Five Questions About: Getting a mortgage


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The Independent Online

Are banks and building societies still lending?

According to the Council of Mortgage Lenders (CML), gross mortgage lending fell 14 per cent in January to £10.5bn (from £12.2bn in December). The good news is it is higher than the £9.5bn lent in January last year. The bad news is it's a far cry from the £30.6bn lent in the pre-crunch days of January 2007.

Will I definitely be accepted for a loan?

No. A lender could turn you down for multitude of reasons, none of which it has to explain. You are less likely to be accepted if you have a small deposit, are recently self-employed or your credit score is under-par.

What is a Mortgage Agreement in Principal?

Its a document from a lender that states you will be agreed a mortgage on the basis of the information you have given, such as credit score and salary. But don't count your chickens as a lender can change its mind. For example, if your payslips don't match your stated income or something arises in the lender's valuation.

How much could I borrow?

Most lenders (around 70 per cent) loan up to 90 per cent of the property value. A few cap borrowing at 95 per cent.

How can I improve my chances of being accepted?

First apply for a copy of your credit file. A simple way to do that is via MoneySupermarket's credit monitoring channel. If you find any errors, apply to the credit reference agency for a Notice of Correction. Register on the electoral role and keep mortgage applications to a minimum as each leaves a footprint on your file.

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