When you’re applying for a mortgage, you should try to avoid doing anything that could damage your chances of being accepted – especially if you’ve already built a good credit score.

 

There are certain ‘red flags’ to lenders which may be viewed negatively by them during your application process. These include:

 

Gambling on bank statements

 

Statistics show that around 0.5% of the UK’s adult population are ‘problem gamblers’, whilst 3.1% of gamblers have bet more than they can afford to lose.

 

Of course, the odd, small bet here and there is not likely to make a difference to a lender, but signs of large or frequent gambling can be warning signs to a bank. They may refuse to lend to you, or they could take your average gambling spend into account for your affordability checks, as they will see you as being dependent on it.

 

Going over your arranged overdraft limit

 

Going over your arranged overdraft limit is unadvisable. Being within your limit is absolutely fine but going over the limit can cause lenders concern that you cannot manage your money properly.

 

Taking out pay day loans

 

These can be a big ‘no-no’ in the eyes of a lender. This could demonstrate a lack of ability to handle your money, and some banks could instantly decline an application if you’ve had a pay day loan recently.

 

Debt management plans

 

If you have a debt management plan, it could narrow your options when it comes to finding a lender. You would typically need to look at a specialised lender that deals with adverse credit, and your interest rates would likely be higher. Even if your debt management plan is historic and it’s no longer on your credit file, it will still show on your bank statements. A lot of people have the cash available to wipe their debts but when the repayments are low, they don’t. However, it can put you in a more favorable position if you do.

 

Bounced direct debits

 

Again, this is another factor which lenders will look at. Ensure that there are enough funds for all your direct debits to clear smoothly.

 

Multiple mortgage applications

 

Searching and applying for credit multiple times within a short period can affect your credit score. Most people don’t realise but even looking for car and home insurance on comparison websites can lead to a credit check.

 

So, before you make a loan request, ensure that you are eligible and try to use a lender that will complete a ‘soft’ search first, which won’t appear on file.

 

Taking cash out on your credit card

 

Not only could this be costly, but a lender may view it as poor money management which could affect your overall rating.

 

Call 07834 818805 or email info@kbmortgageservices.co.uk if you’re looking to speak to a mortgage advisor in Huddersfield, Holmfirth, Brighouse or Halifax.

Your home may be repossessed if you do not keep up repayments on your mortgage.

 

Approval no. Sol9917

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