• Hayley Leith

What is Eligibility?

Updated: Sep 23



Eligibility. It's a word that's used frequently throughout the mortgage industry, and if you've tried applying for a mortgage yourself, you've likely pondered over what eligibility really is.


Since taking out a mortgage involves borrowing a large amount of money, lenders won’t provide one to just anyone. Providing a mortgage to someone who cannot afford it could lead to missed payments and even eventual repossession. Therefore, lenders will usually have criteria you have to meet in order to be eligible for a mortgage.


When applying for a mortgage, regardless of your credit score, a lender will check your credit history against their criteria, determining whether or not you would be eligible for them to offer you a mortgage loan. If not eligible, and the lender carried out a 'hard check' your credit score may be negatively impacted.



What decides my eligibility for a mortgage?

There is a wide range of factors that decide whether or not you’re approved for a mortgage. Generally, each provider will have their own specific criteria to adhere to that decides your eligibility, which means that if you’re rejected by one provider, this doesn’t necessarily mean that you won’t be able to find another provider willing to accept your application - although, making too many applications at once is not advised.


What affects mortgage eligibility?

As stated, each mortgage provider decides their own criteria for lending money. However, generally, a lender will take into consideration:

  • How much you want to borrow

  • Your deposit

  • What kind of property you are wanting to buy - it can be harder to find a lender willing to lend on high-rise flats, ex-local authority property, homes made from non-standard materials, properties above cafes and bars, listed properties and so on

  • Your employment status (the longer you’ve been in your current job, the better)

  • Any debts that you have

  • Your regular spending habits

  • Your credit rating

  • Whether the mortgage is affordable for you


What do lenders look for when checking your eligibility for a mortgage?

Before a lender will lend you money to buy a home, they want to ensure that you can repay it. Because of this, they want to see if you’re responsible when it comes to paying debts, how much you can afford, and whether you fit their other criteria, such as age and UK residency.


Lenders will look at:

Your income - they usually want to see three to six months of recent payslips and your most recent P60. Some lenders may also want to see if you are receiving any government benefits or child maintenance. If you’re self-employed, you will be unable to provide payslips and your income could fluctuate more than someone who is employed. Therefore, you may be asked to produce accounts and the lender’s checks may be more rigorous.


Your expenditure - you may be asked about any credit cards, household bills, insurance policies or outstanding loans that you have. Lenders will also want to know about your other regular expenses, such as child or spousal support, school fees, childcare fees and commuting costs. They may also ask you to estimate any other living costs, such as how much you spend, on average, on clothes and going out. This is where you may need to provide a few months of bank statements to back up your figures.


Future scenarios - lenders will stress test how likely you are to be able to pay if circumstances change - if interest rates rise, for example, or if you’re made redundant or have a baby. This is done by “stressing” the lender’s mortgage rate by 3% to see if it would still be an affordable rate for you.


Your credit score - your credit rating lets potential lenders know what your financial history is like, including how regularly you keep up with credit payments and if you have ever missed any. A lender will look at your credit score when considering your application so that they can have an idea of how risky it would be to lend to you. For example,


If you are taking out a joint mortgage, lenders will look at the finances of everyone involved.



So... how do you know if you’ll be eligible?


Without applying for a mortgage through a broker, there is no way to know if you’ll be accepted for a mortgage without applying for it. As you can imagine, this could become a very risky process if you do not have a great credit score. It can be very disheartening.


However, that doesn’t mean you have no chance of getting a mortgage!


There are tools and advice that can help you increase your credit score and increase your chances of being accepted for a mortgage, without the need to apply multiple times. Our new mortgage eligibility checker carries out a ‘soft check’ on your credit history, comparing this data and the rest that you provide with sets of specialist lender criteria. The smart checker can do this task in ten minutes, whereas it would usually take an average of three to five days for a person to do the exact same thing. Additionally, the results will show you the likelihood of acceptance for each of the top mortgage lenders, as well as highlighting the monthly repayments for the deals.


If you are happy with the results (the most accurate that you will get based on the details that you provide), you can then get in touch with a friendly mortgage advisor here at Mortgage Thoughts to start your journey towards completion.



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