Many people planning to buy their first home are scared of rejection by their lender, according to the new Mortgage Approval Confidence Index from unbiased.co.uk.
The survey reveals that four in ten, or 38 per cent, of first-time buyers are concerned their mortgage application will not be approved.
Even though 28 per cent of all prospective buyers are not feeling confident they will get a mortgage, they are doing very little to improve their chances of a positive response from their bank, unbiased.co,uk says.
The research reveals that both confidence and success can be greatly improved through taking professional mortgage advice from an independent financial adviser, with more than eight in ten (81 per cent) of advised applications being approved first time.
First-time buyers are less likely than other homebuyers to seek the advice of an expert. Mortgage advisers say people moving home make up 37 per cent of their client base, compared to just 26 per cent for first-time buyers. Overall, one in five potential buyers who seek advice from a professional mortgage adviser, do so after having had their initial non-advised application rejected.
Karen Barrett, chief executive of unbiased.co.uk, comments:
“It’s great that so many people are looking to get on the property ladder, and the recent spate of good deals from mortgage providers means this figure is likely to rise even higher. Having a concrete goal in mind such as buying a property is a strong incentive to take charge of your finances and take stock of where you are and what you need to do. One big concern from this research is that so many people aren’t confident they’ll have a mortgage approved, and yet aren’t doing anything to increase their chances.
“Getting professional mortgage advice can make a huge difference to the process – from finding the best deal for your individual circumstances to planning specific steps to make you a more attractive candidate to a lender. Merely hoping for the best isn’t enough. The confidence that comes from having spoken to an expert can turn a potential refusal into a smooth and stress-free purchase.”
Most common things people have done / plan to do to improve their chances of mortgage approval:
|
Steps taken |
Plan to do |
|
| Checked my credit rating |
28% |
25% |
| Made a detailed analysis of all my outgoings |
25% |
23% |
| Taken active steps to improve my credit rating |
25% |
20% |
| Researched the different mortgage providers to learn about their lending criteria |
23% |
29% |
| Significantly reduced spending to cut down my outgoings |
22% |
26% |
| Consulted a financial adviser to help with mortgage application |
19% |
27% |
| Other steps to increase the chances of the mortgage application going through |
14% |
21% |
| None of the above |
32% |
29%
|
