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Quarter of adults in the dark on what makes them ‘mortgage ready'

Wednesday, May 31, 2023
  • One in ten would take a year to become ‘mortgage ready’ even if they had a deposit
  • 17% have had a mortgage rejection before
  • TML highlights the need for professional advice to support with applications

25% of UK adults admit they have no idea when they would be ready to apply for a mortgage, according to new research from The Mortgage Lender (TML).

Looking at what consumers think makes them ready to apply for a mortgage, having a steady and secure income came top (27%). This was closely followed by being full time employment (26%). 23% said saving enough for a deposit meant they knew they were or are ready to apply for and secure a mortgage.

Other factors consumers felt they needed to be mortgage ready included having a good enough credit score (18%), having no debt (17%), and having a partner that earned enough (14%). 11% said they knew they were ready because they had spoken to a mortgage broker.

Reasons consumers knew/know they are ready to apply for a mortgage:

I have/ had a secure steady income

27%

I am/ was full time employed

26%

As soon as I had/ have saved enough for a deposit

23%

My credit score being good enough

18%

I don’t/ didn’t have any outstanding debt

17%

My partner earns/ earned enough

14%

My identification documentation is/ was up to date

13%

I have/had spoken to a broker

11%

I used/ would use a mortgage calculator which said I was

10%

If I have/ I had a serious long-term relationship

9%

I have/ had never applied for a payday loan

9%

I assumed, because I was successful in my last application

6%

If I had/ when I had children/ when I was expecting

2%

TML also asked consumers to imagine that if they had a deposit sorted, how long they thought it would take to be ‘mortgage ready’. The research defined the point at which someone is ready to apply for and secure a mortgage as when they know their financial position, can commit to making monthly payments, have all documentation ready to share with a broker or lender, are on the electoral roll, and have any out-standing loans or credit cards paid off. 12% said it would take them over one year to be ‘mortgage ready’, while 10% said they would be mortgage ready right now.

However, 13% admitted they did not know how long it would take them to be mortgage ready. And with 17% of consumers admitting they have had a mortgage application rejected before, it raises questions as to whether people are fully prepared as they enter the mortgage process.

Sara Palmer, Distribution Director at The Mortgage Lender comments: “Buying a home is one of the biggest financial commitments a person can make and is not a decision to go into blindly. There are many steps to the mortgage process, both from a consumer and a lender perspective, and to help the process run as smoothly as possible it’s important all parties are confident they are fully ready when it comes to an application.

“This is particularly the case as it becomes more challenging to get onto or move up or down the property ladder.”

“A mortgage broker or lender can play an important role in helping consumers understand what is needed to be mortgage ready, and there are benefits to reaching out to them early. This can subsequently help ensure an application progresses as efficiently as possible and in a timely manner. Specialist lenders also have a pivotal role in supporting prospective homeowners, particularly those who may think they can’t get on the property ladder.”

 

The Mortgage Lender surveyed 2,000 UK adults via Opinium between 11th March 2023 and 13th March 2023.