With lenders asking for more details of expenditure, debt and income than ever before, we take a look at what documents you should prepare before applying for a mortgage.
When you decide to buy a home, it pays to put your mortgage offer in place as soon as possible. This gives you a good chance of being taken seriously by the sellers of the property you make an offer for. It also means that they may choose you over someone who has yet to make their application.
By providing your mortgage lender with as much relevant information as possible, the process should be quicker than if they have to contact you for outstanding information. Even so, it is likely to take around four weeks for the formal offer to be made, plus any additional time needed for the lender’s surveyor to carry out a valuation of the property.
Lenders will want an idea of how much your outgoings are, in categories such as debt payments, food, tax, energy bills, insurance premiums and travel costs.
They will also take into consideration the number of dependents you have and any childcare expenses.
You will need to send evidence of your income, which will be by way of payslips, accounts or self-assessment forms for the past three years or P60 forms. You should include details of any benefits you receive, for example, documents showing payment to you of Child Benefit.
You may also have to provide evidence as to where any deposit has come from, for example, that it has been gifted to you and is not a loan.
Have the correct identification documents available, such as current passport, driving licence and utility bills that show your address.
Preparing to make a mortgage application
Put your finances in the best order you can before making a loan application. This means paying off or consolidating debts where you can, closing unused accounts and checking your credit score. Make sure you are on the electoral roll with your current address, as this may be used to verify your personal information.
Take advice as to the type of mortgage that would best suit your circumstances and the amount that you will need to borrow and that you are realistically able to repay. Changing your requirements partway through the application process will cause a delay.
To speed the process up and prove to buyers that you are serious, you can ask your lender for a mortgage in principle, ie. their agreement to loan you a specified amount once you have found the right property.
If you are thinking of buying or selling a property, speak to one of our expert conveyancers on 0345 2413 100 or email us at email@example.com.