good ways of getting that first time loan when youโre just starting out. This is when a family member agrees to cover repayments if you canโt and can be a way that parents can help outhelp a child without having to release capital or dip into their savings.
You could also consider family deposit schemes, where parents can contribute savings or equity to support your application.
But these options come with extra responsibilities, so take proper advice before committing to these.
Avoid New Credit Before Applying
Tempting as it may be, avoid taking on new financing like car loans, credit cards, or store credit shortly before applying for a mortgage. It adds to your debt-to-income ratio and raises red flags for lenders.
Hold off on major purchases and donโt open new credit accounts in the 3โ6 months before applying.ย A clean, stable financial picture will serve you better.
Get Your Paperwork Ready
Being well-prepared can help speed up your application and avoid delays that may affect the size of your offer. Make sure you have:
- Payslips and P60s (usually for the last 3โ6 months)
- Bank statements
- Proof of any other income
- Details of existing debts or financial commitments
- ย Having all of this ready to go makes you look like a serious, organised borrower.
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