How to prepare for a mortgage application.
1. HAVE A DEPOSIT. This can be savings / Gift from a Family member or the proceeds from the sale of your existing property. You can also capital raise on your existing property if you plan to retain your own property or capital raise on another 2nd property or BTL property you also own.
2. HAVE A GOOD CREDIT PROFILE. A good credit profile and an above average credit score is more important than ever and will be an advantage when you want to borrow a high loan amount and at a high Loan to Value (i.e. with a low value deposit). There are a handful of lenders that do not carry-out a credit score which will help some mortgage applicants with no or a low credit score. There are still some lenders left that will consider mortgage applicants with an impaired credit history as a result of arrears and defaults.
3. COLLECT ALL THE RELEVANT PERSONAL AND FINANCIAL DOCUMENTS. Lenders want to check and assess many different documents as part of your mortgage application. This is essential supporting information required to help substantiate your income and outgoings and affordability and these documents generally consist of the following depending on your job status:
- - 3 months wage slips (most recent)
- - 3 months bank statements showing salary credit with the accountholders name and address on the statement if online versions.
- - P60
- - Employment Contracts – for contracted and sub-contracted workers.
SELF-EMPLOYED / LIMITED COMPANY DIRECTORS:
- - SA 302s and Tax Year Overviews if self-employed or Limited Company - last 3 years. These can be obtained from the Inland Revenue.
- - Employment Contracts – for contracted and sub-contracted workers usually involved in IT Contracts and IR 35.
- - CIS 4 – invoices and statements for self-employed sub-contractors in Building Trade.
PERSONAL AND GENERAL:
- - Proof of ID (copy of Passport/ Driving Licence)
- - Address verification - Utility bill/credit card statement/ Council tax all must be dated in the last 10 weeks.
- - Proof of Deposit – for a purchase only. For re-mortgages the equity value is the deposit.
- - Last 12 months mortgage payment history (your annual mortgage statement plus recent bank statements showing mortgage payment debits).
- - Copy of Experian credit profile if you have a low credit score or have an impaired credit history.
INSTRUCT A SOLICITOR.
You’ll need a solicitor to act for you whether it is a purchase or a re-mortgage.
Your solicitor will provide a full mortgage legal and conveyancing service and will deal with all the intricacies of the purchase, purchase and sale or re-mortgage.
They will register the legal title deeds and standard security and attend to the mortgage conditions for your new lender and mortgage and ensure that the mortgage funds are available on the date of entry.Apply now