This will depend on a number of things – the type of mortgage you go for (fixed-rate or variable rate, repayment or interest-only), the amount that you borrow, but most importantly, the interest rate on the mortgage. So it’s going to be important to make sure that you find the best deal for you.
1. When you apply for a mortgage, your lender –the bank or building society – uses the information on your application form, along with the information in your credit report, and give relevant items a value, using their own unique formula. giving you a credit score. Your credit report includes details about whether you’ve kept up to date with payments on loans and credit cards, and the total level of credit that you already have.
2. Different lenders give different credit scores. Because lenders have different past experiences and expectations, they take different factors into consideration and score things differently. And the same lender may score a mortgage application differently to a credit card. the higher your credit score, the better your chances are of getting your mortgage and the deal you want.
3. It’s worth thinking about how much you can afford to borrow and later repay in the future, as your deposit is however only part of the equation. A smaller deposit can mean a larger loan – which means lenders taking a close look at your ability to repay. Your credit history can be a key factor in that, and your credit report can help you understand more about it before you make your application.
4. The Experian Credit Score is a guide to help you understand your credit report, and how past credit management can impact on future credit applications and for you to monitor your progress as you get your finances in order before you apply.
For more helpful information on mortgages, visit www.experian.co.uk/mortgages, with useful hints, tips and features.