In May 2019, UK lenders approved 65,409 mortgages. That’s a fair total. However, when you look at the data, it was over 500 approvals down on the previous month. What’s more, it’s a far cry from the 151,800 mortgages banks and building societies signed off on in May 1988. Although lending approval rates are far from catastrophic at the moment, obtaining money to buy a property is far from easy.
In fact, when you couple this with the fact the average UK house price is now £228,903, prospective owners don’t exactly have the deck stacked in their favour. Fortunately, as is often the case in today’s tech-led world, help is out there. Through a combination of research, insights and streamlining your finances, it’s possible to improve your chances of getting a mortgage.
Smart Saving with Apps
The first way that technology can help is through spending and saving. Regardless of how much you earn, the average mortgage lender now wants a deposit of approximately 15%. Even on the ‘average’ UK home, that’s £34,335 you need to save before you think about applying. For those trying to monitor their outgoings, spending apps are perfect. Syncing your smartphone and bank account, the latest apps not only track your expenditure but help you set budgets.
For example, the PocketGuard Android and iOS app connect to your bank and any debit cards you have. All the data is encrypted, and it provides a read-only connection so no one can use the app to touch your money. Once it accesses your accounts, it analyses your outgoings, your income and balance to determine how much you can safely spend without going into the red. Taking this a step further, Honeyfi allows users to connect with family members/partners and share comments and messages. By working in unison via the app, savers have a better shot at meeting their target.
Solve the Mortgage Equation with Smart Calculators
Once you’ve hacked your saving strategy, knowledge is crucial. Learning everything you can about a lender before you apply can save a lot of wasted effort. For instance, according to data compiled by Trussle, a Virgin Money mortgage can be worth up to 5X your annual income. Just from that fact alone, you can get a sense that this lender may give you slightly more than another bank such as Barclays. Delving deeper into the stats, you can see that Virgin Money was responsible for 3.3% of all mortgage lending in 2017 (£8.4 billion).
When you’ve reviewed the data, you can start to compare. The first way to do that is to read breakdowns and overviews. From there, smart comparison technology comes to the fore. Today, mortgage calculators do more than collate data. Using AI technology, these products can take an applicant’s data and make live market comparisons. By harnessing ever-improving machine learning technology, the calculators can scan the market and identify the best potential deals. Then, as lending dynamics change, new offers arise and the market fluctuations, the software can learn and continually refine its suggests.
In essence, technology has allowed brokers to offer a “smarter” service which, in turn, means borrowers receive better suggestions. Of course, no amount of planning, research and technology will guarantee your mortgage application is accepted. However, if you use the resources out there to your advantage, it’s possible to stack the deck in your favour.