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Who Is Eligible for a Mortgage?

A research by Online Mortgage Advisor shows that a fear of rejection makes those working part-time, flexibly or who are self-employed, along with those who have a poor credit history not apply for a home loan. To help people better understand what the mortgage requirements are, the advisor has published a list of five types of potential borrower who assume they won’t qualify, but they actually could.

“Advice varies enormously between brokers and criteria vary significantly from lender to lender. When one person goes to a broker that fails to secure a mortgage or applies directly to the wrong lender, they presume this goes for everyone and tell their friends and family so,” said David Bird, director of Online Mortgage Advisor.

“Of course, there will still be some people who will face challenges for one reason or another, but the key to truly understanding the eligibility for a mortgage is getting the right advice for your situation,” he added.

The five types mentioned by Online Mortgage Advisor are:

  1. Entrepreneurs – they have achieved business growth, but reinvestment and choosing to pay themselves a smaller salary has limited mortgage opportunities.
  2. The Flexi Crowd – they are self-employed but with a variable monthly income or new to working for themselves. They may have less than two or three years accounts, which means they fall outside lenders’ criteria.
  3. Globe Trotters – they have returned from abroad so they have gaps in their employment and credit history, as well as a lack of searchable addresses.
  4. The Financially Unfortunate – someone who is paying for an ex-partner’s financial problems or people who have been ill or made redundant.
  5. The Maternity Leavers – lenders are often reluctant to lend to people on statutory maternity pay.

For instance, Naomi Willis, who works flexibly running the Skint Dad blog, was among those who assumed they wouldn’t be eligible for a mortgage. “My husband and I guessed we couldn’t get a mortgage because we had a new business and some poor credit history. On paper, we were not mortgage material,” she said.

“It always felt easier and safer not to bother applying until we were ready – out of debt and back on track. However, to my surprise my presumptions were proven wrong recently as we discovered we are eligible and we could be homeowners sooner than we thought,” she concluded.

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