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To say that applying for a mortgage is a nail-biting time is a major understatement, as anyone that has been through the process before will no doubt tell you! As if deciphering all of the legal jargon wasn’t enough, you have to swim through an endless sea of paperwork also and have to face an agonising weight for the thumbs up or thumbs down. You never know which way it’ll go… unless you know how to ace the mortgage test and have your application approved first time.

Believe it or not, it isn’t that difficult to ensure that your mortgage does get accepted with no questions asked, but you have to put in the effort from that first compare mortgages process right through to signing the papers.

Follow the checklist and you’ll soon find yourself holding the keys to the home of your dreams… your home:

1. Check The House

You could choose the perfect house in terms of appearance, neighbourhood area, crime rates, security and maintenance history and it could still cause your mortgage application to be turned down. Hard to believe, but very true. The setting, appearance and history won’t matter one little bit if you have a crack in the foundations because that could bring the house down in as little as 5 years! You might just wake up to find your house crashing down around you one morning.

Get your own surveyor in to do a check if you’ve decided this is the right house for you. The mortgage company will anyway and their surveyor will tell you the same thing that any other surveyor will so get there first! You’ll know whether the house is fit for mortgaging or not and this will save you an awful lot of time later. When your surveyor gives you the thumbs up, you can really start making your dreams a reality.

2. Check Your Credit

This is the main reason for mortgage applications being turned down at the moment. An unbelievable 738,000 mortgage applications were turned down in the UK alone between March and September 2007, and that’s up by 60% from the six months previously. 47% of that total was down to poor or no credit history.

You can prevent your application becoming just another statistic by checking your credit scoring in advance. You stand a much better chance of getting approval first time round if your scoring is labelled good or excellent than if it’s fair or poor. If you haven’t had any credit before, which is highly improbable but not impossible, then get some to improve your credit scoring and have your mortgage accepted first time around. If it doesn’t fall into the higher scoring ranges, whether it’s low or non-existent, then you need to work on your credit before putting in an application.

3. Check The Risk Value

If you happen to be a high-risk applicant then you don’t stand a chance of your application for your mortgage being approved. You could be considered high risk for a whole list of reasons, including if you happen to be self-employed and can’t prove your income, earn a meagre salary, miss credit payments on a regular basis… and the list goes on.

Over 20% of all declined mortgages occur because the applicants don’t earn enough to be able to make their mortgage payments every month. Monthly repayments went up 18% in 2007 alone and the majority are over $1000 a month. Given the cost of living, a household would have to make $2,500 a month and have no debt repayments to make if they want to be able to afford that payment! If you don’t earn enough then don’t put in for a mortgage because you’ll probably have your mortgage application refused.

If you’re self-employed then you’ll need at least 3 years’ accounts before you’ll even be considered for a mortgage with a top provider, regardless of your income. You can prove how much you earn if you happen to be employed but will find that impossible if you work for yourself. You’re required by law to keep all of your accounts for more than 3 years anyway so you should have all the necessary paperwork. It should be in order to increase your chances of approval.

If you’ve missed credit repayments on a regular basis then the solution to this is simple if you want to be approved for a mortgage first time around – start making them every month! This is the easiest problem to solve so start exercising a little common sense and keep up with the bills.

4. Check Your Savings

Last but not least, check to see how much money you have at your disposal. The majority of mortgage companies expect at least 5% deposit on a house, with the majority preferring in the region of 20%. For a $100,000 property, you should have in the region of $20,000 to lay down as a deposit. This pretty much guarantees acceptance if the above is in order. On the other hand, if you have nothing to lay down then most mortgage lenders will say a big fat no.

Buying your dream home should be a well thought out plan because any failed mortgage application will show up on your credit record and possibly ruin your credit score for a while, until you can rebuild it up. Not only that, making sure all of the above are in order will save you a lot of time and hassle as well as stress, so think things through properly and you won’t go far wrong!