Figuring out if you’re eligible for a mortgage might seem like rocket science, but it’s simpler than it sounds. It basically boils down to whether you can afford the payments. So let’s get straight into it.
What does ‘am I eligible for a mortgage?’ mean?
It’s just another way of saying ‘can I get a mortgage?’ Being eligible doesn’t mean you’ll definitely be approved, but it means you meet a lender’s basic requirements (subject to full checks). So you’re in a solid position to get a decision in principle
Lenders will then look at things like your finances, age, and how much you want to borrow when you make a full mortgage application later. Then they’ll decide whether you’re officially approved.
How do lenders decide if you can get a mortgage?
They look at lots of things. Every lender’s different. But they all want to know if you can comfortably pay the money back. So they create a picture of your finances and what you’re like with money.
Lenders also look at how much you want to borrow and the deposit you can put down. This decides your loan to value (LTV), which is the amount you want to borrow compared with the value of the home you’re buying, shown as a percentage.
What are the main factors lenders consider?
One of the big things is your income and how much you spend. In other words, lenders want to see if you’ve got more coming in than you’ve got going out. They’ll also look at stuff like your age and how long you want to borrow the money for.
Finally, they’ll look at your credit history. What’s your credit score like? How many accounts have you already got? If you have a history of missed payments, it could work against you.
How important is my income and employment status?
People ask, ‘Can I get a mortgage with my salary?’ all the time. But the truth is, the income you need to get a mortgage actually depends on other things, like your spending habits, too. Shopaholics who spend more than they earn, beware.
Your employment type counts as well. In other words, are you employed, self-employed or something else? Lenders can typically lend you 5 to 6 times your annual income. So, it could be trickier to get a mortgage if you’re self-employed and your income varies. It’s still possible — banks often lend to self-employed people — but income stability’s important.
The biggest thing, though, is whether you can cover those monthly mortgage payments. So get ready to prove your income with:
- payslips
- bank statements
- your employment contract
- last 2-3 years’ SA302s and Tax Year Overviews (if you’re self-employed).
What credit score do you need to buy a home?
Your credit score’s important when you buy anything on credit, like your TV or sofa. So imagine how vital it is when you’re buying a home!
Lenders will want to know how many credit cards you’ve got and if you’re already paying off a car or mobile phone. They might even look at your student loan (if you have one).
Although no single score decides mortgage eligibility, it could count against you if you’ve got a low score with a history of missed payments or county court judgements (CCJs). But if you’ve got a good score, this will work for you.
Does deposit size matter?
Lenders like it when you put down a bigger deposit. It means lending to you is less of a risk. So, put down as much as you can comfortably afford. You’re more likely to get accepted and could even get offered better rates.
Your loan to value (LTV) matters when it comes to mortgage eligibility too. But don’t worry if you’re struggling to save up. Although some lenders ask for at least a 10% deposit (90% LTV), you could still get a mortgage with a smaller deposit.
You could also look at My First Mortgage, our low deposit mortgage for first time buyers. If you’re wondering ‘can I get a mortgage on a house?’ with as little as a £10k deposit, this might be one for you.
Can I get a mortgage at my age?
You might be wondering, ‘am I eligible for a mortgage at my age?’ Well, it depends. All lenders have slightly different mortgage eligibility rules.
But there are some basics that apply across the board. For example, you’ve usually got to be over 18 years old (with a regular income) to apply. And most lenders ask you to pay it back by the time you’re 75 or retire (whichever comes first).
But don’t assume you can’t get a mortgage if the term stretches into your autumn years. If you can prove your income will be high enough to cover your payments, you could still borrow the magic figure you need. Plus you could always reduce your mortgage term at some point in the future too.
Will lenders look at my spending habits?
They will, yes. They need to be sure you can cover your mortgage payments every month. So if you spend a lot, gamble a lot, or already have a lot of other payments to make, lenders might think you’re higher risk.
How can I improve my chances of getting a mortgage?
There’s no surefire way to get accepted. But doing some of these things could help:
- improve your credit score
- put down a bigger deposit
- lower your loan to value
- pay off debts you’ve already got
- reduce your outgoings
- raise your income (if you can).
Another thing you could do is get a decision in principle before you make a full mortgage application. It can tell you lots about your mortgage eligibility chances.
Get a decision in principle online
Check your mortgage eligibility now. Simply enter a few details about you and your finances and see if we could lend to you.
What documents do I need to prove mortgage eligibility?
Lenders will need to know, for sure, who you are and whether you can pay them back. So, they might ask for some or all of these:
- ID like your passport or driving licence
- proof of your address (a bank statement will usually do)
- payslips
- banks statements for the last few months
- a P60 to prove you’ve got a job
- info about your debts.
If you’re self-employed, you might have to show these too:
- your accounts for the last 2 or 3 years
- your SA302s and Tax Year Overviews for the last 2 or 3 years.
All these things help lenders decide your mortgage eligibility, so have them handy when you apply.
Are all property types eligible for a mortgage?
It depends on the lender. But you might have fewer options if you’re buying a listed property, a high-rise flat, or one with a wooden frame or thatched roof. Some restrictive covenants and self-build homes might make lenders nervous too.
What if my application's rejected?
If you don’t meet a lender’s mortgage requirements, get in touch to find out why. They might ask you to put down a bigger deposit, borrow less, build up your credit score, or pay off outstanding debts. Applying with a partner, which adds a second income, could improve your chance of being accepted too.
Can I get a mortgage on benefits?
Sometimes, especially if it’s not your only income. So if you’ve got a job and top up your income with things like child benefit or tax credits, you’ve got a good chance of being eligible if you pass the lender’s affordability and credit checks.
What would you like to do now?
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Applications are subject to status and lending criteria. Applicants must be UK residents aged 18 or over. The amount we will lend depends on your circumstances, the amount borrowed and the property. A higher deposit may be required for a flat or new build.