First-time buyer mortgages hit 12-year high

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News this week from UK Finance that the number of first-time buyer mortgages has hit a 12-year high will reassure those that may have been stalling their plans to get onto the property ladder whilst Brexit looms in the background. Schemes like Help to Buy have undoubtedly played a part, along with a wide range of mortgage offerings. So what should aspiring property owners be doing to help prepare for that all-important first mortgage? George Robbins, our director of financial services, shares some advice:

“At TransUnion, we’re advocates of consumers taking control of their financial passports and encourage them to check their credit report regularly, which they can do for free via our website. For first-time buyers, this is absolutely essential, as when it comes to applying for a mortgage, a credit score will be one of the factors in a lender’s decision. It represents an assessment of creditworthiness and the likelihood of being able to make repayments, so it’s important to know what information is held.

“That said, a high credit score doesn’t automatically mean the applicant will get the mortgage they want, nor does a low score mean they can’t borrow. Each finance provider has their own lending criteria and will take a number of factors into account to ensure that the mortgage is affordable for the borrower.

“Those keen to get onto the property ladder should make sure, before they start looking for a mortgage, that all the information on their credit file is correct. If necessary, they can take steps to improve their credit score, as we’ve outlined below.”

  • Pay bills on time or ahead of schedule, a good credit score needs to be built up over time – lenders will look favourably on this
  • Avoid keeping a high balance on credit cards. Lenders may view it as excessive debt and be concerned about ability to repay
  • Don’t make multiple applications for credit over a short period of time, as this can have a negative impact on a credit record
  • Close down out of date credit cards and cancel old agreements, such as unused store cards, as these will still appear on the file. Lenders may be wary about the potential size of debt, particularly when taking on the commitment of a mortgage
  • Sever old financial relationships – those that have previously had a joint account or loan with someone they no longer have a financial connection with should update their credit file and remove them. Otherwise, their financial behaviour could influence the mortgage decision
  • If a consumer notices anything on their credit report that could be incorrect, or think they might be the victim of identity fraud and that someone has applied for credit in their name, they should contact the credit reference agency, who will work with the lender to try and resolve the issue

Businesses wanting to find out more about our credit reporting and scoring services can get in touch or consumers looking to check their credit report can do so here.

If you’re a consumer with questions or issues related to your personal credit report, drivers history report, disputes, fraud, identity theft, credit report freeze or credit monitoring services, please visit our Customer Enquiries page for assistance.

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