Once you have saved for your deposit and you have enough money for a mortgage, it’s time to get prepared for your mortgage application. There are lots of different things that you will need to provide alongside your mortgage application, so we thought that we would give you a handy list so that you know what you need:
This item should be at the very top of your list; ideally, it would be handy if you can obtain this before you approach your Mortgage Broker in Cardiff. Your credit report will show you how your credit score is looking, which is what lenders will use to determine whether you’ll be accepted for a mortgage.
They are going to look at everything on your credit file, this will allow them to match you up with a lender that will be best suited to you. If your credit score is low you may need to look at a way to improve your credit score, for example, getting yourself on the voter’s roll seems to really help in terms of your credits score.
In terms of proving that you are, who you say you are, you will need to provide some in date photographic ID. Most of our customers use a driving license or passport for this part of the process.
However, you can’t use driving licence for ID though if you are also using it for proof of address. If you are a non-UK national working over here on a Visa, you’ll need to produce that too.
In addition to your ID, you’ll have to prove where you live. As mentioned above, you can’t use your driving licence or passport if you are already using them for your proof of ID.
We usually advise people to use a utility bill or an original bank statement dated within the last 3 months.
Your bank statements are needed to evidence your income and regular expenditures. When your lender analyses your bank statements, they are going to look for a variety of different things. For example, if a lender notices gambling transactions on your statements, they may not be so happy, it depends how often you gamble. They will also look at whether you stick to your agreed overdraft limit and if your direct debits bounce regularly. They need to be confident that you are going to be able to meet your monthly mortgage payments.
The Bank Statements you need to produce tend to be the ones where your salary goes in and your bills go out.
You will need to prove where your deposit has come from and show that you have the correct amount needed. This is all for anti-money laundering purposes; your lender will need to be certain on everything. I always think it’s best not to move monies around your various accounts too much. If you do, it will make evidencing the audit trail more difficult. Lenders also like to see that you’ve saved up for the deposit, so be careful on transferring large sums of money close to your application.
It’s not unusual for a portion of or the whole of the deposit to be covered by a gifted deposit from a family member or friend. These funds will also need to be evidenced and the person who has gifted you the deposit will need to sign a letter to confirm that it was a gift and not a loan.
In terms of affordability, the most important thing that you will need to evidence is your income. If you are employed this tends to be through your last 3 months’ payslips and some may even want your most recent P60. Lenders can consider regular overtime, commission, shift allowance and bonus. If you are lucky, your lender may accept earnings from more than one employer. This situation comes around when the applicant has a part-time job or is Self Employed.
Many of our customers in Cardiff are Self Employed. If this is you, then you’ll need your Accountants’ help to request your last 2 or 3 years’ proof of earnings from the Revenue. If you submit your own Accounts’ please contact us and we will advise you what to download from the Government Gateway.
As an experienced Mortgage Broker in Cardiff, we always advise that you do your homework and write down an estimate of your anticipated outgoings after you move to a new house. You can then work out a rough idea of how much your council tax and utility bills will be plus your regular expenditures such as food and drink. You will then be able to demonstrate how much disposable income you have available to pay your mortgage from.
Before we carry out an appointment with you we can send you our version of a Budget Planner to help you with this.
As you can see from the above, preparing for a mortgage isn’t easy. Think of it like the “Tortoise and the Hare” – if you want your application to run like clockwork, you’ll need to put the time aside to get everything together. You’ll get there much quicker if you put in the work at the outset!