To explain this you first need to understand the reasons affecting your attempts to get the best rates possible from the lenders in this sector. There are two main factors that that need to be taken into account. The first is the credit crunch itself and the second is to do with the methods used by the lenders when assessing your credit score.



The credit crunch has had a global effect on the mortgage markets and the UK's mortgage markets are feeling the pinch in a big way. The lenders are finding it increasingly difficult to obtain the money they used to and so you will find it increasingly difficult to borrow from them. The reason why the lenders are having a hard time raising funds is down to poor lending in the US with the companies supplying the lenders the funds no longer willing to take the risks on bad investments.

That is not to say that mortgage lenders cannot lend money. It simply means that the criteria for the borrowers is much more rigorous as the lenders do not want to risk lending out more money which they won't get back. Hence the second difficulty for borrowers. This strict vetting system is called credit scoring.

Credit scoring is a computerised system that lenders use to establish someones ability to borrow money. The higher a score the better the quality of borrower and the more likely the lenders is to grant a mortgage. The lower the score the less likely they are to grant a loan or if they do they will tend to grant that loan at a higher rate. This is known as sub prime lending.

There are a lot of different ways in which your score is calculated, most of which you will not be told about as you may be seen to be able to manipulate the answers to your advantage. Having said that, there are tricks to making sure that your credit profile looks as healthy as possible. First of all, it is advantageous to have a stable address history. If your contact address has changed several times in the last 6 years, it can make you look financially unattractive.

Being on the electoral roll is also a plus. The fact that you have voted from the same location for several years gives lenders confidence that you have stayed put and therefore stable for a significant length of time. This will give you more points.

A fixed telephone line is also extremely important. Even if you have good payment history with a mobile, fixed phone lines again convey stability. Also having a stable employment history. If lenders can see that you have remained with the same employer for several years, they can be sure that your salary is going to contnue to come in as it has done. They don't want to see you changing jobs at the drop of a hat.

Finally the big one, make sure you do not miss payments on loans and credit cards. It is important to have credit as having no credit gives the credit scoring system nothing to work with so gives you no benefits at all. Having a nice amount of healthy credit ie paid every month is great for the system it eats up good credit and suggest to the lender that you are a potentially good borrower.

In conclusion, the best advise is to show your financial history in the best possible light and you should be able to get a mortgage just as you would have been able before the credit crunch. Always remember that it is a mortgage advisor's job to help you get the best out of your money, so never underestimate or overlook the professional help which they can offer you.