Millennials changing their spending habits to get mortgage approval
Budding homeowners are attempting to appear financially responsible to boost their chances of getting on the housing ladder, a new report reveals.
The survey, fromÂ MoneySuperMarket, showsÂ that over a fifth (22 per cent) of 18-24 year olds admit to changing their spending habits to present themselves as a good risk for potential lenders.
It is millennials who are most likely to resort to to this tactic, as just nine per cent of those surveyed across all age ranges say that they make tactical changes to their financial behaviour.
With the housing market heating up as we enter summer and the average deposit for a first-time mortgage now overÂ£40,000, it seems that prospective buyers are working to maximise their mortgage chances.
Of millennials that admit to changing their spending habits, over a third (36 per cent) say they would put their spending on a credit card and try to clear the balance each month, while nearly a fifth (18 per cent)Â would pay off existing debts in the run-up to a mortgage application to clean up their finances.
Sally Francis-Miles, ofÂ MoneySuperMarket,Â said:Â 'Anyone planning to apply for a mortgage will look to rein in their spending habits before submitting their application, especially first-time buyers who are new to the process.
'Since the FCA's Mortgage Market Review introduced new affordability criteria in 2014, it's harder to be accepted for a mortgage, even if you know you can comfortably afford the repayments. There is more emphasis on being able to pay if rates increase, which is what catches many people out.
"So while the rules were introduced for the right reasons, we don't want to see people being turned down unnecessarily.
'Clearing debts and generally sorting your finances is the starting point if you're considering getting on the housing ladder. It's also good practice for owning a home."