Credit agency offers seven tips to help you get your first mortgage

Times are still tough for first time buyers and getting a mortgage is often the hardest part of getting on the property ladder.

There’s been some good news recently with big lenders like Woolwich and Nationwide relaunching 90% LTV (Loan To Value) mortgage deals for new customers, but a 10% deposit still requires a big chunk of money when you think that the average house price is now around £160,000.

If you’re in the process of buying your first home, or are thinking of doing so, credit agency Experian has come up with these seven tips to help you improve the chances of getting the mortgage you need – focusing on getting your credit report in order.

For more help and advice you can download our free guide to first time buyer mortgages.

1. Understand how lenders calculate credit scores They take information from the personal history of your credit accounts contained in your credit report, plus details from your application and give relevant items a value, using their own unique formula. The total is your score.

2. Make sure your credit report is accurate Go through it carefully, looking for discrepancies such as different ways of listing your address, and clerical errors, such as duplicate listing of accounts or closed accounts marked as open. Contact the relevant lender about anything you disagree with. It’s free to see your Experian credit report with a 30-day trial of CreditExpert1.

3. Take a reality check There’s no point applying if you haven’t saved a large enough deposit or don’t earn enough to keep up with the repayments without relying on your credit card. Applying to every lender you can find could actually harm your chances. Each application is recorded on your credit report and if lenders see lots in a short period, they could think that you’re desperate or suspect a fraud.

4. Make yourself more attractive Simple steps can add valuable points to your credit score and make you more attractive to mortgage lenders. Try registering to vote at your current address, closing unused accounts or adding a note explaining if special circumstances, such as illness, caused past problems.

5. Remember, remember Make sure you make repayments on time, every time – a missed or late repayment stays on your credit report for at least three years and could cost you the house of your dreams. Set up direct debits if you’re forgetful.

6. Know the score You can find out your Experian Credit Score as often as you like during your free trial of CreditExpert1 - it will give you a good idea of how an application will be assessed.

7. Be patient There’s a reason why the average age of a first time buyer is 352 – it takes time to build a good credit history, save a sufficiently large deposit and earn enough to take on repayments and running costs. It’s worth knowing your credit status – as it may well pay off in the long run.

Stamp duty warning

It’s also worth remembering that from the end of March next year, the Government’s starting threshold for stamp duty on first time buyer property purchases will drop back from £250,000 to £125,000 – so if you’re buying your first home for between £125,001 and £250,000, you could save up to £2,500 in stamp duty by completing before the deadline.

To see how much stamp duty you'll pay when buying a new home, try our stamp duty calculator.

1 New customers only. Monthly fee applies after free trial. 2

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