Getting a mortgage in the credit crunch | Mortgage

By ChrisClare
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This is an article is all about getting a mortgage in the credit crunch and how your credit score last year may have got you a decent mortgage, that same credit score is presenting you with problems getting the very best market leading rates.

Let us first look at what exactly is happening in the world of lending and borrowing. This should help with understanding the current situation. There are two main factors at play, the credit crunch itself and the way in which lenders are rating the potential borrowers. These factors will affect your ability to get certain mortgage services from certain money lenders.

The credit crunch is not just affecting UK markets. Although it is affecting the UK in particular, it has ramefications the world over.In a nutshell, the money lenders are having difficulty in acquiring the money which they subsequently lend on to you, the borrower. Lenders get their money reserves from the money markets in the US. However, poor returns in the US money markets and bad investments have meant that the lenders are reluctant to lend out any more as the risks are too great.

Mortgage lenders can still get money but currently they can only get it if they commit to vetting borrowers a lot more strictly than they have been in the past. This has resulted in the second reason why you may find it harder to get a loan and that is credit scoring.

Credit scoring is a computerised system that lenders use to establish someones ability to borrow money. The higher a score the better the quality of borrower and the more likely the lenders is to grant a mortgage. The lower the score the less likely they are to grant a loan or if they do they will tend to grant that loan at a higher rate. This is known as sub prime lending.

There are a lot of different ways in which your score is calculated, most of which you will not be told about as you may be seen to be able to manipulate the answers to your advantage. Having said that, there are tricks to making sure that your credit profile looks as healthy as possible. First of all, it is advantageous to have a stable address history. If your contact address has changed several times in the last 6 years, it can make you look financially unattractive.

Ensuring you are on the voters roll is a must, lenders like to know that the addresses that they are searching are actually the addresses you have really lived at this is usually confirmed by the fact that you are on the electoral roll or voters roll as it is also known.

Having a landline phone is also a must, it has to be said this does not have a huge effect but it is better than just having a mobile phone. Having a stable employment history is also a must again lenders do not want to see people changing jobs every couple of months this spells trouble and they feel it could leave you without a job in the future and them without mortgage payments.

The last and ultimately most important factor is your repayment history. If you have any credit cards or loans outstanding, the lenders will want to see that you have had a stable history of paying off your bills as and when they were due. It may seem that having no financial commitments would be good here, but actually having some credit works in your favour, as by showing that you pay it off well, you will look good as a potential borrower.

In conclusion, the best advise is to show your financial history in the best possible light and you should be able to get a mortgage just as you would have been able before the credit crunch. Always remember that it is a mortgage advisor's job to help you get the best out of your money, so never underestimate or overlook the professional help which they can offer you.

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Mortgage Route offers information help and advice on mortgages from fully trained mortgage brokers coupled with free mortgage calculators and sourcing tools.

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