Mortgage eligibility can be difficult to gauge for borrowers who have faced stricter affordability and stress tests over the past few years.
Unless utilising the services of a broker, most borrowers are in the dark about what mortgage providers will actually lend them until they are well into the application process. Since failed mortgage applications can negatively affect your credit rating, having a better understanding of their eligibility would be hugely beneficial for many borrowers.
Making the mortgage process easier to navigate
Consumers have been able to check their eligibility for a credit card or loan for some time, making the borrowing process easier and protecting credit scores. Experian recognised the benefits of offering the same service for mortgage lending after finding out that a third of homeowners (from 2,000 surveyed) thought that knowing what deals they could be eligible for would make the mortgage process easier to navigate; it piloted its mortgage eligibility tool in 2017.
The Experian mortgage eligibility service shows prospective borrowers which mortgages they are likely to be accepted for and how much they could borrow. The tool itself compares customer credit information against lender criteria, with the aim of protecting a prospective borrower’s credit history.
50% of testers needed to adjust to meet eligibility criteria
During the pilot, Experian found that around 70% of customers would get a mortgage with one of the service’s lenders, but 50% of those testing the service found that they would need to adjust their deposit or borrowing amount to meet lenders’ affordability requirements.
Currently, the providers on Experian’s system are Aldermore, Barclays, Co-op (Platform), Coventry, Family Building Society, Leeds Building Society and West Brom. More lenders are in the pipeline to join the service but cannot yet be confirmed for commercial confidentiality reasons.
The credit reference agency is rolling out its revolutionary tool to customers over the course of a few weeks, having secured a full mortgage eligibility permission from the Financial Conduct Agency.