Mortgage lenders that lend more (+3 insights)
In this brief guide, we are going to discuss Mortgage lenders that lend more.
Mortgage lenders that lend more
When searching for mortgage lenders who lend more you should take into consideration the fact that the amount a mortgage lender will lend to you will be based on your mortgage affordability and this figure may change depending on the mortgage lender’s criteria which is always subject to change.
Mortgage lenders also commonly use income multiples when looking to determine how much they will lend to you.
This could be between 3 and 7 depending on the mortgage lender and the mortgage product.
Your debt to income is also a very big factor which will determine if a mortgage lender will lend more to you or not.
You must be able to show that you can indeed repay the monthly mortgage payment in full each month for the term of the mortgage.
If you have too much debt then you may not be able to afford the monthly mortgage repayments.
This will mean you are unlikely to get a mortgage and certainly won’t find a mortgage lender that will consider lending more to you based on your current debt to income ratio.
You can use a mortgage calculator to see how much you may be able to borrow.
Below are some of the mortgage lenders that will consider lending more:
- Lloyds Bank
- Halifax Bank
- Scottish Widows
- Coventry building society
- Virgin Money
This data was gathered through Which Mortgage advisers based on a borrower with an annual income of £30,000 with a £25,000 mortgage deposit on a £250,000 property over 25 years.
How to get a mortgage lender to lend more to you
To get a mortgage lender to lend to you there are a few things you will need to do to ensure the mortgage lender views you as being creditworthy.
Below are some of the things you can do t ensure a mortgage lender will feel the need to lend more to you.
Check your credit score
One of the easiest things you can do when looking for a mortgage lender to lend more to you is to check your credit score.
Your credit score is a very important factor when considering your mortgage affordability.
A mortgage lender will pull your credit score from one or all of the credit bureaus and use this as a major factor when deciding if to give you a mortgage.
If you are unsure of what your credit score is then you should check your credit score from the four credit bureaus in the UK: Experian, Crediva, Equifax and Transunion.
Some of these credit bureaus may charge you a fee to view your credit report so what you can alternatively do is request a statutory credit report which is a free credit report which each credit bureau must provide to you upon you requesting it.
Alternatively, you can also use credit score services such as Checkmyfile and clearscore to check your credit report.
If you find that there are errors on your credit report then you should contact the credit bureau and ask them to include a notice of correction.
The credit bureau will do this as they investigate the error and this will allow lenders to take this into consideration.
If you have bad credit such as the below then you ay find it much harder to find mortgage lenders who are willing to lend more to you.
Bad credit includes:
- Debt management plan
- Individual voluntary arrangements
- Missed credit payments
- Late payments
- County court judgments
There are also various tips on how to improve your credit score, they include:
- Avoid missing credit repayments
- Avoid late credit repayments
- Get on the electoral roll for your current address
- Keep your credit utilization below 30%
- Avoid making too many credit applications within a short time
- Avoid getting rejected for credit
- Remove any negative associations from your credit report
- Get a credit builder card or loan to show good credit behaviour
Put down a bigger mortgage deposit
Another way to ensure a mortgage lender may consider lending more to you is by increasing the mortgage deposit you put down and by default reducing the mortgage lenders risk on the mortgage due to a lower loan to value.
You can use a government scheme to improve your mortgage deposit and hence you may qualify for a higher income multiple on your mortgage.
Use a Government scheme
There are various government schemes which you may be able to use to help you get on the property ladder.
Some of these Government schemes include:
- Lifetime ISA– gives you a government bonus of £1,000 if you save a maximum £4,000 a year.
- Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
- Help to buy equity loan– gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
- Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
- Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
- Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
- Right to buy– allows you to buy your home at a discount price.
- Preserved right to buy– same as above.
- Right to acquire– similar to the above.
Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.
Get a standard construction property
Another way to increase the likelihood of getting a mortgage lender to lend more to you is by buying a property classified as standard construction property.
Most mortgage lenders will have higher lending requirements when lending on non-standard construction property and hence they will likely have a higher loan to value requirement.
Get a higher paid job
Another way to ensure a lender will consider lending more to you is by having a much higher income.
Most mortgage lenders decide how much they will lend to you based on your income.
This is known as your income multiple.
The higher your income, the higher the mortgage lender will consider lending to you based on the mortgage lenders income multiple.
Each mortgage lender will have different income multiples and this will differ further based on the mortgage lenders lending criteria on the different products they offer.
Use a mortgage broker for your mortgage in principle
You may want to use an independent mortgage broker to help you get a mortgage on your new home.
Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.
This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.
A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.
After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle.
This will allow you to shop for your home as more estate agents and sellers may take you seriously and it will also give you confidence that your mortgage is indeed a possibility before you make a full mortgage application.
Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.
This will come with a key facts illustration document that details the features of your mortgage including how much you will pay per month.
It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.
If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.
Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.
They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer, and set a completion date with the seller or their conveyancer.
This will then bring an end to the conveyancing process, at which point you will receive the keys to the house and move in.
In this brief guide, we discussed Mortgage lenders that lend more.
If you have any questions or comments please let us know.
If you are in need of advice about your money and you live in the UK then you may contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.